In early January 2025, Virginia’s Senate introduced a bipartisan bill called the Save Local Pharmacies Act (“Act”). The Act is designed to eliminate or reduce pharmacy deserts that have been plaguing Virginia’s rural areas. This trend is unfortunately rampant throughout the country. The Virginia Pharmacy Association released a shocking statistic that 20 counties within Virginia have either one or no pharmacies. This decline in Virginia’s independent pharmacies, especially in rural areas, is due in large part to drastically low reimbursement by the Pharmacy Benefit Managers (“PBMs”) currently participating in Virginia’s Medicaid program. The Act will attempt to realign Virginia’s Medicaid pharmacy benefit under a single, state-contracted PBM, which would restructure the current model which utilizes multiple PBMs. Having multiple PBMs involved in Virginia’s Medicaid program has driven up the costs of Virginia’s pharmacies filling prescriptions for Medicaid patients. For example, Medicaid currently reimburses pharmacies an average of $1.09 per prescription, far below the $10.65 average cost of dispensing prescriptions.
The Act is designed to realign the Medicaid pharmacy benefits with the goal of protecting Virginia’s local pharmacies in the following ways:
- Allow direct state contracting for prescription benefits. The Act would eliminate having multiple PBMs as middlemen in the Medicaid prescription process, allowing Virginia to have oversight for cost efficiency and patient care while also ensuring access to pharmacy benefits in Virgina’s communities;
- Consolidate to just one PBM leading to reduced administrative fees and focused oversight of the formulary, pricing negotiations, and rebates;
- Provide the Department of Medical Assistance Services (“DMAS”) access for drug pricing, rebates and administrative costs disclosed for analysis; and
- Task the new PBM with protecting pharmacy access for residents, particularly in underserved areas.
Virginia is estimating that the Act, if passed by the Virginia legislature and enacted into law by the governor, would save the state at least $39 million annually. Virginia needs to look no further than its surrounding states to see that this model is in its best interest. West Virginia saved over $54 million annually after implementing a state-managed PBM system. Kentucky estimates that it saved $282 million from 2021-2023 with similar legislation. Likewise, Ohio estimates savings of $150 million annually after its recently enacted transparent single-contracted PBM-law. Virginia’s pharmacies and pharmacists should become familiar with and support this Act as it makes its way through the Virginia legislature in 2025.
How Frier Levitt Can Help
Frier Levitt represents numerous pharmacies across the United States assisting them in challenging PBM audits, network access, reimbursement practices (including DIR fees and MAC reimbursement) and providing extensive knowledge on all aspects of the pharmacy-PBM relationship. Contact us to speak with an attorney about how your pharmacy can leverage the various laws and protections afforded to pharmacies, including Virginia’s PBM laws.
