Drug companies will have to notify Minnesota consumers about big prescription medication price hikes, under a major compromise measure signed into law on Tuesday.

The new price transparency law, which passed both chambers of the Legislature with bipartisan support, is the result of more than a year of negotiations between legislators and interest groups. Its enactment comes amid increased political pressure for lawmakers to do something to address the rising cost of prescription drugs.

So what will this agreement mean for Minnesotans heading to the pharmacy to refill prescriptions? Here’s a look at what the new law does — and doesn’t — do.

Does it cap drug prices?

The new law does not stop or restrict price increases, but it does require pharmaceutical companies to give public notice when the cost of certain medications rises sharply. In addition to the notification, manufacturers must explain the reasons for the cost increases and provide other financial information to regulators. Those disclosures will be posted online by the Minnesota Department of Public Health.

How would that affect prices?

Supporters of the law say more transparency will give consumers more power and, potentially, lead to lower prices. Rep. Kelly Morrison, a Deephaven Democrat who worked on the deal, said the measure is “an important first step in raising awareness about the role of drug prices in the cost of health care, and in helping drive down those prices.” State Sen. Julie Rosen, the lead GOP negotiator, called the outcome “a reasonable bill that empowers the consumer and simply asks pharmaceutical companies to justify the prices they charge.”

Critics, including the Pharmaceutical Research and Manufacturers of America, say the change won’t lead to lower prices. In a letter to lawmakers, the lobbying group argued that reporting the mandated information would “undermine competitive forces in the market and could increase costs.”

Are all medications subject to the new reporting requirements?

No. The changes apply to medications that cost $100 or more for a 30-day supply. For brand-name drugs, disclosure is triggered when a price jumps at least 10% over 12 months or 16% over 24 months. Changes for generic drugs must be reported when prices increase by 50% or more. New drugs that exceed certain price thresholds are also subject to the requirements.

When will the information be available?

Late 2021 at the earliest. The reporting requirements take effect on Oct. 1, 2021. At that point, manufacturers will have 60 days after they increase prices or introduce new drugs to submit the mandated information to the state health commissioner.

What happens if manufacturers don’t tell the state about their price increases?

Companies that fail to submit the reports or that provide inaccurate or incomplete information could face fines of up to $10,000 a day. Money from the fines would go into the state’s Health Care Access Fund, which helps pay for MinnesotaCare and other programs.

Are other measures in the works?

Drug prices have become a hot political issue, prompting lawmakers on both sides of the aisle to propose measures aimed at keeping costs down for consumers. As a result, dozens of states adopted laws addressing affordability and accessibility last year. On the federal level, leaders in the U.S. House and Senate have released dueling proposals on drug costs. In addition to this new state measure, Minnesota lawmakers reached an agreement on insulin affordability legislation earlier this year. Gov. Tim Walz signed that bill into law in April.