Senate committee hears hours of testimony on PBMs as pharmacists push two reform bills

The Senate held an extended public hearing on two competing PBM reform bills, SB 93 and SB 99, drawing pharmacists, business groups and insurers who presented sharply different evidence and projections about the bills’ effects.

Senator Jones, sponsor of SB 93, told the committee the issue "between small pharmacies and pharmacy benefit managers known as PBMs is one of the most important issues facing our small business community right now." He described independent pharmacies closing across the state and said the bill would set a clear reimbursement standard: pharmacists would be paid the cost of the drug plus Alabama’s average acquisition cost and a dispensing fee.

The bills matter because proponents say current PBM practices are forcing independent pharmacies to dispense some prescriptions at a loss and are steering patients to PBM‑owned mail‑order pharmacies. Opponents say the bills — particularly measures that set a mandatory dispensing fee and require rebate transparency — would raise costs for employers and employees.

Independent pharmacists and trade groups pressed the committee to act. "A pharmacy cannot sell a medication at or below cost and continue to serve patients," Bobby Giles of the Alabama Pharmacy Association said. Anna Nugent, a second‑generation pharmacist, said, "We're in a crisis and our time is running out," and described giving away tens of thousands of prescriptions that were reimbursed below acquisition cost.

Owners and managers of independent pharmacies described how some PBMs reimburse local fills at rates lower than acquisition cost while steering volume to affiliated mail‑order operations. "Independent pharmacy faces extinction in this state because PBMs own their own pharmacies," said Josh Harden, owner of Mills Pharmacy. Trent McLemore, director of pharmacy for Star Discount Pharmacy, described a workaround his group uses: sending certain fills to a Tennessee location where reimbursement rules are more favorable, then delivering the drug back to Alabama customers.

Business and employer groups urged caution. Robin Stone, director of the Alliance of Alabama Healthcare Consumers, told senators the bills "create staggering costs" and warned a $10.64 dispensing fee applied to every prescription would be borne by employers, insurers and plan members. Caroline Franklin, speaking for the broader business community, estimated that applying a $10.64 fee to 40.4 million commercial prescriptions (2019 KFF figure cited at the hearing) would cost roughly $430 million in a year and said that would drive up premiums and employer costs.

Blue Cross Blue Shield of Alabama, represented by Ted Hoss, urged the committee to focus first on the subset of prescriptions that pharmacsts report as being reimbursed below cost. "The number we hear is somewhere in the 10 to 15% range of the prescriptions that are dispensed are underwater," Hoss said, and urged targeted fixes paired with enforcement of existing laws.

Sponsors debated differences between the bills on the hearing record. Senator Jones said SB 93 would pay the Alabama average acquisition cost plus a $10.64 dispensing fee — "exactly what Medicaid pays these pharmacies in the state of Alabama." Senator Stutz, sponsor of SB 99, said his measure uses a national average ingredient cost, requires rebate passthrough to employers and contains additional enforcement mechanisms; proponents argued SB 99 has "teeth" to prevent PBMs from evading state rules.

Proponents cited other states' experience. Witnesses said Tennessee and West Virginia enacted similar laws and saw net savings or no net cost increases for plans; opponents disputed that interpretation and presented alternative cost models. The Department of Insurance attended meetings with staff and supplied technical feedback, but did not endorse either bill during the hearing.

The committee did not vote on either measure during the session. Senators and witnesses indicated talks will continue; several senators urged more common data and a negotiated compromise, while others said they preferred moving a stronger bill that will more directly constrain PBM practices.

For now, the record from the hearing contains a clear split: independent pharmacists and retail groups seeking statutory protections and a mandatory formula for reimbursement, and employers and insurers warning of immediate cost increases to plans and workers if a legislative fee or mandated reimbursement is imposed.

Votes and formal action: no final votes were taken on SB 93 or SB 99 at this hearing; senators said they would continue discussions and that more work and data would be needed before a floor vote.