Senate OKs Ujifusa bill banning ‘spread pricing’ for drugs in Medicaid plans

State House – The Senate today approved legislation sponsored by Sen. Linda L. Ujifusa to prohibit a practice that allows pharmacy benefits managers (PBMs) to pocket taxpayer-funded Medicaid dollars.

The bill targets “spread pricing” wherein PBMs charge health plans and payors more for a prescription drug than what they reimburse to the pharmacy — and then keep the difference or “spread.” Ohio Medicaid saved about $186.1 million in 2022 and $230.7 million in 2023 after banning the practice.

The bill (2026-S 2462) prohibits the use of spread pricing by in Medicaid plans administered by managed care organizations.

“Currently, managed care organizations’ contracts allow PBMs to charge Medicaid more than they pay pharmacies and keep the difference. Those are taxpayer dollars that do not go toward patient care or the pharmacy,” said Senator Ujifusa (D-Dist. 11, Portsmouth, Bristol). “Prohibiting that practice is basic fiscal management of our Medicaid funding, which is why Rhode Island should join the approximately 25 other states that have enacted limits on spread pricing in managed care.”

Senator Ujifusa noted that spread pricing also hurts Rhode Island’s dwindling number of independent pharmacies, since often PBMs reimburse pharmacies less than they pay in acquisition costs for a drug. Independent pharmacies usually have narrower profit margins than large chains, which are better able to absorb the loss through their more diverse revenue sources.

The bill now goes to the House of Representatives, where Rep. Jennifer A. Stewart (D-Dist. 59, Pawtucket) is sponsoring companion legislation (2026-H 7825).