Proposed State legislation would add a fee to prescriptions

If you have an employer based health insurance plan, you could soon be paying more for every prescription filled, according to Alliance of Alabama Healthcare Consumers (AAHC) Executive Director Robin Stone.

Reading through both SB93 and SB99 – two nearly identical bills introduced by different groups of Senators – they appear to be supporting local pharmacies, preventing them from being subject to unfair practices of some Pharmacy Benefits Managers (PBM). PBMs are "the intermediary between health insurance plans and their network pharmacies which process claims and determine the amount pharmacies are reimbursed for dispensing covered prescriptions," as stated in the SB99 summary.

These bills would seek to give patients more freedom of choice in selecting pharmacies, and opting for lower-cost generics without having named brands forced on them by the PBM, which often have agreements with drug manufacturers. Further, the bills would allow more regulation of PBMs, making them more accountable while restricting retaliatory actions. In short, SB93 and the more indepth SB99 help to prop up and defend both patients and pharmacies from unfair practices. What is not apparent, according to Robin Stone of AAHC, is the price patients will pay for it.

"It's camouflaged," Stone replied when asked where in either of the bills was it stated that every prescription would now come with a mandatory $10.64 fee as the AAHC statement opposing the bill asserts. Indeed, in SB99, line 293 states that PBMs must "Pay an in-network pharmacy a professional dispensing fee that is greater than or equal to the current professional dispensing fee paid by the Medicaid Agency of the State of Alabama under Title XIX of the Social Security Act for dispensing a prescription drug." That fee is $10.64 for each prescription dispensed. It is also, according to Stone, "…the reason Medicaid is requesting a $200M budget increase for the upcoming state general fund budget in 2025."

Regardless of this being the normal way of operating for Medicaid, the service fee is not a normal thing for employer provided insurance, which is the domain of PBMs. According to the AAHC, everyone with an employer-provided health insurance plan – especially those with large manufacturers that often have their own internally managed plans – would be paying this fee "out of pocket." And, unlike many other regulations of this type, there is no exemption to protect small businesses with fewer than 50 employees, according to Stone.

"The scope of it is disruptive," Stone went on, "It's way, way too far; too much of an overreach."

So what is the reason for the fee?

There are over 700 independently owned pharmacies in Alabama, and a total of almost 1,300. However, there were more. As aggressive cost cutting by PBMs – often paying pharmacies less than Medicaid – combined with increasing costs of doing business such as rent and utilities increases, 252 independent pharmacies have closed down since 2019. Affixing this per-prescription fee to all PBM throughput is intended to combat what is seen by many as unfair or insufficient compensation.

"Everything is costing us," said Raymond Boone, second generation owner and pharmacist of Boone's Pharmacy in Demopolis. "We're just trying to protect Alabama healthcare," Boone said of SB99. According to Boone, everything in the bill is "100% for the patient and the pharmacies."

Boone further asserts that the dispensing fee will not be coming out of pocket for patients, and that notion is "simply a scare tactic by people trying to protect [the big business] interests." The verbiage of SB99 states the fee is to be paid by the PBM, not by the patient.

"They're completely content with us not having a dispensing fee at all," Boone stated of the opponents to the bill. "It's simply a fee for the cost of services. Medicaid did all the figuring, and they know how much it costs pharmacies to dispense a prescription," Boone continued, "Many medications are reimbursed by the PBMs below our cost … and they're a long way from maxing their billion dollar budgets." Boone firmly believes that this bill could not only help keep independent pharmacies open in small communities, but will also keep choice and better care in the hands of patients.

"There is nowhere in Demopolis that veterans with Tricare can get a prescription filled. That's the doing of the PBMs, and that's the kind of thing this bill is trying to prevent," Boone said, "These [veterans] have earned the right to have good healthcare and they shouldn't have to travel an hour to get a prescription filled." SB99 would prevent this circumstance by returning choice of pharmacy to the patient. "Even our local Westrock employees," Boone went on, "they can only get two prescriptions filled here, then they've got to drive to Tuscaloosa or Meridian. And that's because of the PBM."

The bill would not affect those with health insurance plans purchased through the health insurance marketplace (healthcare.gov), and would not affect any change to those with Medicare or Medicaid.

SB99 had its first reading on February 5, and is currently in committee review prior to a second reading. It is co-sponsored by 21 State Senators, including District 24 Sen. Bobby Singleton. Singleton's office has not responded for comment as of press deadline.

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