Bill Sponsors
J. Lombardi, Hull, Sanchez, Cruz, and Stewart
Committee
House Health & Human Services
Summary
Select
This legislation aims to increase transparency regarding rising prescription drug prices. It requires the state Board of Pharmacy to identify expensive drugs with rapidly increasing costs and mandates that manufacturers explain the reasons for these price hikes to the Attorney General. The Attorney General will then report these findings to the state government. Additionally, the bill requires health insurers to provide clear, searchable online lists of covered drugs and their costs. It also establishes a commission to study health insurance plan designs regarding out-of-pocket drug limits and adjusts reimbursement formulas for certain drugs under Medicaid.
Sponsor
Analysis
Pros for Progressives
- Increases corporate accountability by forcing pharmaceutical manufacturers to justify rapid price increases to the Attorney General, shedding light on potential price gouging.
- Mandates that insurance companies create transparent, searchable online formularies, empowering patients to find plans that cover their necessary medications affordably.
- Establishes an advisory commission including consumer and patient advocacy representatives to study and recommend changes to out-of-pocket spending limits, potentially lowering costs for patients.
Cons for Progressives
- The information provided to the Attorney General is explicitly exempt from public records laws, meaning the public does not get to see the actual data regarding corporate pricing strategies.
- While it mandates reporting and transparency, the bill does not actually establish price caps or give the government the authority to reject unjustified price increases.
- The implementation timeline is slow, with key insurance transparency rules and reports not due until 2027 and 2028, delaying relief for consumers.
Pros for Conservatives
- Protects business interests by explicitly exempting proprietary pricing data and trade secrets provided to the Attorney General from public inspection and release.
- Promotes free-market principles by requiring insurers to publish accessible pricing and formulary data, allowing consumers to shop for plans more effectively.
- Avoids direct government price controls or caps on pharmaceutical products, relying instead on explanation and transparency rather than market manipulation.
Cons for Conservatives
- Empowers the Attorney General to investigate private businesses and levy civil penalties of up to $10,000, representing a potential weaponization of government against the private sector.
- Increases the regulatory burden on insurance companies and pharmaceutical manufacturers by mandating new reports, website functionalities, and compliance procedures.
- Expands government bureaucracy by creating a new advisory commission and requiring the Department of Health to conduct studies on reimbursement formulas.
Constitutional Concerns
The requirement for manufacturers to disclose internal pricing factors to the Attorney General could be challenged under the Takings Clause (regarding trade secrets) or the First Amendment (compelled speech). However, the bill includes specific provisions stating this information is exempt from public record and must not compromise proprietary nature, which likely mitigates the constitutional risk significantly.
Impact Overview
Groups Affected
- Pharmaceutical Manufacturers
- Health Insurance Companies
- Patients requiring high-cost medication
- Pharmacies
- Medicaid Beneficiaries
Towns Affected
All
Cost to Taxpayers
Amount unknown
Revenue Generated
Amount unknown
BillBuddy Impact Ratings
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Freedom Impact
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Public Services
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Regulatory
Estimated regulatory burden imposed on the subject(s) of the bill.
Clarity of Bill Language
How clear the language of the bill is. Higher ambiguity equals a lower score.
Enforcement Provisions
Measures enforcement provisions and penalties for non-compliance (if applicable).
Environmental Impact
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Privacy Impact
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Bill Status
Current Status
Held
Comm Passed
Floor Passed
Law
History
• 01/15/2026 Introduced, referred to House Health & Human Services
Bill Text
SECTION 1. The general assembly hereby finds and declares as follows:
(1) The costs of prescription drugs have been increasing with regularity;
(2) Containing healthcare costs requires containing prescription drug costs; and
(3) In order to contain prescription drug costs, it is essential to understand the drivers of those costs, as transparency is the first step toward cost containment.
SECTION 2. Title 5 of the General Laws entitled "BUSINESSES AND PROFESSIONS" is hereby amended by adding thereto the following chapter: CHAPTER 19.4 PHARMACEUTICAL COST TRANSPARENCY
5-19.4-1. Definitions.
As used in this chapter:
(1) "340B" means the federal drug pricing program established pursuant to 42 U.S.C.§ 256b.
(2) "340B entity" means an entity participating or authorized to participate in the federal 340B drug discount program, as described in 42 U.S.C.§ 256b, including its pharmacy, or any pharmacy contracted with the participating entity to dispense drugs purchased through the 340B drug discount program.
