The Overview

Rhode Islanders who fill prescriptions will now have more state oversight over the companies that manage their drug benefits, after the Pharmacy Benefit Managers Act, Senate Bill 3060, became law. Pharmacy benefit managers (PBMs) are the intermediaries that administer prescription-drug benefits for health plans, negotiating with drugmakers and deciding which medicines are covered and where patients can fill prescriptions. ​

Three large PBMs managed about 79 percent of U.S. prescription-drug claims as of 2024, according to Reuters, giving them substantial influence over drug costs and pharmacy access. The law requires PBMs to obtain a certificate of authority from Rhode Island's health insurance commissioner before operating in the state and gives the commissioner power to penalize violations.

What the Law Does

The law requires any pharmacy benefit manager doing business in Rhode Island to apply for a certificate of authority from the office of the health insurance commissioner. Without that certificate, a PBM cannot legally operate in the state. The commissioner gains authority to oversee PBM operations and to penalize violations.

The Federal Trade Commission's 2024 interim report raised concerns that PBM market power and business practices could increase costs for patients and health plans and disadvantage pharmacies. PBMs have defended their practices, and the broader debate includes disagreement over how PBM compensation and drug prices affect one another. Rhode Island's law is part of a wider push by states to impose licensing and oversight requirements on PBMs, as federal action on the industry has remained limited.

By the Numbers

Rhode Island has 1,101,801 residents and 441,570 households, according to 2024 American Community Survey five-year estimates covering all ages. About 4.4 percent of residents lacked health insurance, and 13.8 percent reported a disability, under those same figures. The state's median household income was $87,796, and 11.2 percent of residents fell below the poverty line.

Legislative Status

Sen. Pete Appollonio (D-RI) was the lead sponsor, joined by Sen. Melissa Murray (D-RI), Sen. Val Lawson (D-RI), Sen. Frank Ciccone (D-RI), Sen. David Tikoian (D-RI), and Sen. Matt LaMountain (D-RI).

The Senate passed the bill 38 to zero on May 26. The House approved an amendment 68 to zero and then passed the bill 70 to zero on June 10. The Senate concurred with the House version on June 11. Gov. Dan McKee (D) signed the bill on June 22. The National Community Pharmacists Association said Rhode Island pharmacies had "triumph[ed]" after McKee signed the PBM reform legislation.

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