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SB 3059

AN ACT RELATING TO INSURANCE -- PHARMACY FREEDOM OF CHOICE--FAIR COMPETITION AND PRACTICES

2026 Regular Session Introduced by Bob Britto and 5 co-sponsors

Rhode Island SB 3059 tightens PBM transparency and duties, curbing practices like spread pricing and unapproved substitutions, and requires public contract/financial disclosures to

06/22/2026 Signed by Governor
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WeVote Research Nonpartisan
Bill Summary · SB 3059

Summary of SB 3059 (Rhode Island, 2026)

Purpose and intent

  • This act aims to regulate pharmacy benefit managers (PBMs) and related pharmacy benefit management services to promote “Pharmacy Freedom of Choice” and fair competition. It adds duties of transparency, accountability, and consumer protections for PBMs and insurers, with a focus on how PBMs interact with covered individuals (patients), pharmacies, and insurers.

Key provisions and changes

  • Definitions (27-29.1-1)

    • Clarifies terms used in the chapter, including:
    • Eligible bidder: a registered retail/community pharmacy (or equivalent) willing to bid for participation in a restricted network.
    • Nonrestricted vs. restricted pharmacy networks: terms describing network participation and contract relationships.
    • PBM: defined as a third-party administrator that develops/manages pharmacy benefits and networks (including related services such as formulary management, rebates, or prior authorizations).
    • Spread pricing: PBM practice of retaining additional funds beyond what is paid to pharmacies.

  • Availability and accessibility (27-29.1-2)

    • Requires insurers to demonstrate to the Director of Health their ability to ensure pharmacy services are available and accessible, with adequate personnel and facilities, in Rhode Island.

  • Regulation of PBMs (27-29.1-7)

    • PBMs are treated like third-party administrators under existing law and subject to related regulation.
    • Annual reporting: PBMs must file with the Department of Business Regulation (DBR) details about financial arrangements with insurers, including organizational structure if affiliated with other entities; reports become public records.
    • Network integrity and substitutions: PBMs cannot substitute a prescription or alter a prescription’s terms without prescriber approval or lawful basis; DBR may promulgate rules on when substitution is required or permitted.
    • Transparency and disclosure rules in contracting:
    • PBMs cannot penalize pharmacists for disclosing costs to patients or for information about cash prices, availability of therapeutically equivalent alternatives, or other purchasing options.
    • Copayments: PBMs cannot charge a patient copayment higher than the pharmacy’s submitted costs; pharmacies must retain adjudicated costs.
    • Multi-source generic pricing appeals: PBMs must have a defined process to appeal and resolve disputes over multi-source generic pricing, with specific timelines and procedures (30 business days to file; notification and response within 7 business days; if valid, adjust maximum allowable cost retroactively; if denied, provide an equivalent drug option at or below the MAC).

  • Costs of enforcement (27-29.1-10)

    • Enforcement costs are borne by the PBMs and/or insurers against whom complaints are made (on an equal basis).
    • Specifies reimbursement structure for enforcement personnel salaries, technology costs, training, and other related expenses.
    • Surplus funds from other enforcement actions related to this title would be deposited into the Health Insurance Market Integrity Fund.

  • Evaluation report (27-29.1-11)

    • The Health Insurance Commissioner must evaluate the impact of nonrestricted PBN (pharmacy benefit networks) practices on RI health insurance costs and report findings to a legislative committee by May 1, 2005, with recommendations due by March 31, 2027. (Note: This retroactive dates appear to be an artifact from the bill’s drafting; the intent is to monitor impact.)

  • Duty, accountability, and transparency of PBMs (27-29.1-12)

    • Establishes core duties for PBMs:
    • They must manage benefits with care, prudence, diligence, and professionalism.
    • They owe a duty of good faith and fair dealing to covered individuals and pharmacies; they should treat patients with the same duty owed by insurers where applicable.
    • Financial transparency and trust:
    • All funds received by PBMs for providing PBM services must be held in trust and used per contract or law; spread pricing proceeds fall under this provision.
    • The Director can set rules on permissible administrative fees and their use.
    • Accountability and disclosure:
    • PBMs must annually (or more frequently) account to insurers for all pricing discounts, rebates, inflationary payments, credits, clawbacks, fees, chargebacks, and similar benefits.
    • Insurers must have access to PBM financial and utilization information related to PBM services.
    • PBMs must disclose contract terms, including dispensing fees, and disclose any conflicts of interest.
    • Confidential information:
    • Information designated as proprietary/trade secret by the PBM must be kept confidential by the insurer, except as required by law or for enforcement purposes; such designation does not exempt disclosure to the DBR.
    • Regulatory authority:
    • The Director (DBR) will promulgate rules defining duties and obligations for PBMs under this section.

Who/what would be affected

  • Pharmacy Benefit Managers (PBMs) operating in Rhode Island.
  • Insurers regulated under Rhode Island insurance laws.
  • Pharmacists and pharmacies participating in Rhode Island networks (restricted and nonrestricted).
  • Covered individuals (patients) receiving pharmacy benefits.
  • Department of Business Regulation and the Health Insurance Commissioner (enforcement and oversight).

Procedural and timeline aspects

  • Effective date: upon passage.
  • Reporting and enforcement: PBMs/insurers face enforcement under DBR rules with cost-shifting provisions to fund enforcement activities.
  • Appeals process: clear timelines for multi-source generic pricing disputes (30 business days to file; 7 business days to respond; retroactive MAC adjustments if valid).
  • Evaluation/reporting: an evaluation report due to the legislature by specified deadlines (noting an apparent historical/drafting anomaly in dates).

Overall impact

  • The bill increases transparency requirements for PBMs and their financial arrangements with insurers.
  • It imposes duties of good faith, patient access, and limits on certain PBM practices (e.g., spread pricing) and prescription substitutions absent appropriate authorization.
  • It creates a framework for public disclosure of contracts and financial terms, with stronger regulatory oversight and potential cost recovery for enforcement.
  • Aims to enhance patient protections and promote fair competition within Rhode Island’s pharmacy benefit management market.

Compiled from official sources — confirm details with the bill’s official record.

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