(3) "340B prescription drug" means a prescription drug that has been subject to any offer for reduced prices by a manufacturer pursuant to 42 U.S.C.§ 256b and is purchased by a covered entity as defined in 42 U.S.C.§ 256b(a)(4)
(4) "Board" means the state board of pharmacy created pursuant to § 5-19.1-3.
(5) "Department" means the Rhode Island department of health.
(6) "Manufacturer" means a person or entity licensed to manufacture legend drugs pursuant to § 5-19.1-12.
(7) "Prescription drug" means a drug as defined in 21 U.S.C. § 321.
5-19.4-2. Identification of high cost prescription drugs.
(a)(1) The state board of pharmacy, in collaboration with the department, shall identify annually up to fifteen (15) prescription drugs on which the state spends significant healthcare dollars and for which the wholesale acquisition cost has increased by fifty percent (50%) or more over the past five (5) years or by fifteen percent (15%) or more over the past twelve (12) months, creating a substantial public interest in understanding the development of the drugs' pricing. The drugs identified shall represent different drug classes.
(2) The board shall provide to the office of the attorney general the list of prescription drugs developed pursuant to this section and the percentage of the wholesale acquisition cost increase for each drug and shall make the information available to the public on the board's website.
(b)(1) For each prescription drug identified pursuant to subsection (a) of this section, the office of the attorney general shall require the drug's manufacturer to provide a justification for the increase in the wholesale acquisition cost of the drug in a format that the attorney general determines to be understandable and appropriate. The manufacturer shall submit to the office of the attorney general all relevant information and supporting documentation necessary to justify the manufacturer's wholesale acquisition cost increase, which may include:
(i) All factors that have contributed to the wholesale acquisition cost increase;
(ii) The percentage of the total wholesale acquisition cost increase attributable to each factor; and
(iii) An explanation of the role of each factor in contributing to the wholesale acquisition cost increase.
(2) Nothing in this section shall be construed to restrict the legal ability of a prescription drug manufacturer to change prices to the extent permitted under federal law.
(c) The attorney general, in consultation with the department, shall provide a report to the general assembly on or before December 1 of each year based on the information received from manufacturers pursuant to this section. The attorney general shall also post the report on the office of the attorney general's website. LC003757 - Page 2 of 7
(d) Information provided to the office of the attorney general pursuant to this section is exempt from public inspection and copying and is not a public record pursuant to chapter 2 of title 38 ("access to public records"), and shall not be released in a manner that allows for the identification of an individual drug or manufacturer or that is likely to compromise the financial, competitive, or proprietary nature of the information.
5-19.4-3. Injunctive relief.
The attorney general may bring a civil action in the superior court for Providence county for injunctive relief, costs, and attorneys' fees, and to impose on a manufacturer that fails to provide the information required by § 5-19.4-3(b) a civil penalty of no more than ten thousand dollars ($10,000) per violation. Each unlawful failure to provide information shall constitute a separate violation.
5-19.4-4. Rulemaking.
(a) On or before January l, 2027, the insurance commissioner shall adopt rules and regulations to require all health insurers that offer health benefit plans to Rhode Island residents through HealthSource RI or any successor health benefit exchange to provide information to enrollees, potential enrollees, and healthcare providers about the exchange plans' prescription drug formularies.
(b) The rules shall ensure that:
(1) The formulary is posted online in a standard format established by the insurance commissioner;
(2) The formulary is updated frequently and is searchable by enrollees, potential enrollees, and healthcare providers; and
(3) The formulary includes information about the prescription drugs covered, applicable cost-sharing amounts, drug tiers, prior authorization, step therapy, and utilization management requirements.
5-19.4-5. Dispensing fees.
(a) The department shall use the same dispensing fee in its reimbursement formula for 340B prescription drugs as the department uses to pay for non-340B prescription drugs under the Medicaid program.
(b) Notwithstanding the provisions of subsection (a) of this section, the department is authorized to modify the dispensing fee or reimbursement formula provided to federally qualified health centers and Title X family planning clinics for dispensing 340B prescription drugs to Medicaid beneficiaries.
