This bill amends various sections of the General Laws in Chapter 27-29.1, titled "Pharmacy Freedom of Choice - Fair Competition and Practices," to enhance the regulation of pharmacy benefit managers (PBMs) and their operations. Key changes include the introduction of new definitions, such as "covered individual," "health insurance commissioner," and "spread pricing," which clarify the roles and responsibilities of PBMs.

The bill establishes that PBMs must operate with a duty of care and good faith towards covered individuals and pharmacies, ensuring transparency in their financial dealings, including the disclosure of pricing discounts, rebates, and other benefits received by the PBM to insurers.

Additionally, the bill outlines specific regulations for PBMs, including prohibitions against substituting prescriptions without prescriber approval and requirements for a fair appeals process regarding disputes over multi-source generic drug pricing. The appeals process includes provisions for timely communication and resolution of disputes.

The bill mandates that the health insurance commissioner evaluate the impact of PBM practices on health insurance costs in Rhode Island and submit a report of findings and recommendations to the General Assembly by March 31, 2027.

The act is set to take effect on January 1, 2027, and aims to improve accountability and transparency in pharmacy benefit management services.