Bill Sponsors
DiPalma, McKenney, Tikoian, Gallo, Ciccone, LaMountain, and Felag
Committee
Senate Health & Human Services
Summary
Select
This bill creates the "Rhode Island Prescription Drug Purchasing Pool Act." It allows the state government, local municipalities, school districts, self-insured private employers, and health insurance carriers to group together to purchase prescription drugs. The Director of Administration will manage this pool, negotiate contracts with pharmacy benefit managers, and potentially join multi-state purchasing pools to secure drug discounts. Participants still pay for their own claims, as it is not a shared risk pool. It also allows coordination with the state's existing prescription drug discount program.
Sponsor
Analysis
Pros for Progressives
- Leverages collective bargaining power to potentially lower healthcare costs for public servants and workers, promoting community welfare.
- Coordinates with the state's prescription drug discount program, which could lower out-of-pocket medication costs for vulnerable and low-income populations.
- Allows municipalities and school districts to pool resources, potentially freeing up local government budgets to fund other generous public services like education and social safety nets.
Cons for Progressives
- Explicitly states the pool is not a shared risk pool, missing an opportunity to create a more equitable, socialized healthcare structure where costs are distributed among all participants.
- Includes private health insurance carriers and self-insured private employers, which could be seen as using state resources to subsidize corporate entities rather than focusing solely on public welfare.
- Relies on contracting with pharmacy benefit managers (PBMs), an industry often criticized by progressives for prioritizing corporate profits over patient access and systemic reform.
Pros for Conservatives
- Maintains individual financial responsibility by explicitly stating it is not a risk pool and participants must pay the full cost of their own claims, avoiding socialized cost-sharing.
- Allows qualified private employers to voluntarily opt into the pool, giving businesses more options to manage their healthcare expenses without imposing new government mandates.
- Promotes fiscal efficiency in government by allowing municipalities and school districts to negotiate better rates, potentially reducing the tax burden on citizens.
Cons for Conservatives
- Expands the role and administrative size of the state government by creating a new centralized purchasing program managed by the Director of Administration.
- Increases government involvement in the free market for prescription drugs, which conservatives may view as a step toward socialized medicine or price controls.
- Grants the state director broad authority to dictate eligibility, enrollment, and withdrawal rules, potentially tying the hands of private businesses that choose to participate.
Constitutional Concerns
None Likely
Impact Overview
Groups Affected
- State and municipal employees
- Retirees
- Self-insured private employers
- Health insurance carriers
- Dependents of participating employees
Towns Affected
All
Cost to Taxpayers
Amount unknown
Revenue Generated
None
BillBuddy Impact Ratings
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Freedom Impact
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Public Services
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Regulatory
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Clarity of Bill Language
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Bill Status
Current Status
Held
Comm Passed
Floor Passed
Law
History
• 05/05/2026 Introduced, referred to Senate Health and Human Services
Bill Text
SECTION 1. Title 40 of the General Laws entitled "HUMAN SERVICES" is hereby amended by adding thereto the following chapter: CHAPTER 23 THE RHODE ISLAND PRESCRIPTION DRUG PURCHASING POOL ACT
40-23-1. Short title.
This chapter shall be known and may be cited as the "Rhode Island Prescription Drug Purchasing Pool Act."
40-23-2. Definitions.
As used in this chapter:
(1) "Department" means the department of administration.
(2) "Director" means the director of administration.
(3) "Health insurance carrier" means an entity subject to the insurance laws and regulations of this state or subject to the jurisdiction of the office of the health insurance commissioner that offers health insurance, health benefits, or contracts for healthcare services, including prescription drug coverage, to large groups, small groups, or individuals on or outside the Rhode Island health benefit exchange pursuant to § 42-157-1.
(4) "Nonstate public employer" means a municipality, fire district, or other political subdivision of the state including, but not limited to, a school district, public institution of higher education or quasi-public agency or authority within the state.
(5) "Participants" means participants in the Rhode Island prescription drug purchasing pool.
(6) "Qualified private employer" means a self-insured private employer doing business in this state.
40-23-3. Establishment.
(a) There is hereby established the Rhode Island prescription drug purchasing pool. The director shall offer nonstate public employers, qualified private employers, and health insurance carriers the option to purchase prescription drugs for their employees, employees' dependents and retirees under the purchasing authority of the state, subject to the provisions of § 40-23-5(b).
(b) The director shall promulgate rules and regulations to establish procedures to determine:
(1) Eligibility requirements for participation;
(2) Enrollment procedures;
(3) Duration of participation;
(4) Requirements regarding payment; and
(5) Procedures for withdrawal from and termination of participation by nonstate public employers, qualified private employers, and health insurance carriers.
(c) The director is authorized to:
(1) Promulgate rules to implement the provisions of this section in accordance with chapter 35 of title 42 ("administrative procedures");
(2) Reassess and renegotiate contractual arrangements for pharmacy benefit management and related services as necessary to maximize discounts and value delivered to participants while minimizing administrative expenses; and
(3) Consider and enter into multistate prescription drug purchasing pool arrangements as appropriate to maximize discounts and value delivered to participants.
40-23-4. Stop-loss coverage.
(a) The director may obtain stop-loss coverage issued pursuant to chapter 8.2 of title 27 (“stop-loss insurance”); provided that, such coverage otherwise complies with the provisions of this chapter.
(b) The director may offer participants the option to purchase stop-loss coverage from an insurer at a rate negotiated by the director.
40-23-5. Joint and collective participation.
(a) Two (2) or more nonstate public employers or qualified private employers may join LC006239 - Page 2 of 4 together for the purpose of purchasing prescription drugs for their employees, employees' dependents and retirees. Such arrangement shall not constitute a multiple employer welfare arrangement, as defined in the Employee Retirement Income Security Act of 1974 (29 U.S.C. § 1002), as amended from time to time.
