Alabama lawmakers pass bill to help save pharmacies: ‘Never seen a more unfair fight’
A bill to help independent pharmacies stay open in Alabama passed the House unanimously on Tuesday, moving one step closer to the Governor’s desk.
SB252, known as “The Community Pharmacy Relief Act,” passed by a vote of 102-0.
“Whatever y’all do today I want you to pass this bill out of the House,” state Rep. Juandalynn Givan told her colleagues. “I don’t even want an amendment to it, I just want it to pass so my pharmacists will stop texting me essays, theses on why it’s important.”
The bill prohibits Pharmacy Benefit Managers, or PBMs, from paying pharmacists less than Medicaid does and from charging miscellaneous fees.
PBMs are essentially middlemen that manage prescription benefits between insurance companies and employers. They decide which drugs are covered, how much a patient’s copay is, where you can get your prescription filled and how much pharmacies are paid for medications and clinical services, according to the Alabama Pharmacy Association.
Pharmacists said PBMs have been paying them so little that they don’t even cover the cost of the drugs they are providing.
“Pharmacies are struggling to keep their doors open as they are often reimbursed for medication at a price lower than their cost of dispensing the medication to the patient. We continue to lose pharmacies across Alabama every month,” the Alabama Pharmacy Association said in February, when pharmacists staged a walkout to protest PBMs.
Since 2018, roughly 13% of pharmacies in the state have closed, according to the Alabama Independent Pharmacy Alliance.
The bill sponsor, Rep. Phillip Rigsby, who also owns a pharmacy in Huntsville, cried after the legislation passed. He said it “ensures access to healthcare for small communities.”
The bill will now go back to the Senate to consider an amendment passed on the House floor that will allow private businesses to negotiate with PBMs on rebates. A previous version of the bill passed the Senate in March by a vote of 32-0 with one abstention.
Bob Herron, a pharmacist in Tallassee, told AL.com he closed his shop in November after more than three decades because of problems with PBMs.
“After 35 years, the job became harder and harder because you’re getting underpaid by insurance and actually losing money for doing your job,” said Herron. “You’re at their mercy and they’re pushing us out, which will be devastating to the state. We’ll lose jobs and money and access to healthcare.”
Pharmacists and lawmakers sponsoring the bill said PBMs are pushing out independent pharmacies so the pharmacies they own, such as CVS and many mail order pharmacies, can be the only game in town.
The three largest PBMs are Fortune 50 companies that process over 80% of the prescriptions filled in the U.S. each year — CVS Caremark, Optum owned by United Healthcare and Express Scripts owned by Cigna, according to a lawsuit filed by Alabama pharmacists last year. Their profits rank them alongside — and sometimes above — companies like Microsoft and Exxon Mobil, according to the Fortune 500 list.
“They are 100% steering people to their mail order pharmacies and charging an arm and leg to the independent pharmacists,” said State Sen. Larry Stutts, a gynecologist who sponsored an earlier version of the bill.
Herron said this bill could have helped his pharmacy and will save independent pharmacies throughout the state.
“Independent pharmacies have very little power and they don’t want power, they just want it to be fair,” Herron said.
The same bill was up last year but failed to make any progress because of pushback from organizations like the Alliance of Alabama Healthcare Consumers, Blue Cross Blue Shield of Alabama and the Business Council of Alabama, who opposed the bill again this year.
Last year, the bill included a requirement that PBMs pay a $10.64 dispensing fee for every script filled in the state. Opponents said the fee would be passed on to consumers. This year, the bill did not include the $10.64 fee, but opponents still argued that it would be charged to employers who provide insurance to their employees.
“Senate Bill 252 will add new costs to [small business] employers, reduce the value of a family’s benefit plans and increase their overall cost of living,” Robin Stone, the executive director of the Alliance of Alabama Healthcare Consumers said during a public hearing on the bill last week.
“Only two states in the country, West Virginia and Tennessee, have passed laws remotely similar to the legislation you’re considering today. The proposed bill before you would be the most liberal law in the country and the most onerous to employees.”
The West Virginia Bureau for Medical Services reported they saved $54.4 million in the first year after passing their law, which is similar to Alabama’s.
Stutts said the narrative that the bill would add costs to consumers and employers “is just propaganda, it’s not true.”
“That narrative worked for them last year when they killed the bill that Representative Rigsby had, and so they just tried the same narrative even though that number is nowhere in this bill,” Stutts added.
Tony Cochran, a board member for the Business Council of Alabama, said he was “downright embarrassed” by the group’s decision to oppose “a true solution that will save these pharmacists.”
“I’ve watched Montgomery a lot,” he told lawmakers. “But I’ve never seen a more unfair fight.”
Cochran spoke of his friend Jim, an independent pharmacist in a rural Alabama community who tried to take his own life.
“Under the enormous pressure of the PBMs, Jim’s hopelessness left him to believe the only way out of this crisis was to take his own life,” Cochran told lawmakers. “My friend Jim will never man the counter of his pharmacy again. My friend Jim will never serve his community as a pharmacist again. And Jim is the reason I’m here today.”.
Cochran compared the pharmacists to David fighting Goliath.
“Like David, these brave pharmacists, I can’t tell you how amazed and encouraged I am at what they’re doing in the face of such adverse adversity. But unlike David, they’re not doing it by choice. They have to. They have to be in this fight,” he said.
After the bill passed, Rep. AJ McCampbell echoed Cochran’s sentiments.
”We finally got a win for David,” he said, “and we need to consider the Davids of this world as we’re making laws.”