Pharmacy Benefit Managers | Alabama Retail Associati

Legislation related to pharmacy reimbursement rates never reached the House floor for a vote during the Alabama Legislature’s 2024 regular session.

HB238 by Rep. Phillip Rigsby, R-Huntsville, would have required pharmacy benefit managers (PBMs) to reimburse in-network pharmacies for the actual acquisition cost of a medication “plus a professional dispensing fee” under the federal act that created Medicaid. The current dispensing fee is $10.64.

After an hour-long public hearing March 6, the House Insurance Committee approved the bill, but the full House never voted on it.

Insurance plan administrators, including self-insured and government plans, and the Alliance of Alabama Healthcare Consumers, an employers’ alliance, spoke against the bill, while five independent, community pharmacists testified in favor the legislation.

The pharmacists gave specific examples of medications for which they’ve been under reimbursed, yet continue to provide for their patients at a cost to their businesses. “Our pharmacies aren’t being paid for cost of the drugs,” said Jessica Hung with Semmes Pharmacy, which serves Mobile, Baldwin and Escambia counties. “Our pharmacies are going to go out of business.”

The opponents focused on the $10.64 dispensing fee for each prescription and its cost to consumers, especially those that have multiple maintenance drugs and pointed out that the bill did nothing to address the prescription prices set by manufacturers. Opponents also argued no other business in Alabama is guaranteed a profit.

Rigsby said his legislation seeks transparency for the reimbursement process, just as Medicaid provides for its reimbursements.

At the time of the hearing, an Alabama Insurance Department spokesman said the department didn’t fully know the progress made under a 2021 law update, which became effective in 2022, to regulate pharmacy benefit managers.

Rep. A.J. McCampbell, D-Livingston, said, “We are killing small business and I’m tired of it,” pointing out that no PBM representative testified before the committee. “I see it from both sides,” McCampbell said, adding, “It is important to me that small pharmacists stay in small communities. We must do something.”

After the 2024 session ended May 9, the House speaker indicated that a study group made up of pharmacies, insurers, PBMs and drug manufacturers is planned to continue discussion and seek solutions.

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Bill to require PBMs to reimburse pharmacies with acquisition cost of medications plus a dispensing fee never receives floor vote