Rhode Island 2025 Regular Session

Rhode Island House Bill H5860 Compare Versions

Only one version of the bill is available at this time.

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5	5	2025 -- H 5860
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7	7	LC002090
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9	9	S T A T E O F R H O D E I S L A N D
10	10	IN GENERAL ASSEMBLY
11	11	JANUARY SESSION, A.D. 2025
12	12	____________
13	13
14	14	A N A C T
15	15	RELATING TO FOOD AND DRUGS -- PRESCRIPTION DRUG COST PROTECTION
16	16	Introduced By: Representatives Tanzi, Kislak, Hull, Morales, Potter, Ajello, Bennett,
17	17	Cortvriend, Boylan, and Cotter
18	18	Date Introduced: February 28, 2025
19	19	Referred To: House Health & Human Services
20	20
21	21
22	22	It is enacted by the General Assembly as follows:
23	23	SECTION 1. Legislative intent. 1
24	24	The purpose of this chapter is to protect the safety, health, and economic well-being of 2
25	25	Rhode Island residents by safeguarding them from the negative and harmful impact of excessive 3
26	26	and unconscionable prices for prescription drugs. In enacting this act, the legislature finds that 4
27	27	access to prescription drugs is necessary for Rhode Island residents to maintain or achieve good 5
28	28	health: 6
29	29	(i) Excessive prices negatively impact the ability of Rhode Island residents to obtain 7
30	30	prescription drugs and price increases that exceed reasonable levels thereby endanger the health 8
31	31	and safety of Rhode Island residents to maintain or achieve good health; 9
32	32	(ii) Excessive prices for prescription drugs threaten the economic well-being of Rhode 10
33	33	Island residents and endanger their ability to pay for other necessary and essential goods and 11
34	34	services including housing, food and utilities; 12
35	35	(iii) Excessive prices for prescription drugs contribute significantly to a dramatic and 13
36	36	unsustainable rise in health care costs and health insurance that threaten the overall ability of Rhode 14
37	37	Island residents to obtain health coverage and maintain or achieve good health; 15
38	38	(iv) Excessive prices for prescription drugs contribute significantly to rising state costs for 16
39	39	health care provided and paid for through health insurance programs for public employees, 17
40	40	including employees of the state, municipalities and counties, school districts, institutions of higher 18
41	41	education, and retirees whose health care costs are funded by public programs, thereby threatening 19
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45	45	the ability of the state to fund those programs adequately and further threatening the ability of the 1
46	46	state to fund other programs necessary for the public good and safety, such as public education and 2
47	47	public safety; and 3
48	48	(v) Based on findings in subsections (i) through (iv) of this section, the legislature finds 4
49	49	that excessive prices for prescription drugs threaten the safety and well-being of Rhode Island 5
50	50	residents and find it is necessary to act in order to protect Rhode Island residents from the negative 6
51	51	impact of excessive costs. 7
52	52	SECTION 2. Title 21 of the General Laws entitled "FOOD AND DRUGS" is hereby 8
53	53	amended by adding thereto the following chapter: 9
54	54	CHAPTER 38 10
55	55	PRESCRIPTION DRUG COST PROTECTION 11
56	56	21-38-1. Definitions. 12
57	57	As used in this chapter: 13
58	58	(1) “ERISA Plan” means a plan qualified under the Employee Retirement Income Security 14
59	59	Act of 1974, 29 U.S.C. ch. 18 § 1001 et seq. 15
60	60	(2) “Health plan” means any entity subject to the insurance laws and regulations of this 16
61	61	state, or subject to the jurisdiction of the commissioner, that contracts or offers to contract to 17
62	62	provide, deliver, arrange for, pay for, or reimburse any of the costs of healthcare services including, 18
63	63	without limitation, an insurance company offering accident and sickness insurance, a health 19
64	64	maintenance organization licensed under chapter 41 of title 27, a nonprofit hospital service 20
65	65	corporation organized under chapter 19 of title 27, a nonprofit medical service corporation 21
66	66	organized under chapter 20 of title 27, a nonprofit dental service corporation organized under 22
