SB227 Summary

• Requires pharmacy benefits managers (PBMs) to obtain a license from the Alabama Commissioner of Insurance, with initial licensure through December 31, 2021 requiring a nonrefundable fee not exceeding $500, and annual renewal thereafter.

• Prohibits PBMs from requiring patients to use mail-order or affiliate pharmacies, denying network participation to qualified pharmacies, imposing monetary penalties based on pharmacy choice, or steering patients to specific pharmacies, with limited exceptions for cost notifications.

• Mandates annual reporting by PBMs to clients disclosing rebates received from pharmaceutical manufacturers, amounts not passed through to clients, and spread pricing differences between client charges and pharmacy reimbursements.

• Prevents PBMs from reimbursing in-network pharmacies less than affiliate pharmacies, imposing excessive credentialing standards, charging network enrollment fees, or prohibiting pharmacists from discussing cost-sharing information and affordable alternatives with patients.

• Applies regulatory requirements to health maintenance organizations and health care service plans offering pharmacy benefits, making them subject to PBM regulations; effective July 1, 2021, applicable to contracts on and after October 1, 2021.