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House panel adopts bill to bring PSAOs into Virginia drug-price transparency law
Summary
The House committee voted unanimously to report HB 2375, adding pharmacy services administrative organizations (PSAOs) to the state's prescription drug transparency reporting, while carving out an exemption for PSAOs that only charge flat service fees to pharmacies.
The House committee voted 19-0 to report HB 2375, a bill that adds pharmacy services administrative organizations, or PSAOs, to Virginia's prescription drug transparency reporting requirements while exempting PSAOs that generate revenue solely from flat service fees.
The bill, introduced by Delegate Sickles, would require PSAOs that tie fees to prescription drug prices or volume to report under the existing transparency framework. An amendment adopted in committee specifies that a PSAO '2solely [generating] revenue from charging flat service fees to pharmacies and [not] charging pharmacies for services based on prescription drug prices or volume' is exempt from the reporting requirements.
Supporters said the change will give state policymakers more visibility into the entities that help independent pharmacies negotiate contracts with pharmacy benefit managers (PBMs) and wholesalers. "PSAOs are kind of the missing link in that chain," said Christopher West, a virtual witness representing the National Association of Benefit and Insurance Professionals, who testified in favor of the bill. James Pipprell of the Healthcare Distribution Alliance, which represents pharmaceutical distributors and PSAOs, said his group was neutral but supported the adopted amendment.
During committee questions, members sought clarity on which PSAOs would be exempt. Counsel explained the exemption applies when a PSAO's revenue comes only from flat service fees charged to pharmacies rather than fees tied to drug prices or sales volume. Delegate Hodges asked for further detail about how pharmacies see payments at the point of sale; committee members and counsel agreed that PSAOs whose payments to pharmacies differ from the point-of-sale price would not qualify for the exemption and therefore would have to report.
The committee conducted a public-roll vote after receiving brief in-person and virtual testimony. The motion to report the bill as amended passed 19-0.
The amendment text adopted in committee states: "[I]nsert a pharmacy services administrative organization that solely generates revenue from charging flat service fees to pharmacies and does not charge pharmacies for services based on prescription drug prices or volume shall be exempt from the reporting requirements of this section." The committee record does not specify a numerical cap for the flat fee; counsel confirmed no specific dollar cap is included in the amendment.
Votes at a glance: HB 2375 (report as amended) ' passed 19-0.
HB 2375 now moves forward with the committee's report to the next stage of the legislative process.
