                                 CODE OF VIRGINIA

STATE PHARMACY BENEFITS MANAGER (§ 32.1-325.5)

A. As used in this section:
			&#8220;Pharmacy benefits manager&#8221; means the same as that term is
defined in &#xA7; 38.2-3465.
			&#8220;Spread pricing&#8221; 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.
			&#8220;State pharmacy benefits manager&#8221; 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 &#xA7; 38.2-3470,
the state pharmacy benefits manager shall adhere to subdivision A 5 of &#xA7;
38.2-3467 unless otherwise prohibited by federal law.

C. The Department&#8217;s contract with the state pharmacy benefits manager
shall:

   1. Establish the state pharmacy benefits manager&#8217;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;

   4. Require transparency in drug costs, rebates collected and paid, dispensing
   fees paid, administrative fees, and all other charges, fees, costs, and
   holdbacks; and

   5. Prohibit the use of spread pricing.

HISTORY: 2025, cc. 701, 704.