ATAP Sends a Letter to Chairman Shelnutt Expressing Support of SB 227

March 8, 2021

Honorable Shay Shelnutt

Banking and Insurance Committee

600 Dexter Avenue

Montgomery, AL 36104

Re: Support of SB 227– Pharmacy Benefits Managers Reporting/Transparency

Dear Chairman Shelnutt:

On behalf of the Alliance for Transparent and Affordable Prescriptions (ATAP), a group of twenty-eight (28) patient and provider groups, I am writing to express our support for SB 227. This bill seeks to ensure that Alabama patients do not pay inflated costs for their prescriptions. SB 227 increases transparency and accountability for Pharmacy Benefits Managers (PBMs). As you may be aware, PBMs are third-party entities that are hired by insurers and health plan sponsors to manage and administer prescription drug benefit plans.

ATAP is concerned about the role PBMs play regarding the alarming price increases in the cost of prescription drugs for patients, resulting in the loss of patient access to affordable and life-saving medications. Using their intermediary position, Pharmacy Benefits Managers (PBMs):                                                                                                                                                                                              

·      Negotiate rebates and discounts with pharmaceutical manufactures in exchange for including the manufacturer’s drug on the PBMs tiered formulary.

·      Determine which patient medication the PBM will cover and how much the patient will pay for their medication per the tiered formularies.

·      Negotiate rebates and discounts for medications, meant to drive down the cost of medications for patients, which are pocketed by the PBMs within opaque contracts.

·      Prohibit pharmacists from informing patients that the copayment amount for their medications may be higher than paying the retail (“cash”) price for their medication.

SB227 will help remedy many of these practices by:                                                                                     

·      Requiring at least 80% of rebates to be passed back to the patient or the plan,

·      Prohibiting “spread pricing,”

·      Banning copay accumulator policies in state regulated health plans,

·      Prohibiting “steering” to mail order or affiliate pharmacies,

·      Imposing a fiduciary duty on PBMs,

·      Prohibiting PBMs from withholding coverage or require a prior authorization when a covered individual selects a lower cost therapeutically equivalent prescription drug, and

·      Providing for civil penalties if PBMs violate this law.

In closing, I want to reiterate ATAP’s support of SB 227. These reforms are vitally important to efforts to contain drug prices and discourage abuses by PBMs. ATAP is happy to be a resource as you consider SB 227. If you have any questions about our position, or if you would simply like to learn more about how PBMs operate in the marketplace, please contact Joseph Cantrell at jcantrell@rheumatology.org.

Sincerely,

Robert W. Levin, MD 

President, ATAP