BUSINESSES AND PROFESSIONS -- PHARMACEUTICAL COST TRANSPARENCY, the official text

H7118 2026 -- H 7118 ======== LC003757 ======== STATE OF RHODE ISLAND IN GENERAL ASSEMBLY JANUARY SESSION, A.D. 2026 ____________ A N A C T RELATING TO BUSINESSES AND PROFESSIONS -- PHARMACEUTICAL COST TRANSPARENCY Introduced By: Representatives J. Lombardi, Hull, Sanchez, Cruz, and Stewart Date Introduced: January 15, 2026 Referred To: House Health & Human Services It is enacted by the General Assembly as follows: 1 SECTION 1. The general assembly hereby finds and declares as follows: 2 (1) The costs of prescription drugs have been increasing with regularity; 3 (2) Containing healthcare costs requires containing prescription drug costs; and 4 (3) In order to contain prescription drug costs, it is essential to understand the drivers of 5 those costs, as transparency is the first step toward cost containment. 6 SECTION 2. Title 5 of the General Laws entitled BUSINESSES AND PROFESSIONS 7 is hereby amended by adding thereto the following chapter: 8 CHAPTER 19.4 9 PHARMACEUTICAL COST TRANSPARENCY 10 5-19.4-1. Definitions. 11 As used in this chapter: 12 (1) 340B means the federal drug pricing program established pursuant to 42 U.S.C.§ 13 256b. 14 (2) 340B entity means an entity participating or authorized to participate in the federal 15 340B drug discount program, as described in 42 U.S.C.§ 256b, including its pharmacy, or any 16 pharmacy contracted with the participating entity to dispense drugs purchased through the 340B 17 drug discount program. 18 (3) 340B prescription drug means a prescription drug that has been subject to any offer 1 for reduced prices by a manufacturer pursuant to 42 U.S.C.§ 256b and is purchased by a covered 2 entity as defined in 42 U.S.C.§ 256b(a)(4) 3 (4) Board means the state board of pharmacy created pursuant to § 5-19.1-3. 4 (5) Department means the Rhode Island department of health. 5 (6) Manufacturer means a person or entity licensed to manufacture legend drugs pursuant 6 to § 5-19.1-12. 7 (7) Prescription drug means a drug as defined in 21 U.S.C. § 321. 8 5-19.4-2. Identification of high cost prescription drugs. 9 (a)(1) The state board of pharmacy, in collaboration with the department, shall identify 10 annually up to fifteen (15) prescription drugs on which the state spends significant healthcare 11 dollars and for which the wholesale acquisition cost has increased by fifty percent (50%) or more 12 over the past five (5) years or by fifteen percent (15%) or more over the past twelve (12) months, 13 creating a substantial public interest in understanding the development of the drugs pricing. The 14 drugs identified shall represent different drug classes. 15 (2) The board shall provide to the office of the attorney general the list of prescription drugs 16 developed pursuant to this section and the percentage of the wholesale acquisition cost increase for 17 each drug and shall make the information available to the public on the board s website. 18 (b)(1) For each prescription drug identified pursuant to subsection (a) of this section, the 19 office of the attorney general shall require the drug s manufacturer to provide a justification for the 20 increase in the wholesale acquisition cost of the drug in a format that the attorney general 21 determines to be understandable and appropriate. The manufacturer shall submit to the office of 22 the attorney general all relevant information and supporting documentation necessary to justify the 23 manufacturer s wholesale acquisition cost increase, which may include: 24 (i) All factors that have contributed to the wholesale acquisition cost increase; 25 (ii) The percentage of the total wholesale acquisition cost increase attributable to each 26 factor; and 27 (iii) An explanation of the role of each factor in contributing to the wholesale acquisition 28 cost increase. 29 (2) Nothing in this section shall be construed to restrict the legal ability of a prescription 30 drug manufacturer to change prices to the extent permitted under federal law. 31 (c) The attorney general, in consultation with the department, shall provide a report to the 32 general assembly on or before December 1 of each year based on the information received from 33 manufacturers pursuant to this section. The attorney general shall also post the report on the office 34 of the attorney general s website. LC003757 - Page 2 of 7 1 (d) Information provided to the office of the attorney general pursuant to this section is 2 exempt from public inspection and copying and is not a public record pursuant to chapter 2 of title 3 38 ( access to public records ), and shall not be released in a manner that allows for the 4 identification of an individual drug or manufacturer or that is likely to compromise the financial, 5 competitive, or proprietary nature of the information. 