RICHMOND, Va. — A bipartisan group of Virginia lawmakers is advancing legislation through this year's General Assembly aimed at reducing prescription drug prices by targeting pharmacy benefit managers (PBMs), the industry middlemen they say drive up costs through an opaque system.
The legislation comes as Virginia grapples with pharmacy closures that have created "pharmacy deserts" across the state, which officials declared a public health threat last year.
"Complexity and confusion really comes to mind. It's a very opaque system where nobody really understands it," said Del. Otto Wachsmann (R-Sussex), a bill co-patron who has worked both as a pharmacist and for a pharmaceutical company.
Wachsmann said PBMs, negotiate on behalf insurance companies with drug manufacturers on which drugs are covered by insurance and receive rebates from the drug company for doing so, which they pocket. This leads companies to raise overall drug prices to recoup costs, he explained.
PBMs also reimburse pharmacies for stocking drugs, but often at rates below what pharmacists actually pay, Wachsmann said. He experienced this firsthand at his own pharmacy.
"I was having to pay my wholesaler $450 for that bottle of 30 tablets for that diabetes drug. Four to six weeks later, when I would get my reimbursement back from the third party. And add to it, what we collected at the copay, I was receiving a total of $430," Wachsmann said.
Such financial pressures led Wachsmann to sell his pharmacy in 2019 and are driving many pharmacy closures statewide. Last year, dozens more pharmacies closed than opened in Virginia.
"That puts every single Virginian at risk. It puts the health of our communities at risk," said Sen. Aaron Rouse (D-Virginia Beach).
The legislation aims to address these issues through new rules and restrictions on PBMs.
"It bans the practice of PBMs, requiring patients to use only specific pharmacies. It requires disclosures of fees and costs to patients, and it mandates pass through rebates to us," said Del. Katrina Callsen (D-Albemarle).
"That rebate money has to be shared back with cost share. That means it helps lower the copays the patients pay, and helps to lower some of the premiums as well, too," Wachsmann added.
During committee hearings, a lobbyist for the Pharmaceutical Care Management Association, which represents PBMs, said the organization worked with lawmakers on concerns about the bill.
"Don't agree with everything that's been said about PBMs, but but just want to reiterate that everything that a PBM does works to reduce costs for prescription drugs," said Sean Stephenson, the association's lobbyist.
The legislation also requires reporting from PBMs and gives state agencies oversight authority to ensure compliance with new rules.
"Let's give them some strong outlines of what we want to see: transparency, accountability, oversight, and then we'll see how they respond, and if we need to come back, we come back," Callsen said.
The bills have received unanimous bipartisan support as they move through the legislative process. A representative from the Spanberger Administration expressed support for the measures during committee hearings.
CBS 6 is committed to sharing community voices on this important topic. Email your thoughts to the CBS 6 Newsroom.
📲: CONNECT WITH US
Blue Sky | Facebook | Instagram | X | Threads | TikTok | YouTube
This story was initially reported by a journalist and has been converted to this platform with the assistance of AI. Our editorial team verifies all reporting on all platforms for fairness and accuracy. To learn more about how we use AI in our newsroom, click here.
