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The Alabama Legislature has unanimously passed a sweeping bill to regulate pharmacy benefit managers (PBMs), a move independent pharmacists say is a long-overdue step toward fairness in prescription reimbursements.

“It’s a big first step,” said Chip Whitaker, owner of Whitaker Drugs in Greenville. “It’s definitely a positive but it doesn’t have everything that is needed. 252 addresses commercial insurance policies but it doesn’t address federal plans like Medicare at all. The same exact things are going on federally and it’s crucial that we get federal reform.”

Senate Bill 252, known as the “Community Pharmacy Relief Act,” was sponsored by Sen. Bill Beasley, D-Clayton, and aims to address long-standing concerns among independent pharmacies about reimbursement practices that many say have threatened their survival. The House of Representatives approved the bill Tuesday, and the Senate quickly concurred with changes, sending it to Gov. Kay Ivey for signature.

Benefit managers serve as intermediaries between health insurers, drug manufacturers and pharmacies. They manage prescription benefits, negotiate drug prices, set pharmacy reimbursement rates and determine which drugs are covered by health plans. 

Independent pharmacists have long complained that PBMs reimburse them at rates too low to cover even the wholesale cost of medications.

The legislation would ban PBMs from reimbursing independent pharmacies at rates lower than those paid by the Alabama Medicaid Agency and from charging various fees to pharmacies. It would also require PBMs to pass 100% of manufacturer rebates to health plans and prohibit them from blocking pharmacists from informing patients about lower-cost alternatives.

Rep. Joe Lovvorn, R-Auburn, added an amendment to the bill allowing pharmacies to negotiate with PBMs to retain a portion of rebates for administrative purposes.

Alan Carpenter, co-owner of Foster Drugs in Luverne and Hayneville Drugs in Hayneville, praised the legislature’s action. 

“We are excited and happy with the Senate and the House supporting independent pharmacies like they have,” Carpenter said. “We’ve supported the community for years and it’s great to get that back from our representatives.”

Carpenter noted the reform is just a starting point.

“More needs to be done but this is a great first step to PBM reform,” he said. “Medicaid is in a good spot in Alabama but Medicare plans that use those same PBM’s are still a problem.”