Cap Pharmaceutical Drug Markups in The State of Minnesota

 

 

This bill establishes a statewide cap on pharmaceutical drug markups in order to reduce pricing for Minnesota consumers.

It directs the Minnesota Department of Health (MDH) to implement and oversee this cap and ensures that prescription

drugs sold in Minnesota remain affordable and accessible. This bill would create a cap on the amount that pharmaceutical

companies can mark up their drugs. This amount would be 15% of the total cost of production for said drug.

 

 

Minnesota has experienced steady increases in prescription drug prices, which place financial pressure on residents who

rely on essential medications. Even if Minnesota is not among the highest-priced states, rising costs still create an

affordability problem for many families. Capping drug markups offers a clear safeguard against excessive price inflation

and helps ensure that prescription drugs remain accessible and reasonably priced for Minnesota consumers.

 

 

1- “Markup” is defined as any additional cost added to the base production cost of a pharmaceutical drug, including but

not limited to distribution, profit margin, packaging, and administrative overhead.

2- “Pharmaceutical drug” refers to any prescription medication legally sold within the State of Minnesota.

3- “Pharmaceutical company” refers to any manufacturer, distributor, or entity that sets drug prices for medications

sold in Minnesota.

 

 

An annual appropriation of $250,000 shall be allocated to the Minnesota Department of Health to administer and enforce

the provisions of this act. This funding may be used for staffing, compliance reviews, investigations, and any

administrative costs necessary for implementation.

Ongoing enforcement beyond the initial allocation shall be supported through administrative fines collected from

pharmaceutical companies that violate the markup cap.

 

The Minnesota Department of Health shall enforce the provisions of this act.

Any pharmaceutical company found pricing a drug above the 15 percent markup cap shall be subject to:

a. A civil fine of up to $50,000 per violation.

b. Mandatory reimbursement to Minnesota consumers for the overcharged amount.

Repeated violations may result in suspension of the company’s authorization to sell pharmaceutical drugs within

Minnesota until compliance is demonstrated.

 

This act shall take effect on January 1, 2027, allowing adequate time for statewide implementation, administrative

setup, and industry compliance.