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SB345 INTRODUCED
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SB345
NR46GJJ-1
By Senator Stutts
RFD: Banking and Insurance
First Read: 05-Mar-26
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NR46GJJ-1 02/27/2026 JC (L)lg 2026-1071
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First Read: 05-Mar-26
SYNOPSIS:
This bill would make a change to a pharmacy
classification in the law governing the licensing and
operation of pharmacy benefits managers.
The current term of "independent pharmacy,"
referring to a pharmacy classified by the Alabama State
Board of Pharmacy as a community pharmacy, would be
deleted. In its place, a new term, "unaffiliated
pharmacy," would be introduced to refer to a pharmacy
that is not affiliated with a pharmacy benefits
manager.
A BILL
TO BE ENTITLED
AN ACT
Relating to pharmacies; to amend Section 2 of Act
2025-136, 2025 Regular Session, now appearing as Sections
27-45A-3 and 27-45A-10, Code of Alabama 1975, and Section 3 of
Act 2025-136, 2025 Regular Session, now appearing as
27-45A-13, Code of Alabama 1975, to delete the definition of
an "independent pharmacy" and add a definition for
"unaffiliated pharmacy"; and to make conforming changes.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
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BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. Section 2 of Act 2025-136, 2025 Regular
Session, now appearing as Sections 27-45A-3 and 27-45A-10,
Code of Alabama 1975, and Section 3 of Act 2025-136, 2025
Regular Session, now appearing as 27-45A-13, Code of Alabama
1975, are amended to read as follows:
"§27-45A-3
For purposes of this chapter, the following words have
the following meanings:
(1) AFFILIATE or PBM AFFILIATE. An entity, including,
but not limited to, a pharmacy, health insurer, or group
purchasing organization that directly or indirectly, through
one or more intermediaries, has one of the following
affiliations:
a. Owns, controls, or has an investment interest in a
pharmacy benefits manager.
b. Is owned, controlled by, or has an investment
interest holder who is a pharmacy benefits manager.
c. Is under common ownership or corporate control with
a pharmacy benefits manager.
(2) CLAIMS PROCESSING SERVICES. The administrative
services performed in connection with the processing and
adjudicating of claims relating to pharmacist services that
include any of the following:
a. Receiving payments for pharmacist services.
b. Making payments to pharmacists or pharmacies for
pharmacist services.
c. Both paragraphs a. and b.
(3) COVERED INDIVIDUAL. A member, policyholder,
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(3) COVERED INDIVIDUAL. A member, policyholder,
subscriber, enrollee, beneficiary, dependent, or other
individual participating in a health benefit plan.
(4) HEALTH BENEFIT PLAN. A policy, contract,
certificate, or agreement entered into, offered, or issued by
a health insurer to provide, deliver, arrange for, pay for, or
reimburse any of the costs of physical, mental, or behavioral
health care services, including pharmaceutical services.
(5) HEALTH INSURER. An entity subject to the insurance
laws of this state and rules of the department, or subject to
the jurisdiction of the department, that contracts or offers
to contract to provide, deliver, arrange for, pay for, or
reimburse any of the costs of health care services, including,
but not limited to, a sickness and accident insurance company,
a health maintenance organization operating pursuant to
Chapter 21A, a nonprofit hospital or health service
corporation, a health care service plan organized pursuant to
Article 6, Chapter 20 of Title 10A, or any other entity
providing a plan of health insurance, health benefits, or
health services, including a nonprofit agricultural
organization that provides a plan for health care services to
its members.
(6) INDEPENDENT PHARMACY. A pharmacy as defined in
Section 34-23-1 located in the state which holds an active
permit from the Alabama State Board of Pharmacy and is
classified by the Alabama State Board of Pharmacy as a
community pharmacy.
(7) IN-NETWORK or NETWORK. A network of pharmacists or
pharmacies that are paid for pharmacist services pursuant to
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pharmacies that are paid for pharmacist services pursuant to
an agreement with a health benefit plan or a pharmacy benefits
manager.
