AN ACT RELATING TO STATE AFFAIRS AND GOVERNMENT -- THE RHODE ISLAND HEALTH CARE REFORM ACT OF 2004 -- HEALTH INSURANCE OVERSIGHT

HB 7950 regulates prescription drug price increases in Rhode Island by imposing a penalty on manufacturers who raise prices without new clinical evidence. It targets "identified drugs" with "unsupported price increases" as determined by the Institute for Clinical and Economic Review (ICER). Manufacturers face an 80% penalty on the revenue difference between actual sales and what they would have earned at the prior year's wholesale cost (adjusted for inflation), but only if their annual sales exceed $250,000 in the state. The penalty applies for two years after a drug appears on ICER's annual report of unsupported increases. This directly affects drug manufacturers selling in Rhode Island who implement such price hikes.