Alabama lawmakers advance regulations on pharmacy benefit managers
[March 21, 2025]
By KIM CHANDLER
MONTGOMERY, Ala. (AP) — Two blocks from the Alabama Statehouse, a black
wreath hung on the door of Adams Drugs — a symbol to draw attention to
the number of neighborhood pharmacies that have closed, or are in danger
of closing, across the state.
Dozens of independent pharmacies have shuttered in Alabama over the last
two years, according to the Alabama Independent Pharmacy Alliance.
Pharmacists said that is because of financial pressures, in part,
because it can often cost more to dispense a drug than they are
reimbursed by pharmacy benefit managers.
“We’re losing almost one drugstore per week going out of business
because they are paid such a small amount of money from the PBM industry
to fill prescriptions for their patients at their drugstore,” Sen. Billy
Beasley, a Democratic senator and retired pharmacist, said.
Alabama is one of several states considering new regulations on pharmacy
benefit managers, the middlemen between health insurance companies, drug
companies and pharmacies. The Alabama Senate voted 32-0 Thursday to
advance legislation to require minimum reimbursement rates to community
pharmacists. The bill now moves to the Alabama House of Representatives.
Legislation seeking regulations on the benefit managers have also been
proposed in Mississippi, Arkansas and other states. Both large retail
chains and independent pharmacists have closed stores across the country
as drugstores face reimbursement issues, rising costs and other
challenges.

Pharmacy benefit managers leverage purchasing power with drug companies
with the goal of driving down drug costs for consumers. However,
independent pharmacists say the business practices of benefit managers
cause them to lose money on about 20% of prescriptions.
“The biggest issue is we’re not getting paid what it actually cost to
fill a prescription, including labor,” Trent McLemore, a pharmacist with
Star Discount Pharmacy.
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A black wreath hangs on the door of Adams Drugs in Montgomery, Ala.,
Feb. 25, 2025. (AP Photo/Kim Chandler)
 The Alabama bill would require that
PBMs reimburse community pharmacies at the Alabama Medicaid Agency
reimbursement rate. It would also prohibit the practice of “spread
pricing” where a benefits manager charges health plans more for
drugs than they pay pharmacies.
Groups opposed to the bill have said it would effectively put a new
$10.64 fee on prescriptions under the requirement to match state
Medicaid rates, which include a $10.64 dispensing fee. That fee,
they argued, will eventually get passed down to consumers and
businesses.
Helena Duncan, president of the Business Council of Alabama, told a
legislative committee on Wednesday that small businesses, which
might already be struggling to provide insurance to their workers,
will have to either absorb the increased cost or pass it along to
employees through premium increases.
“Shifting the financial burdens from pharmacies to the Alabama
employers is fundamentally unfair,” Duncan told a legislative
committee on Wednesday.
Republican Sen. Andrew Jones, a cosponsor of the bill, said Thursday
said other states have seen drug prices go down. Jones said it is
important to protect neighborhood pharmacies because they play a
vital role in communities.
“You are not going to get a big box store to open in the middle of
the night to get you the medication you need,” Jones said.
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