Requires the secretary of the executive office of health and human services to monitor and mandate changes to the price-setting practices of pharmacy benefit managers to prohibit the spread pricing payment model.

Rhode Island Bill Summary: Regulating Pharmacy Benefit Manager Pricing

This bill targets a pricing practice used by pharmacy benefit managers (PBMs) — companies that act as middlemen between insurance companies, drug manufacturers, and pharmacies. Specifically, the bill would require Rhode Island's Secretary of Health and Human Services to monitor how PBMs set their prices and take action to eliminate a practice called "spread pricing." Spread pricing is when a PBM charges an insurance plan more for a drug than it actually pays the pharmacy, and then keeps the difference — or "spread" — as profit, without being transparent about it.

The bill would give the state's health and human services office the authority to require PBMs to change how they operate if they are found to be using spread pricing. The goal is to replace this model with more transparent pricing arrangements, where PBMs are paid a straightforward, disclosed fee rather than profiting from hidden markups on prescription drugs.

This legislation would primarily affect insurance plans, pharmacies, and ultimately patients and taxpayers in Rhode Island. Eliminating spread pricing could potentially lower prescription drug costs or reduce what state-funded health programs like Medicaid pay for medications. Pharmacies — especially smaller, independent ones — could also benefit, as spread pricing has been criticized for underpaying them. The bill has been referred to the House Finance Committee, where lawmakers will review it before deciding whether to advance it further.