6 5-19.4-3. Injunctive relief. 7 The attorney general may bring a civil action in the superior court for Providence county 8 for injunctive relief, costs, and attorneys fees, and to impose on a manufacturer that fails to provide 9 the information required by § 5-19.4-3(b) a civil penalty of no more than ten thousand dollars 10 ($10,000) per violation. Each unlawful failure to provide information shall constitute a separate 11 violation. 12 5-19.4-4. Rulemaking. 13 (a) On or before January l, 2027, the insurance commissioner shall adopt rules and 14 regulations to require all health insurers that offer health benefit plans to Rhode Island residents 15 through HealthSource RI or any successor health benefit exchange to provide information to 16 enrollees, potential enrollees, and healthcare providers about the exchange plans prescription drug 17 formularies. 18 (b) The rules shall ensure that: 19 (1) The formulary is posted online in a standard format established by the insurance 20 commissioner; 21 (2) The formulary is updated frequently and is searchable by enrollees, potential enrollees, 22 and healthcare providers; and 23 (3) The formulary includes information about the prescription drugs covered, applicable 24 cost-sharing amounts, drug tiers, prior authorization, step therapy, and utilization management 25 requirements. 26 5-19.4-5. Dispensing fees. 27 (a) The department shall use the same dispensing fee in its reimbursement formula for 28 340B prescription drugs as the department uses to pay for non-340B prescription drugs under the 29 Medicaid program. 30 (b) Notwithstanding the provisions of subsection (a) of this section, the department is 31 authorized to modify the dispensing fee or reimbursement formula provided to federally qualified 32 health centers and Title X family planning clinics for dispensing 340B prescription drugs to 33 Medicaid beneficiaries. 34 5-19.4-6. Drug reimbursement - Reporting. LC003757 - Page 3 of 7 1 (a) The department shall: 2 (1) Determine the formula used by other states Medicaid programs to reimburse 340B 3 entities, and covered entities that use 340B pricing for dispensing prescription drugs to Medicaid 4 beneficiaries; 5 (2) Evaluate the advantages and disadvantages of using the same dispensing fee in its 6 reimbursement formula for 340B prescription drugs as the department uses to pay for non-340B 7 prescription drugs under the Medicaid program; and 8 (3) Identify the benefits, if any, of 340B drug pricing to consumers, other payers, and the 9 overall healthcare system. 10 (b) On or before March 15, 2027, the department shall report to the house of 11 representatives, the senate, and the governor s office regarding its findings and recommendations, 12 including recommended modifications to Rhode Island s 340B reimbursement formula, if any, and 13 the financial implications of implementing any recommended modifications. 14 5-19.4-7. Out-of-pocket prescription drug limits – Advisory commission. 15 (a) The Rhode Island department of health shall convene an advisory commission to 16 develop options for all qualified health benefit plans to be offered on the Rhode Island health benefit 17 exchange for the 2028 plan year, including: 18 (1) One or more plans with a higher out-of-pocket limit on prescription drug coverage than 19 the limit established pursuant to current law and regulations; and 20 (2) Two (2) or more plans with an out-of-pocket limit at or below the limit established 21 pursuant to current law and regulations. 