(8)(7) MEDICAID REIMBURSEMENT RATE. The total payment
amount for an outpatient drug dispensed by a pharmacy as set
by rule adopted by the Alabama Medicaid Agency which is in
effect on April 15, 2025.
(9)(8) OTHER PRESCRIPTION DRUG OR DEVICE SERVICES.
Services, other than claims processing services, provided
directly or indirectly, whether in connection with or separate
from claims processing services, including, but not limited
to, any of the following:
a. Negotiating rebates with drug companies.
b. Disbursing or distributing rebates.
c. Managing or participating in incentive programs or
arrangements for pharmacist services.
d. Negotiating or entering into contractual
arrangements with pharmacists or pharmacies, or both.
e. Developing formularies.
f. Designing prescription benefit programs.
g. Advertising or promoting services.
(10)(9) PHARMACIST. As defined in Section 34-23-1.
(11)(10) PHARMACIST SERVICES. Products, goods, and
services, or any combination of products, goods, and services,
provided as a part of the practice of pharmacy.
(12)(11) PHARMACY. As defined in Section 34-23-1.
(13)(12) PHARMACY BENEFITS MANAGER. a. A person,
including a wholly or partially owned or controlled subsidiary
of a pharmacy benefits manager, that provides claims
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of a pharmacy benefits manager, that provides claims
processing services or other prescription drug or device
services, or both, to covered individuals who are employed in
or are residents of this state, for health benefit plans. The
term includes any person that administers a prescription
discount program directly for or on behalf of a pharmacy
benefits manager or health benefit plan for drugs to covered
individuals which are not reimbursed by a pharmacy benefits
manager or are not covered by a health benefit plan.
b. Pharmacy benefits manager does not include any of
the following:
1. A health care facility licensed in this state.
2. A health care professional licensed in this state.
3. A consultant who only provides advice as to the
selection or performance of a pharmacy benefits manager.
(14)(13) PRESCRIPTION DRUGS. Includes, but is not
limited to, certain infusion, compounded, and long-term care
prescription drugs. The term does not include specialty drugs.
(15)(14) REBATE. Any payments or price concessions that
accrue to a pharmacy benefits manager or its health benefit
plan client, directly or indirectly, including through its PBM
affiliate or its subsidiary, third party, or intermediary,
including an off-shore purchasing organization, from a
pharmaceutical manufacturer or its affiliate, subsidiary,
third party, or intermediary. The term includes, but is not
limited to, payments, discounts, administration fees, credits,
incentives, or penalties associated, directly or indirectly,
in any way with claims administered on behalf of a health
benefit plan.
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benefit plan.
(16)(15) SPECIALTY DRUGS. Prescription medications that
require special handling, administration, or monitoring and
are used for the treatment of patients with serious health
conditions requiring complex therapies, and that are eligible
for specialty tier placement by the Centers for Medicare and
Medicaid Services pursuant to 42 C.F.R. § 423.560.
(17)(16) SPREAD PRICING. A prescription drug pricing
model used by a pharmacy benefits manager in which the
pharmacy benefits manager charges a health benefit plan a
contracted price for a prescription drug which is higher than
the amount the pharmacy benefits manager pays the pharmacy for
the prescription drug.
(18)(17) STEERING. The term includes all of the
following practices by a pharmacy benefits manager:
a. Directing, ordering, or requiring a covered
individual to use a specific pharmacy, including a PBM
affiliate pharmacy, for the purpose of filling a prescription
or receiving pharmacist services.
b. Inducing a covered individual to use a designated
pharmacy, including a PBM affiliate pharmacy, by increasing
costs to the health benefit plan or charging the covered
individual up to the full cost for a prescription drug if the
covered individual fails to use the pharmacy designated by the
pharmacy benefits manager.
c. Advertising, marketing, or promoting a pharmacy,
including a PBM affiliate pharmacy, over another in-network
pharmacy.
