HB492 Alabama 2021 Session

Summary

Primary Sponsor

Nathaniel LedbetterRepresentative

Republican

Co-Sponsors

K.L. BrownDanny CrawfordTracy EstesAllen FarleyJoe FaustBob FincherTommy HanesSteve HurstGil IsbellJoe LovvornMac McCutcheonSteve McMillanCharlotte MeadowsBecky NordgrenEd OliverConnie C. RoweHoward SanderfordChris SellsGinny ShaverHarry ShiverVan SmithAndrew SorrellShane Stringer

Session

Regular Session 2021

Title

Pharmacy benefits managers, practices relating to patient steering, price discrimination, fiduciary duty to client, price disclosure, etc. regulated, Dept of Insurance, duties and authorities revised, Act 2019-457, 2019 Reg. Sess., sections amended and renumbered; Secs. 27-45A-6 to 27-45A-11, inclusive, 27-45A-13 added; Secs. 27-45A-3, 27-45A-4, 27-45A-5 am'd.

Summary

HB492 tightens PBM regulation in Alabama by requiring fiduciary duties, price transparency, rebates pass-through to consumers, and banning steering and certain pricing practices.

What This Bill Does

It would require pharmacy benefits managers to be licensed by the Department of Insurance with an application process, fees, and biennial renewals. It would require insureds to receive certain prescription drug rebates and would bar PBMs from reimbursing pharmacies differently from what they pay affiliates or from paying a different amount than the health plan contract. It would prohibit steering insureds to use mail-order or PBM-affiliated pharmacies and require PBMs to act as fiduciaries, disclose payments, and report rebate information to health insurers annually. It would also limit plan designs that pressure users to use PBM affiliates and empower the Insurance Commissioner to enforce these rules with civil penalties.

Who It Affects

• Covered individuals/insureds and enrollees who would receive rebate/discount benefits and protections against steering or higher cost-sharing.
• Pharmacy benefits managers and health benefit plans/insurers, which would face licensing, fiduciary, pricing, reporting, and enforcement requirements.

Key Provisions

• PBMs must be licensed by the Commissioner of Insurance to operate, with an initial license and biennial renewal, plus fees (not to exceed $500).
• PBMs must pass through certain rebates/discounts to insureds and may not reimburse a pharmacy less than what they pay an affiliated PBM or pay more than the contracted plan price for the same drugs.
• PBMs may not steer or require insureds to use mail-order pharmacies or PBM affiliates, and must disclose all payments related to dispensing drugs to clients.
• PBMs must act as fiduciaries to their clients, annually report rebate information, and notify clients of conflicts of interest.
• Enrollees must directly receive at least 80% of the rebates/discounts that accrue to health benefit plans.
• Plans may not impose design features that force use of mail-order or PBM affiliates or increase costs for not using them, and cannot limit insureds' choice of pharmacy.
• The Insurance Commissioner may enforce the act, including civil penalties up to $5,000 per violation, and may suspend or revoke licenses for violations.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Pharmacies and Pharmacists