The bill amends the Rhode Island Health Care Reform Act of 2004 to introduce regulations on price increases for prescription drugs. It establishes a penalty for manufacturers of identified drugs that experience unsupported price increases, which are defined as increases without adequate new clinical evidence. The penalty is calculated as 80% of the difference between the revenue generated from 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 of at least $250,000 in the state will be subject to this penalty, which must be reported and paid annually.

Additionally, the bill prohibits manufacturers from withdrawing identified drugs from sale or distribution in the state for the sole purpose of avoiding the penalty. If a manufacturer intends to withdraw an identified drug, they must provide written notice to the board of pharmacy and the attorney general at least 180 days prior to the withdrawal. A penalty of $500,000 will be imposed on any entity that violates this prohibition. The act is designed to enhance accountability and transparency in drug pricing while ensuring that consumers are protected from unjustified price hikes. The provisions of this act will take effect upon passage.

Statutes affected:
5620: 42-14.5-2.1