Pharmacy Benefits Management

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A pharmacy benefits manager is an entity that performs pharmacy benefits management – that is, administers or manages prescription drug benefits provided by a carrier for the benefit of covered individuals. It includes an entity acting for a pharmacy benefits manager in a contractual relationship in the performance of pharmacy benefits management for a carrier, nonprofit hospital, or third-party payor under a health program administered by Virginia. Pharmacy benefits management is now regulated by Virginia, which includes licensing, reporting and prohibited conduct. 

If you have any questions regarding this information, please e-mail BureauofInsurance@scc.virginia.gov or call (804) 371-9741.

Any individual or entity providing pharmacy benefits management services or otherwise acting as a pharmacy benefits manager in Virginia on or after October 1, 2020, is required to obtain a license unless otherwise covered by a carrier’s license.

Apply for a License:
To apply for a license, you must submit an application and pay the $250 application fee.

License Renewal:
All licenses expire on September 30 and must be renewed for the following one-year period effective October 1.
To renew your license, you must submit a renewal application and pay a $100 nonrefundable renewal fee. Applicants should allow up to 30 days for processing.

View Administrative Letter 2020-04 for further information.

Any carrier that contracts for pharmacy benefits management with one or more pharmacy benefits managers that are required to be licensed by Virginia are required to submit a rebate report to the Commissioner of Insurance. The carrier may submit the report on its own or through its pharmacy benefits manager or managers pursuant to its contract for pharmacy benefits management.

For this purpose, a rebate is a discount or other price concession, including without limitation incentives, disbursements, and reasonable estimates of a volume-based discount, or a payment that is (i) based on utilization of a prescription drug and (ii) paid by a manufacturer or third party, directly or indirectly, to a pharmacy benefits manager, pharmacy services administrative organization, or pharmacy after a claim has been processed and paid at a pharmacy.

For each health benefit plan, the report must include the aggregate amount of rebates:

  • received by the pharmacy benefits manager;

  • distributed to the appropriate health benefit plan; and

  • passed on to the enrollees of each health benefit plan at the point of sale that reduced the enrollees' applicable deductible, copayment, coinsurance, or other cost-sharing amount.

The initial report, covering the period from October 1, 2020 through December 31, 2020, must be submitted to the Commissioner by March 31, 2021. Reports for subsequent quarters are required to be filed according to the following schedule:

Quarter Period Covered Due Date
1 January 1 through March 31 June 30
2 April 1 through June 30 September 30
3 July 1 through September 30 December 31
4 October 1 through December 31 March 31


Rebate Report Guidance and Reporting Instructions
Rebate Report Forms

The Bureau encourages carriers and pharmacy benefits managers to be aware of prohibited conduct related to advertisements, claims adjudication fees, reimbursements for services, network restrictions or adequacy determinations, retaliation for exercising rights and spread pricing.

See § 38.2-3467, Code of Virginia, for details.