The bill amends Chapter 42-14.5 of the General Laws by introducing a new section titled "Unsupported price increases on prescription drugs," aimed at protecting Rhode Island residents from unjustified price hikes on prescription medications. It defines key terms such as "unsupported price increase," which refers to price increases lacking adequate clinical evidence for justification. The state will utilize analyses from the Institute for Clinical and Economic Review (ICER) to identify these unsupported increases. The bill also establishes penalties for manufacturers of identified drugs that raise prices without sufficient justification, calculated as 80% of the revenue difference between current sales and what would have been generated if the previous year's wholesale acquisition cost had been maintained, adjusted for inflation.

Additionally, the bill outlines a notification process for manufacturers, requiring the commissioner to inform them of sales data and any penalties owed. Manufacturers can request a hearing within 30 days of receiving the notice to address any errors and assess the lawful amount due. The bill also allows for appeals of administrative orders, contingent upon the prepayment of penalties unless the manufacturer can demonstrate financial hardship. If a manufacturer wins an appeal, they are entitled to a refund with interest. The act will take effect upon passage, and revenue from penalties will support health initiatives, including immunization accounts.