Bill Sponsors
Britto, McKenney, Bissaillon, DiPalma, and Sosnowski
Committee
Senate Health & Human Services
Summary
Select
This bill amends the state's deceptive trade practices laws to prohibit Pharmacy Benefits Managers (PBMs) from engaging in specific activities. It bans PBMs from using "spread pricing" (charging a health plan more than they pay the pharmacy), steering patients to pharmacies they own, requiring pharmacies to buy from specific wholesalers, and exploiting or selling patient prescription data for profit. It also prevents PBMs from imposing strict early-refill limits on maintenance medications, delaying previously approved step therapy, and operating in Rhode Island without proper state registration and licensing.
Sponsor
Analysis
Pros for Progressives
- Protects patient privacy by banning PBMs from data mining or selling sensitive prescription drug information for marketing and profit.
- Curbs corporate greed and systemic exploitation by prohibiting "spread pricing" and drug repackaging markups, preventing PBMs from improperly extracting extra profits from the healthcare system.
- Supports community welfare and fair competition by preventing large PBMs from steering patients exclusively to pharmacies they own, which helps sustain independent and local pharmacies.
Cons for Progressives
- Expressly excludes important public healthcare populations, such as those on Medicare Part D, TRICARE, and the VA program, leaving these groups without the bill's protections.
- Allows for more restrictive early refill policies specifically for Medicaid enrollees, which could disproportionately burden low-income individuals who rely on that program.
- Focuses on regulating intermediary market behaviors rather than addressing the root causes of high prescription drug prices or establishing a universal, publicly funded healthcare system.
Pros for Conservatives
- Promotes free-market competition by preventing PBM monopolies from unfairly steering patients to their own pharmacies and squeezing out independent businesses.
- Increases transparency in private contracts by banning deceptive practices like "spread pricing" and "effective rate pricing" that distort the true cost of goods.
- Strengthens the rule of law by requiring PBMs to be properly registered and licensed to operate in the state, establishing clear penalties for non-compliance.
Cons for Conservatives
- Imposes heavy government regulations on private businesses, restricting how Pharmacy Benefits Managers can structure their pricing, contracts, and internal operations.
- Restricts corporate freedom by prohibiting PBMs from utilizing their own gathered data for targeted marketing, referrals, or generating additional revenue streams.
- Limits the ability of PBMs to implement cost-saving measures, such as strict early-refill restrictions or preferred pharmacy networks, which could ultimately drive up insurance premiums.
Constitutional Concerns
None Likely. The bill regulates commercial transactions, deceptive trade practices, and privacy concerning protected health information. It does not appear to violate free speech, as commercial speech (like patient steering or marketing) can be regulated to prevent deception and protect consumer privacy. It also leaves standard HIPAA operations intact and does not trigger due process or search and seizure concerns.
Impact Overview
Groups Affected
- Pharmacy benefits managers
- Pharmacists and pharmacies
- Health insurance enrollees
- Healthcare providers
- Health insurance companies
Towns Affected
All
Cost to Taxpayers
None
Revenue Generated
Amount unknown
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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Enforcement Provisions
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Environmental Impact
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Privacy Impact
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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. Chapter 6-13.1 of the General Laws entitled "Deceptive Trade Practices" is hereby amended by adding thereto the following section:
6-13.1-31. Prohibited acts - Pharmacy benefits managers.
(a) For the purposes of this section:
(1) “Effective rate pricing” means any payment reduction for pharmacist or pharmacy services by a pharmacy benefits manager through reconciliation processes or aggregate payment reductions that are not expressly disclosed and agreed to between the pharmacy benefits manager and pharmacist or pharmacy and that result in reimbursement below the contracted rate.
(2) “Enrollee” means an individual residing in this state for whom an insurer administers, provides, pays for, insures, or covers healthcare services; provided, however, that for purposes of this section, the term shall exclude individuals enrolled in Medicare Part D, the federal employee health benefit program, TRICARE, or the VA program.
(3) “Inducement” means a financial incentive including, but not limited to, variations in premiums, deductibles, copayments, or coinsurance, offered to influence the selection, recommendation, or use of health care items or services.
