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PBMs are Hurting Alaskans. Support SB 121 for Patient Freedom of Pharmacy Choice

January 6, 2023 - May 31, 2024

Let’s pull back the curtains on PBM practices that are hurting Alaskans!

We had the opportunity to meet with many of Alaska’s senators and representatives during our Legislative Fly-in recently to discuss a critical issue: Patient Freedom of Pharmacy Choice and bringing transparency to prescription drug pricing with a solution in SB121/HB226, sponsored by Senator Giessel and Representative Sumner.

Here you will find a letter dated February 20, 2024, from the National Association of Attorneys General and signed by Alaska Attorney General Treg Taylor; describing the egregious practices of PBMs that are harming our Alaskan communities, patients, employers, and pharmacies.

As this letter exemplifies, this is an urgent and bipartisan issue that requires the immediate attention of the Alaska State Legislature. As you will see and hear in committee hearings over the coming weeks, we cannot put off action on this issue for another day.

Who are PBMs?

Pharmacy Benefits Managers (PBMs) are the pharmaceutical supply chain’s hidden middlemen that are driving up the cost of prescription medications, delaying patient access to necessary treatments, and shutting down pharmacies in Alaska. Insurance companies use PBMs to help decide if medications are covered, and how much patients pay. The three largest PBMs cover 80% of the market and last year they denied claims to over 1,150 different medications.

How are PBMs hurting Alaska’s patients and pharmacies? 

  1. Spread Pricing: Spread pricing occurs when PBMs charge health plans more for a prescription drug than they reimburse pharmacies. The difference between what PBMs charge and what they reimburse contributes to their revenue. This practice has been criticized for lack of transparency and potentially inflating costs for health plans and consumers.
  2. Vertical Integration: Some PBMs are part of larger healthcare organizations or have affiliations with pharmacy chains and insurers. This vertical integration can lead to conflicts of interest, as PBMs may prioritize the interests of their parent companies over those of the health plans and patients they serve. This is why Alaskans are forced to use out-of-state mail-order or PBM-preferred pharmacies. This prevents patients from choosing their local/preferred pharmacy and is one of the direct causes of our local pharmacies closing. Pharmacies not owned/affiliated by PBMs often face challenges due to the market power of PBMs. Reimbursement rates and contract terms imposed by PBMs may put financial strain on smaller pharmacies potentially leading to closures and reduced access to healthcare services in certain areas.
  3. Lack of Transparency:  PBMs are NOT transparent with their practices. The complex rebate system and pricing arrangements between PBMs, pharmaceutical manufacturers, and health plans are often opaque, making it challenging for stakeholders, including patients and healthcare providers, to understand how drug prices are determined.
  4. White Bagging: In white bagging, the specialty medication is dispensed by an out-of-state and shipped directly to the healthcare provider’s office or a designated healthcare facility. This practice prevents our pharmacists from ensuring safe dispensing and storage of medications. Shipping delays can also delay patient access to critical medications.
  5. Brown Bagging: In brown bagging, patients obtain their clinician-administered medications (such as chemotherapy) from a mail-order specialty pharmacy and bring them to the healthcare provider’s office or facility for administration. Patients should not be responsible for safely storing and transporting their medications. Similar to white bagging, any shipping delays would delay time-sensitive patient care. The practices of white bagging and brown bagging not only inconvenience patients and providers, but they evade necessary safety practices of health systems and the Drug Supply Chain Security Act.

We are all experiencing the negative impacts of PBMs on our patients by decreasing access to pharmacy care within our communities and driving up the cost of prescription drugs to line their pockets. PBMs claim to save patients and employers money on prescription drugs, yet the “big 3” are among the richest companies in the world. Learn more about their abuses and how they hide behind smoke and mirrors.

See the Community Oncology Association’s PBM Horror Stories

Check out Buddy Carter’s Pulling Back the Curtain on PBM Abuses

Watch Dr. Mariana Socal describe the system that allows and even incentivizes PBMs to drive up the cost of drugs (20 Min.)

Watch Dr. Mariana Socal’s presentation on PBMs, health policy, and drug pricing (65 min.)

Take a peak at what PBMs think of patients and profits

See one of their new tricks putting hurdles up for patients


SUPPORT SB 121 for Patient Freedom of Pharmacy Choice. 

Support Email Template: SB121/HB226 Template Email

This bill:

  1. Guarantees freedom of patient choice of pharmacy. This bill bars Pharmacy Benefits Managers (PBMs) from funneling patients to PBM-approved pharmacies that are often owned by or affiliated with the PBM.
  2. Guarantees patients safe and efficient access to clinician-administered drugs. This bill enhances patient well-being and safety. The PBM practices of “white bagging” and “brown bagging” are potentially unsafe and impose barriers between patients and their healthcare providers. At issue are expensive drugs—like infusion cancer drugs—that clinicians prepare and administer directly to patients in a clinical setting. PBMs often bar hospital and clinical pharmacies from filling prescriptions on-site to treat patients. Instead, PBMs require prescriptions to be sent to external, PBM-selected pharmacies that ship the drug to the patient’s provider, who then must store the drug until the patient arrives for treatment (“white bagging”). Or worse, PBMs require the drug to be shipped to the front porch of the patient who then must then retrieve, store, and carry the drug to the clinic for treatment (“brown bagging”). In these situations, clinical pharmacies cannot ensure the efficacy of the drug’s source, dosage, or handling in transit. As such, providers can’t guarantee they will have the drug when needed or that it will be safe and effective when they receive it. This bill bars insurers and PBMs from requiring white or brown bagging. It also authorizes the Board of Pharmacy to regulate these practices.
  3. Puts an end to other objectionable PBM practices by bringing them within the Alaska Unfair Trade Practices and Consumer Protection Act. This bill will ensure that a PBM may not:
  • reimburse any pharmacy less than the PBM reimburses its own affiliated pharmacies;
  • impose unequal copayments, fees or conditions for those of the same benefit category;
  • “steer” patients to PBM-affiliated pharmacies using penalties, benefits or personal data;
  • restrict patients to only mail-order or PBM-affiliated pharmacies;
  • prohibit a network pharmacy from shipping or delivering drugs to its patients;
  • require undue credentialing standards or fees from pharmacies as a condition of joining a PBM network;
  • engage in “spread pricing,” e., collect more for a drug from an insurer than the PBM reimburses to the pharmacy (and pocketing the difference)
  1. Provides pharmacies a shot at fair reimbursement from PBMs. Pharmacies buy drugs from wholesalers and must recover their costs from PBMs. But PBMs use their own proprietary ‘black box’ formulas that often limit recovery to a level below a pharmacy’s actual cost, short-changing pharmacies. This bill requires reimbursement at an objective and transparent standard: the ‘national average drug acquisition cost,’ continually updated by CMS survey. It also balances appeal procedures so pharmacies have a meaningful opportunity for fair reimbursement from PBMs.



PCMA vs. Wehbi (North Dakota) 

Unions drop CVS

SMART thanks the US Senate for the PBM Reform Act

Rutledge v. PCMA

Oncologists Sound the Alarm About Rise of White Bagging




January 6, 2023
May 31


Alaska Pharmacists Association