Alabama’s Community Pharmacy Relief Act (SB 252) and the launch of the Alabama Department of Insurance (ALDOI) PBM Compliance Division mark a decisive shift in the state’s PBM oversight. For independent pharmacies, the new regime offers a meaningful enforcement pathway to address under-reimbursement, steering, spread pricing, and audit abuses—paired with a dedicated regulator and complaint-driven enforcement posture. The Compliance Division became effective on September 2, 2025, and on November 19, 2025, ALDOI announced that Dr. Kelli Littlejohn Newman would lead the unit effective December 16, 2025, underscoring the state’s readiness to operationalize the statute’s new powers.
Key SB 252 Protections and Enforcement Focus
SB 252 supplies express authority for ALDOI to enforce both the 2012 Pharmacy Audit Integrity Act and the newly enacted provisions of SB 252, enabling a unified approach to PBM compliance, audits, and claims administration. Substantively, SB 252:
- Establishes a reimbursement floor set no lower than Alabama Medicaid, curbing below‑cost payments that jeopardize dispensing sustainability for independents.
- Restricts spread pricing, allowing it only when required under the health benefit plan and, in that case, requiring the PBM to file an annual spread report with the Commissioner disclosing the difference between plan charges and pharmacy reimbursement.
- Restricts patient steering, to address practices that divert patients away from community pharmacies through ownership interests or incentive structures.
- Requires 100% manufacturer rebate pass‑through to health plans, targeting opaque revenue streams which often distort network and formulary dynamics.
Taken together, these protections target core business practices that have historically eroded margins and patient access at independent pharmacies. SB 252 also centralizes PBM oversight within ALDOI’s new PBM Compliance Division, making clear that the Department may use its complaint‑driven enforcement posture to address conduct affecting reimbursements, audit integrity, and pharmacy viability. The Commissioner is directed to adopt rules and may impose civil penalties of at least $1,000 per violation. The Department may also assess a complaint filing fee up to $100, which must be repaid to the complaining pharmacy if a violation is proven and may waive the fee at its discretion. Importantly, the statute provides that the state’s regulatory costs will be paid by PBMs, not from the state’s general fund, which further supports sustained, active oversight without burdening taxpayers.
Complaint-Driven Oversight: How Filing Can Translate into Practical Relief
Under the new framework, filing a well-documented complaint with the PBM Compliance Division is not a mere formality, it is intended to serve as the entry point to targeted investigation and enforcement designed to remedy noncompliant PBM practices in real time. ALDOI has indicated it will use complaints to trigger the Division’s intake, triage, and enforcement mechanisms. For independent pharmacies, that means a clearer route to state-backed action when facing reimbursement below the statutory floor, spread pricing, steering, or audit overreach.
Because ALDOI can enforce both the audit integrity rules and SB 252’s substantive requirements, pharmacies can seek relief tailored to the problem experienced, including correction of audit practices and enforcement of fair claim administration and network standards where Alabama law provides clear rules. The Division’s structure and leadership is designed to produce more consistent complaint handling, and the Department’s public messages point to robust use of the statute’s “filing and enforcement powers” to address issues that directly affect independent pharmacies’ economic sustainability. The allocation of regulatory costs to PBMs further supports ongoing enforcement, which is critical to achieving durable compliance outcomes from filed complaints. In addition, when an independent pharmacy’s claim is rejected but the prescription is later dispensed at a different in‑network pharmacy, the PBM must pay the independent pharmacy a surcharge equal to the reimbursement the independent would have received under the Medicaid‑based floor.
In practical terms, a complaint can prompt ALDOI to open an investigation and, where warranted, direct corrective actions aimed at the specific harm identified. For pharmacies, this can translate into outcomes such as reprocessing of affected claims at compliant rates, cessation of prohibited steering practices, correction of noncompliant audit procedures, and formal enforcement against PBM conduct that violates Alabama law. Where a violation is proven, the PBM must also repay any filing fee paid by the complaining pharmacy, and independent pharmacies can obtain the statutory surcharge payment in the claim‑rejection scenario described above. Documented, claim‑level examples and audit materials significantly strengthen a filing and increase the likelihood of timely, targeted relief.
Relief for Pharmacies under SB 252
The enrolled text does not create a new, express private right of action for pharmacies to recover standalone statutory damages. Enforcement occurs primarily through the Commissioner of Insurance, including examinations, rulemaking, and civil penalties. However, SB 252 does provide two forms of direct monetary relief that flow to pharmacies:
- Complaint fee repayment: If a pharmacy pays a filing fee (up to $100) with a complaint alleging an audit‑related violation and the violation is proven, the PBM must repay that fee to the complaining pharmacy; the Commissioner may also waive the fee.
- Independent pharmacy surcharge: If an independent pharmacy’s claim is rejected and the drug is subsequently dispensed at a different in‑network pharmacy, the PBM must pay the independent pharmacy a surcharge equal to the Medicaid‑based reimbursement the independent pharmacy would have received.
Beyond these targeted monetary provisions, pharmacies can obtain regulatory remedies via ALDOI, such as claim reprocessing at compliant rates, cessation of prohibited practices, and corrective actions. Civil penalties of at least $1,000 per violation are available to the state regulator, but the statute does not authorize separate “statutory damages” payable to pharmacies apart from the fee repayment and surcharge described above.
Why Dr. Kelli Littlejohn Newman’s Appointment Matters
ALDOI’s appointment of Dr. Kelli Littlejohn Newman to lead the PBM Compliance Division, effective December 16, 2025, signals that the state intends to centralize PBM oversight under an experienced pharmacy policy leader. Dr. Newman has over two decades of experience in pharmacy practice, healthcare administration, and state government, including service as Senior Director of Clinical Services at the Alabama Medicaid Agency, leadership of Alabama’s shift to an acquisition‑based drug pricing model, and advisory work with the Legislature’s PBM task force. For independent pharmacies, her appointment likely translates into a more structured complaint intake and triage pathway, closer alignment across state actors on audits, network standards, and claims administration, and more active PBM oversight across ALDOI divisions—again, with PBMs bearing the state’s regulatory costs.
Bottom Line for Independent Pharmacies
SB 252 equips ALDOI with the authority and infrastructure to act on pharmacist complaints and enforce core protections against under-reimbursement, spread pricing, and steering, while shoring up audit integrity. With the PBM Compliance Division now active and led by Dr. Newman, independent pharmacies have a practical pathway to relief by filing complaints that can prompt investigation and enforcement calibrated to Alabama’s new statutory standards, backed by a funding model that holds PBMs responsible for the costs of the state’s regulatory oversight.
How Frier Levitt Can Help Pharmacies with PBM Issues
Frier Levitt provides comprehensive legal representation to pharmacies across the country in matters involving PBM relationships. We are dedicated to protecting the rights of pharmacies and guiding them through regulatory challenges and audit responses. If your pharmacy has been under reimbursed by a PBM or is having PBM network issues, Frier Levitt’s experienced attorneys are available to provide informed guidance and effective advocacy.
