This bill requires that a state entity, health plan or participating plan qualified under the federal Employee Retirement Income Security Act of 1974 may not purchase prescription drugs to be dispensed or delivered to a consumer of this State at a cost that exceeds the referenced rate. The referenced rate of a prescription drug is the maximum rate for a drug determined by the Secretary of the United States Department of Health and Human Services under the federal Medicare program. Any savings generated as a result must be used to reduce costs to consumers.