The proposed bill, SB 486, 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 defines key terms, including "unsupported price increase," which refers to an increase in price for a prescription drug that lacks adequate new clinical evidence to justify 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.

A penalty structure is established, whereby a penalty will be assessed on the sales within the state of identified drugs, payable by manufacturers with at least $250,000 in total annual sales within the state. The penalty will equal 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 previous year's wholesale acquisition cost, adjusted for inflation.

Manufacturers will be required to submit detailed sales information to the commissioner, including total sales, units sold, and changes in wholesale acquisition costs. The commissioner will notify manufacturers of identified drugs subject to penalties, which will be collected annually.

The bill prohibits manufacturers from withdrawing identified drugs from sale to avoid penalties and imposes a fine of $500,000 for any entity that withdraws a drug in violation of this section. Manufacturers aggrieved by the commissioner's actions may request a hearing and appeal decisions under specified conditions.

Revenue generated from these penalties will be allocated to a restricted receipt account to offset costs associated with assessing and collecting penalties, as well as to support the "childhood immunization account" and the "adult immunization account." The act is set to take effect upon passage, providing a framework for accountability in drug pricing practices within the state.