22 (b) The advisory commission shall include at least the following members: 23 (1) A representative of the Rhode Island health benefits exchange, appointed by the 24 governor; 25 (2) A representative of each of the commercial health insurers offering plans on the Rhode 26 Island health benefit exchange, appointed by each insurer; 27 (3) The insurance commissioner, or designee; 28 (4) A representative of the exchange advisory board established pursuant to § 42-157-7, 29 appointed by the governor; 30 (5) A representative of a Rhode Island AIDS services organization, appointed by the 31 governor; 32 (6) The director of the department of administration, or designee; 33 (7) The director of the department of health, or designee; 34 (8) A consumer nominated by a Rhode Island AIDS services organization and appointed LC003757 - Page 4 of 7 1 by the governor; 2 (9) A representative of the American Cancer Society appointed by the governor; and 3 (10) A consumer nominated by the American Cancer Society and appointed by the 4 governor. 5 (c)(1) The advisory commission shall meet at least six (6) times prior to the department 6 submitting plan designs to the state board of pharmacy for approval. 7 (2) In developing the standard qualified health benefit plan designs for the 2028 plan year, 8 the department shall present the recommendations of the advisory commission established pursuant 9 to this section. 10 5-19.4-8. Reports. 11 (a) On or before February 15, 2027, the department shall provide to the governor, the house 12 of representatives, and the senate: 13 (1) An overview of the cost-share increase trend for all qualified health benefit plans 14 offered on the Rhode Island health benefit exchange for the 2019 through 2027 plan years that were 15 subject to the out-of-pocket prescription drug limit established in state law or regulation; 16 (2) Detailed information regarding lower cost-sharing amounts for selected services that 17 will be available in all qualified health benefit plans in the 2027 plan year due to the flexibility to 18 increase the out-of-pocket prescription drug limits established pursuant to this chapter; 19 (3) A comparison of the bronze-level qualified health benefit plans offered in the 2027 plan 20 year in which there will be flexibility in the out-of-pocket prescription drug limit established under 21 state law and regulation; 22 (4) Information about the process engaged in by the advisory commission established in 23 this chapter and the information considered to determine modifications to the cost-sharing amounts 24 in all qualified health benefit plans for the 2027 plan year, including prior year utilization trends, 25 feedback from consumers and health insurers, health benefit exchange outreach and education 26 efforts, and relevant national studies; 27 (5) Cost-sharing information for standard qualified health benefit plans from states with 28 federally-facilitated exchanges compared to those on the Rhode Island health benefit exchange; 29 and 30 (6) An overview of the outreach and education plan for enrollees in all qualified health 31 benefit plans offered on the Rhode Island health benefit exchange. 32 (b) On or before February l, 2028, the department shall report to the governor, the house 33 of representatives, and the senate: 34 (1) Enrollment trends in all qualified health benefit plans offered on the Rhode Island LC003757 - Page 5 of 7 1 health benefit exchange; and 2 (2) Recommendations from the advisory commission established pursuant to § 5-19.4-7 3 regarding modification of out-of-pocket prescription drug cost limits. 4 SECTION 3. This act shall take effect upon passage. ======== LC003757 ======== LC003757 - Page 6 of 7 EXPLANATION BY THE LEGISLATIVE COUNCIL OF A N A C T RELATING TO BUSINESSES AND PROFESSIONS -- PHARMACEUTICAL COST TRANSPARENCY *** 1 This act would direct the state board of pharmacy, in collaboration with the department of 2 health, to annually identify up to fifteen (15) prescription drugs on which the state spends 3 significant healthcare dollars due to increases in costs. This list would be provided to the attorney 4 general s office, and the attorney general s office would require the drugs manufacturers to submit 5 relevant information and documentation to justify these cost increases. The act would further direct 6 the department of health to use the same dispensing fee in its reimbursement formula for 340B 7 prescription drugs as it uses to pay for non-340B prescription drugs under the Medicaid program, 8 and to provide information to the general assembly and the governor about these programs. The act 9 would also establish an advisory commission on out-of-pocket prescription drug costs which would 10 study these costs and make reports and recommendations to the governor and the general assembly. 11 This act would take effect upon passage. ======== LC003757 ======== LC003757 - Page 7 of 7