Pharmacy Benefits Managers-Licensing and Certain Prohibited Conduct (Revised)

SCOTT A. WHITE COMMISSIONER OF INSURANCE STATE CORPORATION COMMISSION BUREAU OF INSURANCE P.O. BOX 1157 RICHMOND, VIRGINIA 23218 1300 E. MAIN STREET RICHMOND, VIRGINIA 23219 TELEPHONE: (804) 371-9741 www.scc.virginia.gov/boi July 28, 2020 Administrative Letter 2020-04 REVISED 6-27-2023 To: Pharmacy Benefits Managers; All Carriers Licensed to Write Accident and Sickness Insurance in Virginia; All Health Services Plans and Health Maintenance Organizations Licensed in Virginia; and Life and Health Interested Parties Re: Licensure Requirements, Rebate Reporting, and Certain Prohibited Conduct During its 2020 Session, the Virginia General Assembly passed Acts of Assembly Chapters 219 and 1288 (House Bill 1290 and Senate Bill 251, respectively), related to the licensing of pharmacy benefits managers, rebate reporting, and certain prohibited conduct by carriers and pharmacy benefits managers. Please see §§ 38.2- 3465 through 38.2-3470 of the Code of Virginia (Code). This legislation is effective October 1, 2020. Under § 38.2-3466 of the Code, any person providing pharmacy benefits management services or otherwise acting as a pharmacy benefits manager in the Commonwealth on or after October 1, 2020, shall obtain a license from the Bureau of Insurance (Bureau), unless otherwise covered by a carrier’s license.1 To obtain this initial license, a person must complete and submit an application via SIRCON and pay a $250 nonrefundable fee. The Bureau will begin accepting applications immediately. Please allow up to 30 days for processing. Licenses will be renewable annually for the period October 1 through September 30 in the year following initial issuance. To renew the license, a licensed pharmacy benefits manager must submit a renewal application via SIRCON and pay a $100 nonrefundable renewal fee. 1 If pharmacy benefits management is performed within and under the authority of the carrier’s license, then no separate pharmacy benefits manager license is required. Administrative Letter 2020-04 Page 2 The Bureau also encourages carriers and pharmacy benefits managers to be aware of the rebate reporting requirements in § 38.2-3468 B and the conduct prohibited under the new law in § 38.2-3467, related to advertisements, claims adjudication fees, reimbursements for services, network restrictions or adequacy determinations, retaliation for exercising rights and spread pricing. Questions concerning this administrative letter should be addressed to: For inquiries related to licensure AgentLicensing@scc.virginia.gov (804) 371-9631 For all other inquiries such as rebate reporting BureauofInsurance@scc.virginia.gov (804) 371-9741. Sincerely, Scott A. White Commissioner of Insurance This administrative letter was revised on June 26, 2023, to amend the contact information for questions about the administrative letter, to remind PBMs of their obligations for rebate reporting, and offer an online application and renewal process.