Issues with drop shipping and the difficulty of running a business in the post-COVID world are making more and more stores close. One type of business we never thought would be in danger is pharmacies, and in Alabama, they are closing at an unprecedented rate.
The Alabama Independent Pharmacy Alliance says that these kinds of businesses have been closing faster over the past two years. This is especially true for those that are privately owned and not part of a bigger chain. As with any business, there are many reasons, but the main one seems to be one that only this type of model has: financial pressures because the costs of giving out drugs are higher than what pharmacy benefit managers pay back.
Democratic senator and retired pharmacist in the state, Sen. Billy Beasley, spoke out about the problem in a worried way: “We’re losing almost one drugstore every week because they are paid so little by the PBM industry to fill prescriptions for their patients at their drugstore.”
Because of how expensive medicines are, this issue affects a lot more people than it should. Alabama is now one of the states thinking about making changes to the rules that pharmacy benefit managers must follow. Health insurance companies, drug companies, and pharmacies all deal with these managers. In exchange, the managers set the payment and take a cut of the profit. The Alabama Senate passed 32-0 Thursday to move forward with a bill that would require community pharmacists to be paid at least a certain amount. This was done to try to solve the problem or at least ease the stress.
If this bill passes, pharmacy benefit managers would have to pay back community pharmacies at the same rate as the Alabama Medicaid Agency. Currently, their job is to negotiate lower drug prices for customers by using their buying power with drug companies. It would also stop “spread pricing,” which is when a benefits manager makes more money by charging health plans more for drugs than the pharmacists are willing to pay.
Similar bills are being considered in states like Mississippi and Arkansas, which have also had schools close because of problems with repayment and rising costs. In Alabama, the plan still needs to be passed by the Alabama House of Representatives, but there is hope that it will be passed quickly.
The new pharmacy payment bill in Alabama
Republican Sen. Andrew Jones, who is a sponsor of the bill, said that states that have taken similar steps have seen drug prices go down and towns get better because fewer pharmacies have to close. “You are not going to get a big box store to open in the middle of the night to get you the medicine you need,” he said.
There are, however, many people who are against the bill. These people have warned that if it becomes law, the bull would add a new $10.64 fee to medicines in order to match state Medicaid rates, which already include a $10.64 dispensing fee. Since shops are already having a hard time making ends meet, this fee would have to be passed on to customers, who are also having a hard time.
The president of the Business Council of Alabama, Helena Duncan, agreed with this assessment and added that this would also affect small companies that are already paying more for insurance because the new fee would make those costs go up even more. The already struggling business would have to pay for this, or the cost would have to be passed on to workers through higher premiums. “It is fundamentally unfair to put the financial burdens on Alabama employers,” Duncan told a legislative committee on Wednesday.