Letter from AIPA regarding the ongoing PBM issue

November 5, 2025

Fall is upon us, bringing cool nights and busy schedules as we plan tailgate parties, Thanksgiving feasts and Christmas parties. This year, the hardworking staff at Alabama Department of Insurance (DOI) are busy with a very different task, addressing a threat to healthcare in our state.

The final provisions of SB252, The Community Pharmacy Relief Act, took effect on October 1, mandating that Pharmacy Benefit Managers (PBMs) pay independent pharmacies in Alabama at a rate no less than what Alabama Medicaid pays for prescription drug services. Since then, independent pharmacies have been busy monitoring those PBMs for noncompliance with the law and reporting infractions to Alabama Department of Insurance.

The result has been a heavy workload for the DOI’s PBM Division. Regulators there have been flooded with reports of underpayment by PBMs. Data from members of the Alabama Independent Pharmacy Alliance indicate an estimated average of between 100 and 150 instances of underpayment per pharmacy per week since October 1, 2025, a staggering amount of work for a newly formed division of the DOI. 

This heavy workload is the direct result of PBMs’ choices and actions. Some PBMs have responded to pharmacies with claims of ignorance of or immunity from the law that legislators passed unanimously in the 2025 session, despite a five and one-half month period between the Governor’s signature on April 15 and the October 1 effective date of the law’s final provisions. Some have responded that instead of correcting the claims themselves, they will require pharmacies to rebill claims and collect more money from patients, thereby placing responsibility on the pharmacy and the patient for the PBMs’ disregard of the law.

The Community Pharmacy Relief Act was intended as a “Band-Aid” to stop the closure of independent pharmacies in our state, and some of the intended effect has indeed been achieved: even with incomplete PBM compliance, pharmacies are reporting positive differences in pay rates on commercial claims that might mean the difference between bankruptcy and solvency for those businesses.  But a “Band-Aid” is not intended to heal a gaping wound.  The gash on Alabama healthcare that is the PBMs must be cauterized by further addressing PBM practices and their willingness to disregard state law.  The Department of Insurance is the front line in addressing this problem.  Addressing the problem completely, however, will require the continued attention of our legislature, the Governor, and the Attorney General.  The PBMs’ methods of skirting the intent of SB252 can only be fully eliminated with complete scrutiny of their practices.

If you are a customer of a locally owned pharmacy, ask your pharmacist how these issues are affecting them.  And importantly, thank your legislators for their efforts in defending your local pharmacy from unethical PBM practices by passing SB252, made law as Act #2025-136.

Alabama Independent Pharmacy Alliance (AIPA) is a volunteer organization comprised of local pharmacy owners, pharmacists and staff, dedicated to preserving and forwarding the practice of independent pharmacy in the state of Alabama.

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