Two bills were filed last week in the Alabama Senate that would regulate pharmacy benefit managers (PBMs).
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 two bills regulating PBMs are Senate Bill 93 by State Sen. Andrew Jones (R-Centre) and Senate Bill 99 by State Sen. Larry Stutts (R-Tuscumbia).
“Independent pharmacies all across Alabama are closing their doors because of unchecked corporate greed by PBMs. In many cases, these PBMs pay pharmacists less than the cost of the drugs they prescribe. SB 93 will stop this by mandating fair payments. These payments are prohibited in law from being charged to the patient. The bill also empowers pharmacists to reject prescriptions that lose money and enables them to have honest conversations with their patients. PBMs know that what they are doing is wrong; that's why they've been hitting pharmacists with gag clauses and stifling free speech. It's time to put that to an end,” Jones told 1819 News on Monday.
Stutts said his PBM legislation has enforcement provisions that allow the Department of Insurance to “enforce the intent and the letter of the law.”
“This legislation is actually going to save consumers money. Because what happens right now is the PBMs direct people to their own pharmacies or mail-order pharmacies, so there’s no free-market principles involved there,” Stutts told 1819 News on Monday. “Where it’s going to save money is the PBMs get a rebate from different drug companies to put their drug on their formulary. So even if there’s a cheaper, generic alternative, you may be forced to use the drug that’s on the formulary which is more expensive. What my bill does is it mandates that the rebate goes back to the consumer instead of going to the PBM. The PBMs call it a rebate. I would call it a kickback. They get reimbursed money after the fact for including a particular company’s drug on their formulary. This is going to save the consumer money because it’s going to give you options of drugs that may not currently be on the formulary of the PBM. My bill mandates that that rebate either go directly back to the customer, who is the patient, or it goes back to the customer, who is the employer that provides them with insurance. Either way it’s going to drive either the insurance rates down or it’s going to go directly back to the consumer. In the long run, it’s going to save the consumer money.”
The topic of PBM reform briefly came up in the 2024 legislative session. House Bill 238 (HB238) by State Rep. Phillip Rigsby (R-Huntsville) would have added reporting and practice restrictions to PBMs' operations. The legislation also would have added a dispensing fee to prescriptions filled in the state.
Opponents said the bill would lead to higher costs for health plans and their consumers, which supporters denied. After it was passed out of a committee, the bill never received a vote in the House.
The Alliance of Alabama Healthcare Consumers (AAHC) announced its opposition to Senate Bill 93 and Senate Bill 99 on Monday. AAHC said both bills would impose an additional $10.64 dispensing fee on every prescription in Alabama. The group estimated the fee would cost Alabamians “at least an extra $900 per person or $3,600 for a family annually.”
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.
“Imposing a permanent fee on every prescription filled in Alabama is not a solution to the problem of rising drug costs; the new $10.64 dispensing fee designated for pharmacy owners is a costly burden that will ultimately create more problems for consumers and employers. Families and employers need help to reduce their prescription drug costs; new fees will add more costs. Both bills fail to address the exorbitant drug prices set by drug manufacturers. This approach ignores the real driving source of rising healthcare costs – skyrocketing drug prices from national manufacturers,” AAHC executive director Robin Stone said on Monday. “If this new proposed $10.64 dispensing fee for pharmacy owners is approved, it will be forced down the supply chain and will be paid by employers, families, and other consumers, and not Pharmacy Benefits Managers. These proposals will cost Alabamians at least an extra $900 per person or $3,600 for a family each year.”
To connect with the author of this story or to comment, email caleb.taylor@1819News.com.
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