Pharmacy owners from around the state pleaded with Alabama lawmakers Wednesday to stop allowing them to be paid less than their costs to fill some prescriptions, saying it is driving them out of business.
“Our independent pharmacies are closing at an alarming rate, and it’s because they are not being fairly compensated for the drugs that they provide,” said Sen. Andrew Jones, R-Centre. “In many cases, they are compensated less than the cost they pay for the drugs.”
Opponents of proposed legislation say they’re sympathetic to the pharmacists’ plight, but adding a more than $10 dispensing fee to every prescription filled is not the answer.
“We recognize that there is a problem, but shifting the burden from pharmacies to employers is not the solution,” said Caroline Franklin of the Business Council of Alabama.
Jones is the sponsor of Senate Bill 93, one of two bills that would mandate pharmacy benefit managers, third-party groups that control drug benefits for insurers, reimburse the retailers for the cost of the drugs, plus a dispensing fee.
Senate Bill 99, by Sen. Larry Stutts, R-Tuscumbia, is similar, but the bills vary in their regulations and how they set drug acquisition costs and the dispensing fee that would be applied to prescriptions.
Senate Bill 93 ties the fee to one paid by Medicare, currently $10.64 per prescription; Senate Bill 99 has the $10.64 fee, plus an additional 2% of cost or $25, whichever is less.
Anna Noojin, a second-generation pharmacist from Boaz, talked Wednesday about serving her community along with her father, and the financial burdens placed on pharmacists by PBMs.
“We gave away 40,000 prescriptions last year,” Noojin told the Senate Banking and Insurance Committee during a public hearing on SB93. “No business can survive that way.
“… We are in crisis and our time is running out.”
Members of the Alabama Pharmacy Association are planning a “walkout” of their businesses at 1 p.m. Tuesday to join an advocacy day at the State House.
“This is a chance to let our communities know what it would look like if their local pharmacy closed,” association Chief Executive Officer Louise Jones said in a written statement. “It is a visible way to advocate for patient access and pharmacy survival at the State House.”
The Senate committee did not vote on either bill after more than an hour of discussion Wednesday and the sponsors were asked to work together on a compromise between the two bills.
Jones’ SB93 has eight co-sponsors. Stutts’ SB99 has 20.
“We cannot put these small pharmacies out of business, it’s just that simple,” said Sen. Rodger Smitherman, D-Birmingham, one of the co-sponsors of SB99.
Opponents of the bills argue that while they target PBMs, the dispensing fees in SB 93 and SB 99 will be passed on to employers and patients in the state.
The Retirement Systems of Alabama sent a letter to committee members opposing both bills. Its Public Education Employees’ Health Insurance Plan covers about 350,000 active and retired education employees and their dependents.
“Our preliminary estimated cost increases are $31 million for SB93 and $36 million for SB99; however, these do not include any other potential cost increases such as the loss of current contract financial guarantees from the PBM to the plan, which are highly valuable,” the letter said.
Blue Cross has its own PBM and Ted Hosp, vice president of government relations for Blue Cross and Blue Shield of Alabama, said pharmacists are “underwater” on about 10% to 15% of prescriptions filled, meaning their costs are covered on a majority of prescriptions filled. He urged lawmakers to focus on the smaller number that is the problem, and not impose a fee on every prescription that will significantly increase costs to employers and their employees.
“We agree with the pharmacies that they should not have to dispense prescriptions for less than the cost of the drugs,” he said. “There are ways to fix these problems and help make sure that pharmacies are open and available for the people they serve. Respectfully, the bills before you today however do not seek that common ground.”
Stutts, at the end of the meeting, said claims that his bill would drive up costs are “absolutely false.” He said rebates negotiated between PBM and manufacturers would go back to employers who are paying for the premiums.
Proponents described SB99 as having more “teeth” and will keep pharmacies from asking for help from the Legislature each year; opponents said it’s more restrictive for employers.
Robin Stone, director of the employer group Alliance of Alabama Healthcare Consumers, said neither bill would prohibit the increased costs from being passed on to businesses or consumers.
“Neither of these bills addresses the real cause of health care concerns, which is the skyrocketing costs of drugs,” he said.
A similar bill was approved in a House committee last year but never advanced.