(4) “Maximum allowable cost price” or “MAC price” means the maximum amount that a pharmacy benefits manager will reimburse toward the cost of a drug.
(5) “Patient steering” means any communication, verbal or written, by a pharmacy benefits manager to a patient to directly or indirectly influence the patient’s choice of pharmacy or encourage use of an alternate pharmacy that is a preferred pharmacy. This includes any requirement that a consumer utilize a particular pharmacy.
(6) “Pharmacy benefits manager” or “PBM” means an entity doing business in this state that contracts to administer or manage prescription drug benefits on behalf of any carrier that provides prescription drug benefits to residents of this state.
(7) “Spread pricing” means the model of prescription drug pricing in which a pharmacy benefits manager charges a health benefit plan a contracted price for prescription drugs that differs from the amount the pharmacy benefits manager directly or indirectly pays the pharmacist or pharmacy for pharmacy goods or services.
(b) Violations. It shall be an unfair and deceptive trade practice and a method of unfair competition in violation of this chapter for any pharmacy benefits manager to:
(1) Conduct or participate in spread pricing or effective rate pricing;
(2) Directly or indirectly engage in patient steering to a pharmacy in which the pharmacy benefits manager, or any of its affiliated entities, maintains an ownership interest or control;
(3) Penalize an enrollee or offer an inducement to an enrollee for the purpose of encouraging use of a specific retail, mail-order, or other pharmacy in which a pharmacy benefits manager holds an ownership or controlling interest, or in which the pharmacy holds an ownership or controlling interest in the pharmacy benefits manager;
(4) Require a pharmacist or pharmacy to purchase drugs from a particular wholesaler;
(5) Deflate or fail to adjust the MAC price set by the pharmacy benefits manager where the wholesaler offering the price upon which the MAC price is based chooses not to sell the drug to the pharmacist or pharmacy, rendering the MAC price unavailable to the pharmacist or pharmacy;
(6) Fail to honor maximum allowable cost requirements in accordance with §§ 27-18-33.2, 27-19-26.2, 27-20-23.2, 27-20.1-15.1, or 27-41-38.2;
(7) Impose an early-refill restriction on a maintenance medication with a prescription of at least a thirty (30) day supply that requires fewer than seven (7) days of medication remaining before the prescription may be refilled; provided, however, that pursuant to regulation, guidance or at the direction of the executive office of health and human services, a pharmacy benefits manager may apply a more restrictive early refill policy for Medicaid enrollees without violating the provisions of this subsection. This provision shall not apply to controlled substances in schedules II to V;
(8) Fail to honor or otherwise delay the acceptance of previously completed step therapy documentation where the prescribed drug is on the health plan’s prescription drug formulary, the enrollee has tried the step therapy required while enrolled in their current health plan or a health LC006236 - Page 2 of 5 plan in which they were previously enrolled, and the enrollee’s provider has submitted justification and supporting clinical documentation that such prescription drug was discontinued due to lack of efficacy or effectiveness, diminished effect, or an adverse effect or event;
(9) Exploit prescription drug information obtained from enrollees for monetary gain or economic power over pharmacists or pharmacies including, but not limited to, using data mining or other similar methods to gather patient information generated or obtained throughout the prescription filling process at any pharmacy for the purpose of directing business toward a pharmacy commonly owned, controlled, or exclusively contracted with the PBM;
(10) Sell, exchange, or use in any manner prescription drug information regarding an enrollee obtained from an enrollee’s use of a prescription drug for purposes of marketing solicitation, patient steering, generating referrals, or any other practice or act that provides the pharmacy benefits manager, or any of its affiliates or subsidiaries, economic power or control over pharmacists or pharmacies, or that interferes in the enrollee’s free choice of pharmacy;
(11) Engage in drug repackaging for the purpose of extracting a price markup. A pharmacy benefits manager that owns or controls a mail-order pharmacy shall not allow the mail-order pharmacy to repackage drugs for the purpose of selling the repackaged items at prices higher than the reimbursement price of the drug in its original manufacturer packaging, unless the enrollee to whom the repackaged drugs are dispensed is informed in writing that the drug has been repackaged and is being sold at a higher price; or
(12) Operate in Rhode Island without being registered and in good standing with the secretary of state to do business in the state or without being licensed and in good standing with the department of business regulation. Each day that a pharmacy benefits manager operates without such registration or licensure and good standing shall constitute a separate violation.
