Pharmacy Benefits Management
Important Memorandum addressing application process changes, rebate report filing frequency, clarification of report recipients (06/15/2022)
A pharmacy benefits manager is an entity that performs pharmacy benefits management – that is, administers or manages prescription drug benefits provided by a carrier for the benefit of covered individuals. It includes an entity acting for a pharmacy benefits manager in a contractual relationship in the performance of pharmacy benefits management for a carrier, nonprofit hospital, or third-party payor under a health program administered by Virginia. Pharmacy benefits management is now regulated by Virginia, which includes licensing, reporting and prohibited conduct.
For inquiries related to licensure, please email AgentLicensing@scc.virginia.gov or call (804) 371-9631.
For all other inquiries, such as rebate reporting, please email BureauofInsurance@scc.virginia.gov or call (804) 371-9741.
Any individual or entity providing pharmacy benefits management services or otherwise acting as a pharmacy benefits manager in Virginia on or after October 1, 2020, is required to obtain a license unless otherwise covered by a carrier’s license. Beginning April 1, 2022, all license applications must be filed electronically through Sircon using the application link below.
Apply for a License:
To apply, submit an application for an initial license or renewal license and pay the specified application fee. For an initial license, the fee is $250; to renew a license, the fee is $100. Licenses may be renewed beginning 90 days prior to the October 1 annual effective date.
When completing an application for initial licensure via Sircon, resident applicants must select “New Insurance Licenses” and non-resident applicants must select “Other Licenses.”
When completing an application for license renewal via, select "Renew Insurance Licenses".
Existing licenses not renewed by October 1, will be processed as an initial license and require payment of the $250 license fee.
View Administrative Letter 2020-04 (Revised 6/27/2023) for further information.
Any carrier which provides health benefit plans and contracts with one or more pharmacy benefits managers for pharmacy benefits management services must file a rebate report with the Commissioner of Insurance. The carrier may submit the report on its own or through its pharmacy benefits manager or managers pursuant to its contract for pharmacy benefits management.
IMPORTANT NOTE: This rebate reporting requirement, administered by the State Corporation Commission’s Bureau of Insurance pursuant to § 38.2-3468, Code of Virginia, should not be confused with a similar prescription drug price transparency reporting requirement being administered by the Virginia Department of Health through a nonprofit data services organization (Virginia Health Information) pursuant to § 32.1-23.4, Code of Virginia, as further set forth in 12VAC5-219. The State Corporation Commission report should be emailed to firstname.lastname@example.org, whereas the Virginia Department of Health report should be emailed to email@example.com.
For purposes of the reporting requirement administered by the Bureau of Insurance, a rebate is a discount or other price concession, including without limitation incentives, disbursements, and reasonable estimates of a volume-based discount, or a payment that is (i) based on utilization of a prescription drug and (ii) paid by a manufacturer or third party, directly or indirectly, to a pharmacy benefits manager, pharmacy services administrative organization, or pharmacy after a claim has been processed and paid at a pharmacy.
The report filed with the Commissioner must include, for each health benefit plan, the aggregate amount of rebates:
- received by the pharmacy benefits manager;
- distributed to the appropriate health benefit plan; and
- passed on to the enrollees of each health benefit plan at the point of sale that reduced the enrollees' applicable deductible, copayment, coinsurance, or other cost-sharing amount.
The frequency of rebate reporting has changed from quarterly to annually. The first annual report must be filed with the Bureau of Insurance on or before March 31, 2024, for calendar year 2023. The final required quarterly report covered the period October 1, 2022 through December 31, 2022, and was due on or before March 31, 2023.
The Bureau encourages carriers and pharmacy benefits managers to be aware of prohibited conduct related to advertisements, claims adjudication fees, reimbursements for services, network restrictions or adequacy determinations, retaliation for exercising rights and spread pricing.
See § 38.2-3467, Code of Virginia, for details.
The Bureau of Insurance responds to complaints filed against pharmacy benefits managers (PBM) by insureds, patients, pharmacists and others, on matters within its regulatory authority.
To file a complaint against a PBM providing pharmacy benefits management services for commercial health plans under Virginia law, use the PBM Complaint Form.
Provide as much information as possible. Attach copies of all supporting documentation to the completed complaint form, and keep the original documents for your records. Submit a separate complaint form for each PBM.
Send the completed form to the Bureau of Insurance using one of the following methods:
Mail: Pharmacy Benefits Manager Complaints
Virginia Bureau of Insurance
State Corporation Commission
P.O. Box 1157
Richmond, VA 23218
Complaints against a PBM servicing a Medicaid plan should be directed to the Department of Medical Assistance Services, and not be filed with the Bureau of Insurance.