The bill amends the Rhode Island Health Care Reform Act of 2004 to introduce new definitions and regulations regarding prescription drug pricing. It establishes terms such as "unsupported price increase," which refers to a price hike for a prescription drug that lacks adequate clinical evidence to support the increase. The bill defines "identified drug" as any prescription drug that has been identified as having an unsupported price increase and outlines the role of the Executive Office of Health and Human Services (EOHHS) in managing these regulations.

The bill imposes a penalty on manufacturers of identified drugs, calculated as 80% of the difference between the revenue generated by sales of the identified drugs and the revenue that would have been generated if the manufacturer had maintained the wholesale acquisition cost from the previous calendar year, adjusted for inflation using the Consumer Price Index. Manufacturers with total annual sales exceeding $250,000 in the state are subject to this penalty, which must be reported and paid annually.

Additionally, the bill prohibits manufacturers from withdrawing identified drugs from sale or distribution within the state for the purpose of avoiding the penalty. It requires manufacturers intending to withdraw a drug to provide written notice to the board of pharmacy and the attorney general at least 180 days prior to withdrawal. The attorney general is authorized to assess a penalty of $500,000 on any entity that withdraws an identified drug in violation of this provision.

The bill also establishes a process for manufacturers to appeal penalty assessments made by the commissioner. The act will take effect upon passage.

Statutes affected:
5620: 42-14.5-2.1