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Retirement Systems of Alabama opposing legislation over prescription cost concerns

The Retirement Systems of Alabama (RSA) voiced its opposition to HB238, which advanced through the Alabama House Insurance Committee last week.

The bill, sponsored by State Rep. Phillip Rigsby (R-Huntsville), would reform prescription drug reimbursement by mandating pharmacy benefit managers compensate in-network pharmacies for the actual acquisition costs of medications, in addition to implementing a dispensing fee modeled on federal guidelines used in Medicaid.

Neah Scott, Legislative Counsel for the RSA, added their concerns to a growing list of membership groups speaking out against the financial implications of the proposal, now awaiting a full vote of the Alabama House. 

The RSA oversees the Public Education Employees’ Health Insurance Plan (PEEHIP), covering approximately 300,000 public education employees, retirees, and their dependents. Scott said the bill would increase the cost of the program. 

RELATED: Debate over pharmacy reimbursement bill expected to intensify

“This bill is bad for education employees and retirees because it could increase their out of pocket costs without providing any additional benefit,” Scott said.

“PEEHIP is funded by education employer contributions and member premiums. If PEEHIP’s costs go up, either employer contributions or premiums would need to increase. This bill would increase PEEHIP’s costs by mandating reimbursement of drugs on the Medicaid model which will prevent PEEHIP from negotiating reimbursements and would require it pay a dispensing fee of $10.64 for every prescription.”

Proponents argue that the so-called FAIR Meds Act will ensure healthcare access, promote transparency in drug pricing, foster competition, and allow patients freedom in pharmacy choice. Despite growing opposition, the bill has support from the American Pharmacy Association and the American Cooperative Pharmacy. 

State lawmakers are midway through the 2024 legislative session and currently on a regularly-scheduled break, set to return on March 19, 2024. 

Grayson Everett is the state and political editor for Yellowhammer News. You can follow him on Twitter @Grayson270

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