SB99 would substantially expand Alabama’s regulation of pharmacy benefit managers (PBMs) and PBM affiliates in the administration of prescription drug benefits for health benefit plans. The bill renames and broadens the existing PBM licensure law into an “Accountability Act,” adds detailed definitions for PBM-related terms, and gives the Department of Insurance explicit authority to enforce the chapter, examine PBM records, adopt rules, and impose civil penalties of at least $1,000 per violation. It also creates a new private right of action allowing pharmacies, pharmacists, health care providers, insurers, covered individuals, and beneficiaries injured by a violation to sue for damages, injunctive relief, attorney fees, and costs.
The bill sets reimbursement floors for in-network pharmacies, requiring PBMs to pay at least the National Average Drug Acquisition Cost or wholesale acquisition cost plus a small add-on, and to pay a dispensing fee at least equal to Alabama Medicaid’s professional dispensing fee. It requires PBMs to pass through 100% of manufacturer rebates to clients unless the client directs point-of-sale application, and it bars spread pricing. SB99 also restricts PBMs from steering patients to mail-order or PBM-affiliate pharmacies, from forcing brand-name drugs when lower-cost therapeutically equivalent options exist, from charging patients more than the pharmacy reimbursement, and from imposing certain fees, penalties, or retroactive adjustments on pharmacies outside the audit rules.
The bill further amends the Pharmacy Audit Integrity Act to tighten audit procedures and limit recoupments from pharmacies. It narrows when clerical errors can be treated as fraud, limits overpayment recoupment to the actual overpaid amount, restricts audit sample sizes and timing, requires notice and reporting procedures, and prohibits certain charge-backs, fees, and retaliatory actions. It also adds special protections for pharmacies participating in the federal 340B program and limits PBM practices affecting those entities. The act would take effect October 1, 2025.
The overall sentiment reflected in the bill text and its sponsorship appears favorable toward pharmacies and covered individuals, with the measure framed as a consumer- and provider-protection bill aimed at PBM accountability, transparency, and fair reimbursement. The bill’s title and structure suggest support from lawmakers concerned about PBM practices, and there is no recorded vote or committee transcript in the provided materials indicating opposition or amendment debate.
The main points of contention likely center on the bill’s broad restrictions on PBM business practices, especially reimbursement mandates, rebate pass-through requirements, limits on steering and mail-order incentives, and the new private right of action. PBMs and health plan administrators may view these provisions as increasing costs, limiting contracting flexibility, and exposing them to litigation, while pharmacies and patient advocates are likely to support the bill’s protections against under-reimbursement, spread pricing, and audit-related recoupments.
SB99 would amend multiple sections of the Alabama Code governing PBM licensure, pharmacy benefit management, and pharmacy audits, while adding a new civil remedy section. It would increase Department of Insurance oversight, establish reimbursement and rebate rules, prohibit spread pricing and steering practices, and revise audit and recoupment standards under the Pharmacy Audit Integrity Act. The bill would directly affect PBMs, PBM affiliates, health insurers, health benefit plans, pharmacies, pharmacists, covered individuals, beneficiaries, and certain 340B-participating entities.
The bill appears to have a generally pro-pharmacy, pro-consumer orientation, emphasizing accountability, transparency, and limits on PBM practices that are portrayed as harmful to pharmacies and patients. Based on the bill’s framing and the absence of recorded opposition in the provided context, the overall sentiment is best characterized as supportive or reform-minded, though the measure likely would draw resistance from PBMs and some health plan stakeholders because of its cost and litigation implications.
The most notable areas of contention are the mandated minimum reimbursement rates, the requirement to pass through all rebates, the ban on spread pricing, and the restrictions on steering patients to preferred or affiliate pharmacies. PBMs may also object to the new private right of action, civil penalties, and expanded Department of Insurance audit authority, while pharmacies are likely to support those provisions as necessary enforcement tools. Additional friction may arise over the bill’s limits on audit recoupments, its protections for 340B entities, and its restrictions on using claims data for marketing or mail-order referrals.