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A BILL to amend and reenact §
32.1-325.5
of the Code of Virginia, relating to state pharmacy benefits manager; contractual provisions; dispensing fee increases; report.
Be it enacted by the General Assembly of Virginia:
1. That §
32.1-325.5
of the Code of Virginia is amended and reenacted as follows:
§
32.1-325.5
. State pharmacy benefits manager.
A. As used in this section:
"Pharmacy benefits manager" means the same as that term is defined in §
38.2-3465
.
"Spread pricing" means the model of prescription drug pricing in which the pharmacy benefits manager charges a managed care plan a contracted price for prescription drugs, and the contracted price for the prescription drugs differs from the amount the pharmacy benefits manager directly or indirectly pays the pharmacist or pharmacy for pharmacist services.
"State pharmacy benefits manager" means the pharmacy benefits manager contracted by the Department pursuant to this section to administer pharmacy benefits for all Medicaid recipients in the Commonwealth.
B. By July 1, 2026, the Department shall select and contract with a single third-party administrator to serve as the state pharmacy benefits manager to administer all pharmacy benefits for Medicaid recipients, including those enrolled in a managed care organization by such date with whom the Department contracts for the delivery of Medicaid services. Each managed care contract entered into or renewed by the Department for the delivery of Medicaid services by a managed care organization shall require the managed care organization to contract with and utilize the state pharmacy benefits manager for the purpose of administering all pharmacy benefits for Medicaid recipients enrolled with the managed care organization. Notwithstanding the provisions of §
38.2-3470
, the state pharmacy benefits manager shall adhere to subdivision A 5 of §
38.2-3467
unless otherwise prohibited by federal law.
C. The Department's contract with the state pharmacy benefits manager shall:
1. Establish the state pharmacy benefits manager's fiduciary duty owed to the Department;
2. Require the use of pass-through pricing;
3. Require the state pharmacy benefits manager to use the common formulary, reimbursement methodologies, and dispensing fees negotiated by the Department
,
and
require that ingredient-cost reimbursement is based on the nati
onal average drug acquisition cost
, or if unavai
lable,
the wholesale acquisition cost minus a discount set by the Department
,
plus a professional dispensing fee, determined by the Department
;
4. Require
real-time or near real-time
transparency in drug costs, rebates collected and paid, dispensing fees paid, administrative fees,
and
all other charges, fees, costs, and holdbacks
, claim denials appeals
, and network participation
;
and
5. Prohibit the use of spread pricing
;
6
.
Prohibit the state pharmac
y benefits manager from
steering
Medicaid recipients to affiliated pharmacies through differential cost-sharing, restrictive network design, or the mandatory use of a
mail order pharmacy provider;
7.
Require the state pharmacy benefits manager
to:
a. Meet
network adequacy standards established by the
Department based on
geographic
access, travel time, and availability of
retail community
pharmacies;
b. Allow any appropriately licensed pharmacy that agrees to the terms of a provider contract t
o participate in the pharmacy network
under the same terms, conditions, and reimbursement
methodologies
,
as any other pharmacy participating
in
the network
;
c.
Verify that all contracted pharmacies are actively accepting Medicaid recipients and to maintain
accurate directory information;
d.
Submit annual reports to the Department
t
hat contain the information
described in subsection B of §
38.2-3468
;
e. Disclose
to the Department
pricing
and maximum acquisition cost
methodol
ogies, including
a
detailed
explanation of how pharmacy reimbursement amounts are calculated, updated, and adjusted
;
and
f
.
Allow invoice
-based
or national average drug
acquisition
cost
-based
appeals and
require an adjustment of rates network-wide when an appeal is upheld
; and
8. Include enforcement mechanisms and monetary penalties for noncomp
l
iance
.
D.
The Department
shall
annual
ly
calculate the savings generated by the use of the state pharmacy benefits manager
, which are the documented reduction in Medicaid pharmacy spending resulting
from such use, including
administrative
consolidation,
improved
pricing accuracy through the use of the national average drug
acquisition
cost-based reimbursement, reduced overhead
, greater transparency, and elimination of duplicative managed care organization pharmacy benefits manager contracts.
E.
The Department shall
annually increase its dispensing fee suc
h that the
Department's total annual amount spent on dispensing fees is increased by the
amount calculated by the Department in accordance with subsection D.
The Department shall
annually
publish
and make available on its website
its
annual and total
savings
achieved
, the
annual and total
amount applied to dispensing fees
increases
,
and the updated dispensing fees
.
F
.
The
Department shall
report
by September 30 of each year
to the General Assembly
on the state pharmacy benefits manager
's compliance with the provisions of this section, national average drug
acquisition
cost
compliance, pharmacy reimbursement trends, network
adequacy
compli
ance, and dispensing fee sufficiency.