H 8360Abuse & Fraud

Commercial Law - General Regulatory Provisions - Deceptive Trade Practices

This bill bans pharmacy benefit managers from using unfair pricing, selling patient data, and forcing patients to use specific pharmacies.

Held for study

Population
Affected

Email Legislator

Introduced Mar 27, 2026Committee House Corporations

Plain-English Summary

This bill regulates Pharmacy Benefit Managers (PBMs), the companies that manage prescription drug benefits for health insurers. It makes it illegal for PBMs to engage in deceptive trade practices, such as forcing patients to use pharmacies owned by the PBM, overcharging for repackaged drugs, or selling patient data for profit. It also prohibits "spread pricing," where a PBM charges a health plan more for a drug than it pays the pharmacy, keeping the difference. Additionally, it protects patients from having to repeat failed treatments when switching insurance plans and prevents unfair early-refill restrictions on daily maintenance medications.

For younger readers

When you need medicine, your doctor gives you a prescription, and your parents' insurance helps pay for it. There are companies called Pharmacy Benefit Managers (or PBMs) that help the insurance companies handle this. This new rule says PBMs have to play fair. They can't secretly overcharge for medicine, sell your private information, or force your family to only buy medicine from their favorite stores. It also makes sure people who need medicine every day can get their refills on time without unnecessary delays.

Who & Where It Applies

Impacted groups

Pharmacy benefits managersPharmacists and local pharmaciesHealth insurance enrolleesHealth insurance companiesPatients requiring maintenance medications

Impacted communities

All

Constitutional & Fiscal Check

None Likely. The bill regulates commercial transactions, deceptive trade practices, and the administration of healthcare benefits, which fall squarely within the state's police powers to regulate commerce and protect consumers. It includes standard privacy and data protections without infringing on protected speech or due process.

Estimated cost

None

Estimated revenue

Amount unknown

Bill Analysis

Both viewpoints

For Progressives

Limits corporate greed and exploitation by banning "spread pricing" and unjustified price markups on repackaged drugs, keeping healthcare costs fairer for consumers.
Protects patient privacy by strictly prohibiting the exploitation and sale of enrollee prescription data for profit, marketing, or patient steering.
Enhances patient welfare and access to healthcare by honoring previous step-therapy documentation, preventing patients from having to needlessly suffer through ineffective treatments again just because they switched insurance plans.
Excludes major public healthcare programs like Medicare Part D, TRICARE, and the VA from these protections, leaving many vulnerable populations without the bill's safeguards.
Allows Medicaid to be subjected to more restrictive early-refill policies than private insurance, which could disproportionately burden low-income individuals who rely on the state's social safety net.
Focuses primarily on regulating market practices rather than establishing a public or universal system to guarantee affordable prescription drugs for all residents regardless of insurance status.

For Conservatives

Promotes free-market competition by preventing large PBM monopolies from steering patients only to pharmacies they own or control, protecting independent local pharmacies.
Increases transparency and fairness in business contracts by banning hidden "effective rate pricing" and deceptive "spread pricing" models that distort the true cost of goods.
Strengthens the rule of law by requiring PBMs to be properly licensed and registered in the state, imposing strict daily penalties for operating illegally.
Imposes strict government regulations on private business contracts and pricing models, limiting the corporate freedom of Pharmacy Benefit Managers to operate as they see fit.
Dictates specific operational rules for private companies, such as how they handle drug repackaging and step-therapy documentation, which increases the regulatory burden and compliance costs.
Expands the state's consumer protection laws to heavily micromanage the health insurance sector, potentially driving up administrative costs that could be passed on to employers and consumers.

Votes

Loading votes...

Full Bill Text

Changes to existing Rhode Island law · 94 additions

It is enacted by the General Assembly as follows:

SECTION 1. Chapter 6-13.1 of the General Laws entitled "Deceptive Trade Practices" is hereby amended by adding thereto the following section: 6-13.1-31. Prohibited acts - Pharmacy benefits managers.

(a) For the purposes of this section:

(1) “Effective rate pricing” means any payment reduction for pharmacist or pharmacy services by a pharmacy benefits manager through reconciliation processes or aggregate payment reductions that are not expressly disclosed and agreed to between the pharmacy benefits manager and pharmacist or pharmacy and that result in reimbursement below the contracted rate.

(2) “Enrollee” means an individual residing in this state for whom an insurer administers, provides, pays for, insures, or covers healthcare services; provided, however, that for purposes of this section, the term shall exclude individuals enrolled in Medicare Part D, the federal employee health benefit program, TRICARE, or the VA program.

(3) “Inducement” means a financial incentive including, but not limited to, variations in premiums, deductibles, copayments, or coinsurance, offered to influence the selection, recommendation, or use of health care items or services.

(4) “Maximum allowable cost price” or “MAC price” means the maximum amount that a pharmacy benefits manager will reimburse toward the cost of a drug.

(5) “Patient steering” means any communication, verbal or written, by a pharmacy benefits manager to a patient to directly or indirectly influence the patient’s choice of pharmacy or encourage use of an alternate pharmacy that is a preferred pharmacy. This includes any requirement that a consumer utilize a particular pharmacy.

