The proposed bill seeks to protect Rhode Island residents from exorbitant prices for prescription drugs, which the legislature views as a serious threat to public health and economic stability. To address this issue, the bill introduces a new chapter titled "Prescription Drug Cost Protection" into Title 21 of the General Laws, establishing definitions, regulations, and prohibitions regarding prescription drug pricing. Key provisions include the establishment of a "maximum fair price" for referenced drugs, which sets a cap on the prices that can be charged. It prohibits purchasers from paying more than this maximum price and allows ERISA plans to opt into these regulations. Additionally, any savings generated must be used to lower costs for consumers, thereby promoting health equity.

To ensure compliance and transparency, the bill requires state entities, health plans, and participating ERISA plans to report annually to the insurance commissioner on the savings achieved from referenced drugs and how these savings were utilized to promote health equity. The bill also includes enforcement mechanisms, such as fines for violations, with significant penalties for manufacturers or distributors that attempt to evade price limitations. The insurance commissioner is granted rulemaking authority to implement the chapter's requirements, and a severability clause is included to maintain the enforceability of the remaining provisions if any part of the legislation is found invalid. The act will take effect upon passage.