S 2466Insurance

Insurance - Pharmacy Freedom of Choice - Fair Competition and Practices

This bill requires Pharmacy Benefit Managers to pay independent pharmacies the same reimbursement rates as their own affiliated pharmacies.

Held for study

Population
Affected

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Introduced Feb 6, 2026Committee Senate Health & Human Services

Plain-English Summary

This legislation mandates that Pharmacy Benefit Managers (PBMs) reimburse independent, non-affiliated pharmacies at the same rate as they reimburse their own affiliated pharmacies for the same drugs or services. It explicitly prohibits PBMs from using contract terms or performance metrics to pay independent pharmacies less. The bill grants the Office of the Health Insurance Commissioner (OHIC) and the Attorney General enforcement authority, allows OHIC to request data to verify compliance, and ensures these rules apply to Medicaid managed care organizations. The aim is to ensure fair competition and prevent discrimination in pharmacy reimbursements.

For younger readers

Imagine a company that decides how much money stores get paid for selling medicine. Sometimes, this company also owns some of the stores. This bill says that the company has to play fair. They cannot pay their own stores more money than they pay other stores for the exact same medicine. It is like a referee in a game making sure that one team doesn't get special treatment just because they are friends with the referee. The government will watch to make sure everyone follows these rules so all the stores get treated the same.

Who & Where It Applies

Impacted groups

Independent PharmaciesPharmacy Benefit Managers (PBMs)Medicaid RecipientsPharmacistsHealth Insurers

Impacted communities

All

Constitutional & Fiscal Check

None Likely

Estimated cost

Amount unknown

Estimated revenue

None

Bill Analysis

Both viewpoints

For Progressives

Strengthens the local economy and community resilience by protecting small, independent pharmacies from the predatory pricing and monopolistic practices of large corporate conglomerates.
Ensures equitable healthcare access for vulnerable populations, including Medicaid recipients, by preventing reimbursement disparities that often force independent pharmacies in underserved areas to close or drop coverage.
Increases corporate accountability and transparency by empowering state regulators to audit data and prevent large healthcare middlemen from prioritizing profits over fair service delivery.
Could potentially lead to an increase in overall healthcare costs or insurance premiums if reimbursement rates are leveled up to match higher-cost affiliated pharmacies, which may ultimately burden consumers.
Does not address the root cause of skyrocketing pharmaceutical prices, focusing instead on business-to-business reimbursement disputes rather than lowering costs for patients.
Places an additional administrative burden on state enforcement agencies without explicitly allocating new funding or resources to handle the increased oversight workload.

For Conservatives

Protects small business owners and independent entrepreneurs from unfair market manipulation by large, dominant corporate entities, fostering a more competitive marketplace.
Ensures a level playing field for competition, reinforcing the principle that businesses should succeed based on merit and service rather than rigged financial structures.
Combats fraud and evasion by closing loopholes that allow organizations to circumvent established rules through complex subcontracting and affiliation schemes.
Represents a significant government intrusion into the free market by dictating the terms of private contracts and reimbursement rates between business entities.
Expands the size and scope of the administrative state by granting broad rulemaking and enforcement powers to the Office of the Health Insurance Commissioner.
Interferes with the ability of businesses to negotiate volume discounts or vertical integration efficiencies, potentially reducing market efficiency and driving up costs.

Votes

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Full Bill Text

Changes to existing Rhode Island law · 31 additions

SECTION 1. Chapter 27-29.1 of the General Laws entitled "Pharmacy Freedom of Choice — Fair Competition and Practices" is hereby amended by adding thereto the following section: 27-29.1-12. Fair pharmacy reimbursement and anti-discrimination.

(a) Reimbursement parity. A pharmacy benefit manager shall not reimburse a non-affiliated pharmacy or pharmacist in an amount less than the net effective reimbursement, inclusive of all fees, adjustments, incentives, and other remuneration, paid directly or indirectly to an affiliated pharmacy or pharmacist for the same drug or service.

(b) Anti-discrimination. A pharmacy benefit manager shall not impose contractual terms, reimbursement methodologies, performance metrics, or other requirements that have the effect of reimbursing non- affiliated pharmacies or pharmacists at a lower rate than affiliated pharmacies or pharmacists for the same drug or service.

(c) Transparency of affiliated reimbursement. Upon request by the office of the health insurance commissioner (“OHIC”), a pharmacy benefit manager shall provide reimbursement data reasonably necessary to verify compliance with this section, including data relating to affiliated pharmacies.

(d) Enforcement. This section shall be enforced by OHIC and the attorney general pursuant to their existing authority under law.

(e) Medicaid applicability. All Medicaid managed care organizations, and all pharmacy benefit managers contracted by or on behalf of Medicaid managed care organizations, shall comply with the provisions of this section with respect to all Medicaid pharmacy benefits, whether administered directly or through a pharmacy benefit manager.

(f) Prohibition on evasion. A pharmacy benefit manager, insurer, or Medicaid managed care organization shall not avoid compliance with this section through affiliation structures, subcontracting, differential pricing metrics, reimbursement methodologies, or contractual arrangements designed to favor affiliated pharmacies or pharmacists.

(g) Rulemaking. The OHIC may promulgate and adopt rules and regulations necessary to implement and enforce this section.

SECTION 2. This act shall take effect upon passage.