Alabama House passes bill regulating pharmacy benefit managers
Rep. Phillip Rigsby, R-Huntsville, speaking on the floor of the Alabama House of Representatives in the Alabama State House in Montgomery, Alabama, on April 8, 2025. Rigsby, an independent pharmacy owner, carried "Community Pharmacy Relief Act", sponsored by Sen. Sen. Bill Beasley, D-Clayton, which passed the House unanimously. (Anna Barrett/Alabama Reflector)
The Alabama House of Representatives on Tuesday unanimously passed legislation that creates 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,' seeks to address concerns from independent pharmacies over reimbursement rates and business practices that critics say have driven many out of business.
PBMs act as a 'middle-man' between health insurers, pharmacies and drug manufacturers. They negotiate drug prices, determine reimbursement rates for pharmacies and manage prescription drug benefits.
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Critics accuse PBMs of using their position to impose unfair fees and steer patients toward PBM-owned pharmacies. PBMs are also accused of keeping manufacturer rebates for themselves instead of passing the savings along to consumers.
Rep. Phillip Rigsby, R-Huntsville, an independent pharmacy owner who carried the legislation in the House, said after the bill passed that the process was hard, but that he knew he needed to continue on for the local pharmacies across the state.
'There have been many ups and downs in this journey, and there were days I wanted to throw in the towel, but I realized that my flesh was telling me to quit,' Rigsby said. 'Thanks be to God. When I felt defeated, that's when my faith reminded me.'
Rep. Mark Gidley, R-Hokes Bluff, said the legislation is very important for family-owned pharmacies across the state. According to ABC33/40, 300 of Alabama's 800 independent pharmacies have closed across the state in the last six years.
'We have pharmacies that are closing all across the state. My understanding is about 10 since the first of the year,' Gidley said. 'The loss of local pharmacies is a terrible detriment to the health care of our people, especially in the rural areas. This can't happen.'
The bill 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 House unanimously passed an amendment from Rep. Joe Lovvorn, R-Auburn, that would allow pharmacies to negotiate with the PBMs to keep a part of rebates used for administrative reasons.
'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 bill goes to the Senate for concurrence or a conference committee.
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