MONTGOMERY, Ala. (AP) — Just two blocks away from the Alabama Statehouse, a solemn black wreath hangs on the door of Adams Drugs. This symbolic gesture aims to raise awareness about the increasing number of local pharmacies that have shut down or are at risk of closure across the state.
The Alabama Independent Pharmacy Alliance reports that dozens of independent pharmacies have ceased operations in Alabama over the past two years. Pharmacists attribute this trend to financial strains, as the cost of dispensing medication often exceeds the reimbursement they receive from pharmacy benefit managers.
Senator Billy Beasley, a retired pharmacist and Democratic senator, expressed concern about the nearly one drugstore closing per week due to inadequate payments from pharmacy benefit managers. In response, Alabama, along with other states like Mississippi and Arkansas, is considering enacting new regulations on these middlemen, who act between health insurance companies, drug manufacturers, and pharmacies.
The Alabama Senate recently voted 32-0 to advance legislation that would mandate minimum reimbursement rates for community pharmacists. This bill now progresses to the Alabama House of Representatives for further consideration.
Pharmacy benefit managers negotiate drug prices with the aim of reducing costs for consumers. Nonetheless, independent pharmacists argue that their business practices result in losses on around 20% of prescriptions due to insufficient payments.
The proposed Alabama bill seeks to ensure that pharmacy benefit managers reimburse community pharmacies at rates equivalent to those set by the Alabama Medicaid Agency. It also seeks to eliminate “spread pricing,” where benefit managers charge health plans more for drugs than they pay pharmacies.
Opponents of the bill claim that requiring a $10.64 fee to match state Medicaid rates could burden consumers and businesses. Helena Duncan, president of the Business Council of Alabama, expressed concerns about small businesses facing increased costs that may be passed on to employees through higher insurance premiums.
Senator Andrew Jones, a Republican cosponsor of the bill, emphasized the importance of protecting local pharmacies as essential community assets. He highlighted that neighborhood pharmacies provide crucial services that larger retailers may not offer, underscoring their significance in ensuring access to medication when needed most.
