Health insurance; pharmacy benefits managers, definition of "covered entity."
SB1311 amends Virginia’s health insurance code section defining terms used in the state’s pharmacy benefits manager (PBM) regulation framework. The bill updates and expands definitions for key entities and practices, including “covered entity,” “contract pharmacy,” “pharmacy benefits management,” “pharmacy benefits manager,” “rebate,” “retained rebate,” “retained rebate percentage,” and “spread pricing.” It also clarifies that a “covered entity” under the 340B drug pricing program means an entity described in federal law, but excludes hospitals as defined in Virginia law.
The measure is largely definitional, but those definitions matter because they determine which organizations and transactions fall within Virginia’s PBM oversight rules. By specifying how rebates, retained rebates, and spread pricing are defined, the bill supports enforcement and reporting around prescription drug pricing and PBM compensation practices. It also expressly includes PBM affiliates and entities acting on behalf of PBMs, broadening the scope of relationships covered by the statute.
The bill amends § 38.2-3465 of the Code of Virginia, affecting the statutory definitions that govern PBM regulation in the health insurance article. Its practical impact is to refine the legal framework for oversight of prescription drug benefit administration, including 340B contract pharmacy arrangements, rebate pass-through issues, and spread pricing practices. The changes may affect carriers, PBMs, pharmacies, nonprofit health maintenance organizations operating group models, third-party payors, and covered entities participating in prescription drug reimbursement arrangements.
The bill appears to have been broadly supported and noncontroversial in the legislature. It advanced unanimously or near-unanimously through committee and floor votes in both chambers, including 15-0 in Senate committee, 38-0 on final Senate passage, 21-0 in House committee, and 94-0 in the House. The voting record suggests general agreement on clarifying PBM-related definitions rather than a partisan or policy-divisive debate.
No committee transcript is provided, and the vote totals show no recorded opposition, so there is little evidence of active contention in the legislative record supplied. The most likely areas of policy sensitivity are the bill’s treatment of PBM rebates, retained rebates, spread pricing, and the scope of “covered entity” under the 340B framework, because those definitions can affect drug pricing, pharmacy reimbursement, and the reach of PBM regulation. However, based on the available record, these issues did not generate visible disagreement during consideration.