5-19.4-6. Drug reimbursement - Reporting. LC003757 - Page 3 of 7
(a) The department shall:
(1) Determine the formula used by other states' Medicaid programs to reimburse 340B entities, and covered entities that use 340B pricing for dispensing prescription drugs to Medicaid beneficiaries;
(2) Evaluate the advantages and disadvantages of using the same dispensing fee in its reimbursement formula for 340B prescription drugs as the department uses to pay for non-340B prescription drugs under the Medicaid program; and
(3) Identify the benefits, if any, of 340B drug pricing to consumers, other payers, and the overall healthcare system.
(b) On or before March 15, 2027, the department shall report to the house of representatives, the senate, and the governor's office regarding its findings and recommendations, including recommended modifications to Rhode Island's 340B reimbursement formula, if any, and the financial implications of implementing any recommended modifications.
5-19.4-7. Out-of-pocket prescription drug limits – Advisory commission.
(a) The Rhode Island department of health shall convene an advisory commission to develop options for all qualified health benefit plans to be offered on the Rhode Island health benefit exchange for the 2028 plan year, including:
(1) One or more plans with a higher out-of-pocket limit on prescription drug coverage than the limit established pursuant to current law and regulations; and
(2) Two (2) or more plans with an out-of-pocket limit at or below the limit established pursuant to current law and regulations.
(b) The advisory commission shall include at least the following members:
(1) A representative of the Rhode Island health benefits exchange, appointed by the governor;
(2) A representative of each of the commercial health insurers offering plans on the Rhode Island health benefit exchange, appointed by each insurer;
(3) The insurance commissioner, or designee;
(4) A representative of the exchange advisory board established pursuant to § 42-157-7, appointed by the governor;
(5) A representative of a Rhode Island AIDS services organization, appointed by the governor;
(6) The director of the department of administration, or designee;
(7) The director of the department of health, or designee;
(8) A consumer nominated by a Rhode Island AIDS services organization and appointed LC003757 - Page 4 of 7 by the governor;
(9) A representative of the American Cancer Society appointed by the governor; and
(10) A consumer nominated by the American Cancer Society and appointed by the governor.
(c)(1) The advisory commission shall meet at least six (6) times prior to the department submitting plan designs to the state board of pharmacy for approval.
(2) In developing the standard qualified health benefit plan designs for the 2028 plan year, the department shall present the recommendations of the advisory commission established pursuant to this section.
5-19.4-8. Reports.
(a) On or before February 15, 2027, the department shall provide to the governor, the house of representatives, and the senate:
(1) An overview of the cost-share increase trend for all qualified health benefit plans offered on the Rhode Island health benefit exchange for the 2019 through 2027 plan years that were subject to the out-of-pocket prescription drug limit established in state law or regulation;
(2) Detailed information regarding lower cost-sharing amounts for selected services that will be available in all qualified health benefit plans in the 2027 plan year due to the flexibility to increase the out-of-pocket prescription drug limits established pursuant to this chapter;
(3) A comparison of the bronze-level qualified health benefit plans offered in the 2027 plan year in which there will be flexibility in the out-of-pocket prescription drug limit established under state law and regulation;
(4) Information about the process engaged in by the advisory commission established in this chapter and the information considered to determine modifications to the cost-sharing amounts in all qualified health benefit plans for the 2027 plan year, including prior year utilization trends, feedback from consumers and health insurers, health benefit exchange outreach and education efforts, and relevant national studies;
(5) Cost-sharing information for standard qualified health benefit plans from states with federally-facilitated exchanges compared to those on the Rhode Island health benefit exchange; and
(6) An overview of the outreach and education plan for enrollees in all qualified health benefit plans offered on the Rhode Island health benefit exchange.
(b) On or before February l, 2028, the department shall report to the governor, the house of representatives, and the senate:
(1) Enrollment trends in all qualified health benefit plans offered on the Rhode Island LC003757 - Page 5 of 7 health benefit exchange; and
(2) Recommendations from the advisory commission established pursuant to § 5-19.4-7 regarding modification of out-of-pocket prescription drug cost limits.
SECTION 3. This act shall take effect upon passage.
(1) The costs of prescription drugs have been increasing with regularity;
(2) Containing healthcare costs requires containing prescription drug costs; and
(3) In order to contain prescription drug costs, it is essential to understand the drivers of those costs, as transparency is the first step toward cost containment.
SECTION 2. Title 5 of the General Laws entitled "BUSINESSES AND PROFESSIONS" is hereby amended by adding thereto the following chapter: CHAPTER 19.4 PHARMACEUTICAL COST TRANSPARENCY
5-19.4-1. Definitions.
