SB344 Alabama 2021 Session

Summary

Primary Sponsor

Tom ButlerSenator

Republican

Co-Sponsor

William “Bill” M. Beasley

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

SB344 regulates pharmacy benefits managers in Alabama by requiring licensing, imposing fiduciary duties, restricting certain pricing and steering practices, increasing rebate and cost-sharing transparency, and strengthening enforcement.

What This Bill Does

It requires PBMs operating in Alabama to be licensed by the Insurance Commissioner, with fees and biennial renewals and public-record license information. It mandates PBMs to act as fiduciaries to their health-plan clients and to disclose all direct and indirect payments related to dispensing drugs, plus annual reporting of drug rebates (including rebates not passed through). It bans spread pricing and prohibits reimbursements to a pharmacy that are lower than what is paid to an affiliated PBM, and it prohibits steering insureds to mail-order or PBM-affiliate pharmacies except in specific cases. It protects consumers by preventing restrictions on choosing a pharmacy, requiring cost-sharing transparency, and limiting PBM plan designs that push use of mail-order or affiliated pharmacies; it also outlines enforcement provisions and penalties for violations.

Who It Affects

• Health benefit plans, insurers, and their insured members (enrollees) who would see changed rebate transparency, fiduciary duties, and cost-sharing protections.
• Pharmacies, pharmacists, and pharmacy benefits managers operating in Alabama who would face licensing requirements, pricing restrictions (including no spread pricing), limits on steering, and mandatory reporting and enforcement obligations.

Key Provisions

• PBMs must be licensed by the Alabama Commissioner of Insurance starting January 1, 2020, with up to a $500 license fee, biennial renewal, and public-record license status.
• PBMs are required to act as fiduciaries to their clients, disclose all direct/indirect payments related to dispensing, and annually report the total rebates received (including rebates not passed through to clients).
• Prohibits spread pricing and prevents reimbursements to state pharmacies that are less than amounts paid to PBM affiliates for the same services.
• Bans steering insureds to use mail-order or PBM affiliate pharmacies, with limited exceptions, and prohibits plan designs that increase costs if the insured does not use such outlets.
• Protects patient choice by prohibiting restrictions on selecting a preferred pharmacy, requiring cost-share information to be available, and allowing disclosure of lower-cost alternatives; restricts certain PBM actions related to pricing and network enrollment.
• Provides enforcement powers to the Commissioner, including civil penalties up to $5,000 per violation, license suspension or revocation, and a complaint process for those adversely affected.

AI-generated summary using openai/gpt-5-nano on Feb 23, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Pharmacies and Pharmacists