FOOD AND DRUGS -- PRESCRIPTION DRUG COST PROTECTION, the official text

S2384 2026 -- S 2384 ======== LC004201 ======== STATE OF RHODE ISLAND IN GENERAL ASSEMBLY JANUARY SESSION, A.D. 2026 ____________ A N A C T RELATING TO FOOD AND DRUGS -- PRESCRIPTION DRUG COST PROTECTION Introduced By: Senators DiPalma, Murray, Urso, Bell, Appollonio, DiMario, Thompson, and Valverde Date Introduced: January 30, 2026 Referred To: Senate Health & Human Services It is enacted by the General Assembly as follows: 1 SECTION 1. Legislative intent. 2 The purpose of this chapter is to protect the safety, health, and economic well-being of 3 Rhode Island residents by safeguarding them from the negative and harmful impact of excessive 4 and unconscionable prices for prescription drugs. In enacting this act, the legislature finds that 5 access to prescription drugs is necessary for Rhode Island residents to maintain or achieve good 6 health: 7 (i) Excessive prices negatively impact the ability of Rhode Island residents to obtain 8 prescription drugs and price increases that exceed reasonable levels thereby endanger the health 9 and safety of Rhode Island residents to maintain or achieve good health; 10 (ii) Excessive prices for prescription drugs threaten the economic well-being of Rhode 11 Island residents and endanger their ability to pay for other necessary and essential goods and 12 services including housing, food and utilities; 13 (iii) Excessive prices for prescription drugs contribute significantly to a dramatic and 14 unsustainable rise in health care costs and health insurance that threaten the overall ability of Rhode 15 Island residents to obtain health coverage and maintain or achieve good health; 16 (iv) Excessive prices for prescription drugs contribute significantly to rising state costs for 17 health care provided and paid for through health insurance programs for public employees, 18 including employees of the state, municipalities and counties, school districts, institutions of higher 19 education, and retirees whose health care costs are funded by public programs, thereby threatening 1 the ability of the state to fund those programs adequately and further threatening the ability of the 2 state to fund other programs necessary for the public good and safety, such as public education and 3 public safety; and 4 (v) Based on findings in subsections (i) through (iv) of this section, the legislature finds 5 that excessive prices for prescription drugs threaten the safety and well-being of Rhode Island 6 residents and find it is necessary to act in order to protect Rhode Island residents from the negative 7 impact of excessive costs. 8 SECTION 2. Title 21 of the General Laws entitled FOOD AND DRUGS is hereby 9 amended by adding thereto the following chapter: 10 CHAPTER 38 11 PRESCRIPTION DRUG COST PROTECTION 12 21-38-1. Definitions. 13 As used in this chapter: 14 (1) “ERISA Plan” means a plan qualified under the Employee Retirement Income Security 15 Act of 1974, 29 U.S.C. ch. 18 § 1001 et seq. 16 (2) “Health plan” means any entity subject to the insurance laws and regulations of this 17 state, or subject to the jurisdiction of the commissioner, that contracts or offers to contract to 18 provide, deliver, arrange for, pay for, or reimburse any of the costs of healthcare services including, 19 without limitation, an insurance company offering accident and sickness insurance, a health 20 maintenance organization licensed under chapter 41 of title 27, a nonprofit hospital service 21 corporation organized under chapter 19 of title 27, a nonprofit medical service corporation 22 organized under chapter 20 of title 27, a nonprofit dental service corporation organized under 23 chapter 20.1 of title 27, a nonprofit optometric service corporation organized under chapter 20.2 of 24 title 27, a domestic insurance company subject to chapter 1 of title 27 that offers or provides health 25 insurance coverage in the state, and a foreign insurance company subject to chapter 2 of title 27 26 that offers or providers health insurance coverage in the state. 27 (3) Insurance commissioner or commissioner means the director of the department of 28 business regulation or the director s designee. 29 (4) “Maximum fair price” means the maximum rate for a drug published by the Secretary 30 of the United States Department of Health and Human Services pursuant to Section 1195 of P.L. 31 117-169 (2022). 32 (5) “Participating ERISA plan” means an ERISA plan that has elected to participate in the 33 requirements and restrictions of this chapter and provides notice as described in § 21-38-3. 34 (6) “Price applicability period” means the period of time defined in Section 1191 of P.L. LC004201 - Page 2 of 6 1 117-169 (2022). 2 (7) “Referenced drug” means a drug subject to a maximum fair price. 3 (8) “State entity” means any agency of state government that purchases prescription drugs 4 on behalf of the state for a person whose health care is paid for by the state, including any agent, 5 vendor, fiscal agent, contractor, or other party acting on behalf of the state. State entity does not 6 include the medical assistance program established under 42 U.S.C. §1396 et seq. 7 21-38-2. Payment in excess of referenced rate prohibited. 8 (a) The maximum fair price is the maximum payment for a referenced drug and applies to 9 all purchases of a referenced drug and reimbursements for a claim for the referenced drug during 10 the price applicability period when the referenced drug is dispensed, delivered, or administered to 11 an individual in the state in person, by mail, or by other means. 