d. Engaging in any practice that results in excluding,
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d. Engaging in any practice that results in excluding,
restricting, or inhibiting an in-network pharmacy from
providing prescription drugs to beneficiaries under a health
benefit plan, which may involve, but not be limited to, the
use of credentialing or accreditation standards, day supply
limitations, or delivery method limitations.
e. Engaging in any practice aimed at directly or
indirectly influencing a pharmaceutical manufacturer to limit
its distribution of a prescription drug to certain pharmacies
or to restrict distribution of the drug to non-PBM affiliate
pharmacies .
(18) UNAFFILIATED PHARMACY. A pharmacy that is not a
PBM affiliate ."
"§27-45A-10
With respect to a pharmacist or pharmacy, a pharmacy
benefits manager, directly or through an affiliate or a
contracted third party, may not do any of the following:
(1) Reimburse an in-network pharmacy or pharmacist in
the state an amount less than the amount that the pharmacy
benefits manager reimburses a similarly situated PBM affiliate
for providing the same pharmacist services to covered
individuals in the same health benefit plan.
(2) Practice spread pricing in this state unless
required under the health benefit plan. If spread pricing is
practiced pursuant to the health benefit plan, the pharmacy
benefits manager shall submit an annual report to the
commissioner which discloses the differences between the
amount the health benefit plan is charged and the amount
network pharmacies are reimbursed.
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network pharmacies are reimbursed.
(3) Deny a pharmacy or pharmacist the right to
participate as a network provider if the pharmacy or
pharmacist meets and agrees to the terms and conditions,
including reimbursements, in the pharmacy benefits manager's
contract, including an independent unaffiliated pharmacy that
qualifies for reimbursement at the minimum rate established in
Section 27-45A-13(a)(1), notwithstanding any term to the
contrary in the pharmacy benefits manager's contract.
(4) Impose credentialing standards on a pharmacist or
pharmacy beyond or more onerous than the licensing standards
set by the Alabama State Board of Pharmacy or charge a
pharmacy or pharmacist any fee in regard to, without
limitation, network enrollment, network participation,
credentialing or recredentialing, change of ownership,
submission of claims, transmission of claims, adjudication of
claims, claims processed through discount card programs, or
otherwise, if not in conjunction with an audit conducted
pursuant to Article 8, Chapter 23, Title 34 ;, provided ,
however, this subdivision shall not prohibit a pharmacy
benefits manager from setting minimum requirements for
participating in a pharmacy network.
(5) Prohibit a pharmacist or pharmacy from providing a
covered individual with any relevant information about a
prescription drug, including the following:
a. The cost and reimbursement amount of the drug.
b. An alternative drug.
c. Any other information considered to be necessary in
the professional judgment of the pharmacist.
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the professional judgment of the pharmacist.
(6) Prohibit a pharmacist or pharmacy from offering and
providing delivery services to a covered individual as an
ancillary service of the pharmacy, provided all of the
following requirements are met:
a. The pharmacist or pharmacy can demonstrate quality,
stability, and safety standards during delivery.
b. The pharmacist or pharmacy does not charge any
delivery or service fee to a pharmacy benefits manager or
health insurer.
c. The pharmacist or pharmacy alerts the covered
individual that he or she will be responsible for any delivery
service fee associated with the delivery service, and that the
pharmacy benefits manager or health insurer will not reimburse
the delivery service fee.
(7) Charge or hold a pharmacist or pharmacy responsible
for a fee or penalty relating to an audit conducted pursuant
to Article 8, Chapter 23, Title 34, provided this prohibition
does not restrict recoupments made in accordance with the
Pharmacy Audit Integrity Act.
(8) Charge a pharmacist or pharmacy a point-of-sale or
retroactive fee or otherwise recoup funds from a pharmacy in
connection with claims for which the pharmacy has already been
paid, unless the recoupment is made pursuant to an audit
conducted in accordance with Article 8, Chapter 23, Title 34.
