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Bill regulating pharmacy benefit managers goes to Ivey

By CAROLINE BECK and TODD STACY, Alabama Daily News

MONTGOMERY, Ala. – A bill that would put more state regulations on pharmacy benefit managers passed its final vote in the House on Thursday.

Senate Bill 227 from Sen. Tom Butler, R-Madison, prohibits PBMs from giving people a financial incentive to choose one pharmacy over another. It also says that PBMs can’t require people to use a mail-order pharmacy or a pharmacy affiliated with a pharmacy benefits manager. House Majority Leader Nathaniel Ledbetter, R-Rainsville, is the bill’s House sponsor and said the bill was about protecting small-town pharmacies from being beaten out by larger pharmacy companies.

“Our hometown pharmacists are the ones who know our families and pay for our little league baseball uniforms,” Ledbetter said.

An amendment from Ledbetter was also passed that includes language that he said would hopefully prevent the bill from being thrown out in the courts if it was challenged. Multiple House members said the amendment took away most of the effectiveness of the bill but Ledbetter said so much work had already been done to come to the compromise and didn’t want to see the bill fail.

Pharmacy benefit managers are third-party groups that manage drug benefits for insurers, including Blue Cross and Blue Shield of Alabama, the state’s largest insurer. Butler, a former pharmacist, has argued for several years that PBMs have at times reimbursed pharmacies less than the cost of medications, putting pharmacies in financial jeopardy.

BCBS was originally opposed to the bill, arguing that the increased regulations would ultimately lead to higher prescription costs for Alabamians. The company was involved in negotiating the compromise amendment.

“It is our job and the job of our partners to balance access and choice with cost and quality,” said Koko Mackin, BCBS Vice President for corporate communications in a statement to ADN.  “While we understand the concerns of Alabama pharmacists, the original bill contained provisions that would have increased healthcare costs for our customers.  It also contained provisions that would have limited our customers’ ability to choose benefit plans that meet their overall needs.  We are grateful to have been included in the discussions that led to today’s events and appreciate the strong legislative leadership that brought us together. “

The amendment passed the House 71-15. As amended, the final bill passed 101-0 and the Senate agreed with the changes. The bill now goes to the governor.   

Senate President Pro Tem Greg Reed, R-Jasper, thanked Butler and Sen. Billy Beasley, D-Clayton, for their work on the bill that was several sessions in the making.

“It’s a very complex issue, but it’s worth the time and effort for the people of Alabama,” Reed said.

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