H 8383Pharmaceuticals

Human Services - The Rhode Island Prescription Drug Purchasing Pool Act

This bill creates a state-managed purchasing pool for local governments and businesses to buy prescription drugs together.

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Introduced Apr 1, 2026Committee House Health & Human Services

Plain-English Summary

This bill creates the "Rhode Island Prescription Drug Purchasing Pool Act." It allows cities, towns, school districts, self-insured private businesses, and health insurance companies to join a state-run group to buy prescription drugs. The Director of Administration manages the pool and can negotiate contracts or join multistate groups to get lower drug prices. Participants still pay for their own drug claims, as it is not a shared risk pool. The bill also allows the pool to work with the state's existing prescription drug discount program to help lower costs for enrolled individuals.

For younger readers

This bill creates a large shopping group run by the state of Rhode Island to buy medicine. Cities, schools, and some businesses can join this group. When many people buy things together, they can often get a lower price. The state will manage this group and try to find the best deals on medicine by buying in large amounts. The businesses and cities in the group still pay for their own medicine, but they get to use the lower prices the state figured out for everyone.

Who & Where It Applies

Impacted groups

Municipal employeesSelf-insured private employersHealth insurance carriersState prescription drug discount program participantsSchool district employees

Impacted communities

All

Constitutional & Fiscal Check

None Likely. The bill simply establishes a voluntary purchasing cooperative for prescription drugs managed by the state. It does not mandate participation, infringe on free speech, violate due process, or authorize unreasonable searches and seizures.

Estimated cost

Amount unknown

Estimated revenue

None

Bill Analysis

Both viewpoints

For Progressives

Leverages collective state purchasing power to lower healthcare costs, increasing the affordability of essential medications for workers, retirees, and vulnerable populations.
Coordinates with the state's prescription drug discount program, expanding access to affordable medicine for lower-income residents and strengthening the social safety net.
Allows municipalities and school districts to save money on employee healthcare, freeing up local government funds for other generous public services like education and community programs.
Explicitly states the pool is not a risk pool, meaning smaller or sicker groups still bear the full burden of their high medical claims rather than sharing the risk equitably across all participants.
Fails to impose direct price caps or strict regulations on pharmaceutical companies, relying instead on market negotiations which may not sufficiently curb corporate profiteering.
Limits private business participation to self-insured employers, potentially excluding smaller businesses and their workers who might benefit most from discounted prescription drugs.

For Conservatives

Protects taxpayers by explicitly stating the pool is not a risk pool, ensuring that participants pay for their own claims and the state does not subsidize private or municipal healthcare costs.
Offers a voluntary, market-based solution for self-insured private employers to lower their operational costs without imposing new government mandates or taxes on businesses.
Reduces the financial burden on local municipalities and school districts, which could lead to lower local property taxes and more efficient use of government funds.
Expands the size and scope of state government by creating a new bureaucratic program within the Department of Administration to manage prescription drug purchasing.
Increases government involvement in the free market by centralizing purchasing power, which could disrupt private pharmacy benefit managers and private insurance markets.
Grants the Director of Administration broad authority to promulgate rules and enter into multistate agreements, potentially bypassing legislative oversight and centralizing executive power.

Votes

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Full Bill Text

Changes to existing Rhode Island law · 75 additions

It is enacted by the General Assembly as follows:

SECTION 1. Title 40 of the General Laws entitled "HUMAN SERVICES" is hereby amended by adding thereto the following chapter: 40-23-1. Short title. This chapter shall be known and may be cited as the "Rhode Island Prescription Drug Purchasing Pool Act." 40-23-2. Definitions. As used in this chapter:

(1) "Department" means the department of administration.

(2) "Director" means the director of administration.

(3) "Health insurance carrier" means an entity subject to the insurance laws and regulations of this state or subject to the jurisdiction of the office of the health insurance commissioner that offers health insurance, health benefits, or contracts for healthcare services, including prescription drug coverage, to large groups, small groups, or individuals on or outside the Rhode Island health benefit exchange pursuant to § 42-157-1.

(4) "Nonstate public employer" means a municipality, fire district, or other political subdivision of the state including, but not limited to, a school district, public institution of higher education or quasi-public agency or authority within the state.

(5) "Participants" means participants in the Rhode Island prescription drug purchasing pool.

(6) "Qualified private employer" means a self-insured private employer doing business in this state. 40-23-3. Establishment.

(a) There is hereby established the Rhode Island prescription drug purchasing pool. The director shall offer nonstate public employers, qualified private employers, and health insurance carriers the option to purchase prescription drugs for their employees, employees' dependents and retirees under the purchasing authority of the state, subject to the provisions of § 40-23-5(b).

(b) The director shall promulgate rules and regulations to establish procedures to determine:

(1) Eligibility requirements for participation;

(2) Enrollment procedures;

(3) Duration of participation;

(4) Requirements regarding payment; and

(5) Procedures for withdrawal from and termination of participation by nonstate public employers, qualified private employers, and health insurance carriers.

(1) Promulgate rules to implement the provisions of this section in accordance with chapter 35 of title 42 ("administrative procedures");

(2) Reassess and renegotiate contractual arrangements for pharmacy benefit management and related services as necessary to maximize discounts and value delivered to participants while minimizing administrative expenses; and

(3) Consider and enter into multistate prescription drug purchasing pool arrangements as appropriate to maximize discounts and value delivered to participants. 40-23-4. Stop-loss coverage.

(a) The director may obtain stop-loss coverage issued pursuant to chapter 8.2 of title 27 (“stop-loss insurance”); provided that, such coverage otherwise complies with the provisions of this chapter.

(b) The director may offer participants the option to purchase stop-loss coverage from an insurer at a rate negotiated by the director. 40-23-5. Joint and collective participation.

(a) Two (2) or more nonstate public employers or qualified private employers may join together for the purpose of purchasing prescription drugs for their employees, employees' dependents and retirees. Such arrangement shall not constitute a multiple employer welfare arrangement, as defined in the Employee Retirement Income Security Act of 1974 (29 U.S.C. § 1002), as amended from time to time.

(b) The director may offer nonstate public employers, qualified private employers, and licensed insurance carriers the option to purchase prescription drugs through the plan set forth in collective bargaining agreement executed between the State of Rhode Island and authorized representatives of the unions representing state employees if the director determines that allowing such nonstate public employers, qualified private employers, or licensed insurance carrier such option is consistent with the collective bargaining agreement.

(1) Such determination shall not be required if the director establishes a separate prescription drug purchasing plan or plans for nonstate public employers, qualified private employers, and licensed insurance carriers. 40-23-6. Construction. The Rhode Island prescription drug purchasing pool does not constitute a risk pool, and all participants shall pay the full cost of their own claims and prescription drugs. 40-23-7. Coordination with prescription drug discount program.

(a) The director may coordinate the Rhode Island prescription drug purchasing pool with the state's prescription drug discount program set forth in § 42-66.2.1-2 including, but not limited to, purchasing prescription drugs for the prescription drug discount program through the Rhode Island prescription drug purchasing pool, and offering discounts, rebates, and prices secured through the Rhode Island prescription drug purchasing pool to participants in the state's prescription drug discount program.

(b) In pursuing such coordination, the department of human services shall collaborate with the director of the department of administration to ensure the state's prescription drug discount program is being used in a manner that maximizes enrollment and minimizes prices paid by enrollees for prescription drugs.

SECTION 2. This act shall take effect upon passage.