(6) “Pharmacy benefits manager” or “PBM” means an entity doing business in this state that contracts to administer or manage prescription drug benefits on behalf of any carrier that provides prescription drug benefits to residents of this state.

(7) “Spread pricing” means the model of prescription drug pricing in which a pharmacy benefits manager charges a health benefit plan a contracted price for prescription drugs that differs from the amount the pharmacy benefits manager directly or indirectly pays the pharmacist or pharmacy for pharmacy goods or services.

(b) Violations. It shall be an unfair and deceptive trade practice and a method of unfair competition in violation of this chapter for any pharmacy benefits manager to:

(1) Conduct or participate in spread pricing or effective rate pricing;

(2) Directly or indirectly engage in patient steering to a pharmacy in which the pharmacy benefits manager, or any of its affiliated entities, maintains an ownership interest or control;

(3) Penalize an enrollee or offer an inducement to an enrollee for the purpose of encouraging use of a specific retail, mail-order, or other pharmacy in which a pharmacy benefits manager holds an ownership or controlling interest, or in which the pharmacy holds an ownership or controlling interest in the pharmacy benefits manager;

(4) Require a pharmacist or pharmacy to purchase drugs from a particular wholesaler;

(5) Deflate or fail to adjust the MAC price set by the pharmacy benefits manager where the wholesaler offering the price upon which the MAC price is based chooses not to sell the drug to the pharmacist or pharmacy, rendering the MAC price unavailable to the pharmacist or pharmacy;

(6) Fail to honor maximum allowable cost requirements in accordance with §§ 27-18-33.2, 27-19-26.2, 27-20-23.2, 27-20.1-15.1, or 27-41-38.2;

(7) Impose an early-refill restriction on a maintenance medication with a prescription of at least a thirty (30) day supply that requires fewer than seven (7) days of medication remaining before the prescription may be refilled; provided, however, that pursuant to regulation, guidance or at the direction of the executive office of health and human services, a pharmacy benefits manager may apply a more restrictive early refill policy for Medicaid enrollees without violating the provisions of this subsection. This provision shall not apply to controlled substances in schedules II to V;

(8) Fail to honor or otherwise delay the acceptance of previously completed step therapy documentation where the prescribed drug is on the health plan’s prescription drug formulary, the enrollee has tried the step therapy required while enrolled in their current health plan or a health plan in which they were previously enrolled, and the enrollee’s provider has submitted justification and supporting clinical documentation that such prescription drug was discontinued due to lack of efficacy or effectiveness, diminished effect, or an adverse effect or event;

(9) Exploit prescription drug information obtained from enrollees for monetary gain or economic power over pharmacists or pharmacies including, but not limited to, using data mining or other similar methods to gather patient information generated or obtained throughout the prescription filling process at any pharmacy for the purpose of directing business toward a pharmacy commonly owned, controlled, or exclusively contracted with the PBM;

(10) Sell, exchange, or use in any manner prescription drug information regarding an enrollee obtained from an enrollee’s use of a prescription drug for purposes of marketing solicitation, patient steering, generating referrals, or any other practice or act that provides the pharmacy benefits manager, or any of its affiliates or subsidiaries, economic power or control over pharmacists or pharmacies, or that interferes in the enrollee’s free choice of pharmacy;

(11) Engage in drug repackaging for the purpose of extracting a price markup. A pharmacy benefits manager that owns or controls a mail-order pharmacy shall not allow the mail-order pharmacy to repackage drugs for the purpose of selling the repackaged items at prices higher than the reimbursement price of the drug in its original manufacturer packaging, unless the enrollee to whom the repackaged drugs are dispensed is informed in writing that the drug has been repackaged and is being sold at a higher price; or

(12) Operate in Rhode Island without being registered and in good standing with the secretary of state to do business in the state or without being licensed and in good standing with the department of business regulation. Each day that a pharmacy benefits manager operates without such registration or licensure and good standing shall constitute a separate violation.

(1) Except where expressly provided, for purposes of this section, a violation shall be deemed to occur each time a prohibited act is committed for each individual consumer transaction.

(2) Nothing in this section shall be construed to prohibit truthful, non-misleading communications regarding cost or interfere with, or violate, a consumer’s right to know where the consumer may obtain the lowest cost drugs, whether a consumer is utilizing insurance or other third-party reimbursement or not.

(3) Nothing in this section shall be construed to interfere with the requirement that consumers receive notice of changes to pharmacy networks, such as the inclusion of new pharmacies or removal of existing pharmacies from networks.

(4) Nothing in this section shall prohibit the authorized use of protected health information for health care operations under the Health Insurance Portability and Accountability Act of 1996 (Pub. L. No. 104-191).

(5) Nothing in this section shall be construed or applied in a manner that conflicts with applicable federal law or regulation.

(6) Nothing in this section shall be construed to limit or preclude the authority of the attorney general to pursue any other remedy, penalty, or cause of action available under common law or statute including, but not limited to, actions for injunctive relief, restitution, civil penalties, or other equitable or legal relief. Nor shall this section be construed to limit the application of chapter 13.1 of title 6 ("deceptive trade practices") or any other provision of the general laws to the conduct described herein. This amendment shall be interpreted to clarify existing law only.

SECTION 2. This act shall take effect upon passage.