2025 -- H 5116

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LC000094

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2025

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A N   A C T

RELATING TO BUSINESSES AND PROFESSIONS -- PHARMACEUTICAL COST

TRANSPARENCY

     Introduced By: Representatives J. Lombardi, Hull, Potter, Stewart, Voas, and Felix

     Date Introduced: January 22, 2025

     Referred To: House Health & Human Services

     It is enacted by the General Assembly as follows:

     SECTION 1. The general assembly hereby finds and declares as follows:

     (1) The costs of prescription drugs have been increasing with regularity;

     (2) Containing health care 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 19.3

PHARMACEUTICAL COST TRANSPARENCY

     5-19.3-1. Definitions.

     As used in this chapter:

     (1) "340B" means the federal drug pricing program established pursuant to 42 U.S.C.§

256b.

     (2) "340B 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)

     (3) "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.

     (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.

     5-19.3-2. 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 health care

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.

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     (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.

     5-19.3-3. 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 § 5-19.3-3(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.

     5-19.3-4. Rulemaking.

     (a) On or before January l, 2026, 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 health care 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 health care 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.

     5-19.3-5. 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.

     5-19.3-6. Drug reimbursement - Reporting.

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     (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 health care system.

     (b) On or before March 15, 2026, 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.

     5-19.3-7. 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 2027 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

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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 2027 plan year,

the department shall present the recommendations of the advisory commission established pursuant

to this section.

     5-19.3-8. Reports.

     (a) On or before February 15, 2026, 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 2026 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 2026 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 2026 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 2026 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, 2027, 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

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health benefit exchange; and

     (2) Recommendations from the advisory commission established pursuant to § 5-19.3-8

regarding modification of out-of-pocket prescription drug cost limits.

     SECTION 3. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO BUSINESSES AND PROFESSIONS -- PHARMACEUTICAL COST

TRANSPARENCY

***

     This act would direct the state board of pharmacy, in collaboration with the department of

health, to annually identify up to fifteen (15) prescription drugs on which the state spends

significant health care dollars due to increases in costs. This list would be provided to the attorney

general's office, and the attorney general's office would require the drug's manufacturers to submit

relevant information and documentation to justify these cost increases. The act would also direct

the department of health to use the same dispensing fee in its reimbursement formula for 340B

prescription drugs as it uses to pay for non-340B prescription drugs under the Medicaid program,

and to provide information to the general assembly and the governor about these programs. The act

would also establish an advisory commission on out-of-pocket prescription drug costs who would

study these costs and make reports and recommendations to the governor and the general assembly.

     This act would take effect upon passage.

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