The proposed bill, HB 5860, aims to protect Rhode Island residents from excessive prices for prescription drugs by establishing a new chapter titled "Prescription Drug Cost Protection" within Title 21 of the General Laws. The bill introduces a framework to regulate the pricing of prescription drugs, recognizing that high drug prices hinder access to necessary medications and contribute to rising healthcare costs.
Key provisions of the bill include:
1. **Maximum Fair Price**: The bill establishes a "maximum fair price" for referenced drugs, which cannot be exceeded by any purchaser or health plan in the state. This price is defined as the maximum rate for a drug published by the Secretary of the United States Department of Health and Human Services.
2. **Payment Prohibition**: It is a violation for any purchaser to buy a referenced drug or seek reimbursement for it at a cost higher than the maximum fair price during the price applicability period.
3. **ERISA Plan Participation**: ERISA plans may opt-in to the provisions of this chapter, with a requirement to notify the insurance commissioner in writing by February 1 of each year if they wish to participate.
4. **Registered Agent Requirement**: Any entity that sells, distributes, delivers, or offers for sale any drug in the state must maintain a registered agent and office within the state.
5. **Use of Savings**: Any savings generated from compliance with the pricing regulations must be used to reduce costs for consumers. Entities are directed to consider strategies that promote health equity when utilizing these savings.
6. **Reporting Requirements**: State entities, health plans, and participating ERISA plans must submit an annual report to the insurance commissioner detailing the savings achieved and how those savings were utilized.
7. **Enforcement and Penalties**: Each violation of the chapter is subject to a fine of $1,000, with every individual transaction in violation considered a separate violation. The attorney general is authorized to enforce the provisions of the statute.
8. **Prohibition on Withdrawal of Drugs**: Manufacturers or distributors are prohibited from withdrawing referenced drugs from sale or distribution within the state to avoid the impact of the rate limitations. They must provide written notice of withdrawal 180 days prior to such action.
9. **Good Faith Negotiation**: Manufacturers or distributors must negotiate in good faith with payors or sellers of prescription drugs regarding prices within the referenced rate.
10. **Severability Clause**: If any provision of this chapter is determined to be invalid, the invalidity will not affect other provisions or applications of the chapter.
The bill is designed to ensure that any savings from reduced drug costs are utilized to lower consumer expenses and promote health equity. It will take effect upon passage.