As used in this chapter:
(1) "340B" means the federal drug pricing program established pursuant to 42 U.S.C.§ 256b.
(2) "340B entity" means an entity participating or authorized to participate in the federal 340B drug discount program, as described in 42 U.S.C.§ 256b, including its pharmacy, or any pharmacy contracted with the participating entity to dispense drugs purchased through the 340B drug discount program.
(3) "340B prescription drug" means a prescription drug that has been subject to any offer for reduced prices by a manufacturer pursuant to 42 U.S.C.§ 256b and is purchased by a covered entity as defined in 42 U.S.C.§ 256b(a)(4)
(4) "Board" means the state board of pharmacy created pursuant to § 5-19.1-3.
(5) "Department" means the Rhode Island department of health.
(6) "Manufacturer" means a person or entity licensed to manufacture legend drugs pursuant to § 5-19.1-12.
(7) "Prescription drug" means a drug as defined in 21 U.S.C. § 321.
5-19.4-2. Identification of high cost prescription drugs.
(a)(1) The state board of pharmacy, in collaboration with the department, shall identify annually up to fifteen (15) prescription drugs on which the state spends significant healthcare dollars and for which the wholesale acquisition cost has increased by fifty percent (50%) or more over the past five (5) years or by fifteen percent (15%) or more over the past twelve (12) months, creating a substantial public interest in understanding the development of the drugs' pricing. The drugs identified shall represent different drug classes.
(2) The board shall provide to the office of the attorney general the list of prescription drugs developed pursuant to this section and the percentage of the wholesale acquisition cost increase for each drug and shall make the information available to the public on the board's website.
(b)(1) For each prescription drug identified pursuant to subsection (a) of this section, the office of the attorney general shall require the drug's manufacturer to provide a justification for the increase in the wholesale acquisition cost of the drug in a format that the attorney general determines to be understandable and appropriate. The manufacturer shall submit to the office of the attorney general all relevant information and supporting documentation necessary to justify the manufacturer's wholesale acquisition cost increase, which may include:
(i) All factors that have contributed to the wholesale acquisition cost increase;
(ii) The percentage of the total wholesale acquisition cost increase attributable to each factor; and
(iii) An explanation of the role of each factor in contributing to the wholesale acquisition cost increase.
(2) Nothing in this section shall be construed to restrict the legal ability of a prescription drug manufacturer to change prices to the extent permitted under federal law.
(c) The attorney general, in consultation with the department, shall provide a report to the general assembly on or before December 1 of each year based on the information received from manufacturers pursuant to this section. The attorney general shall also post the report on the office of the attorney general's website. LC003757 - Page 2 of 7
(d) Information provided to the office of the attorney general pursuant to this section is exempt from public inspection and copying and is not a public record pursuant to chapter 2 of title 38 ("access to public records"), and shall not be released in a manner that allows for the identification of an individual drug or manufacturer or that is likely to compromise the financial, competitive, or proprietary nature of the information.
5-19.4-3. Injunctive relief.
The attorney general may bring a civil action in the superior court for Providence county for injunctive relief, costs, and attorneys' fees, and to impose on a manufacturer that fails to provide the information required by § 5-19.4-3(b) a civil penalty of no more than ten thousand dollars ($10,000) per violation. Each unlawful failure to provide information shall constitute a separate violation.
5-19.4-4. Rulemaking.
(a) On or before January l, 2027, the insurance commissioner shall adopt rules and regulations to require all health insurers that offer health benefit plans to Rhode Island residents through HealthSource RI or any successor health benefit exchange to provide information to enrollees, potential enrollees, and healthcare providers about the exchange plans' prescription drug formularies.
(b) The rules shall ensure that:
(1) The formulary is posted online in a standard format established by the insurance commissioner;
(2) The formulary is updated frequently and is searchable by enrollees, potential enrollees, and healthcare providers; and
(3) The formulary includes information about the prescription drugs covered, applicable cost-sharing amounts, drug tiers, prior authorization, step therapy, and utilization management requirements.
5-19.4-5. Dispensing fees.
(a) The department shall use the same dispensing fee in its reimbursement formula for 340B prescription drugs as the department uses to pay for non-340B prescription drugs under the Medicaid program.
