- 52+ independent Alabama pharmacies closed since 2022 amid PBM disputes
- New bill enforces Medicaid-level reimbursements and bans hidden spread pricing
- 20% of prescriptions currently cost pharmacists more than reimbursement value
- Mississippi and Arkansas pursuing similar PBM regulation measures
Two blocks from Alabama's capitol, Adams Drugs' shuttered storefront symbolizes a growing crisis. Over 50 neighborhood pharmacies have disappeared across the Heart of Dixie since 2022, victims of reimbursement battles with pharmacy benefit managers (PBMs). These third-party intermediaries now face unprecedented state oversight through SB 227, passed unanimously by Alabama's Senate this week.
The legislation targets two critical pain points for pharmacists: unpredictable reimbursements and spread pricing schemes. Under the proposed rules, PBMs must match Alabama Medicaid's $10.64 dispensing fee per prescription - a 38% increase over current averages. Star Discount Pharmacy's Trent McLemore explains: Filling a blood pressure medication often costs $12.50 when you factor in staff and overhead, but PBMs only send us $8.90.
Three industry insights shape this conflict: First, PBMs process 80% of U.S. prescriptions yet remain exempt from federal transparency rules. Second, Alabama's Medicaid reimbursement model being used as a benchmark hasn't been updated since 2018. Third, rural counties like Wilcox (34% poverty rate) have lost 60% of pharmacies since 2020, creating medication deserts.
Opposition groups warn of hidden costs. The Business Council of Alabama projects a $214 million annual burden on employers if implemented. This isn't solving the problem - just moving bankruptcies from pharmacies to mom-and-pops,argued President Helena Duncan during committee hearings. However, bill co-sponsor Senator Andrew Jones counters with data from West Virginia, where similar 2021 reforms reduced average drug prices by 6.2% within 18 months.
The regional implications are stark. Mobile's Cottage Hill Pharmacy narrowly avoided closure last month by cutting operating hours and eliminating delivery services. Owner Lisa Nguyen states: We dispense 47 HIV medications at a loss because PBMs classify them as 'specialty drugs.' This bill lets us budget based on actual costs.
Nationally, 31 states now have active PBM regulation bills - a 400% increase from 2019. Arkansas's 2023 law requiring real-time reimbursement disclosures has already recovered $12 million for pharmacies. As Alabama's House prepares to vote, all eyes are on whether these measures can balance corporate interests with community health needs.