MONTGOMERY, Ala. – The National Association of Chain Drug Stores is hailing Republican Alabama Gov. Kay Ivey for signing into law legislation (Act 2021-341) on May 6 which further regulates pharmacy benefits managers (PBMs) and helps ensure that  reimbursement rates cover pharmacies’ costs of purchasing drugs.

Steve Anderson

The measure – sponsored by Republican State Sen. Tom Butler – becomes effective on July 1 and will apply to PBM contracts on and after October 1.

Specifically, the legislation states that PBMs may not “vary the amount a pharmacy benefits manager reimburses an entity for a drug, including each and every prescription medication that is eligible for specialty tier placement by the Centers for Medicare and Medicaid Services.”

Additionally, PBMs are prohibited from “reimburs[ing] an in-network pharmacy or pharmacist in the state an amount less than the amount that the pharmacy benefits manager reimburses a similarly situated PBM affiliate” for pharmacist services for patients in the same health benefit plan.

Among other provisions, the measure also states that a PBM may not:

• Charge a pharmacist or pharmacy a point-of-sale or retroactive fee or otherwise recoup funds from a pharmacy in connection with claims for which the pharmacy has already been paid.

• Exclusively require the purchase of pharmacist services through a mail-order pharmacy or PBM affiliate.

• Impose a monetary advantage or penalty under a health benefit plan that would affect a patient’s choice of pharmacy.

• Deny a pharmacy or pharmacist the right to participate as a contract provider if they meet and agree to the terms and conditions of the PBM’s contract.

prohibit a pharmacist or pharmacy from informing a patient about a more affordable alternative prescription drug if one is available.

“We applaud Governor Ivey for her strong support and for signing into law legislation which we believe will directly benefit the patients that Alabama pharmacies and pharmacy teams serve,” said NACDS President and CEO Steve Anderson. “NACDS also commends the Alabama Pharmacy Association for their continued efforts to establish PBM transparency. Throughout the COVID-19 pandemic, pharmacies have served as critical and convenient access points to care. Thanks to Governor Ivey and the Alabama state legislature, an important step has been taken to help pharmacies keep their doors open to patients and help ensure that Alabamians maintain access to the quality healthcare services they need and deserve.”

NACDS also thanked the Alabama Pharmacy Association; Butler; State Sen. Gerald Allen (R); State Sen. Will Barfoot (R); State Sen. William Beasley (D); State Sen. Garlan Gudger (D); State Sen. Jimmy Holley (D); State Sen. Steve Livingston (R); State Sen. Del Marsh (R); State Sen. Arthur Orr (R); State Sen. Dan Roberts (R); State Sen. Clay Scofield (R); State Sen. Rodger Smitherman (D); and State Sen. Larry Stutts (R) for advancing this crucial legislation.