67	67	chapter 20.1 of title 27, a nonprofit optometric service corporation organized under chapter 20.2 of 23
68	68	title 27, a domestic insurance company subject to chapter 1 of title 27 that offers or provides health 24
69	69	insurance coverage in the state, and a foreign insurance company subject to chapter 2 of title 27 25
70	70	that offers or providers health insurance coverage in the state. 26
71	71	(3) "Insurance commissioner" or "commissioner" means the director of the department of 27
72	72	business regulation or the director's designee. 28
73	73	(4) “Maximum fair price” means the maximum rate for a drug published by the Secretary 29
74	74	of the United States Department of Health and Human Services pursuant to Section 1195 of P.L. 30
75	75	117-169 (2022). 31
76	76	(5) “Participating ERISA plan” means an ERISA plan that has elected to participate in the 32
77	77	requirements and restrictions of this chapter and provides notice as described in § 21-38-3. 33
78	78	(6) “Price applicability period” means the period of time defined in Section 1191 of P.L. 34
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82	82	117-169 (2022). 1
83	83	(7) “Referenced drug” means a drug subject to a maximum fair price. 2
84	84	(8) “State entity” means any agency of state government that purchases prescription drugs 3
85	85	on behalf of the state for a person whose health care is paid for by the state, including any agent, 4
86	86	vendor, fiscal agent, contractor, or other party acting on behalf of the state. State entity does not 5
87	87	include the medical assistance program established under 42 U.S.C. §1396 et seq. 6
88	88	21-38-2. Payment in excess of referenced rate prohibited. 7
89	89	(a) The maximum fair price is the maximum payment for a referenced drug and applies to 8
90	90	all purchases of a referenced drug and reimbursements for a claim for the referenced drug during 9
91	91	the price applicability period when the referenced drug is dispensed, delivered, or administered to 10
92	92	an individual in the state in person, by mail, or by other means. 11
93	93	(b) It is a violation of this chapter for any purchaser to purchase a referenced drug or seek 12
94	94	reimbursement for a referenced drug to be dispensed, delivered, or administered to an individual in 13
95	95	the state in person, by mail, or by other means for a cost higher than the maximum fair price. The 14
96	96	maximum fair price does not include a dispensing fee paid to a pharmacy for dispensing a 15
97	97	referenced drug and nothing in this chapter shall be interpreted to prevent a retail pharmacy from 16
98	98	receiving a dispensing fee above the maximum fair price. 17
99	99	21-38-3. ERISA plan opt-in. 18
100	100	An ERISA plan may elect to participate in the provisions of this chapter. Any ERISA plan 19
101	101	that desires its purchase of prescription drugs to be subject to the prohibition described in this 20
102	102	section shall notify the insurance commissioner in writing by February 1 of each year. 21
103	103	21-38-4. Rulemaking authority. 22
104	104	The insurance commissioner shall have the authority to implement regulations pursuant to 23
105	105	chapter 35 of title 42 ("administrative procedures") to fully implement the requirements of this 24
106	106	chapter. 25
107	107	21-38-5. Registered agent and office within the state. 26
108	108	Any entity that sells, distributes, delivers, or offers for sale any drug in the state is required 27
109	109	to maintain a registered agent and office within the state. 28
110	110	21-38-6. Use of savings. 29
111	111	(a) Any savings generated as a result of the requirements in § 21-38-3 during the referenced 30
112	112	rate applicability period above shall be used to reduce costs to consumers. Any state entity, health 31
113	113	plan or participating ERISA plan shall calculate such savings and utilize such savings directly to 32
114	114	reduce costs for its members. In determining how to utilize savings in order to comply with this 33
115	115	provision, purchasers are directed to consider strategies that promote greater health equity by 34
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119	119	addressing disparities across communities. 1
120	120	(b) No later than April 1 of each calendar year, each state entity, health plan and 2
121	121	participating ERISA plan subject to this chapter shall submit to the insurance commissioner a report 3