(c) Construction.
(1) Except where expressly provided, for purposes of this section, a violation shall be deemed to occur each time a prohibited act is committed for each individual consumer transaction.
(2) Nothing in this section shall be construed to prohibit truthful, non-misleading communications regarding cost or interfere with, or violate, a consumer’s right to know where the consumer may obtain the lowest cost drugs, whether a consumer is utilizing insurance or other third-party reimbursement or not.
(3) Nothing in this section shall be construed to interfere with the requirement that consumers receive notice of changes to pharmacy networks, such as the inclusion of new pharmacies or removal of existing pharmacies from networks.
(4) Nothing in this section shall prohibit the authorized use of protected health information LC006236 - Page 3 of 5 for health care operations under the Health Insurance Portability and Accountability Act of 1996 (Pub. L. No. 104-191).
(5) Nothing in this section shall be construed or applied in a manner that conflicts with applicable federal law or regulation.
(6) Nothing in this section shall be construed to limit or preclude the authority of the attorney general to pursue any other remedy, penalty, or cause of action available under common law or statute including, but not limited to, actions for injunctive relief, restitution, civil penalties, or other equitable or legal relief. Nor shall this section be construed to limit the application of chapter 13.1 of title 6 ("deceptive trade practices") or any other provision of the general laws to the conduct described herein. This amendment shall be interpreted to clarify existing law only.
SECTION 2. This act shall take effect upon passage.
6-13.1-31. Prohibited acts - Pharmacy benefits managers.
(a) For the purposes of this section:
(1) “Effective rate pricing” means any payment reduction for pharmacist or pharmacy services by a pharmacy benefits manager through reconciliation processes or aggregate payment reductions that are not expressly disclosed and agreed to between the pharmacy benefits manager and pharmacist or pharmacy and that result in reimbursement below the contracted rate.
(2) “Enrollee” means an individual residing in this state for whom an insurer administers, provides, pays for, insures, or covers healthcare services; provided, however, that for purposes of this section, the term shall exclude individuals enrolled in Medicare Part D, the federal employee health benefit program, TRICARE, or the VA program.
(3) “Inducement” means a financial incentive including, but not limited to, variations in premiums, deductibles, copayments, or coinsurance, offered to influence the selection, recommendation, or use of health care items or services.
(4) “Maximum allowable cost price” or “MAC price” means the maximum amount that a pharmacy benefits manager will reimburse toward the cost of a drug.
(5) “Patient steering” means any communication, verbal or written, by a pharmacy benefits manager to a patient to directly or indirectly influence the patient’s choice of pharmacy or encourage use of an alternate pharmacy that is a preferred pharmacy. This includes any requirement that a consumer utilize a particular pharmacy.
(6) “Pharmacy benefits manager” or “PBM” means an entity doing business in this state that contracts to administer or manage prescription drug benefits on behalf of any carrier that provides prescription drug benefits to residents of this state.
(7) “Spread pricing” means the model of prescription drug pricing in which a pharmacy benefits manager charges a health benefit plan a contracted price for prescription drugs that differs from the amount the pharmacy benefits manager directly or indirectly pays the pharmacist or pharmacy for pharmacy goods or services.
