The bill introduced to the Rhode Island General Assembly seeks to establish a maximum fair price for prescription drugs to protect Rhode Island residents from the negative effects of high drug costs. It introduces a new chapter titled "PRESCRIPTION DRUG COST PROTECTION" to Title 21 "FOOD AND DRUGS" of the General Laws, which includes definitions for terms such as "ERISA Plan," "Health Plan," and "Maximum fair price," among others. The bill prohibits the purchase or reimbursement of referenced drugs at a cost higher than the maximum fair price and allows ERISA plans to opt into these provisions. It also requires entities selling drugs in Rhode Island to maintain a registered agent and office within the state and grants the insurance commissioner rulemaking authority to implement the chapter's requirements.

The legislation mandates that participating ERISA plans report annually to the insurance commissioner on the savings achieved and how these savings were used to promote health equity. It sets forth enforcement measures, including a $1,000 fine per violation and authorizes the attorney general to enforce these provisions. Additionally, the bill penalizes manufacturers or distributors who withdraw drugs from sale in the state to circumvent rate limitations, with fines up to $500,000 or the amount of annual savings. The bill includes a severability clause and would take effect upon passage, aiming to prevent the state and health plans from purchasing drugs at costs exceeding the established referenced rate.