(b) Notwithstanding the provisions of subsection (a) of this section, the department is authorized to modify the dispensing fee or reimbursement formula provided to federally qualified health centers and Title X family planning clinics for dispensing 340B prescription drugs to Medicaid beneficiaries.
5-19.4-6. Drug reimbursement - Reporting. LC003757 - Page 3 of 7
(a) The department shall:
(1) Determine the formula used by other states' Medicaid programs to reimburse 340B entities, and covered entities that use 340B pricing for dispensing prescription drugs to Medicaid beneficiaries;
(2) Evaluate the advantages and disadvantages of using the same dispensing fee in its reimbursement formula for 340B prescription drugs as the department uses to pay for non-340B prescription drugs under the Medicaid program; and
(3) Identify the benefits, if any, of 340B drug pricing to consumers, other payers, and the overall healthcare system.
(b) On or before March 15, 2027, the department shall report to the house of representatives, the senate, and the governor's office regarding its findings and recommendations, including recommended modifications to Rhode Island's 340B reimbursement formula, if any, and the financial implications of implementing any recommended modifications.
5-19.4-7. Out-of-pocket prescription drug limits – Advisory commission.
(a) The Rhode Island department of health shall convene an advisory commission to develop options for all qualified health benefit plans to be offered on the Rhode Island health benefit exchange for the 2028 plan year, including:
(1) One or more plans with a higher out-of-pocket limit on prescription drug coverage than the limit established pursuant to current law and regulations; and
(2) Two (2) or more plans with an out-of-pocket limit at or below the limit established pursuant to current law and regulations.
(b) The advisory commission shall include at least the following members:
(1) A representative of the Rhode Island health benefits exchange, appointed by the governor;
(2) A representative of each of the commercial health insurers offering plans on the Rhode Island health benefit exchange, appointed by each insurer;
(3) The insurance commissioner, or designee;
(4) A representative of the exchange advisory board established pursuant to § 42-157-7, appointed by the governor;
(5) A representative of a Rhode Island AIDS services organization, appointed by the governor;
(6) The director of the department of administration, or designee;
(7) The director of the department of health, or designee;
(8) A consumer nominated by a Rhode Island AIDS services organization and appointed LC003757 - Page 4 of 7 by the governor;
(9) A representative of the American Cancer Society appointed by the governor; and
(10) A consumer nominated by the American Cancer Society and appointed by the governor.
(c)(1) The advisory commission shall meet at least six (6) times prior to the department submitting plan designs to the state board of pharmacy for approval.
(2) In developing the standard qualified health benefit plan designs for the 2028 plan year, the department shall present the recommendations of the advisory commission established pursuant to this section.
5-19.4-8. Reports.
(a) On or before February 15, 2027, the department shall provide to the governor, the house of representatives, and the senate:
(1) An overview of the cost-share increase trend for all qualified health benefit plans offered on the Rhode Island health benefit exchange for the 2019 through 2027 plan years that were subject to the out-of-pocket prescription drug limit established in state law or regulation;
(2) Detailed information regarding lower cost-sharing amounts for selected services that will be available in all qualified health benefit plans in the 2027 plan year due to the flexibility to increase the out-of-pocket prescription drug limits established pursuant to this chapter;
(3) A comparison of the bronze-level qualified health benefit plans offered in the 2027 plan year in which there will be flexibility in the out-of-pocket prescription drug limit established under state law and regulation;
(4) Information about the process engaged in by the advisory commission established in this chapter and the information considered to determine modifications to the cost-sharing amounts in all qualified health benefit plans for the 2027 plan year, including prior year utilization trends, feedback from consumers and health insurers, health benefit exchange outreach and education efforts, and relevant national studies;
(5) Cost-sharing information for standard qualified health benefit plans from states with federally-facilitated exchanges compared to those on the Rhode Island health benefit exchange; and
(6) An overview of the outreach and education plan for enrollees in all qualified health benefit plans offered on the Rhode Island health benefit exchange.
(b) On or before February l, 2028, the department shall report to the governor, the house of representatives, and the senate:
(1) Enrollment trends in all qualified health benefit plans offered on the Rhode Island LC003757 - Page 5 of 7 health benefit exchange; and
(2) Recommendations from the advisory commission established pursuant to § 5-19.4-7 regarding modification of out-of-pocket prescription drug cost limits.
SECTION 3. This act shall take effect upon passage.