(b) Violations. It shall be an unfair and deceptive trade practice and a method of unfair competition in violation of this chapter for any pharmacy benefits manager to:
(1) Conduct or participate in spread pricing or effective rate pricing;
(2) Directly or indirectly engage in patient steering to a pharmacy in which the pharmacy benefits manager, or any of its affiliated entities, maintains an ownership interest or control;
(3) Penalize an enrollee or offer an inducement to an enrollee for the purpose of encouraging use of a specific retail, mail-order, or other pharmacy in which a pharmacy benefits manager holds an ownership or controlling interest, or in which the pharmacy holds an ownership or controlling interest in the pharmacy benefits manager;
(4) Require a pharmacist or pharmacy to purchase drugs from a particular wholesaler;
(5) Deflate or fail to adjust the MAC price set by the pharmacy benefits manager where the wholesaler offering the price upon which the MAC price is based chooses not to sell the drug to the pharmacist or pharmacy, rendering the MAC price unavailable to the pharmacist or pharmacy;
(6) Fail to honor maximum allowable cost requirements in accordance with §§ 27-18-33.2, 27-19-26.2, 27-20-23.2, 27-20.1-15.1, or 27-41-38.2;
(7) Impose an early-refill restriction on a maintenance medication with a prescription of at least a thirty (30) day supply that requires fewer than seven (7) days of medication remaining before the prescription may be refilled; provided, however, that pursuant to regulation, guidance or at the direction of the executive office of health and human services, a pharmacy benefits manager may apply a more restrictive early refill policy for Medicaid enrollees without violating the provisions of this subsection. This provision shall not apply to controlled substances in schedules II to V;
(8) Fail to honor or otherwise delay the acceptance of previously completed step therapy documentation where the prescribed drug is on the health plan’s prescription drug formulary, the enrollee has tried the step therapy required while enrolled in their current health plan or a health LC006236 - Page 2 of 5 plan in which they were previously enrolled, and the enrollee’s provider has submitted justification and supporting clinical documentation that such prescription drug was discontinued due to lack of efficacy or effectiveness, diminished effect, or an adverse effect or event;
(9) Exploit prescription drug information obtained from enrollees for monetary gain or economic power over pharmacists or pharmacies including, but not limited to, using data mining or other similar methods to gather patient information generated or obtained throughout the prescription filling process at any pharmacy for the purpose of directing business toward a pharmacy commonly owned, controlled, or exclusively contracted with the PBM;
(10) Sell, exchange, or use in any manner prescription drug information regarding an enrollee obtained from an enrollee’s use of a prescription drug for purposes of marketing solicitation, patient steering, generating referrals, or any other practice or act that provides the pharmacy benefits manager, or any of its affiliates or subsidiaries, economic power or control over pharmacists or pharmacies, or that interferes in the enrollee’s free choice of pharmacy;
(11) Engage in drug repackaging for the purpose of extracting a price markup. A pharmacy benefits manager that owns or controls a mail-order pharmacy shall not allow the mail-order pharmacy to repackage drugs for the purpose of selling the repackaged items at prices higher than the reimbursement price of the drug in its original manufacturer packaging, unless the enrollee to whom the repackaged drugs are dispensed is informed in writing that the drug has been repackaged and is being sold at a higher price; or
(12) Operate in Rhode Island without being registered and in good standing with the secretary of state to do business in the state or without being licensed and in good standing with the department of business regulation. Each day that a pharmacy benefits manager operates without such registration or licensure and good standing shall constitute a separate violation.
(c) Construction.
(1) Except where expressly provided, for purposes of this section, a violation shall be deemed to occur each time a prohibited act is committed for each individual consumer transaction.
(2) Nothing in this section shall be construed to prohibit truthful, non-misleading communications regarding cost or interfere with, or violate, a consumer’s right to know where the consumer may obtain the lowest cost drugs, whether a consumer is utilizing insurance or other third-party reimbursement or not.
(3) Nothing in this section shall be construed to interfere with the requirement that consumers receive notice of changes to pharmacy networks, such as the inclusion of new pharmacies or removal of existing pharmacies from networks.
(4) Nothing in this section shall prohibit the authorized use of protected health information LC006236 - Page 3 of 5 for health care operations under the Health Insurance Portability and Accountability Act of 1996 (Pub. L. No. 104-191).
(5) Nothing in this section shall be construed or applied in a manner that conflicts with applicable federal law or regulation.
(6) Nothing in this section shall be construed to limit or preclude the authority of the attorney general to pursue any other remedy, penalty, or cause of action available under common law or statute including, but not limited to, actions for injunctive relief, restitution, civil penalties, or other equitable or legal relief. Nor shall this section be construed to limit the application of chapter 13.1 of title 6 ("deceptive trade practices") or any other provision of the general laws to the conduct described herein. This amendment shall be interpreted to clarify existing law only.
SECTION 2. This act shall take effect upon passage.