The bill amends the Rhode Island Health Care Reform Act of 2004 by introducing a new section, 42-14.5-6, focused on regulating unsupported price increases for prescription drugs. The purpose of this section is to protect the safety, health, and economic well-being of Rhode Island residents by guarding against the negative impacts of unsupported price increases for prescription drugs.

The bill establishes that large drug manufacturers, defined as those with at least $250,000 in total annual sales within the state, must justify any price increases with adequate clinical evidence. An "unsupported price increase" is defined as an increase in price for a prescription drug for which there is no, or inadequate, new clinical evidence to support the increase. The state will utilize analyses prepared annually by the Institute for Clinical and Economic Review (ICER) to determine whether a price increase is unsupported.

If a price increase is deemed unsupported, a penalty will be assessed on the sales of the identified drugs, calculated as 80% of the difference between the revenue generated by sales within the state of the identified drugs and the revenue that would have been generated if the manufacturer had maintained the previous year's wholesale acquisition cost, adjusted for inflation using the consumer price index. Manufacturers will be notified of their penalty obligations within 60 days of the annual publication of the ICER's Unsupported Price Increase Report.

The bill outlines the reporting requirements for manufacturers, including the submission of a return detailing sales, units sold, wholesale acquisition costs, and the calculation of the penalty owed. The penalties will be collected annually, and the revenue generated will be used to offset costs associated with assessing and collecting the penalty, as well as to support immunization accounts.

Additionally, the bill prohibits manufacturers or distributors of identified drugs from withdrawing those drugs from sale or distribution within the state to avoid penalties. A significant penalty of $500,000 will be imposed on any entity that withdraws an identified drug in violation of this section.

Manufacturers aggrieved by the commissioner's penalty assessment may request a hearing within 30 days of notification. Appeals from administrative orders or decisions will be governed by chapter 35 of title 42, with the right to appeal conditioned upon prepayment of all interest and penalties unless the manufacturer demonstrates financial hardship.

The provisions of this act will take effect upon passage.