State legislature passes bill intended to lower prescription drug costs for many Alabamians

MONTGOMERY — The Alabama House of Representatives on Wednesday unanimously passed a bill by State Sen. Arthur Orr (R-Decatur) that could help lower prescription drug costs for hardworking families in the Yellowhammer State.

SB 73, which passed the Senate unanimously last week, clarifies that pharmacy benefit managers cannot use contractual “gag clauses” to forbid pharmacists from telling customers if they can save money by buying a prescription out-of-pocket with cash.

As of 2018, 25 other states had already banned the gag clauses that pharmacy benefit managers sometimes seek to impose on local pharmacists.

The bill now heads to Governor Kay Ivey’s desk.

Prescription drugs are sometimes more expensive when purchased via insurance rather than with cash because pharmacy benefit managers can also charge co-pays that are more expensive than the drug itself — and then “clawback” part of the co-pay from the local pharmacist.

Orr’s proposal bans these clawbacks, along with the gag clauses.

“This bill is about protecting the individual consumer, and allowing local pharmacists to inform their customers when it would be cheaper for the customer to buy a prescription drug with cash, out-of-pocket,” Orr explained. “You should have transparent pricing in the healthcare market, and consumers should know which options are most affordable for them and their families.”

Pharmacist Steve Hoffart told NBC News that at his pharmacy in Magnolia, Texas, a customer had to pay $43 for the cholesterol drug Simvastatin. If the customer had paid cash, it would only have cost $19, according to Hoffart.

Orr’s bill also requires pharmacy benefit managers to register with the Alabama Department of Insurance, which will oversee the industry should SB 73 become law.

“At the end of day, we want consumers to be able to shop for the best deal possible in the prescription drug market — that’s one of the keys to driving drug costs down for Alabama families,” Orr concluded.

State Rep. Kyle South (R-Fayette) carried the bill in the House.

Sean Ross is a staff writer for Yellowhammer News. You can follow him on Twitter @sean_yhn