The proposed bill, HB 7118, aims to enhance transparency in pharmaceutical pricing by establishing a new chapter, "Pharmaceutical Cost Transparency," within Title 5 of the General Laws. It mandates the state board of pharmacy, in collaboration with the department of health, to annually identify up to fifteen prescription drugs that have seen significant cost increases, specifically those with a wholesale acquisition cost rise of 50% or more over five years or 15% or more over the past year. The attorney general will then require manufacturers of these drugs to justify the price increases, providing detailed information on contributing factors, including the percentage of the total cost increase attributable to each factor. Information submitted to the attorney general is exempt from public records, ensuring confidentiality for manufacturers.

Additionally, the bill directs the department of health to use the same dispensing fee in its reimbursement formula for 340B prescription drugs as it uses for non-340B prescription drugs under the Medicaid program. The department is also authorized to modify the dispensing fee for federally qualified health centers and Title X family planning clinics dispensing 340B drugs to Medicaid beneficiaries.

The bill establishes an advisory commission to develop options for modifying out-of-pocket prescription drug limits in health benefit plans, including plans with higher limits and those at or below current limits. The commission will consist of various stakeholders, including representatives from health insurers, the insurance commissioner, and consumer advocates. The commission is required to meet at least six times before submitting plan designs for approval.

Reports on cost-sharing trends, recommendations for modifications to out-of-pocket limits, and findings regarding the 340B reimbursement formula will be provided to the governor and the general assembly by specified deadlines. The act is set to take effect upon passage, reflecting a comprehensive approach to managing and understanding prescription drug costs in the state.