HB 5430: Relating to pharmaceutical benefits - West Virginia

Committee Substitute → hb5430 s hhr am _ 3-2 adopted.htm · 7 edits

MODERATE

The House Health and Human Resources committee adopted a 3-2 amendment that significantly softened several provisions of HB 5430. Most notably, it removed the outright ban on PEIA contracting with PBMs that own West Virginia pharmacies, converted Medicaid's pharmacy cost containment requirement into a one-year pilot program with budget neutrality conditions, and expanded rebate pass-through requirements to explicitly cover GPOs and other vendors while mandating 100% pass-through for PEIA.

SCOPE

Removed the prohibition on PEIA contracting with pharmacy benefit managers that own or have affiliate pharmacies licensed in West Virginia. This was a key anti-vertical-integration restriction.

Converted Medicaid's pharmacy cost containment tool from a full implementation mandate into a one-year pilot program. Added that the pilot will not require Medicaid to alter existing contractual agreements, does not mandate changes in clinical practice, and must be budget neutral (state expenditure may not increase relative to protected savings).

REQUIREMENT

Changed PEIA's PBM regulatory requirement from a condition of contract (PEIA may not contract unless PBM is subject to the Pharmacy Audit Integrity Act) to a statement that any such contract is automatically subject to those requirements, while adding an exemption for PEIA from section 33-51-9(e) reimbursement methodology rules.

Expanded the rebate pass-through provision (section 33-51-9(k)) to explicitly name the Pharmacy Benefit Manager, the GPO, or any other vendor as entities whose rebates must be passed through. Added a specific proviso requiring that for PEIA, 100 percent of all such rebates shall be passed on to the plan to reduce premiums.

Changed PEIA's pharmacy cost containment requirement from 'contract with and implement' to 'issue a competitive bid solicitation for a contract,' broadened the scope from just lowest-cost and polypharmacy data to 'cost and effectiveness, including but not limited to' those factors, added a patient outcomes safeguard, and gave the agency discretion to modify its drug formulary based on vendor recommendations.

FISCAL

Added requirement that any cost containment vendor used by Medicaid under the pilot must agree to terms reflecting a contractual savings-to-fee guarantee, and added a new provision allowing Medicaid to enter a long-term contract with the vendor before the pilot ends if net savings are demonstrated.

DEFINITION

Added an exclusion to the 'Rebate GPO' definition: it does not include entities providing benefits to Medicaid, including state-administered multi-state supplemental rebate pools. This narrows which GPOs are subject to the bill's PBM restrictions.

hb5430 sfa helton _ 3-9 adopted.htm → hb5430 sfat helton _ 3-9 adopted.htm · 3 edits

MINOR

The bill title was updated to include a specific exemption ensuring the new pharmacy regulations do not conflict with Medicare. Additionally, the bill was amended to remove a previous instruction to delete a section from the text, effectively preserving that content in the final version.

Scope change

The bill now explicitly clarifies that its new provisions do not apply to conflict with Medicare, and the removal of a deletion instruction means a specific section regarding the Public Employees Insurance Agency remains in the bill rather than being struck out.

REQUIREMENT

Added a specific clause stating that nothing in the new subsection shall be applied to conflict with Medicare.

TECHNICAL

Removed an instruction to strike out lines 116-121 on page 12, meaning that text will remain in the final bill.

Updated the bill header text from 'SFA' to 'SFAT'.

hb5430 hfa worrell 2-18 _1 adopted.htm → hb5430 sfa helton _ 3-9 adopted.htm · 5 edits

MODERATE

The bill was amended to add a federal preemption clause protecting Medicare coverage from the bill's restrictions, and to update definitions regarding pharmacy data and administrative organizations. Additionally, a specific section of the bill was removed entirely.

Scope change

The bill's scope was narrowed by adding an exemption for Medicare-eligible retirees and by removing a section that is no longer included in the final text.

ELIGIBILITY

Added a provision stating that the bill's rules do not apply to medical and prescription drug coverage for Medicare-eligible retirees.

REQUIREMENT

Added a clause ensuring the bill does not conflict with federal Medicare laws.

Deleted a section of the bill that was previously included in the committee substitute.

DEFINITION

Updated the definition of 'Claim level information' to specify it is data required to adjudicate claims.

Updated the definition of 'Pharmacy services administration organization' to include entities that manage claims payments from payors.

hb5430 s hhr am _ 3-2 adopted.htm → hb5430 hfa worrell 2-18 _1 adopted.htm · 1 edit

MINOR

The bill was amended to add a specific exemption for Medicare-eligible retirees regarding a new requirement that pharmacy benefit managers cannot base reimbursement on patient outcomes or metrics. This change ensures that the new restrictions on how pharmacies are paid do not apply to the medical and prescription drug coverage plans for retirees who are eligible for Medicare, clarifying the scope of the new regulations.

Scope change

The bill's scope was narrowed by adding an exception for a specific group of beneficiaries (Medicare-eligible retirees) regarding new prohibitions on outcome-based reimbursement practices.

ELIGIBILITY

Added an exemption stating that the new provisions prohibiting pharmacy benefit managers from basing reimbursement on patient outcomes, scores, or metrics do not apply to medical and prescription drug coverage for Medicare-eligible retirees.

Enrolled Committee Substitute → Committee Substitute · 7 edits

MODERATE

The bill was reformatted from an official legislative document into a web page layout, but the substantive policy text was significantly expanded to include new reporting requirements, stricter reimbursement rules for pharmacy benefit managers (PBMs), and a ban on PBMs owning local pharmacies. These changes aim to increase transparency, lower costs for public employees, and prevent conflicts of interest in the state's pharmaceutical purchasing.

