On March 24, 2021, Virginia Governor Ralph Northam signed HB 2007, adding Virginia to the growing list of states that have enacted drug pricing transparency measures. The new law, which takes effect January 1, 2022, establishes drug price transparency requirements for manufacturers, wholesale distributors, PBMs, and carriers.

The legislation establishes an annual (by April 1) reporting requirement for manufacturers with respect to 1) brand-name drugs and non-biosimilar biologicals with a WAC of $100 or more for a 30-day supply or course of treatment and any increase of 15% or more in WAC over the preceding calendar year; and 2) biosimilars launched with an initial WAC that is not at least 15% less than the WAC of the reference biologic.

Reporting is also required for generic drugs with a WAC of at least $100 per 30-day supply (adjusted annually for inflation) and an increase in WAC of at least 200% relative to the average WAC of the drug during the preceding 12-month period. There is some ambiguity with respect to how the trigger dates and the reporting dates align (e.g. whether a WAC increase in January 2022 would be reported April 1, 2022 or April 1, 2023).

With respect to any drug that triggers reporting requirements, the manufacturer must report several categories of information to a data services organization selected by the Virginia Department of Health. These categories include, among others, research and development costs, which of the manufacturer’s drugs have a therapeutically equivalent generic, and a statement regarding the factor or factors that caused the increase in wholesale acquisition cost. A manufacturer’s reporting obligations are satisfied by reporting information and data included on the manufacturer’s 10-K “or any other public disclosure.”

The law imposes civil penalties up to $2,500 per day for failure to report. The Department of Health is required to establish a schedule of penalties for failure to report, based on the level of severity of the violation. Regulations from the Department of Health are required within approximately 9 months of enactment.