AN ACT RELATING TO HEALTH AND SAFETY -- PRESCRIPTION DRUG SAVINGS AND TRANSPARENCY ACT OF 2026 (Establishes the "Prescription Drug Savings and Transparency Act of 2026.")

S2563

2026 -- S 2563
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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 HEALTH AND SAFETY -- PRESCRIPTION DRUG SAVINGS AND
TRANSPARENCY ACT OF 2026

Introduced By:
Senators Ujifusa, Lawson, Urso, Euer, Mack, Murray, Acosta, Zurier,
DiMario, and Valverde

Date Introduced:
February 13, 2026

Referred To:
Senate Health & Human Services
It is enacted by the General Assembly as follows:
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SECTION 1. Legislative findings and purpose.
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The general assembly finds and declares that:
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(1) The Rhode Island Medicaid program represents a substantial portion of the state budget
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and provides essential health coverage to children, seniors, people with disabilities, and low-income
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working families.
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(2) Prescription drug benefits account for a significant and growing share of Medicaid
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expenditures, and the structure used to administer those benefits directly affects program costs,
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transparency, administrative efficiency, and beneficiary access to medically necessary medications.
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(3) Several states, including Kentucky, West Virginia, Ohio, and Connecticut, have
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improved Medicaid prescription drug oversight by adopting consolidated prescription drug
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management approaches, including combinations of uniform preferred drug lists, consolidated
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pharmacy benefit management functions, and centralized administrative oversight.
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(4) Research, audits, and multi-state experience demonstrate that consolidated prescription
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drug management approaches can lower administrative costs for states, increase the share of
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manufacturer rebates returned to Medicaid, reduce administrative burdens for prescribers and
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pharmacies, and improve continuity of care for beneficiaries, particularly when individuals change
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plans or eligibility categories.
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(5) Audits and oversight reviews in multiple states have found that incomplete disclosure,

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contractual confidentiality provisions, and the routing or reclassification of Medicaid pharmacy-
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related payments through affiliates or non-pharmacy cost categories have impeded effective
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oversight, necessitating clear statutory authority for regulator access to relevant information.
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(6) The purpose of this act is to require an independent, comprehensive, and fiscally
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rigorous evaluation conducted by the office of the auditor general to determine whether Rhode
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Island would benefit from consolidating prescription drug management within the Medicaid
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program, and to ensure that such evaluation is based on complete and accurate information
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regarding Medicaid prescription drug expenditures.
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SECTION 2. Title 23 of the General Laws entitled "HEALTH AND SAFETY" is hereby
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amended by adding thereto the following chapter:
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CHAPTER 106
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PRESCRIPTION DRUG SAVINGS AND TRANSPARENCY ACT OF 2026
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23-106-1. Short title.
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This act shall be known and may be cited as the "Prescription Drug Savings and
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Transparency Act of 2026."
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23-106-2. Authority to conduct independent study.

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(a) The office of the auditor general is authorized and directed to conduct a performance,
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financial, and/or cost-effectiveness study to evaluate whether Rhode Island would benefit from
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consolidated prescription drug management for the Medicaid program. As deemed necessary to
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conduct the study, the office of the auditor general may contract with an independent pharmacy
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pricing and audit consultant (PPAC) or other qualified external entities with expertise in Medicaid
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prescription drug management, pharmacy benefit audits, and fiscal analysis.
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(b) The study shall evaluate and compare, at a minimum, the following prescription drug
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management structures currently implemented by one or more state Medicaid programs:
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(1) Administration of the pharmacy benefit through Medicaid managed care organizations
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utilizing multiple pharmacy benefit managers and multiple preferred drug lists, representing Rhode
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Island’s current status quo;
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(2) Administration of the pharmacy benefit under a single, statewide preferred drug list,
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regardless of claims-processing or administrative structure including, but not limited to, models
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used in the states of Connecticut, Kentucky, and West Virginia;
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(3) Administration of the pharmacy benefit through a single state-contracted pharmacy
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benefit manager, such as in the state of Kentucky, through direct state contracting; and
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(4) Administration of the pharmacy benefit under a state-administered fee-for-service
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model, including through a fiscal agent or administrative services organization, such as in the state

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of Connecticut;
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(c) In conducting the study, the office of the auditor general shall retain full and
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independent authority to evaluate fiscal assumptions, cost estimates, methodologies, the receipt,
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allocation, and accounting of manufacturer rebates, administrative fees, and projected financial
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outcomes.
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23-106-3. Scope of analysis.

