HB238 Alabama 2024 Session

Summary

Primary Sponsor

Phillip RigsbyRepresentative

Republican

Session

Regular Session 2024

Title

Pharmacy Benefits Managers; Providing more regulation

Summary

HB238 would regulate Alabama's pharmacy benefits managers by licensing them, curbing certain pricing practices, and boosting oversight and transparency of rebates and claims.

What This Bill Does

HB238 creates a license for PBMs and gives the Insurance Commissioner broader power to regulate and investigate them. It bans paying pharmacies less than their actual acquisition cost and prohibits PBMs from charging health insurers more than what they pay pharmacies; it also bans spread pricing. It requires PBMs to pass through 100% of manufacturer rebates to health benefit plans and to report rebate amounts to both the commissioner and plan sponsors; it also applies the Pharmacy Audit Integrity Act to PBMs for fraud, waste, or abuse investigations. It protects insurers when transferring claims processing between PBMs and sets rules for data transfer when changing PBMs, with an effective date of October 1, 2024.

Who It Affects

• PBMs would be newly licensed and subjected to stronger regulation and enforcement, including price and rebate rules and oversight by the Insurance Commissioner.
• Health benefit plans/insurers, pharmacies, and covered individuals would see rebates passed through to plans, more pricing transparency, and protections around switching PBMs and data/file transfers.

Key Provisions

• 100% pass-through of rebates to health benefit plans/clients and related reporting; spread pricing is prohibited.
• Licensing and expanded oversight: PBMs must obtain licenses, renewals are required, and the Insurance Commissioner gains enhanced enforcement powers with applicability of the Pharmacy Audit Integrity Act to PBMs.

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

Subjects

Health