SB99 Alabama 2025 Session

Summary

Primary Sponsor

Larry StuttsSenator

Republican

Session

2025 Regular Session

Title

Drug Insurance Benefits; impose more restrictions on pharmacy benefit managers

Summary

SB99 tightens Alabama’s oversight of pharmacy benefit managers (PBMs) by limiting their practices, boosting reimbursements and rebates transparency, and expanding enforcement and audit powers.

What This Bill Does

The bill expands the Department of Insurance’s oversight of PBMs, sets benchmarks for how much PBMs reimburse pharmacies, and regulates claims processing and use of manufacturer rebates. It bans steering, such as pressuring beneficiaries to use certain drugs or pharmacies, and gives plans, beneficiaries, and pharmacies the right to pursue civil action against PBMs for violations. It strengthens audit rules under the Pharmacy Audit Integrity Act, detailing how audits are conducted, how overpayments are recouped, and timelines for final reports. It also creates a civil action framework (27-45A-13) for remedies, penalties, injunctive relief, and attorney fees, with pass-through rebates to clients and new licensing and reporting requirements for PBMs.

Who It Affects

• Pharmacy benefits managers (PBMs) and PBM affiliates would face new licensure, stricter rules on reimbursement and claims processing, additional audit requirements, and potential penalties and civil exposure for violations.
• Beneficiaries/covered individuals, health benefit plans/insurers, and in-network pharmacies would gain protections against steering and discriminatory practices, receive more transparent rebates and cost information, have the right to sue PBMs for violations, and be shielded by stronger audit and recoupment rules.

Key Provisions

• Establishes the Alabama Pharmacy Benefits Manager Licensure, Regulation, and Accountability Act to regulate PBMs in the state.
• Expands Department of Insurance oversight by setting reimbursement benchmarks, and regulating claims processing and the use of rebates by PBMs.
• Prohibits PBMs from steering beneficiaries to a specific drug variant or to certain pharmacies within a network.
• Authorizes civil actions against PBMs for violations, with remedies including actual damages, minimum penalties per violation, injunctive relief, and attorneys’ fees.
• Strengthens the Pharmacy Audit Integrity Act with defined audit procedures, advance notice, timelines, and protections against clerical errors; sets rules for recoupment of overpayments.
• Imposes a minimum reimbursement floor for in-network pharmacies (NADAC-based plus a small addition, with a cap/no more than the lesser of 2% or $25) and requires professional dispensing fees at or above Medicaid levels; applies reimbursements uniformly to all in-network pharmacies, including PBM affiliates.
• Requires PBMs to pass through 100% of rebates to the client unless the client directs otherwise, and restricts improper use of rebates.
• Restricts practices that limit pharmacy choice, increases transparency around cost shares and reimbursements, and limits spread pricing and other manipulative pricing strategies.
• Mandates annual reports to clients disclosing aggregate rebates and pass-through details, with confidentiality protections.
• Adds civil action provisions (27-45A-13) enabling individuals or entities injured by PBM violations to seek damages, injunctions, and attorney fees, with procedural safeguards for class actions.
• Aligns definitions and terms (Health Benefit Plan, Pharmacy, PBM, In-Network Pharmacy, Spread Pricing, Steering, etc.) in related Alabama insurance statutes to support PBM regulation, and sets October 1, 2025, as the effective date.

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

Subjects

Insurance