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The study required under this act shall evaluate the prescription drug management
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structures identified in § 23-106-2 and shall include, but not be limited to:
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(1) A comparison of current Medicaid prescription drug expenditures with projected
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expenditures under distinct prescription drug management models currently implemented by one
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or more state Medicaid programs, including fiscal impacts to the state budget;
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(2) An assessment of administrative costs, pricing transparency, rebate aggregation and
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retention, pharmacy reimbursement methodologies, and oversight implications;
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(3) An analysis of impacts on Medicaid beneficiary access, provider prescribing practices,
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utilization management requirements, and continuity of care;
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(4) A review of cost savings, health outcomes, and implementation challenges experienced
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by states that have adopted the structures identified in § 23-106-2; and
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(5) Recommendations for any statutory, regulatory, procurement, or contract changes
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necessary to implement any such structure within Medicaid, if determined to be in the best interest
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of the state.
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23-106-4. Required information.

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(a) Any private entity including, but not limited to, any pharmacy benefit manager,
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managed care organization, group purchasing organization, rebate aggregator, claims processor,
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administrator, subcontractor, affiliate, parent, subsidiary, or related entity, that receives, retains,
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administers, manages, negotiates, or is otherwise paid or reimbursed any funds, fees, rebates, price
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concessions, or other remuneration, directly or indirectly, in connection with prescription drug
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benefits provided under the Rhode Island Medicaid program, shall, notwithstanding any contractual
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provision to the contrary, upon request of the office of the auditor general or contractors working
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in conjunction with the auditor general for purposes of performing this study, provide timely,
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complete, and unredacted access to information, data, and records reasonably necessary to carry
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out the study required under this chapter.
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(b) Information subject to subsection (a) of this section shall include, but not be limited to,
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records relating to:
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(1) All Medicaid pharmacy claims, including ingredient costs, dispensing fees,

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administrative fees, utilization data, and any other amounts paid, received, retained, or transferred
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in connection with Medicaid prescription drug benefits;
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(2) All rebates, price concessions, discounts, administrative charges, service fees, data fees,
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or other forms of compensation or remuneration, regardless of how such amounts are characterized
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or reported;
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(3) Any arrangements, agreements, or transactions through which compensation related to
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Medicaid prescription drug benefits is assigned, shared, transferred, aggregated, retained, or
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reclassified, including amounts embedded in or attributed to non-pharmacy services or other cost
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categories;
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(4) All contracts, subcontracts, and amendments relating to Medicaid prescription drug
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benefits, including contracts with manufacturers, wholesalers, pharmacies, intermediaries, or
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affiliated entities;
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(5) Formularies, preferred drug lists, utilization management criteria, step therapy
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protocols, and prior authorization policies applicable to Medicaid prescription drug benefits; and
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(6) Any other information necessary to evaluate the fiscal, administrative, and operational
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impacts of consolidated prescription drug management within the Medicaid program.
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(c) Information provided pursuant to this section:
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(1) Shall be used solely for purposes of the study authorized by this chapter;
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(2) Shall be protected from public disclosure to the extent permitted by law, including as
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confidential commercial or proprietary information; provided that, such designations shall not be
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used to withhold information from the office of the auditor general; and provided, further, that
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aggregated or de-identified findings may be included in the final report; and
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(3) Shall be subject to appropriate data security and privacy protections.
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23-106-5. Enforcement.

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This chapter shall be enforced by the office of the auditor general and the attorney general.
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Nothing in this chapter shall be construed to limit or restrict the authority of the office of the auditor
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general, the attorney general, or any other state official under any other provision of law.
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23-106-6. Reporting.

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The office of the auditor general shall submit a written report of findings and
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recommendations, including any proposed legislation, to the speaker of the house of
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representatives, the president of the senate, and the chairs of the house and senate finance
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committees no later than March 31, 2027.
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23-106-7. Severability.

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If any provision of this chapter or its application to any person or circumstance is held

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invalid, the invalidity shall not affect other provisions or applications of the chapter.
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SECTION 3. This act shall take effect upon passage.
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EXPLANATION
BY THE LEGISLATIVE COUNCIL
OF
A N A C T
RELATING TO HEALTH AND SAFETY -- PRESCRIPTION DRUG SAVINGS AND
TRANSPARENCY ACT OF 2026
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This act would establish the “Prescription Drug Savings and Transparency Act of 2026.”
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This act would authorize an independent, comprehensive study by the office of the auditor general
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to determine whether Rhode Island would benefit from adopting a consolidated prescription drug
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management program within the Medicaid program.
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This act would take effect upon passage.
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