Op-Ed: Alabama’s Pharmacy Crisis: Why We Need More Transparency from Drug Middlemen
- Staff Report
- Aug 5
- 3 min read
by Joe Jones
In Alabama, the pharmacy industry is facing a crisis that threatens not only the survival of local, family-owned pharmacies, but also fair costs for health plans that companies provide to workers. At the center of this crisis are Pharmacy Benefit Managers (PBMs)— PBMs are companies that act as middlemen between drug makers, pharmacies, and health plans. Their influence over drug pricing and pharmacy reimbursement has grown unchecked, with employers, employees, patients, pharmacies, and taxpayers paying inflated costs.
In response to mounting pressure, Alabama has taken legislative action. In April 2025, S.B. 252, the Community Pharmacy Relief Act, was signed into law. This landmark legislation, championed by the Alabama Independent Pharmacy Alliance (AIPA), ties commercial reimbursement for independent pharmacies to the state’s Medicaid Reimbursement Rate. It requires disclosure of spread pricing (when PBMs charge health plans more for drugs than they pay pharmacies, pocketing billions for themselves) and gives more power to the Department of Insurance to enforce rules. It’s a major step forward for transparency and fairness—but it’s only the beginning.
Founded in 2024 by a coalition of independent pharmacists, AIPA has played a pivotal role in driving reform. Through grassroots advocacy and collaboration with former Alabama state Senator John Rice, they’ve raised awareness among lawmakers and the public about the harmful, anticompetitive practices of PBMs and their devastating impact on small-town pharmacies. Their efforts led to one of the most significant legislative wins in the country against PBMs, similar to legislation passed by Tennessee over 4 years ago.
With employer-sponsored health plans, one of the most serious concerns is the lack of visibility into claim-level data. Employers, particularly those managing ERISA-governed 1 health plans, have a responsibility to act in the best interest of their plan participants (ERISA is a federal law that requires employers to manage health plans responsibly for their employees). Yet, without access to detailed claims data, they are unable to audit PBMs and investigate whether they are engaging in practices like spread pricing or steering patients to
their own pharmacies. Billionaire Mark Cuban told podcaster Charlie Kirk: Ask your PBM for a full list of drug claims and real prices—most companies can't even get that info. 2
A recent post by Greg Reybold, a respected pharmacy advocate, revealed the concerning discrepancy of rebate percentages for large employers in Alabama as compared to other markets, despite a higher drug spend. In the image 3, he states that large employers spent between 88% and 385% more on prescription drugs than other markets yet receive 4-26% lower rebates. Considering this disparity, state lawmakers should act to provide the hardworking employees and employers with a sustainable prescription drug market.
The shady tactics have become so evident that large employers are now taking legal action against PBMs for breaking promises to act fairly. Some have even dropped the “Big Three” PBMs—CVS Caremark, Express Scripts, and OptumRx—citing concerns over inflated costs and lack of transparency. 4 The Federal Trade Commission has also filed a lawsuit against these PBMs, accusing them of anticompetitive practices that have driven up drug prices, even for life-saving medications like insulin. 5
For ERISA plan sponsors, the message is clear: fiduciary responsibility demands action. As Mark Cuban warned in an interview with KFF Health News, speaking to hundreds of Fortune 500 executives, “You’re getting ripped off. You don’t really understand the elements, and that’s costing you money and costing you wellness. And now you are going to get sued. It’s not a question of if but a question of when.” 6 Silence and inaction are no longer viable options. Employers must demand full access to claims data, audit PBM contracts, and ensure that their pharmacy benefits are aligned with the best interests of their employees.
Alabama is leading the charge, but the fight is far from over. The survival of community pharmacies, the affordability of prescription drugs, and the integrity of employer-sponsored health plans all hang in the balance. It’s time to bring PBMs out of the shadows and into the light.
Joe Jones is an independent pharmacist and co-owner of Mills Pharmacies.
Employee Retirement Income Security Act of 1974
KFF Health News: https://kffhealthnews.org/news/article/pbms-pharmacy-benefit-managers-erisa-lawsuit-mark-cuban-cost-plus/
KFF Health News: https://kffhealthnews.org/news/article/pbms-pharmacy-benefit-managers-erisa-lawsuit-mark-cuban-cost-plus/
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