MONTGOMERY, Ala. – An Alabama House committee on Wednesday approved a bill that says pharmacists can’t be reimbursed less than the cost of the drugs they provide to customers and a set “dispensing fee” that is currently $10.64.
Opponents of House Bill 238 said it could result in increased costs to consumers and to businesses that provide health coverage to employees.
“This is not a tax on the patient, this is the cost of doing business,” said House Bill 238 sponsor Rep. Phillip Rigsby, R-Huntsville. He’s a pharmacist who sold his independent pharmacy a few years ago because he was losing money on some drugs.
“I was two months away from not being able to make payroll,” he told Alabama Daily News.
The bill requires pharmacy benefit managers, third-party groups that manage drug benefits for insurers, to reimburse in-network pharmacies their actual acquisition cost for a medication “plus a professional dispensing fee” set by the federal government and used in programs like Medicaid.
Rigsby said the $10.64 helps cover pharmacists’ costs, including staff and utilities. He said without the bill, pharmacies, particularly in rural areas, will close.
He told his colleagues on the committee the fees may be recouped by the PBMs through increased insurance premiums or co-pays paid by consumers.
During a nearly hour-long public hearing Wednesday morning, the House Insurance Committee heard testimony from pharmacists who said they’re “underwater” on some of the prescriptions they fill and opponents like Robin Stone with the employer group Alliance of Alabama Healthcare Consumers, who called it “tax on any Alabama who gets a prescription.”
“To my knowledge, there is not another health care provider or any other profession or business in the state that is guaranteed a profit,” Stone told the committee.
He also said the bill does nothing to address the real problem with prescription costs — the price set by the manufacturer.
Debbie Lynn, executive director of the Easter Seals Central Alabama, also spoke against the bill citing potential concerns for families with multiple which could be significant for families with multiple monthly medications.
Neah Scott, legislative counsel for the Retirement Systems of Alabama, also spoke against the bill and its potential impact on the Public Education Employees’ Health Insurance Plan. It currently covers about 300,000 people.
“(The Public Education Employees’ Health Insurance Plan) has concerns about the long-term cost impacts to the plan and our members from HB238 due to the provision mandating the amount PEEHIP would have to reimburse pharmacies for drugs,” Scott told Alabama Daily News. “We understand the importance of our community pharmacists and already give them preferential treatment in reimbursements.
It was noted that while pharmacists can lose money on the prescriptions they fill, they can also make above costs on others. But if they were making money, they wouldn’t be asking for this bill, Rigsby said later.
Several pharmacists from around the state asked the committee to approve the bill.
Audrey Newton, a pharmacist in Florence who often provides prescriptions to patients at Riverbend Center for Mental Health, told the committee that she loses money on a popular medication to treat schizophrenia.
In one year, she’s lost $3,600 on one prescription for one patient. Pharmacists have the option not to stock a particular medication. But if they carry it, they have to provide it to patients, even if it’s at a loss.
“Pharmacists are caring and compassionate and continue to fill these prescriptions at a loss,” Newton said.
The bill was approved on a voice vote and is now in line for a vote in the House.
Rigsby isn’t the first lawmaker to try to change how PBMs operate.
The Legislature in 2021 approved some regulations and reporting rules for PBMs.