New legislation regulating pharmacy benefit managers (PBMs) in Alabama by State Sen. Billy Beasley (D-Clayton) passed the Alabama Senate on Thursday.
PBMs are intermediaries between pharmacies and health insurance companies. Supporters of the entities say they help keep costs down for consumers. Pharmacists blame PBMs for putting independent pharmacies out of business.
The bill regulates PBMs and requires them to pay "community pharmacies" at least the Medicaid reimbursement rate for a prescription filled. It exempts hospital pharmacies and large chain pharmacies like Wal-Mart, Publix, CVS and Walgreens. If passed into law, the bill will go into effect on October 1.
“It’s in black and white in the legislation that the reimbursement to the pharmacist can not be passed on to the consumer so I want to make that very clear. The actual acquisition cost of the drug plus the reimbursement which is based on Medicaid can not be passed on to the consumer. Anything to the contrary is just a scare tactic,” State Sen. Andrew Jones (R-Centre) told reporters on Thursday.
Opponents of the bill say it will raise costs for consumers.
The Alliance of Alabama Healthcare Consumers (AAHC) said after the bill passed that they “strongly disagree with statements that the legislation will not impact consumers.”
AAHC’s members include Alabama Power, Regions, Alabama League of Municipalities, Association of County Commissions of Alabama, BlueCross BlueShield of Alabama, Business Council of Alabama, CVSHealth and the National Federation of Independent Businesses.
“The changes in this legislation reduce the overall cost impact on employers, and some of the other changes are positive for employers. The new $10.64 fee on every prescription filled at independent pharmacies under an employer benefit plan remains a very serious concern. This fee will add millions of dollars in healthcare benefit costs to employer benefit plans. We strongly disagree with statements that the legislation will not impact consumers. Over 50 percent of Alabamians have healthcare through an employer, and this legislation is totally directed at those commercial benefit plans. We will continue to push for changes to this legislation that reduce the burden on Alabama employers and their families.” AAHC executive director Robin Stone said in a statement on Thursday.
Beasley said on the Senate floor that the "PBM industry has been taking advantage of the role they play."
"Cost of drugs has escalated for almost 40 years now and I honestly believe the creation of the PBM industry has caused the manufacturers to charge more for the retail sale of pharmaceuticals," he added.
The bill now heads to the House.
"I'm very hopeful and basically certain that the House is going to pass this. It's a good piece of legislation. A lot of people have worked on it, and there's compromises along the way, but it's definitely a step in the right direction, and it needs to be passed unanimously in the House just like it was in the Senate today," State Sen. Larry Stutts (R-Tuscumbia) told reporters on Thursday.
To connect with the author of this story or to comment, email [email protected].
Don't miss out! Subscribe to our newsletter and get our top stories every weekday morning.
