HUNTSVILLE, Ala. (WHNT) — Locally owned Alabama pharmacies have been closing their doors at a rapid rate, but a bill that passed the state legislature Tuesday will change how they are reimbursed, aiming to keep more independent pharmacies open.
Huntsville-based Star Discount Pharmacy Director Trent McLemore said he would not have expected to see this day six months ago, and he believes this bill will create a more fair system.
“It is literally a lifeline for independent pharmacies, for small businesses, which is what really matters,” McLemore said.
He said local pharmacies have been getting paid less than their larger, corporate counterparts.
SB 252, called the Community Pharmacy Relief Act, will put new regulations on Pharmacy Benefit Managers (PBMs). PBMs are the middlemen who work between pharmacies and insurance companies. They decide how much money a pharmacy will be reimbursed for filling a prescription.
The legislation directs PBMs to take 100% of the rebate money they get from drug makers in connection with Alabama contracts and pay the money to Alabama health insurance providers. The money will be used to make sure independent pharmacists are paid a $10.64 dispensing fee.
The measure still needs Gov. Kay Ivey’s signature to become law.
McLemore said that while pharmacies will be paid more, patients will not see cost increases.
“Your co-pays will not go up when this starts,” McLemore said. “Your premiums won’t go up, and ultimately, you’ll have more options as soon as the governor signs this.”
Patients should now pay the same co-pay at any in-network pharmacy.
“No longer will it be, ‘Well, I’m sorry. We can only fill here twice, and you have to get a mail order, or I can only fill for 30 days versus 90 days, or the co-pay is way higher at an independent,’” McLemore said. “Those will all be on an equal playing field.”
McLemore said that when the cost of getting a prescription filled is not a determining factor anymore, he believes competition will be driven by customer service.
“It makes it about patient care instead of about dollars again,” McLemore said.
He said the passage of the bill is a win for David against Goliath.
“Being able to know that we won’t get paid below our cost is a lifesaving grace for a lot of independent pharmacies,” McLemore said.
More than 100 Alabama pharmacies have closed in the past four years, state figures show.
The Alabama Legislature has also called for a multi-year study looking into how PBMs are operating in the state and identify any practices that are decreasing positive competition between pharmacies. McLemore said he hopes the study will inspire more legislation down the line, like expanding access to specialty pharmacy drugs.
“Specialty pharmacy accounts for about half of PBM profits right now,” McLemore said. “Those are your very expensive items. These are the drugs you see on TV commercials, and they cost tens of thousands of dollars.”
Specialty pharmacy drugs are excluded from the current legislation.
Pharmacies will begin receiving reimbursements on October 1.
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