(b) The director may offer nonstate public employers, qualified private employers, and licensed insurance carriers the option to purchase prescription drugs through the plan set forth in collective bargaining agreement executed between the State of Rhode Island and authorized representatives of the unions representing state employees if the director determines that allowing such nonstate public employers, qualified private employers, or licensed insurance carrier such option is consistent with the collective bargaining agreement.
(1) Such determination shall not be required if the director establishes a separate prescription drug purchasing plan or plans for nonstate public employers, qualified private employers, and licensed insurance carriers.
40-23-6. Construction.
The Rhode Island prescription drug purchasing pool does not constitute a risk pool, and all participants shall pay the full cost of their own claims and prescription drugs.
40-23-7. Coordination with prescription drug discount program.
(a) The director may coordinate the Rhode Island prescription drug purchasing pool with the state's prescription drug discount program set forth in § 42-66.2.1-2 including, but not limited to, purchasing prescription drugs for the prescription drug discount program through the Rhode Island prescription drug purchasing pool, and offering discounts, rebates, and prices secured through the Rhode Island prescription drug purchasing pool to participants in the state's prescription drug discount program.
(b) In pursuing such coordination, the department of human services shall collaborate with the director of the department of administration to ensure the state's prescription drug discount program is being used in a manner that maximizes enrollment and minimizes prices paid by enrollees for prescription drugs.
SECTION 2. This act shall take effect upon passage.
40-23-1. Short title.
This chapter shall be known and may be cited as the "Rhode Island Prescription Drug Purchasing Pool Act."
40-23-2. Definitions.
As used in this chapter:
(1) "Department" means the department of administration.
(2) "Director" means the director of administration.
(3) "Health insurance carrier" means an entity subject to the insurance laws and regulations of this state or subject to the jurisdiction of the office of the health insurance commissioner that offers health insurance, health benefits, or contracts for healthcare services, including prescription drug coverage, to large groups, small groups, or individuals on or outside the Rhode Island health benefit exchange pursuant to § 42-157-1.
(4) "Nonstate public employer" means a municipality, fire district, or other political subdivision of the state including, but not limited to, a school district, public institution of higher education or quasi-public agency or authority within the state.
(5) "Participants" means participants in the Rhode Island prescription drug purchasing pool.
(6) "Qualified private employer" means a self-insured private employer doing business in this state.
40-23-3. Establishment.
(a) There is hereby established the Rhode Island prescription drug purchasing pool. The director shall offer nonstate public employers, qualified private employers, and health insurance carriers the option to purchase prescription drugs for their employees, employees' dependents and retirees under the purchasing authority of the state, subject to the provisions of § 40-23-5(b).
(b) The director shall promulgate rules and regulations to establish procedures to determine:
(1) Eligibility requirements for participation;
(2) Enrollment procedures;
(3) Duration of participation;
(4) Requirements regarding payment; and
(5) Procedures for withdrawal from and termination of participation by nonstate public employers, qualified private employers, and health insurance carriers.
(c) The director is authorized to:
(1) Promulgate rules to implement the provisions of this section in accordance with chapter 35 of title 42 ("administrative procedures");
(2) Reassess and renegotiate contractual arrangements for pharmacy benefit management and related services as necessary to maximize discounts and value delivered to participants while minimizing administrative expenses; and
(3) Consider and enter into multistate prescription drug purchasing pool arrangements as appropriate to maximize discounts and value delivered to participants.
40-23-4. Stop-loss coverage.
(a) The director may obtain stop-loss coverage issued pursuant to chapter 8.2 of title 27 (“stop-loss insurance”); provided that, such coverage otherwise complies with the provisions of this chapter.
(b) The director may offer participants the option to purchase stop-loss coverage from an insurer at a rate negotiated by the director.
40-23-5. Joint and collective participation.
(a) Two (2) or more nonstate public employers or qualified private employers may join LC006239 - Page 2 of 4 together for the purpose of purchasing prescription drugs for their employees, employees' dependents and retirees. Such arrangement shall not constitute a multiple employer welfare arrangement, as defined in the Employee Retirement Income Security Act of 1974 (29 U.S.C. § 1002), as amended from time to time.
(b) The director may offer nonstate public employers, qualified private employers, and licensed insurance carriers the option to purchase prescription drugs through the plan set forth in collective bargaining agreement executed between the State of Rhode Island and authorized representatives of the unions representing state employees if the director determines that allowing such nonstate public employers, qualified private employers, or licensed insurance carrier such option is consistent with the collective bargaining agreement.
(1) Such determination shall not be required if the director establishes a separate prescription drug purchasing plan or plans for nonstate public employers, qualified private employers, and licensed insurance carriers.
40-23-6. Construction.
The Rhode Island prescription drug purchasing pool does not constitute a risk pool, and all participants shall pay the full cost of their own claims and prescription drugs.
40-23-7. Coordination with prescription drug discount program.
(a) The director may coordinate the Rhode Island prescription drug purchasing pool with the state's prescription drug discount program set forth in § 42-66.2.1-2 including, but not limited to, purchasing prescription drugs for the prescription drug discount program through the Rhode Island prescription drug purchasing pool, and offering discounts, rebates, and prices secured through the Rhode Island prescription drug purchasing pool to participants in the state's prescription drug discount program.
(b) In pursuing such coordination, the department of human services shall collaborate with the director of the department of administration to ensure the state's prescription drug discount program is being used in a manner that maximizes enrollment and minimizes prices paid by enrollees for prescription drugs.
SECTION 2. This act shall take effect upon passage.