(9) Except for a drug reimbursed, directly or
indirectly, by the Medicaid program, vary the amount a
pharmacy benefits manager reimburses an entity for a drug,
including each and every prescription medication that is
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including each and every prescription medication that is
eligible for specialty tier placement by the Centers for
Medicare and Medicaid Services pursuant to 42 C.F.R. §
423.560, regardless of any provision of law to the contrary,
on the basis of whether:
a. The drug is subject to an agreement under 42 U.S.C.
§ 256b; or
b. The entity participates in the program set forth in
42 U.S.C. § 256b.
(10) If an entity participates, directly or indirectly,
in the program set forth in 42 U.S.C. § 256b, do any of the
following:
a. Assess a fee, charge-back, or other adjustment on
the entity.
b. Restrict access to the pharmacy benefits manager's
pharmacy network.
c. Require the entity to enter into a contract with a
specific pharmacy to participate in the pharmacy benefits
manager's pharmacy network.
d. Create a restriction or an additional charge on a
patient who chooses to receive drugs from the entity.
e. Create any additional requirements or restrictions
on the entity.
(11) Require a claim for a drug to include a modifier
to indicate that the drug is subject to an agreement under 42
U.S.C. § 256b.
(12) Penalize or retaliate against a pharmacist or
pharmacy for exercising rights under this chapter or Article
8, Chapter 23, Title 34. For purposes of this subdivision, the
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8, Chapter 23, Title 34. For purposes of this subdivision, the
conduct prohibited includes any written or verbal
communication that a reasonable individual would construe as a
threat of penalty or retaliation received before or in the
course of exercising rights under this chapter or Article 8,
Chapter 23, Title 34.
(13) Prohibit a pharmacist or pharmacy from declining
to dispense a drug to a covered individual, or directing a
covered individual to another pharmacy, if the reimbursement
amount would be lower than the dispensing cost of the
pharmacist or pharmacy.
(14) Take retaliatory action against, or impose any
penalty on, a pharmacist or pharmacy who declines to dispense
a drug to a covered individual under subdivision (13),
including cancellation or nonrenewal of a contract, or suit
for breach of contract."
"§27-45A-13
(a) Notwithstanding any other provision of this chapter
or any form of a contract to the contrary, with respect to an
independent unaffiliated pharmacy, a pharmacy benefits manager,
directly or through an affiliate or a contracted third party,
may not do any of the following:
(1) Reimburse for dispensing a prescription drug in an
amount that is less than the Medicaid reimbursement rate.
(2) Impose a fee or otherwise adjust or lower the
reimbursement of a drug at the time the claim is adjudicated,
or after the claim is adjudicated, that in any way reduces the
amount of reimbursement for the drug as regulated pursuant to
subdivision (1).
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subdivision (1).
(3) Increase a covered individual's cost-sharing
percentage or ratio at or after the point of sale by raising
the deductible, copayment, or coinsurance, or by requiring any
other out-of-pocket payment as a means to recoup the
dispensing cost portion of the reimbursement required pursuant
to subdivision (1).
(4) Reject payment of a claim for a drug that is
submitted by an independent unaffiliated pharmacy when the drug
is available to a covered individual at a different in-network
pharmacy; provided, however, if the drug is dispensed by the
different in-network pharmacy, the pharmacy benefits manager
shall pay the independent unaffiliated pharmacy a surcharge
equal to the reimbursement that would have been paid pursuant
to subdivision (1) had the independent unaffiliated pharmacy
dispensed the drug.
(b) A health benefit plan that covers individuals who
are public employees and that reimburses
independent unaffiliated pharmacies for dispensing prescription
drugs during its plan year in an aggregate amount that is
higher than would otherwise be calculated using the rate set
in subdivision (a)(1), upon proof of the same submitted to the
commissioner, shall be exempt from this section.
Section 2. This act shall become effective on June 1,
2026.
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