Sen. Ujifusa and Rep. Stewart introduce bills to lower prescription drug and Medicaid costs
STATE HOUSE –Sen. Linda L. Ujifusa and Rep. Jennifer A. Stewart are taking aim at the high cost of prescription drugs with bills that protect Rhode Island patients and taxpayers from the harmful activities of pharmacy benefit managers (PBMs), private corporations that work on behalf of insurers and make enormous revenues in the complex, nontransparent system that gets drugs from manufacturers to patients.
“Not only are PBMs driving up the costs of prescription drugs, they are driving up what taxpayers pay for Medicaid and keeping funds that should go to actual health care providers,” said Senator Ujifusa (D-Dist. 11, Portsmouth, Bristol).
The National Community Pharmacists Association estimates that PBMs have been adding about 30 cents per dollar to the price consumers pay for prescriptions.
“Multiple states are doing a much better job monitoring and overseeing Medicaid PBMs and have saved consumers and taxpayers hundreds of millions of dollars,” added Representative Stewart (D-Dist. 59, Pawtucket). “Rhode Island should follow their lead.”
Legislation they have filed would ban a practice known as “spread pricing” wherein PBMs charge health plans and payers more for a prescription drug than what they reimburse to the pharmacy — and then keep the difference or “spread.” Ohio Medicaid, which banned spread pricing, saved about $186.1 million in 2022 and $230.7 million in 2023.
The first bill (2025-S 0173, 2025-H 5498) would prohibit spread pricing by health insurance corporations that manage Medicaid plans for approximately 90 percent of Medicaid enrollees. The bill was included in the Senate’s package of health care priorities announced last week. The House Health and Human Services Committee has scheduled a hearing on the House version of the bill Thursday.
The second bill (2025-S 0117, 2025-H 5463) prohibits PBMs from using spread pricing and prohibits several other harmful PBM practices including keeping “rebates,” or legal manufacturer kickbacks that PBMs get for giving certain drugs favorable placement on covered or preferred drug lists known as “formularies.” Rebates incentivize PBMs to put on their formularies the drugs that get them the highest rebates, not those that are the least expensive or most effective for patients. The bill also prohibits discriminatory treatment of non-affiliated pharmacies and pharmacists and requires that the PBM provide EOHHS information to permit effective oversight and enforcement.
In addition, the bill restricts PBM prescription drug “utilization management” techniques that prevent patients from getting drugs prescribed by their physicians in a timely manner. For example, PBMs routinely impose prior authorizations requirements that require patients and their care providers to get third-party approval before getting prescribed medicines. PBMs also require patients to start with or switch to lower-priced medications before being approved for medications their physicians originally prescribed. PBMs can also essentially force patients off their current therapies by increasing out-of-pocket costs or terminating coverage of particular drugs. Multiple states are acting to restrict these PBM practices.
Beyond those controls, the bill also requires the Executive Office of Health and Human Services to analyze and make recommendations to the governor and the General Assembly by Jan. 1, 2026, about:
- Creating a single Medicaid PBM (like Ohio)
- Carving out pharmacy benefits from the managed care program (like West Virginia which saved $54.4 million and Kentucky which saved $56.6 million)
- Adopting a Medicaid uniform preferred prescription drug list (PDL) (multiple states including Texas), and
- Removing MCOs and moving to a Connecticut-style Medicaid program.
While the single Medicaid PBM and the Medicaid uniform PDL are in Gov. Daniel McKee’s 2026 budget proposal, many of this bill’s consumer and taxpayer saving requirements were in a model MCO contract that was canceled recently and are not currently required.
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