122	122	describing the savings achieved for each referenced drug for the previous calendar year and how 4
123	123	those savings were used to achieve the requirements of subsection (a) of this section, including how 5
124	124	the savings were used to promote greater health equity by addressing disparities across 6
125	125	communities. 7
126	126	(c) The insurance commissioner shall implement rules setting forth the method for 8
127	127	calculating savings and the format and submission requirements for the report described in 9
128	128	subsection (b) of this section. 10
129	129	21-38-7. Enforcement. 11
130	130	Each violation of this chapter shall be subject to a fine of one thousand dollars ($1,000). 12
131	131	Every individual transaction in violation of § 21-38-2 is determined to be a separate violation. The 13
132	132	attorney general is authorized to enforce the provisions of this statute. The refusal of a manufacturer 14
133	133	or distributor to negotiate in good faith as described in § 21-38-8(d) shall be a valid affirmative 15
134	134	defense in any enforcement action brought under this chapter. 16
135	135	21-38-8. Prohibition on withdrawal of referenced drugs for sale. 17
136	136	(a) It shall be a violation of this chapter for any manufacturer or distributor of a referenced 18
137	137	drug to withdraw that drug from sale or distribution within this state for the purpose of avoiding 19
138	138	the impact of the rate limitations set forth in § 21-38-3. 20
139	139	(b) Any manufacturer that intends to withdraw a referenced drug from sale or distribution 21
140	140	from within the state shall provide a notice of withdrawal in writing to the insurance commissioner 22
141	141	and to the attorney general one hundred eighty (180) days prior to such withdrawal. 23
142	142	(c) The insurance commissioner shall assess a penalty on any manufacturer or distributor 24
143	143	that it determines has withdrawn a referenced drug from distribution or sale in the state in violation 25
144	144	of subsection (a) or (b) of this section. With respect to each referenced drug for which the insurance 26
145	145	commissioner has determined the manufacturer or distributor has withdrawn from the market, the 27
146	146	penalty shall be equal to: 28
147	147	(1) Five hundred thousand dollars ($500,000); or 29
148	148	(2) The amount of annual savings determined by the insurance commissioner as described 30
149	149	in § 21-38-6, whichever is greater. 31
150	150	(d) It shall be a violation of this chapter for any manufacturer or distributor of a referenced 32
151	151	drug to refuse to negotiate in good faith with any payor or seller of prescription drugs a price that 33
152	152	is within the referenced rate as determined in § 21-38-2. 34
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156	156	(e) The insurance commissioner shall assess a penalty on any manufacturer or distributor 1
157	157	that it determines has failed to negotiate in good faith. With respect to each referenced drug for 2
158	158	which the insurance commissioner has determined the manufacturer or distributor has failed to 3
159	159	negotiate in good faith, the penalty shall be equal to: 4
160	160	(1) Five hundred thousand dollars ($500,000); or 5
161	161	(2) The amount of annual savings determined by the insurance commissioner as described 6
162	162	in § 21-38-6, whichever is greater. 7
163	163	21-38-9. Severability clause. 8
164	164	If any provision of this chapter or the application thereof is determined to be invalid, the 9
165	165	invalidity shall not affect other provisions or applications of this chapter which can be given effect 10
166	166	without the invalid provision or application, and to this end the provisions of this chapter are 11
167	167	severable. 12
168	168	SECTION 3. This act shall take effect upon passage. 13
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175	175	EXPLANATION
176	176	BY THE LEGISLATIVE COUNCIL
177	177	OF
178	178	A N A C T
179	179	RELATING TO FOOD AND DRUGS -- PRESCRIPTION DRUG COST PROTECTION
180	180	***
181	181	This act would prohibit the state, participating ERISA, or any health plan from purchasing 1
182	182	referenced drugs for a cost higher than the referenced rate. 2
183	183	This act would take effect upon passage. 3
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