AN ACT RELATING TO COMMERCIAL LAW -- GENERAL REGULATORY PROVISIONS -- PRICE GOUGING OF PRESCRIPTION DRUGS PROHIBITED (Makes it a felony to price gouge prescriptions or pharmaceuticals in time of a shortage.)

H7214

2026 -- H 7214
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LC003774
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STATE OF RHODE ISLAND
IN GENERAL ASSEMBLY
JANUARY SESSION, A.D. 2026
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A N A C T
RELATING TO COMMERCIAL LAW -- GENERAL REGULATORY PROVISIONS -- PRICE
GOUGING OF PRESCRIPTION DRUGS PROHIBITED

Introduced By:
Representatives J. Lombardi, Hull, Ajello, Potter, Cruz, and Stewart

Date Introduced:
January 21, 2026

Referred To:
House Judiciary
It is enacted by the General Assembly as follows:
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SECTION 1. Title 6 of the General Laws entitled "COMMERCIAL LAW – GENERAL
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REGULATORY PROVISIONS" is hereby amended by adding the following chapter:
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CHAPTER 13.4
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PRICE GOUGING OF PRESCRIPTION DRUGS PROHIBITED
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6-13.4-1. Purpose.

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The purpose of this act is to prohibit prescription drug price gouging or excessive pricing
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during market shortages.
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6-13.4-2. Findings.

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The general assembly finds as follows:
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(1) Many pharmaceutical drugs are necessary to maintain the health and welfare of the
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American people;
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(2) Currently the nation is facing a chronic shortage of vital drugs necessary in surgery, in
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treating cancer, and in fighting other life threatening illnesses; and
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(3) In order to prevent any party within the chain of distribution of any vital drugs from
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taking unfair advantage of consumers during market shortages, the public interest requires that such
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conduct be prohibited and made subject to criminal penalties.
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6-13.4-3. Definitions.

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As used in this chapter the following words and terms shall have the following meanings:

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(1) "Biologic" means a virus, therapeutic serum, toxin, antitoxin, vaccine, blood, blood
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component or derivative, allergenic product, or analogous product, or arsphenamine or derivative
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of arsphenamine (or any other trivalent organic arsenic compound), applicable to the prevention,
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treatment, or cure of a disease or condition of human beings;
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(2) "Drug" means a drug intended for use by human beings that:
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(i) Because of its toxicity or other potential for harmful effect, or the method of its use, or
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the collateral measures necessary to its use, is not safe for use except under the supervision of a
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practitioner licensed by law to administer such drug; or
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(ii) Is limited by an approved application under §505 of the Federal Food, Drug, and
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Cosmetic Act (21 U.S.C. 355) to use under the professional supervision of a practitioner licensed
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by law to administer such drug;
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(3) "Market emergency" means any declaration of a state of emergency by the governor or
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by declaration by the President;
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(4) "Market shortage" means a situation in which the total supply of all clinically
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interchangeable versions of an FDA regulated drug is inadequate to meet the current or projected
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demand at the user level;
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(5) "Price gouging" means charging a consumer an unreasonably high price for any drug
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during a declared market emergency. This section shall not prohibit the fluctuation in the price of
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drugs that occurs during the normal course of business;
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(6) "Unreasonably excessive drug pricing" means the amount charged represents a gross
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disparity between the average prices at which the same or similar commodity was readily available
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and sold or offered for sale within the local area in the usual course of business during the thirty
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(30) days immediately before the declaration of the market emergency and the additional charges
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are not substantially attributable to increased cost to retailers, imposed by their suppliers, including
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replacement costs imposed by the vendors' source. Additionally, the average price calculation
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during said thirty (30) day period shall not include discounted prices set and offered as a result of
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bona fide manufacturer's or supplier's limited discounts or rebates; and
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(7) "Vital drug" means any drug or biologic used to prevent or treat a serious or life
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threatening disease or medical condition, for which there is no other available source with sufficient
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supply of that drug or biologic or alternative drug or biologic available.
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6-13.4-4. Unreasonably excessive drug pricing.

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(a) The governor may issue an executive order or rely on an executive order of the
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President, declaring a market shortage or market emergency for a period of six (6) months with
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regard to one or more vital drugs due to a market shortage under this chapter.

