Senate health panel holds multiple PBM reform bills targeting spread pricing and reimbursement transparency

PROVIDENCE, R.I. — The Senate Committee on Health and Human Services on March 20 heard testimony and held a package of bills aimed at pharmacy benefit managers, or PBMs, with members saying reform is needed to protect Medicaid, commercial plan sponsors and independent pharmacies.

Senators took the first procedural action on a set of measures including Senate Bill 117 and Senate Bill 173 (both addressing Medicaid PBM practices), Senate Bill 165 (a straight prohibition on spread pricing), and Senate Bill 221 (an omnibus commercial PBM bill that would require more disclosure and consider NADAC-like pricing for commercial plans). All of the bills were formally “held” for further study by voice vote at the end of the hearing.

Supporters — including sponsor Senator Ujifusa and the Rhode Island Black, Latino, Indigenous and AAPI caucus — described PBMs as intermediary firms that take money from plans or taxpayers and pay pharmacies and providers. “PBMs are middlemen for middlemen,” said Senator Ujifusa, arguing that spread pricing and rebate-driven formularies can divert savings away from patients and providers. Independent pharmacists and health centers told the committee those practices are contributing to pharmacy closures and reduced services.

Independent pharmacists gave detailed operational testimony. Matt (Matt’s Local Pharmacy) told the committee, “I am literally hemorrhaging money out of my business… we are gonna go out of business,” describing daily losses on high-cost branded prescriptions and difficulty negotiating with PBMs such as Prime Therapeutics and Blue Cross–affiliated arrangements. Zahan Akbar (Abbott Pharmacy) and Hassan Iqbal (Park Square Pharmacy) said audit practices, tight reimbursement and central-fill models are forcing independents to cut services such as home delivery and blister packaging.

Public health and provider witnesses described attendant impacts. Matt Roman, chief operating officer at Thundermist Health Center, said the organization lost $5,600,000 in 2024 because of manufacturer and PBM restrictions tied to the 340B program and related spread-pricing dynamics, forcing program cuts and layoffs. Elena Nicolella, representing Rhode Island’s eight community health centers, told the committee those health centers serve more than 210,000 Rhode Islanders and have lost “over $16,000,000 since 2022” because of changing contract pharmacy access and manufacturer limits.

Pharmaceutical industry representatives urged caution and called for broader approaches. Rachel Caudill Latham of PhRMA said state-level price controls or narrow remedies could cause unintended consequences, and suggested the committee consider the entire supply chain and market dynamics. Brian Jordan, a pharma contract lobbyist, and other industry witnesses said the system is complex and includes insurers, PBMs and pharmacies.

Several witnesses and senators described legislative options already used in other states, including banning spread pricing, mandating pass-through pricing or NADAC/NADEF-based reimbursement, and requiring PBMs to disclose rebates and fees. Supporters pointed to states such as Ohio, Texas and Kentucky as examples where PBM regulation yielded Medicaid savings and stronger reimbursement to pharmacies.

Committee action: Senate Bill 117 — motion to hold made by Senator Lauria, seconded by Senator Thompson; committee voice vote, bill held. Senate Bill 173 — motion to hold made by Senator Thompson, seconded by Senator Apollonio; committee voice vote, bill held. Senate Bill 165 — motion to hold made by Senator Loria, seconded by Senator Erso; committee voice vote, bill held. Senate Bill 221 — motion to hold made by Senator Arloyer (mover) and Senator Sewell (second); committee voice vote, bill held.

What remains: Committee members asked for data and documentation that proponents and opponents cited in testimony, including information about the dollar amount and mechanisms of spread pricing, the structure of PBM audits, and evidence about reform impacts used by other states. Senator Jafusa asked industry representatives to provide documentation supporting claims that spread pricing increases costs by specific percentages.

The committee did not adopt final policy and left the bills “held” for additional review and possible amendment. Supporters said they will continue to press for reforms focused on transparency, reimbursement tied to NADEF/NADAC pricing or outright bans on spread pricing; opponents cautioned about unintended supply or access impacts and urged multi‑stakeholder solutions.