The bill seeks to address the issue of high prescription drug costs by targeting the practices of Pharmacy Benefit Managers (PBMs). It outlines the dominance of PBMs in the market and their negative impact on drug prices, including practices like charging insurance sponsors more than what they reimburse pharmacies and influencing drug formulary placements for rebates. The bill references state efforts and a Supreme Court case that support the regulation of PBMs. To combat these issues, the bill proposes amendments to the General Laws, specifically Section 27-20.7-12, to enforce greater transparency and accountability for PBMs. This includes new requirements for PBMs to obtain a certificate of authority to act as an administrator, such as submitting organizational documents, financial statements, and business plans, and providing copies of all contracts with insurers.

The bill further defines PBMs as third-party administrators, making them subject to the same regulations. It prohibits practices like spread pricing and mandates pharmacy pass-through pricing and non-discriminatory treatment of pharmacies. PBMs are required to prioritize consumer benefits and pass through all manufacturer-derived revenues to lower drug prices for consumers. The bill also prohibits PBMs from profiting from the federal 340B program by offering lower reimbursement rates to 340B entities. PBMs must disclose financial arrangements to the office of health insurance commissioner (OHIC), which has the authority to enforce these provisions and impose fines for violations. The bill includes a severability clause and takes effect upon passage, aiming to protect patients and taxpayers from excessive prescription drug costs.

Statutes affected:
2385: 27-20.7-12, 27-29.1-7