Scope change

The bill's scope expanded from primarily regulating the Public Employees Insurance Agency (PEIA) to also explicitly regulating the Medicaid program and adding new prohibitions on PBM ownership structures and specific fee limitations.

REQUIREMENT

Added a requirement for PBMs to report detailed, itemized data on every pharmacy claim (including drug names, costs, and fees) to the PEIA and Medicaid.

Mandated that PBMs reimburse pharmacies at least the national average drug acquisition cost plus a $10.49 dispensing fee, with specific protections for 340B entities.

Prohibited PBMs from owning or having affiliate pharmacies licensed in West Virginia to prevent conflicts of interest.

Required the PEIA to implement a pharmacy cost containment tool by July 1, 2026, to help providers choose lower-cost drug options.

Ordered the Office of the Insurance Commissioner to conduct a biennial study on pharmacy dispensing costs by December 1, 2026.

DEFINITION

Added extensive new definitions for terms like '340B entity,' 'List Price,' and 'Maximum allowable cost' to clarify regulatory standards.

TIMELINE

Extended the deadline for the PBM business intelligence study from 2024 to 2026 and updated the cost containment tool implementation deadline to July 1, 2026.

Engrossed Committee Substitute → Enrolled Committee Substitute · 8 edits · Apr 1, 2026

MODERATE

This bill was transitioned from a draft committee version to the final enrolled version, incorporating significant policy additions regarding pharmacy benefit management. The final text expands reporting requirements for the Public Employees Insurance Agency, establishes a pilot program for a pharmacy cost containment vendor, and introduces new protections for 340B pharmacies and patient cost-sharing calculations. It also adds a new definition section and a mandate for the Insurance Commissioner to study dispensing fees.

Scope change

The bill's scope expanded from primarily regulating the Public Employees Insurance Agency (PEIA) to explicitly including the Medicaid program under a new pilot program and adding comprehensive definitions for the Pharmacy Audit Integrity Act applicable across the state.

REQUIREMENT

Added a new section requiring the Medicaid program to establish a one-year pilot program for a pharmacy cost containment vendor by July 1, 2026, focusing on engaging prescribing providers with cost data.

Expanded quarterly reporting requirements for pharmacy benefit managers to include 15 new data points such as mail/retail codes, brand/generic indicators, and ingredient costs, plus an annual report on the spread between charges and reimbursements.

Added a requirement that pharmacy benefit managers pass 100% of rebates to the health plan to reduce premiums, with specific provisions for the Public Employee Insurance Agency.

Added a new requirement for PEIA to contract with networks to provide care to members out of state.

DEFINITION

Added a new definitions section (§33-51-3) defining terms like '340B entity,' 'affiliate,' 'List Price,' and 'Pharmacy benefits management' to clarify the scope of the Pharmacy Audit Integrity Act.

ENFORCEMENT

Added a new provision (§33-51-14) mandating the Office of the Insurance Commissioner to conduct a biennial study on the cost to dispense outpatient prescription drugs in West Virginia.

ELIGIBILITY

Added specific protections for 340B pharmacies, prohibiting pharmacy benefit managers from discriminating against them or charging higher fees than non-340B pharmacies.

TECHNICAL

Included standard legislative formatting elements such as navigation links, certification signatures, and effective date language found in the enrolled version but absent in the draft.

Introduced Version → Engrossed Committee Substitute · 10 edits · Mar 13, 2026

MAJOR

The bill was updated from an introduced draft to an engrossed committee substitute, adding significant new provisions to regulate pharmacy benefit managers (PBMs) and expand reporting requirements. Key additions include a ban on PBMs owning or affiliating with pharmacies, a prohibition on charging pharmacies less than the national average drug acquisition cost, and new definitions for terms like '340B entity' and 'affiliate.' The text also introduces a requirement for a pharmacy cost containment tool and mandates that PBMs pass 100% of drug rebates to reduce patient costs.

Scope change

The bill's scope expanded from primarily regulating the Public Employees Insurance Agency (PEIA) to explicitly including the Medicaid program and establishing broader statewide definitions and prohibitions applicable to all pharmacy benefit managers operating in West Virginia.

DEFINITION

Added a comprehensive list of new definitions including '340B entity,' 'affiliate,' 'national average drug acquisition cost,' and 'pharmacy cost containment tool' to clarify regulatory terms.

REQUIREMENT

Added a mandate for the Public Employees Insurance Agency to implement a pharmacy cost containment tool by July 1, 2026, which must present prescribing providers with lowest net cost information.

Expanded quarterly reporting requirements for PBMs to include detailed data points such as mail/retail codes, brand/generic indicators, gross cost, member cost, and ingredient costs.

Added a requirement that PBMs pass 100% of all drug rebates to the health plan to lower patient cost-sharing, rather than retaining them as profit.

Added a requirement for the Office of the Insurance Commissioner to conduct a biennial study on the cost of dispensing outpatient prescription drugs in West Virginia.

Modified the reporting structure to include specific instructions on how to report differences between amounts paid to pharmacies and amounts reimbursed to the agency.

PROHIBITIONS

Added a prohibition preventing PBMs from owning or having affiliate relationships with pharmacies licensed in West Virginia to prevent conflicts of interest.

Added a prohibition preventing PBMs from reimburing pharmacies less than the national average drug acquisition cost plus a $10.49 dispensing fee.

Added a ban on PBMs charging health plans more than the amount they pay pharmacies for the same prescription drugs.

ENFORCEMENT

Added authority for the Insurance Commissioner to order reimbursement to insureds or pharmacies who suffer monetary losses due to PBM violations.

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