The bill aims to address the high cost of prescription drugs by focusing on the regulation of Pharmacy Benefit Managers (PBMs). It notes that PBMs have grown into large conglomerates, with three companies controlling a significant market share, and have been involved in practices like spread pricing and restrictive patient care protocols such as prior authorizations and step therapy. The bill acknowledges state efforts and a Supreme Court case that support state regulation of PBMs. It seeks to amend Section 27-20.7-12 of the General Laws to require PBMs to obtain a certificate of authority, provide necessary information to the office of health insurance commissioner (OHIC), and meet standards of competence and trustworthiness.

The proposed legislation introduces several key changes to PBM practices. It includes PBMs under the definition of third-party administrators, making them subject to the same regulations, and requires them to file an annual report on their financial arrangements and organizational structure. The bill prohibits spread pricing, mandates pharmacy pass-through pricing, and eliminates discriminatory practices against non-affiliated pharmacies. It also aims to eliminate delays in patient care by restricting the use of prior authorization and step therapy. The bill requires PBMs to pass on all manufacturer-derived revenues or discounts to consumers, and grants the office of health insurance commissioner the power to enforce these regulations, including imposing civil fines and hiring independent contractors for assistance. The bill would be effective immediately upon passage.

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