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Legislature passes pharmacy benefits manager reform legislation

The legislation allows Alabama patients to choose their own pharmacies rather than being forced to use a mail-order pharmacy.


The Alabama House of Representatives on Thursday passed legislation to make sure that Alabama citizens, and not the insurance company’s pharmacy benefit manager, can pick their own pharmacies. The Senate later concurred with the pharmacy benefits manager

SB227 is sponsored by Sen. Tom Butler, R-Madison, and carried in the House by House Majority Leader Nathanial Ledbetter, R-Rainsville.

A pharmacy benefit manager, or PBM, is a third-party administrator of prescription drug programs for commercial health plans, self-insured employer plans, Medicare Part D plans, the Federal Employees Health Benefits Program and state government employee plans.

According to the American Pharmacists Association, “PBMs are primarily responsible for developing and maintaining the formulary, contracting with pharmacies, negotiating discounts and rebates with drug manufacturers, and processing and paying prescription drug claims.”

Ledbetter said that the pharmacy benefits manager reform legislation “would allow patients to choose their own pharmacy and prevents PBMs form forcing or incentivizing one pharmacy or another.” Under this bill, PBMs “cannot force” patients to use mail-order pharmacies. “Pharmacists have to agree to the same terms” as the preferred pharmacies.

“The big boys have crushed or swallowed up our small hometown pharmacies,” said Rep. Thomas Jackson, D-Thomasville. “When our local businesses close because of these giants it hurts our communities.”

“When you walk into those big businesses you become just a number,” Jackson said. “Your local pharmacists knows who you are. They know your family.”

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Ledbetter said that the local pharmacies “pay for the baseball uniforms.”

This is a compromise bill. The original legislation was opposed by the insurance industry and the Business Council of Alabama.

“How good it is to see cooperation,” said Rep. Arnold Mooney, R-Indian Springs. “It is a good thing for our body when things come around this way.”

“It is good,” Ledbetter said. “Not everybody got what they wanted.”

Ledbetter said that mail-order pharmacies will often keep sending the drugs.

“After they quit using it, they often keep getting it for three or four months, and they have to try to stop it,” Ledbetter said.

Rep. Tim Wadsworth, R-Arley, said: “I spoke to both of our local pharmacists, and they are absolutely in support of it.”

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“It helps keep an 80-year-old grandmother from having to drive to Birmingham and one of those big box stores,” Wadsworth said.

Ledbetter said: “My local delivery is when my local pharmacist stops by my house and puts it in the mailbox.”

Ledbetter added a floor amendment that would make this bill subject to federal law.

“All parties and Sen. Butler have agreed,” Ledbetter said.

“We thought it would go to court, and we would lose the entire bill,” Ledbetter explained. “Without this language, there could be a possibility. State law cannot supersede federal law.”

Rep. Paul Lee, R-Dothan, who chairs the House Health Committee said: “In my opinion, we just lost half the bill. I have voted in my career on 50 bills where I knew there was going to be a lawsuit. I never let that deter me.”

“I would hate to have them lose this bill,” Ledbetter said. “We can’t fix this. The federal government has to fix this.”

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Rep. David Standridge, R-Hayden: “My pharmacist cautioned me about amendments. My pharmacist said that we should support what Senator Butler is trying to do.”

Ledbetter explained that all of the parties were at the table trying to get this fixed so we could have this on the floor. This is not perfect, but it moves the ball down the field.”

The House passed SB227 31 to 0.

Senate Majority Leader Clay Scofield, R-Guntersville, said: “I am really glad that we got that done.”

“That little pharmacy is all the health care they got” in one small town in Scofield’s district. “Those folks are worth protecting.”

Speaker of the House Mac McCutcheon, R-Monrovia, said: “We have been working on this for three years.

Because the House amended the bill, SB227 had to go back to the Senate for their concurrence of House changes. The Senate voted to concur with House changes 29 to 0. It is now awaiting action from Gov. Kay Ivey. Tuesday will be day 28 of the 2021 Legislative Session.

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Brandon Moseley is a former reporter at the Alabama Political Reporter.

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