Starting Wednesday, independently owned pharmacies in Alabama will be reimbursed more money for some of the drugs they provide customers.
While advocates for the new pharmacy reimbursement law say consumers shouldn’t notice any changes at the register, one insurer says some customers could see their out-of-pocket costs increase.
One of the most significant items of the 2025 legislative session, Senate Bill 252 says pharmacy benefit managers can’t reimburse independent pharmacies less than the amount paid by the Alabama Medicaid Agency. That currently includes the average cost of the drug and a $10.64 per-prescription dispensing fee.
Pharmacy benefit managers are third-party groups that negotiate drug prices for insurers and enter into contracts with pharmacies. While stores have not been underpaid on every prescription they sell, pharmacists for years have told lawmakers about losing hundreds of dollars, sometimes thousands, on a single prescription. They blamed low reimbursement rates as a primary reason for the shuttering of dozens of independent pharmacies in recent years.
Sen. Billy Beasley, D-Clayton, sponsored the bill in the Senate. He’s a retired pharmacist who once owned several stores.
“It’s personal for me, but it’s really personal for all the drugstore owners in Alabama,” Beasley told Alabama Daily News on Monday. “If you lose a drugstore in a small community, it affects the citizens of that community greatly.”
Beasley said the bill gives Alabamians “freedom of choice.”
“(Pharmacy benefit managers) can’t dictate where a patient has to go to get a prescription filled,” he said.
The bill also prohibits the practice of “spread pricing” where a benefit manager charges health plans more for drugs than they pay pharmacies.
The new law doesn’t apply to chain pharmacies, Medicare recipients or those who buy their medications without insurance.
The law says PBMs can’t “increase a covered individual’s cost-sharing percentage or ratio at or after the point of sale by raising the deductible, copayment, or coinsurance, or by requiring any other out-of-pocket payment as a means to recoup the dispensing cost…”
Blue Cross and Blue Shield of Alabama uses Prime Therapeutics as its PBM.
“On Oct. 1, customers may see changes to the amount they owe when picking up prescriptions at a community pharmacy,” BCBS said in a statement to ADN on Monday.
The insurer said copay amounts are not changing, nor is the way copay amounts and out-of-pocket costs are applied. Health plans have always required customers to pay the lesser amount of the cost of the drug, including the dispensing fee, or the designated copay.
For example, if a customer’s copay is up to $15 and their prescription in September cost them $8, starting Wednesday, the cost of that drug and dispensing fee is now more than $18. The customer would pay the $15 copay, but not more.
It’s unclear how many people might see higher costs, and it will depend on plans and medications.
“We know that rising prescription costs can place a burden on individuals and families,” said Dorinda Cale, vice president of pharmacy services at BCBS. “These changes stem from changes to the law – not a decision that we or our PBM partner made. We remain firmly committed to advocating for lower drug prices on behalf of our customers.”
Bobby Giles, government affairs director for the Alabama Pharmacy Association, said the new law allows customers to see their drug pricing with no games or gimmicks.
“I do think that a pharmacist now will be able to say yes to a patient who comes in and wants a prescription filled, because it will be paid at the average acquisition costs plus the average cost of dispensing it, no more, no less,” Giles told ADN.
He said customers shouldn’t see any changes to what they’re paying at the counter, “if the law is properly followed by the PBMs.”
If customers and pharmacies do see price increases passed on to them, they have the right to file a complaint with the Alabama Department of Insurance, Giles said.
“And we’re going to highly encourage that, if that’s what we see with multiple PBMs,” he said.
The legislation instructed the state insurance commissioner to adopt rules to enforce the law, and a complaint process. There’s a $1,000-per violation fine for PBMs that don’t comply with the law.
Another major PBM operating in Alabama is CVS Caremark. It referred questions about the law’s impact to its industry trade group, Pharmaceutical Care Management Association.
In a statement to ADN, Greg Lopes, a spokesperson for PCMA, said pharmaceutical companies alone set high prices for drugs.
“Unfortunately, the new mandated dispensing fee for community pharmacies in Alabama will increase health care costs for the state’s employers,” Lopes said. “The legislation will restrict the tools PBMs use to reduce drug costs and limit PBMs’ ability to offer employers choices to create health benefits for their workers.
“As a result, Alabama employers offering health care benefits will be forced to follow unnecessary and costly regulations, and unfortunately, the entirety of the law will likely increase prescription drug costs for Alabama’s patients.”