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(b) If the governor or the President issues an executive order under subsection (a) of this
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section, it shall be unlawful for any person to sell vital drugs at a price that is unreasonably
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excessive and such action indicates that the seller is taking unfair advantage of the circumstances
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related to a market shortage to unreasonably increase prices during such period.
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6-13.4-5. Penalties.

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(a) Any person who sells or offers to sell any vital drug during a declared market shortage
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with the knowledge and intent to charge a price that is unreasonably excessive under the
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circumstances shall be guilty of a felony and shall be imprisoned for up to five (5) years and by a
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fine of up to ten thousand dollars ($10,000) or both.
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(b) Multiple offenses. In assessing the penalty provided by subsection (a) of this section,
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each day of a continuing violation shall be considered a separate violation.
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(c) Whenever it shall appear to the attorney general that any person or entity is engaged in
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practices constituting a violation of any provision of this chapter and until such complaint is
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dismissed by the attorney general or set aside by a court upon review, the department of the attorney
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general may in its discretion bring an action in the superior court for the county in which the
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violation has occurred, to enjoin such acts or practices, and upon a proper showing, a permanent or
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temporary injunction or restraining order shall be granted in the interest of the general public.
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(d) The department of the attorney general is authorized to enforce the penalties set forth
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in this section.
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6-13.4-6. Determination of unreasonably excessive drug pricing.

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(a) The attorney general, in determining whether an alleged violator's price was
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unreasonably excessive, shall consider whether:
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(1) The price reasonably reflected additional costs, not within the control of that person or
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company, that were paid, incurred, or reasonably anticipated by that person or company;
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(2) The price reasonably reflected additional risks taken by that person or company to
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produce, distribute, obtain, or sell such product under the circumstances;
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(3) There is a gross disparity between the challenged price and the price at which the same
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or similar goods were readily available in the state prior to the declared market shortage;
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(4) The marginal benefit received by the wholesaler or distributor is significantly changed
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in comparison with marginal earnings in the year before a market shortage was declared;
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(5) The price charged was comparable to the price at which the goods were generally
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available in the New England area if the wholesaler or distributor did not sell or offer to sell the
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prescription drug in question prior to the time a market shortage was declared; and
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(6) The price was substantially attributable to local, regional, national, or international

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market conditions.
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(b) Consultation. Not later than one year after the effective date of this chapter and annually
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thereafter, the attorney general or designee, shall consult with representatives of the National
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Association of Wholesalers, group purchasing organizations, pharmaceutical distributors,
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hospitals, manufacturers, patients, and other interested community organizations to reassess the
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criteria set forth in subsection (a) of this section in determining unreasonably excessive drug pricing
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and prepare and submit to the general assembly a report on the results of the reassessment.
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6-13.4-7. Duration.

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(a) Any market shortage declared by the governor or President in accordance with this
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chapter shall be in effect for a period not to exceed six (6) months from the date on which the
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governor or President issues the executive order.
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(b) Termination. Any market shortage declared by the governor or President in accordance
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with this chapter shall terminate if:
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(1) There is enacted a law terminating the market shortage which shall be passed by the
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general assembly after a national market shortage is declared; or
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(2) The governor or President issues a proclamation terminating the market shortage;
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whichever comes first.
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(c) Declaration renewal. The governor or President may renew the state of market shortage
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declared under subsection (a) of this section, if the governor or President declares that the severe
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shortage continues to affect the health and well-being of citizens beyond the initial six (6) month
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period.
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SECTION 2. This act shall take effect upon passage.
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EXPLANATION
BY THE LEGISLATIVE COUNCIL
OF
A N A C T
RELATING TO COMMERCIAL LAW -- GENERAL REGULATORY PROVISIONS -- PRICE
GOUGING OF PRESCRIPTION DRUGS PROHIBITED
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This act would prohibit price gouging of prescribed drugs or pharmaceuticals in times of
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market emergency or market shortages, and would make violators guilty of a felony with
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punishment up to five (5) years, a fine up to ten thousand dollars ($10,000) or both. The act would
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further make them subject to injunctive relief upon suit brought by the department of the attorney
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general.
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This act would take effect upon passage.
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