Senate panel advances bill to move Virginia Medicaid pharmacy benefit to single state-contracted PBM

Senate subcommittee members advanced SB 875, the Save the Local Pharmacies Act, after lengthy testimony from pharmacists, pharmacy owners and health-plan representatives about disappearing community pharmacies and the role PBMs play in Medicaid reimbursements.

The bill, presented by Sen. Rouse, would realign Virginia’s Medicaid pharmacy benefit under a single state‑contracted PBM. Sponsors said the change aims to increase transparency, curb PBM practices that they said divert payments meant for pharmacies and stabilize independent and rural pharmacy access. Sen. Rouse cited other states that moved to a single‑PBM model and reported large savings, and estimated the bill could save Virginia about $39 million annually.

Supporters included multiple independent pharmacists who said closures are occurring across rural and urban areas, and trade groups representing independent and chain pharmacies. Jeremy Counts of Counts Family Pharmacy and others described under‑reimbursement, rising closures and long prior‑authorization calls as reasons the state should act. Several speakers said a single PBM model in other states preserved pharmacies and improved reimbursements.

Health plans, PBM vendors and the administration opposed the change or urged caution. Heidi Dix of the Virginia Association of Health Plans told the committee the bill would be expensive to implement and estimated roughly $17 million in administrative costs and up to $44 million if rebate structures change. Jeff Leonardi, chief deputy at the Department of Medical Assistance Services (DMAS), said most Medicaid members already receive services through managed care, that moving the pharmacy benefit would be a “seismic” change, and that competitive and timing issues (including a conflict‑of‑interest clause in the bill) could push implementation to fiscal 2028.

Committee members acknowledged the scale of the change and the administration’s concerns but indicated willingness to move the bill forward to full committee with expected amendments — including an enactment delay and technical fixes to the conflict‑of‑interest language. The subcommittee reported the bill out with three yes votes, zero no votes and two abstentions recorded; members said they expect additional amendments before full committee consideration.

Why it matters: Supporters said the bill addresses immediate pharmacy closures and access gaps in medically underserved areas; opponents said the change could raise short‑term costs and disrupt managed care delivery without careful transition planning.

Votes and next steps: The motion to report SB 875 passed in subcommittee with the clerk recording “Ayes 3, no 0, 2 abstentions.” Sponsors said they would draft amendments to address implementation timing, competitive bidding language and other technical concerns before the full committee.