The Virginia Department of Health owes millions of dollars to an HIV drug manufacturer after it received overpayments of rebates from the company for years, said Laurie Forlano, VDH’s lead epidemiologist.
The drug rebates are one of Virginia’s largest sources of funding to provide health care for people living with HIV who can’t afford treatment.
VDH flagged what Forlano called a “billing error” when it lost nearly 50% of its funding from drug rebates used to pay for HIV treatment in 2024 compared to the previous year. The big dip led VDH to cut services for HIV treatment early last year, providing only the most critical HIV care — a loss that was devastating for patients.
In Hampton Roads, the LGBT Life Center clinic has lost more than $1.3 million in funding due to rebate decreases and federal reductions in HIV prevention funds, according to the group’s CEO, Stacie Walls.
“Providers across the state, the ones that were getting rebate grants … have lost faith in the Virginia Department of Health and their ability to manage these grants and funds, and get them out to the community,” Walls said.
“They have decimated the funding — I don’t think any of us have confidence that the state is administering these programs really well,” she added.
Virginia covers insurance payments for people who can’t afford HIV care but don’t qualify for Medicaid. When HIV medication payments are made with VDH-sponsored insurance, VDH earns rebates from pharmaceutical companies.
In 2024, VDH provided 2,648 people with insurance support for HIV treatment, and directly bought medication for 1,879 clients, an annual report shows.
“For many years, we were able to carry over rebate dollars that had not been expended from one year to the next,” Forlano said.
“We believe we unintentionally received some rebate payments in those prior grant years, which falsely elevated the amount we received,” she added.
Virginia’s HIV drug rebates dropped from more than $32 million in 2023 to just under $17 million in 2024, VDH officials said. VDH is still figuring out how much money it owes to the drug manufacturer for past years and doesn't yet have a repayment plan.
“These are thousands and thousands of lines of data — we’re still in the discovery and resolution process,” Forlano told WHRO.
Forlano said that VDH has been working with the manufacturer, whose name she declined to disclose, to resolve the issue since early 2025.
Gilead Sciences, the leading manufacturer of HIV medication globally, told WHRO it overpaid rebates to VDH from the second quarter of 2021, to the second quarter of 2023.
“VDH has reviewed the data, processes, and policies via operational discussions with Gilead to resolve the identified issues with claims submission and related rebate payments,” the company wrote.
“...To be clear, Gilead overpaid rebates due to a billing error by Virginia — it did not cut them,” Gilead added.
Forlano agrees that paperwork issues largely contributed to the problem.
“The words that were used or attached to certain claims in the files, and the process [for claiming rebates] itself contributed to the error,” Forlano said.
Cuts to HIV care
Cuts to HIV clinics due to the lost rebates have limited access to care for HIV patients across the state. The clinics are part of the federal Ryan White HIV/AIDS Fund, administered by states, which provides HIV medication and related treatment for people who are uninsured or underinsured.
After the big rebate decrease limited money for HIV care in 2024, VDH slashed funding for Ryan White clinics from $29.7 million in 2024 to $9.7 million last year.
The cuts mean that people who test positive for HIV wait longer to receive treatment, Walls said. The LGBT Life Center has been unable to immediately start treatment after testing since losing its Ryan White funding.
“It is systematically dismantling public health systems in Virginia that will take years to rebuild,” Walls said.
The number of clinics funded in Virginia dropped from 29 to 14, leading providers to rely more heavily on limited local funding and smaller grants.
Ryan White clinics are an essential safety net for people living with HIV who are uninsured or underinsured, and serve half of those diagnosed with HIV in the U.S.
But the cuts to clinics were necessary for the state to continue providing HIV-suppressing medications, VDH officials said. State health departments are federally required to prioritize providing these HIV medications over other HIV-related care.
During the current General Assembly session, multiple legislators have proposed budget amendments to backfill at least part of the lost clinic funding. To help plug the budget hole, the state received a $3.8 million supplemental federal grant for HIV care.
Virginia is also facing rising insurance costs and federal cuts to Medicaid that threaten care for people living with HIV.
“It’s possible that additional cost savings or containment measures will need to be implemented,” Forlano said. “One option is a wait list; we’re really trying to avoid that.”
VDH also applied for emergency relief funding from the U.S. Health Resources and Services Administration - funding meant specifically to prevent or alleviate waitlists for state HIV medication assistance programs. Forlano said VDH is waiting for confirmation from HRSA on whether it will receive the funding and how much it will be.
“There’s a range of [federal] awards,” Forlano said. “It probably won’t be more than $3 million or $4 million, if that.”