12 (b) It is a violation of this chapter for any purchaser to purchase a referenced drug or seek 13 reimbursement for a referenced drug to be dispensed, delivered, or administered to an individual in 14 the state in person, by mail, or by other means for a cost higher than the maximum fair price. The 15 maximum fair price does not include a dispensing fee paid to a pharmacy for dispensing a 16 referenced drug and nothing in this chapter shall be interpreted to prevent a retail pharmacy from 17 receiving a dispensing fee above the maximum fair price. 18 21-38-3. ERISA plan opt-in. 19 An ERISA plan may elect to participate in the provisions of this chapter. Any ERISA plan 20 that desires its purchase of prescription drugs to be subject to the prohibition described in this 21 section shall notify the insurance commissioner in writing by February 1 of each year. 22 21-38-4. Rulemaking authority. 23 The insurance commissioner shall have the authority to implement regulations pursuant to 24 chapter 35 of title 42 ( administrative procedures ) to fully implement the requirements of this 25 chapter. 26 21-38-5. Registered agent and office within the state. 27 Any entity that sells, distributes, delivers, or offers for sale any drug in the state is required 28 to maintain a registered agent and office within the state. 29 21-38-6. Use of savings. 30 (a) Any savings generated as a result of the requirements in § 21-38-3 during the referenced 31 rate applicability period above shall be used to reduce costs to consumers. Any state entity, health 32 plan or participating ERISA plan shall calculate such savings and utilize such savings directly to 33 reduce costs for its members. In determining how to utilize savings in order to comply with this 34 provision, purchasers are directed to consider strategies that promote greater health equity by LC004201 - Page 3 of 6 1 addressing disparities across communities. 2 (b) No later than April 1 of each calendar year, each state entity, health plan and 3 participating ERISA plan subject to this chapter shall submit to the insurance commissioner a report 4 describing the savings achieved for each referenced drug for the previous calendar year and how 5 those savings were used to achieve the requirements of subsection (a) of this section, including how 6 the savings were used to promote greater health equity by addressing disparities across 7 communities. 8 (c) The insurance commissioner shall implement rules setting forth the method for 9 calculating savings and the format and submission requirements for the report described in 10 subsection (b) of this section. 11 21-38-7. Enforcement. 12 Each violation of this chapter shall be subject to a fine of one thousand dollars ($1,000). 13 Every individual transaction in violation of § 21-38-2 is determined to be a separate violation. The 14 attorney general is authorized to enforce the provisions of this statute. The refusal of a manufacturer 15 to negotiate in good faith as described in § 21-38-8(d) shall be a valid affirmative defense in any 16 enforcement action brought under this chapter. 17 21-38-8. Prohibition on withdrawal of referenced drugs for sale. 18 (a) It shall be a violation of this chapter for any manufacturer of a referenced drug to 19 withdraw that drug from sale or distribution within this state for the purpose of avoiding the impact 20 of the rate limitations set forth in § 21-38-3. 21 (b) Any manufacturer that intends to withdraw a referenced drug from sale or distribution 22 from within the state shall provide a notice of withdrawal in writing to the insurance commissioner 23 and to the attorney general one hundred eighty (180) days prior to such withdrawal. 24 (c) The insurance commissioner shall assess a penalty on any manufacturer that it 25 determines has withdrawn a referenced drug from distribution or sale in the state in violation of 26 subsection (a) or (b) of this section. With respect to each referenced drug for which the insurance 27 commissioner has determined the manufacturer has withdrawn from the market, the penalty shall 28 be equal to: 29 (1) Five hundred thousand dollars ($500,000); or 30 (2) The amount of annual savings determined by the insurance commissioner as described 31 in § 21-38-6, whichever is greater. 32 (d) It shall be a violation of this chapter for any manufacturer of a referenced drug to refuse 33 to negotiate in good faith with any payor or seller of prescription drugs a price that is within the 34 referenced rate as determined in § 21-38-2. LC004201 - Page 4 of 6 1 (e) The insurance commissioner shall assess a penalty on any manufacturer that it 2 determines has failed to negotiate in good faith. With respect to each referenced drug for which the 3 insurance commissioner has determined the manufacturer has failed to negotiate in good faith, the 4 penalty shall be equal to: 5 (1) Five hundred thousand dollars ($500,000); or 6 (2) The amount of annual savings determined by the insurance commissioner as described 7 in § 21-38-6, whichever is greater. 8 21-38-9. Severability clause. 9 If any provision of this chapter or the application thereof is determined to be invalid, the 10 invalidity shall not affect other provisions or applications of this chapter which can be given effect 11 without the invalid provision or application, and to this end the provisions of this chapter are 12 severable. 13 SECTION 3. This act shall take effect upon passage. ======== LC004201 ======== LC004201 - Page 5 of 6 EXPLANATION BY THE LEGISLATIVE COUNCIL OF A N A C T RELATING TO FOOD AND DRUGS -- PRESCRIPTION DRUG COST PROTECTION *** 1 This act would prohibit the state, participating ERISA, or any health plan from purchasing 2 referenced drugs for a cost higher than the referenced rate. 3 This act would take effect upon passage. ======== LC004201 ======== LC004201 - Page 6 of 6