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MONTGOMERY, Ala. — The Alabama Senate Thursday passed a bill creating new regulations on reimbursements and fees pharmacy benefit managers (PBMs) charge to pharmacies.
SB 252, sponsored by Sen. Bill Beasley, D-Clayton and called the “Community Pharmacy Relief Act,” aims to address concerns from independent pharmacies over reimbursement rates and business practices that critics say have driven many out of business.
“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,” Beasley, a retired pharmacist, said on the Senate floor.
The bill, which passed in a 32-0 vote with one abstention, would impose new restrictions on PBMs, including a prohibition on reimbursing independent pharmacies at rates lower than those paid by the Alabama Medicaid Agency. It would also ban PBMs from charging certain fees to pharmacies, require them to pass on 100% of manufacturer rebates to health plans and prevent them from blocking pharmacists from disclosing lower-cost alternatives to patients.
The bill faced intense but cordial debate on the Senate floor, with supporters of the bill saying PBMs are currently straining independent pharmacies. Beasley, pointing to pharmacy closures, criticized the PBM industry for what he described as unfair reimbursement practices.
“The PBM industry owns the mail-order pharmacies. They control the contract that the drug solos agree to,” Beasley said, adding that “over the last 40 years, and they always say, ‘if you let me be your manager, we’ll save you money on your expenditures on prescription drugs.” Well, Senators, it hasn’t happened.”
Sen. Chris Elliott, R-Daphne, introduced an amendment that would have delayed the reimbursement provisions until January 2026 to allow businesses time to adjust.
“We have friends in the business community, both on the pharmacy side and on the employer and employee side. And what this does is simply move again the effective date … so it gives them time to work through their contracts and enter into new contracts,” Elliot said.
The amendment failed after Sen. Andrew Jones, R-Centre, opposed the delay, saying that pharmacies needed relief immediately. After further discussion, lawmakers settled on an October 1 effective date as a compromise.
After the vote, senators from both parties said the bill was a significant step in addressing rising prescription drug costs and protecting local pharmacies.
The bill now goes on to the House of Representatives for consideration.
