2025 Minnesota Session and Special Session Review

The Minnesota Special Session adjourned and the Legislature concluded their work on the budget for the upcoming 2026-2027 biennium in the early morning hours of Tuesday, June 9th. The roughly $66 billion budget, signed into law by Governor Walz on June 14th, represents a reduction in the $72B budget passed in 2023 and addresses nearly half of the projected $5 billion structural deficit in the 2028-2029 budget.

Governor Walz signed the remaining budget, tax and bonding bills, which passed last early Tuesday. We are not aware of any line-item vetoes being part of his final actions. The new budget bill will now go into effect on July 1, 2025.

This year, the pharmacy community set out to stem the disastrous tide of pharmacy closures in Minnesota and reform the Minnesota Medical Assistance (Medicaid) drug benefit management model. Minnesota pharmacy had a good session, passing two significant priorities: Directed Pharmacy Dispensing Payment Program (DPDPP) and implementation of a Single Pharmacy Benefit Manager (SPBM) for Minnesota Medicaid. 

Thanks to our membership for rising to the call of our grassroots advocacy efforts. Because of you, more than 220 messages were sent to legislators by pharmacy professionals and patients, calling on them to support pharmacies and their sustainability. These powerful messages were delivered straight to lawmakers' inboxes, making it clear that pharmacy voices were speaking up across the entire state.

MPhA and the broader Minnesota pharmacy coalition advocated for and helped pass this legislation by testifying in support of Senator Mann and Representative Nadeau and Bahner’s bills this session. Both the DPDPP and SPBM for MA provisions included in the 20025 Health Omnibus budget act gained broad bi-partisan support this year. When implemented, the state of Minnesota expects to save millions while providing greater patient access to pharmacies and reimbursing providers adequately.

Both these policies are expected to provide a short-term life-line of additional MA reimbursement by managed care contractors and at cost reimbursement once the DHS-Single PBM management model for MN MA claims reimbursed to our pharmacies beginning in 2027.

We are working with DHS to now implement and have the required federal (CMS) approval of the DHS Directed Pharmacy Dispensing Payment Program as soon as possible. Based on previous comments from the current federal administration, it is unclear whether or not the DPDPP program will be approved. Stay tuned.

Here are the provisions enacted in various budget bills that impact Minnesota pharmacy

MN – Health Omnibus budget legislation S.F. No. 6 / HF2

(MPA priorities bolded)

Article 2 - Department of Health Policy
Sec. 1-3: Agency initiative that modifies the information that 340B covered entities must report to the commissioner of health and makes technical changes to the reporting section
Sec. 6-14: Agency initiative that modifies requirements for reporting to the commissioner of health on prescription drug prices and related information.(Section 12 includes reporting of mail-order delivered medications)

Article 3 - Health Licensing Boards

Sec. 106, 108-111, 125. Modifies qualifications, fees, and other requirements for pharmacy internsSec. 112, Subd. 6, (g): The central repository may purchase a drug from a wholesaler licensed by the board to fill prescriptions for eligible patients when the repository does not have a sufficient supply of donated drugs to fill the prescription. The central repository may use any purchased drugs remaining after filling the prescriptions for which the drugs were initially purchased to fill other prescriptions. Whenever possible, the repository must use donated drugs to fill prescriptions

Article 4 – Pharmacy Benefits
Sec.1-2, 4: Prohibits certain modifications to a health plan’s formulary
Sec. 3: Extends the sunset of the Drug Formulary Committee to June 30, 2029
Sec 5-7, 9: Directs DHS to select a single state pharmacy benefit manager to process all pharmacy claims for MA and MinnesotaCare enrollees served under managed care. Effective date, January 1st, 2027
Sec 8: Establishes a Directed Pharmacy dispensing payment of $4.50 per filled prescription for the MA program for eligible MA pharmacy claims through calendar year 2026

Article 8 - Human Services Health Care Finance
Sec 1, 9: Extends access to audio-only telehealth in MA, MinnesotaCare, and private health plans through fiscal year 2027
Sec. 32: Includes rebates in the calculation of “gross revenues” for a tax on wholesale drug distributors

Article 21 - Appropriations
Sec. 3, Subd. 16: MN Medical Association grant: $237,000 Grant for "Treat Yourself First" Campaign

Article 23 – Health Related Boards appropriations

Sec. 2: Medication Repository Program. $450,000 in fiscal year 2026 and $450,000 in fiscal year 2027 are from the general fund for the medication repository program to purchase prescription drugs under Minnesota Statutes, section 151.555, subdivision 6, paragraph (g)

A provision included in the MN - Tax Omnibus legislation SF20/HF9

Article 8 - Miscellaneous
Sec. 17: Pharmacy refund. Modifies the timing for when a pharmacy may claim a refund for the legend drugs tax paid on out-of-state drug shipments. Effective January 1, 2026