Rhode Island Joins The PBM Oversight Movement: What Senate Bill 3060 Means For Pharmacies, Health Plans And PBM Regulation

he national conversation surrounding pharmacy benefit managers (PBMs) continues to accelerate, and Rhode Island has now entered the debate in a meaningful way.

With the passage of Senate Bill 3060 Substitute B, Rhode Island has adopted a comprehensive Pharmacy Benefit Managers Act that places PBMs under the direct oversight of the Rhode Island Office of the Health Insurance Commissioner (OHIC). While the legislation does not impose the type of sweeping reimbursement reforms recently seen in states such as Arkansas and Tennessee, it reflects a broader trend that is reshaping the PBM landscape across the country: increased transparency, greater accountability and more aggressive state oversight.

For independent pharmacies, health care providers and plan sponsors, the legislation is another signal that state lawmakers are no longer willing to accept limited visibility into PBM operations.

A Shift Toward Formal PBM Regulation

Historically, PBMs have operated in a regulatory environment that differed significantly from insurers, pharmacies and other health care entities. Rhode Island’s new law changes that dynamic.

Beginning January 1, 2027, PBMs operating in Rhode Island will be required to obtain a certificate of authority from OHIC. The law creates a formal licensure structure, authorizes examinations and investigations and gives regulators the ability to suspend or revoke a PBM’s authority to operate in the state.

In practical terms, Rhode Island is moving PBMs into a category that looks far more like a regulated insurance industry participant than a private contractor operating behind the scenes.

That development alone is noteworthy.

Transparency Becomes a Central Theme

One of the most significant aspects of the legislation is its reporting framework.

Under the law, PBMs must annually report a broad range of information to regulators, including:

• Rebates received from pharmaceutical manufacturers;
• Amounts passed through to insurers;
• Amounts passed through to patients at the point of sale;
• Amounts retained by the PBM;
• Spread pricing practices;
• Pharmacy network information;
• Manufacturer compensation arrangements; and
• Other financial incentives tied to PBM operations.

Although individual company information will remain confidential, OHIC is required to publish aggregated data annually.

For years, independent pharmacies and pharmacy advocates have argued that policymakers cannot effectively address drug pricing and reimbursement issues without first understanding how money moves through the pharmaceutical supply chain. Rhode Island’s reporting requirements appear designed to provide regulators with precisely that visibility.

Why Independent Pharmacies Should Pay Attention

At first glance, some pharmacy owners may read the legislation and conclude that it does not immediately affect reimbursement rates, DIR fees, network participation or pharmacy audits.

That observation is largely correct. However, overlooking the bill would be a mistake.

The legislation creates a foundation for future regulatory action by giving Rhode Island regulators access to information that historically has been difficult to obtain. Once regulators begin collecting data regarding rebate retention, spread pricing, pharmacy network development and other PBM practices, policymakers will be better positioned to evaluate whether additional reforms are warranted.

Across the country, meaningful PBM reform has often followed transparency initiatives.

States frequently begin by gathering information. Once regulators and lawmakers understand how PBM business models function in practice, additional legislative proposals often follow.

For independent pharmacies, Rhode Island’s law may be less about immediate change and more about establishing the infrastructure for future oversight.

Part of a Larger National Trend

Rhode Island’s action should also be viewed in the context of developments occurring nationwide.

Over the last several years, states have increasingly challenged traditional PBM business practices. Recent legislative activity in Arkansas and Tennessee has generated national attention because of efforts to address vertical integration and pharmacy ownership concerns. Other states have focused on spread pricing restrictions, reimbursement standards, pharmacy steering practices and rebate transparency.

While Rhode Island’s approach is different, the underlying message is remarkably similar: state governments want greater visibility into PBM operations and greater authority to regulate them.

The days when PBMs could operate largely outside the public spotlight appear to be ending.

What Comes Next?

The most important question may not be what Senate Bill 3060 does today, but what it enables tomorrow.

By requiring certification, annual reporting, regulatory examinations and detailed disclosures, Rhode Island has equipped its regulators with tools they previously lacked. The information generated through this framework could shape future legislative initiatives involving pharmacy reimbursement, spread pricing, network adequacy, rebate pass-through requirements and other issues that remain central to ongoing PBM reform efforts.

For pharmacies, providers and health care organizations operating in Rhode Island, now is the time to monitor implementation closely.

Regulatory frameworks often begin with transparency. Significant policy changes frequently follow.

Final Thoughts

Rhode Island’s Pharmacy Benefit Managers Act is another indication that the momentum behind PBM reform remains strong at both the state and federal levels.

Although the legislation does not immediately alter pharmacy reimbursement methodologies or prohibit specific PBM business practices, it represents another example of reasonable regulation and transparency requirements. For independent pharmacies that have long advocated for greater accountability in the prescription drug supply chain, this development is significant.

As implementation moves forward and reporting data becomes available, stakeholders should expect Rhode Island’s PBM regulatory landscape to continue evolving.

Lucas W. Morgan, Esq. and Dae Y. Lee, Esq., PharmD, CPBS represent various industry stakeholders including independent pharmacies, pharmacy owners, plan sponsors, healthcare providers and other healthcare stakeholders nationwide on audits, investigations, regulatory, transactional, reimbursement and other healthcare and pharmacy related matters.

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