top of page
  • Writer's pictureStaff Report

Alabama Medical Mafia Pushes a "Pharmacy Tax" False Narrative in their War Against Independent Pharmacies

Last month the 2024 Alabama legislative session came to a close without HB 238 also known as the FAIR Meds Act making it to the House floor for a vote despite it having been passed unanimously by the House Insurance Committee on March 6th.  Heavy pressure from lobbyists representing the powerful downtown Birmingham syndicate which includes big mules such as Blue Cross Blue Shield of Alabama, Alabama Power, Regions Bank as well as the Business Council of Alabama and the Association of County Commissions of Alabama resulted in the legislation stalling out without being voted on. Working under the front group known as the Alliance of Alabama Healthcare Consumers, their main line of attack which was aided and abetted by the bought off local media was to push a false narrative which purported to describe what they referred to as a "$10.64 pharmacy tax" for every prescription filled with private insurance that they claimed would be created by HB 238 being passed.

Parroted by news outlets around the state as well as low information commenters on social media, the "pharmacy tax" narrative poisoned the well for serious consideration of HB 238. Valley Pharmacy recently celebrated its 50th anniversary and co-owner Craig Moore shared his keen insights on the nature of these AAHC talking points with the Examiner during an exclusive interview.

Asked who he believes to be the author and source of the narrative that HB 238 is a "pharmacy tax", Moore responded;

Personally, I believe it is the lobby for the PBM's. Certain buzz words can kill anything in this State and tax is one those words. It ranks up there with Obama, Liberals, etc.

Asked how he would describe the Alliance of Alabama Healthcare Consumers and the impact of their actions on independent pharmacies to someone who is not familiar with that organization, Moore stated;

I had never heard of this alliance until this bill came about. I had knowledge of these organizations individually but never collectively. Of the 17 or so represented, some of them are very successful manufacturers in the state. Most of which received significant incentives from the legislature to be here. Some are what I would call lobbying or special interest groups (Poarch Creek Band of Indians, ACC of Alabama, and BCA). The biggest bank in the State and the Healthcare Giants in the State and then the insurance companies who actually either have ties to PBM's (BCBS). or they own their own PBM (CVS Health). All of the members are extremely powerful forces in this State and all of them have loads of cash. I don't think they really care what the impact on independent pharmacy is. Someone once asked me if I knew what the golden rule was and my reply was yes. Do unto others as you would have them do unto you. He responded that I was wrong and promptly replied " He who owns the gold makes the rules."

Asked how he would assess the AAHC membership of organizations such as Blue Cross Blue Shield of Alabama, Business Council of Alabama, Association of County Commissions of Alabama, Alabama Power, Regions Bank and the Poarch Creek Band of Indians as it relates to the harm being caused to independent pharmacies by sabotaging HB 238 through the "pharmacy tax" narrative, Moore remarked;

This is my opinion and my opinion alone. The biggest tool in a PBM's toolbox has always been the rebate. They shake the drug manufacturers down for rebates (which they keep the lion's share) and then they deceive the business owners. For example, the first time that I saw it in action, I was working in Industry and CVS Caremark told our HR and Finance team that if we made all of our employees go to CVS or use CVS mail order, they would give us $50K. The accountants in the room were salivating. The others were thinking about how bringing such a rebate to the CEO would net a bonus or raise to that individual, etc. Meanwhile, who cares where the employees have to go. I just netted the company $50K. I am sure the rebates are much higher to both the PBM and to the employer. In Alabama's case most of these manufacturers don't even know how they are being fleeced by the PBM. They don't know what the rebates the PBM is receiving in relation to what the PBM is giving them. As it stands now a PBM isn't required to be transparent with anyone. All they know is that they are getting cash flow through rebates from the likes of BCBS and CVS Health. If this bill were to pass, they would lose their rebates and prices would skyrocket and none of that is true. It is the exact opposite. So the majority of the group was probably told by a few members of the group that this was a bad bill plus I am sure Obama, Sanders and AOC names came up and that's all it took. Can't lose those rebates.

Asked if the "$10.64 tax" figure that has been put forth accurate and how he believes it was calculated, Moore noted;

The $10.64 is an accurate number. It is the dispensing fee that Alabama Medicaid pays all pharmacies for processing Medicaid claims. So for example, Medicaid has a fee schedule for all covered drugs. They compensate you with the fee schedule plus they give you a $10.64 dispensing fee. Alabama Medicaid doesn't use a PBM so there are no hidden fees and additional costs to the State. So a dispensing fee makes up for the cost of rendering professional services and covering cost. The State recognized there is a professional aspect to filling a prescription and there are costs associated with it other than the cost of the drug. The PBM model says here is the reimbursement, take it or leave it. The PBM does not pay a dispensing fee. They just say this is what we will reimburse you for this drug. For most drugs, it is either pennies on the dollar profit or a loss. They don't take into consideration the cost of doing business. Even the PBM owned pharmacies would get the dispensing fee and the bill stated that the PBM had to absorb the $10.64 and that they couldn't pass it along to the consumer. How in the crap would you get the average citizen to understand that.

Asked how he would debunk the narrative that HB 238 puts the burden on businesses and their employees by driving up their insurance premiums or directly increasing consumer prices at the register, Moore commented;

Actually it should save everyone money. The bill requires that the PBM pass all of the rebates from the drug manufacturer that they receive to the business. Today, they don't have to give rebates and the business doesn't even know what the PBM is receiving. The bill also requires that the PBM be transparent with the business. That would mean that they must show all of their secrets to the world. This would quickly cause everyone to realize that they are being had. Think back to vertical integration. Imagine if an employer was able to see what the PBM was pricing for the drugs, the markup to the employer, the pullback of the co pay, the amount of reimbursement the PBM pharmacy was making vs. the independent or rival PBM pharmacy.

Asked why the AAHC has characterized HB 238 as a selfish cash grab by what they call the "pharmacy sector" to push through "a series of previously rejected demands", Moore answered;

The only thing I can figure is that they haven't completely studied the bill to see how it would actually benefit their businesses or they are being paid so much by the PBM's to follow the narrative. I am sure that it is a PBM narrative "the pharmacy sector" to deflect blame to the drug manufacturer and anyone other than the PBM and the PBM pharmacy. I would just say follow the money and see where it leads. It's not the independent , that's for sure. Why are there only 500 of us left?

Sharing a message with the voters of Alabama in regards to the "pharmacy tax" narrative, Moore concluded;

First of all, be an independent thinker. Read the bill. Ask yourself why there is so much opposition coming from the most powerful organizations in the State. Why don't they want transparency? Once again, you may want to take text from my comments on the $10.64.

155 views0 comments


Subscribe to Our Newsletter

You have been signed up to our mailing list!

bottom of page