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On Tuesday, the Alabama House of Representatives passed SB252, sponsored by Sen. Billy Beasley, D-Clayton. The “Community Pharmacy Relief Act” would support independent pharmacies statewide by creating more transparency and limiting the power of pharmacy benefit managers, was passed unanimously by a 102-0 vote. The Senate had already approved the bill on March 20.
Rep. Phillip Rigsby, R-Huntsville, sponsored the legislation in the House and is an independent pharmacy owner. He said the bill addresses concerns over the business practices of PBMs, who act as intermediaries between pharmacies, health insurers and drug manufacturers.
The bill received accolades on the floor from members across the aisle. Rep. Mark Gidley, R-Hokes Bluff, noted that since the beginning of this year alone, Alabama had lost ten local pharmacies.
“The loss of local pharmacies is a terrible detriment to the healthcare of our people, especially in the rural areas. This can’t happen,” said Gidley.
SB252 seeks to improve the financial stability of independent pharmacies, especially those in rural areas, which have faced significant closures in recent years. The bill imposes a series of reforms that aim to curb the practices of PBMs, such as prohibiting reimbursement rates lower than those offered by the Alabama Medicaid Agency.
The bill also bans PBMs from engaging in practices that favor PBM-affiliated pharmacies over local ones, prevents retroactive fees, spread pricing and certain audit penalties, and ensures that independent pharmacies receive equitable treatment for reimbursements and network participation.
Additionally, the bill mandates that 100 percent of manufacturer rebates be passed on to health plans or used to reduce patient costs unless negotiated otherwise.
An amendment from Rep. Joe Lovvorn, R-Auburn, passed on the House floor. It allows private businesses to negotiate the terms of rebate distribution, either receiving the rebates directly or applying them to administrative fees.
“If I’m a private business and have the right to negotiate with a PBM, that if I want to take part of those rebates from those drugs that are offered, I can either receive those rebates or I can negotiate to be part of the administrative fee,” Lovvorn said.
The legislation emerged after extensive discussions during the offseason with lawmakers, pharmacy associations, a PBM study group and major stakeholders like Blue Cross Blue Shield of Alabama.
“To all the pharmacy groups in the state, Alabama Pharmacy Association, Alabama Pharmacy Cooperative, the Alabama Independent Pharmacy Association, and all the many pharmacists that walk these halls this session to participate in educating and their grassroots efforts that got this bill to where we are today, job well done,” said Rigsby
After the bill passed, House Speaker Nathaniel Ledbetter, R-Rainsville, expressed his support for SB252 as a significant achievement for community pharmacies and an example of the importance of the work accomplished in Montgomery.
“Members of the Legislature are sent to Montgomery to solve complex issues affecting their districts – and this one is as challenging as they come, impacting every corner of our state. Accomplishing this is a testament to the strength of the legislative process, and I commend Rep. Rigsby and the rest of my colleagues for staying the course on this important issue,” said Ledbetter.
