On January 8th of 2025 an article entitled "Alabama lawmakers pushing for prescription drug tax hike ‘will be back for round 2 in 2025’" was published on the Yellowhammer News website which can be viewed at the following address;

Countering the Blue Cross Blue Shield of Alabama funded narrative talking points being spewed out by the corporate shills at yellowbelly news was a righteous rebuttal written by Mills Pharmacy Owner/Chief Compliance Officer Josh Hardin of Hoover.
It can be read in its entirety as follows;
Yellowhammer News published a story on January 8, 2025, entitled, “Alabama lawmakers pushing for prescription drug tax hike ‘will be back for round 2 in 2025’.” The story quoted CJ Pearson, who is evidently considered to be an authoritative voice on the pharmacy landscape given his credentials as a “leading young conservative voice.”
Mr. Pearson is at best profoundly ignorant of the landscape faced by pharmacies, at worst disingenuous. Labeling the proposed 2023 bill as a “tax” was an outright lie to the public, and the narrative that the bill would raise costs was largely promulgated by Robin Stone of the Alabama Alliance of Healthcare Consumers. Stone is the former Vice President for Government Relations of Blue Cross Blue Shield of Alabama, which is a stakeholder in one of the six largest pharmacy benefit managers in the nation, and is therefore opposed to any meaningful reform.
To understand why this is a lie, one must pull back at least one layer of how pharmacy benefit managers operate. Each of the largest PBMs owns a pharmacy operation, which directly competes with Alabama-owned pharmacies. In most cases these are mail order pharmacies (in which case all revenue is taken out of our state), but CVS/Caremark owns CVS Pharmacy, whose stores account for many of the 570 chain pharmacies in Alabama.
The PBM sets the contract pricing for drugs for both its independent competitors and for itself, with its own pharmacies paid high rates, while independents are paid below dispensing costs and even below acquisition costs. One example of this was uncovered last October, when the Mississippi Board of Pharmacy published limited results of an audit it performed of Optum, one of the three largest PBMs. It found that on the same day in October 2022, the PBM paid its own pharmacy 2,250% what it paid independent pharmacies for the same quantity of omeprazole, a common acid reflux medication. For context: one pharmacy in Central Alabama was paid $3.55 by the same PBM for a 30-day supply of the same drug in October 2022, a figure well below what is required to stay in business (2,250% of that is $79.88, the amount that the PBM likely paid its own pharmacy). A patient with no insurance could buy that drug for $15-20, and the pharmacy would make an acceptable margin.
It is also crucial to understand spread pricing in this example. Spread pricing is a well-known revenue generator for PBMs, in which the PBM pays the pharmacy a low amount, then bills the insurance fund a higher amount. In this case, the PBM would have no incentive to bill two different rates to the same insurance fund for a patient whose drug cost $79.88 at mail order and a patient whose drug cost $3.55 at an independent pharmacy. Therefore, we have no reason to believe that the insurance fund was not billed $79.88 for the claim where the pharmacy was paid $3.55, with the PBM keeping the difference of $76.33 for itself and thereby inflating the cost to the patient’s insurance fund.
PBMs inflate costs, creating the problem that they claim to be necessary to solve, fleecing insurance funds in our state and driving up residents’ premiums. If the pharmacy in this example were paid acquisition cost plus the Medicaid dispensing fee with a ban on spread pricing, the bottom-line cost of the drug would be around $14. Compare this to the $79.88 that Optum likely charged, and you can see why PBM reform is not a tax, but rather a cost savings tool for the entire state.
Proposed pharmacy legislation would ban spread pricing and mandate that a PBM could not underpay a non-affiliated pharmacy nor pay its own affiliate more than other pharmacies. This would dent PBM revenues significantly, and so they and their allies are willing to lie to legislators and the people of Alabama.
Finally, I would point out to young Mr. Pearson that President Trump himself recently addressed the “middlemen” in pharmacy and the problem that they pose. Perhaps Mr. Pearson is not as in touch with the conservative movement as his reputation would imply.
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