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Solutions
The situation is dire, but not hopeless.
Pharmacy reform is healthcare reform.
And pharmacy reform IS possible, but solutions must be an improvement on current statute, comprehensive, and informed by the expertise of working pharmacists and independent pharmacy owners. Additionally, enforcement of pharmacy benefit manager (PBM) regulations must be timely, stringent, and result in penalties that actually dissuade illegal behavior (currently, all large PBMs are known to have a budget specifically for settling lawsuits, which oftentimes result in fines that are a "drop in the bucket" compared to their profit margins).
Community pharmacies need to be paid fairly for the critical healthcare services they provide—it's as simple as that. Currently, most are struggling to stay alive due to chronic underrimbursement from mostly-Fortune 15 companies that claim they're "unable" to pay us appropriately, and that doing so will "increase costs." In reality, their anticompetitive, abusive practices are actually inflating the cost of care, harming patients, payers, and providers—including pharmacies—in the process.
Reimbursement Reform
Today, PBMs operate in a "black box," regularly claiming that their claims and reimbursement data is "proprietary" and leaving entities that work with them—including pharmacies, employers, and even the government—completely in the dark. Implementing regulations that enhance transparency about PBM practices, including pricing arrangements and rebates, is KEY to uncovering where exactly money is (and is not) flowing to and from PBMs.
Demanding Transparency
Addressing monopolization and encouraging competition between PBMs will help to increase accountability and ensure fair negotiations with pharmacies and drug manufacturers. Currently, just 3 PBMs—CVS Caremark, Express Scripts, and Optum—control over 80% of the prescription market.
Promoting Competition
The health insurance industry spends a LOT of money each year lobbying for laws that protect their profit margins. Reviewing and updating existing regulations will help address legislative loopholes used by PBMs to ensure that they operate in a way that benefits pharmacies, patients, and the healthcare industry as a whole.
Regulatory Reforms
Currently, PBMs skirt the law so often that they have a budget specifically for settling lawsuits—it's more financially beneficial for them to ignore the rules and pay the price, which is usually an amount so small to be is insignificant to their multi-billion dollar bottom lines. Effective PBM reform includes strengthening enforcement and implementing penalties that actually discourage unlawful conduct.
Improving Enforcement
Establishing an index-based reimbursement model
such as one that utilizes the National Average Drug Acquisition Cost (NADAC)—as many states across the U.S. have already done, with hundreds of millions in savings already reported—ensures that pharmacies are paid fairly for the essential work they do AND that PBMs don't just get to make up their own prices upon which reimbursements to pharmacies are based. This also increases transparency and encourages standardization of drug pricing.
is critical to the health of Minnesota's
local pharmacies, patients, & communities
PBM REFORM
MNIndys in action
Members of our organization succeeded in helping pass two critical pharmacy-focused provisions during the 2025 MN state legislative session:
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1. Establish a Single PBM (SPBM) model for Medicaid to increase transparency and ensure fair reimbursement to pharmacies. All Managed Care Organizations (MCOs), such as HealthPartners and UCare, who administer prescription benefits on behalf of Medicaid patients must use a single PBM, which will be chosen by the state of Minnesota. This will save the state a ton in admin fees, ensures that pharmacies are paid appropriately (NADAC + the state’s fee-for-service dispensing fee), and increases transparency.
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2. Establish a Directed Pharmacy Payment Program (DPPP), which will help prevent further closures until the SPBM goes into effect. Qualified pharmacies will be paid a $4.50 dispensing fee for all MCO claims for Medicaid patients, effectively increasing pharmacies’ current dispensing fee of $0.00 to $0.80 per prescription to $4.50. Qualified pharmacies are defined as Indys, pharmacies in pharmacy deserts, and common ownership with 12 or less stores. This legislation will be in effect until mid-2027.
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Unfortunately, the vast majority of our energy during the 2026 Legislative Session was spent protecting the above provisions, in which we were successful. The Directed Pharmacy Payment Program (DPPP) is now underway and will backdate payments to eligible pharmacies to January 1, 2026, and Managed Care Organizations (MCOs) will still be required to reimburse pharmacies at the new NADAC+ rate established in our Single PBM (SPBM) legislation starting January 1, 2027, even though DHS has announced that the SPBM framework for Medicaid won't actually be able to be implemented until January 1, 2028. Additionally, Myers & Stauffer have officially begun the process of surveying pharmacies in order to establish our own state-derived index value—MNAAC—for drug pricing.
Currently, our Legislative Working Group and other MNIndys members are continuing to work with lobbyists, a public affiars team, and MN state legislators to craft a game plan for the 2027 MN legislative session. Stay tuned via our newsletter, the MNIndys Mailer!
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MNIndys members testify at the MN Capitol
The MNIndys' Legislative Working Group serves as a go-to resource for legislators working on bills to support Minnesota's independent and other community-based pharmacies.
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Check out these videos to see MNIndys leaders Andrew Russell, RPh (Elko New Market Family Pharmacy), John Hoeschen, RPh (St. Paul Corner Drug), and Hildie Hoeschen, RN (St. Paul Corner Drug) testify before the Minnesota Legislature in support of bills we fought to pass during the 2025 session.
FUNDING
MNIndys is a nonprofit organization.
Our efforts are entirely funded by MNIndys members and donors.