MONTGOMERY — Two bills filed in the State Senate that would regulate pharmacy benefit managers (PBMs) received a public hearing in the Senate Banking and Insurance Committee on Wednesday.
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). Neither bill was voted on in committee on Wednesday.
Trent McLemore, a Huntsville resident and director of pharmacy at Star Discount Pharmacy, told 1819 News on Wednesday he was confident Senate Bill 99 would pass out of committee. He called Senate Bill 93 a “band-aid.”
“I’m highly confident and optimistic. The biggest thing is we formed (SB 99) based on other states’ bills where the data showed it didn’t increase costs,” McLemore said. “Everybody is just over it and wants this to move through and get done.”
Stutts told 1819 News after the meeting, “I have all the confidence we’re going to pass (SB 99) out of committee next week and get it to the Senate floor and pass it. Then the work will move to the House.”
“It’s going to drive down overall drug costs because you can have generic substitutes. PBMs are currently not allowing them in their formulary. SB 99 mandates that any rebates go back to the consumer. In every other state that’s saved health care costs,” he added.
The Alliance of Alabama Healthcare Consumers (AAHC) opposes both bills.
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 cost of this new fee would be an enormous and permanent burden on employers and their employees. Spending on prescription drugs continues to increase annually. This legislation does not address the skyrocketing cost of drugs that are driving consumer healthcare costs. Adding a new fee would require patients and employers to pay more money for the same prescription,” AAHC executive director Robin Stone said in a statement this week.
Jones defended Senate Bill 93 by saying, “I feel like one of the big differences in these two bills got missed today. Nobody talked about it. I just wanted to mention it. Our bill uses the Alabama average cost plus the dispensing fee which is exactly what Medicaid pays these pharmacies in the state of Alabama, the average Alabama cost plus $10.64.”
“SB 99 uses the national average plus the $10.64 plus 2% or $25. You’ve got Alabama cost on 93 and you’ve got national cost on 99. Both of them have the Medicaid rate but 99 has an additional 2% or $25. The last thing I’ll mention is our bill was also written by independent pharmacies. I want to make that very clear,” Jones said at the committee meeting.
Josh Hardin, a proponent of Senate Bill 99 and owner of Mills Pharmacy, said independent pharmacies face “extinction in this state” due to PBMs.
“Last year, we were forced to close one of our Birmingham locations because of PBM practices. Independent pharmacy faces extinction in this state because PBMs own their own pharmacies, they operate in this state, they steer their own patients to them, they set pricing for both those pharmacies and their independent competitors with the aim of driving all those competitors out and achieving a monopoly. They also keep a spread on every claim that an independent pharmacy processes so they’re profiting off of that independent pharmacist’s labor,” Hardin said at the committee meeting.
To connect with the author of this story or to comment, email caleb.taylor@1819News.com.
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