Provides certain controls over prescription drug costs by imposing transparency, oversight and accountability requirements on commercial insurers and their pharmacy benefit managers.
Impact
The bill will significantly alter the regulatory landscape for pharmacy benefit managers in Rhode Island. By imposing clearer guidelines and requirements for reporting, PBMs will be compelled to operate under increased scrutiny, which supporters argue will lead to more competitive drug pricing and, ultimately, reduced costs for consumers. Annual reports required from PBMs will provide insights into the financial arrangements with insurers, fostering a more open environment in the healthcare sector.
Summary
S0221 is a legislative act aimed at addressing the rising costs of prescription drugs in Rhode Island by enforcing greater transparency and accountability on pharmacy benefit managers (PBMs) and commercial insurers. The bill seeks to prevent unfair pricing practices, such as 'spread pricing', where PBMs charge health plans more for medications than what they reimburse pharmacies, effectively pocketing the difference. Instead, the legislation promotes a 'pass-through pricing' model where the charges reflect only the actual reimbursement to pharmacies, accompanied by transparent administrative fees.
Contention
While proponents of S0221 view it as a crucial measure to protect consumers from excessive pharmaceutical costs, critics argue that the bill may not sufficiently address the underlying issues of high drug prices. Some stakeholders in the pharmaceutical industry express concerns that the increased regulations could lead to unintended consequences, such as reduced access to medications if companies decide to withdraw from the market due to financial unfeasibility. This contention highlights the ongoing debate over how best to balance regulation with the need for accessible healthcare.
Implementation
Upon passage, S0221 is expected to come into effect immediately, requiring the health insurance commissioner to set forth rules and regulations to ensure compliance from the outset. The commissioner will hold quarterly public meetings to review the practices of the insurers and PBMs, ensuring accountability and allowing for stakeholder involvement in the oversight process.
Regulates pharmacy benefit managers' policies and practices through rules and regulations promulgated by the office of health insurance commissioner, relating to accurate costs and pricing reporting, restricting discriminatory practices.
Limits the use by insurers of step therapy, a protocol that establishes a specific sequence in which prescription drugs for a specified medical condition are covered by an insurer, by allowing medical providers to request step therapy exceptions.
Limits the use by insurers of step therapy, a protocol that establishes a specific sequence in which prescription drugs for a specified medical condition are covered by an insurer, by allowing medical providers to request step therapy exceptions.
Provides certain controls over prescription drug costs by imposing transparency, oversight and accountability requirements on commercial insurers and their pharmacy benefit managers.
Prohibits an insurer from imposing a requirement of prior authorization for any admission, item, service, treatment, test, exam, study, procedure, or any generic or brand name prescription drug ordered by a primary care provider.
Requires that the department of human services and the department of behavioral healthcare, developmental disabilities and hospitals provide forecasted costs reflecting the recommended rate review on a monthly basis.