Hundreds of Alabama Pharmacies are Closing. Will Yours be Next?

Hundreds of Alabama Pharmacies are Closing. Will Yours Be Next?
By Kimberly Cripps

Hoover, Ala. - When Anthony Bolus and his team opened Ross Bridge Pharmacy in 2019, he never imagined he’d be closing its doors just over five years later – despite growing sales and increasing revenue.

“I’ve been part of opening pharmacies before, both commercial and independent,” said Anthony. “But I’ve never had to close one. Until now.”

Anthony and his team have become one of hundreds of independent pharmacies across the U.S. that have had to make the tough decision to shut their doors in the wake of increasing drug costs and decreased reimbursements from Pharmacy Benefits Managers, or PBMs.

In Alabama, 350 independent pharmacies have permanently closed since 2018. Between December 2024 and March 2025, over 326 pharmacies shut down nationwide; 237 were independent and 52 were in Alabama.

The mass closings leave behind more questions than answers. What is a PBM and how do they work? Why aren’t pharmacies receiving proper reimbursements? Where is that money going? How are PBMs reporting significant profits, while thousands of independent and chain pharmacies are closing nationwide? And, perhaps most significantly, if pharmacies are being pushed to close, what does that mean for the future of patient care?

What is a Pharmacy Benefit Manager?
Pharmacy Benefit Managers, also known as PBMs, serve as the middleman between pharmacies and insurance companies. They initially came onto the scene in the 1960s when insurance companies began offering prescription drug benefits. The role of the PBM was to help streamline claims processing for insurance companies while helping patients save money on out-of-pocket costs for prescription drugs.

Pharmacies stock prescription drugs by purchasing them from a wholesaler, such as AmerisourceBergern, Cardinal Health, McKesson Corporation, or one of 10,000+ other establishments. Upon receiving a prescription from a physician, patients then purchase their drugs from a pharmacy, where a claim is filed through the PBM. The PBM then creates the patient co-pay, if there is one, to pay off some of the difference of the mediation to the pharmacy. Next, the insurance company reimburses the PBM for the cost of the patient’s drugs. Finally, the PBM passes that reimbursement on to the pharmacy.

But here is where it gets tricky.

While pharmacies are floating the cost of prescription drugs on the front end, they are not receiving full reimbursement for their costs from the PBM. In many cases, they are hit with a loss—meaning that in situations like Anthony’s—pharmacies can increase the number of prescriptions filled and still lose money. According to financial paperwork from Ross Bridge Pharmacy, which was edited to ensure patient privacy before being shared, this can amount to losing hundreds of dollars on just one prescription.

“When 30–35% of the prescriptions you fill are at a loss, you’re not going to make it,” Anthony shared.

How Did We Get Here?
If PBMs were created to help customers, and not to hurt pharmacies, how did we get here?

In 2007, CVS Corporation acquired the pharmacy benefit firm Caremark RX, Inc., creating what is now the largest PBM. While there were no issues at the time of the merger, the U.S. Federal Trade Commission began investigating CVS in August 2009 because the chain’s new business practices “led to higher prices, compromised quality of care and pushed patients to choose CVS drugstores over other pharmacies.”

A potential conflict of interest exists when a pharmacy wants to run its own PBM and set drug prices, customer costs and reimbursement costs. There is also a concern that this could create a monopoly by eliminating competition.

Fast forward to today, PBMs “Big Three,” CVS Health’s Caremark, United Health’s Optum RX and Cigna’s Express Scripts control about 79% of the market. Add in Blue Cross Blue Shield’s Prime Therapeutics, Humana for Medicare and MedImpact’s Healthcare Solutions, and it jumps to 90% market control. These six companies are largely responsible for setting drug costs and determining pharmacy reimbursements. And, by default, they determine who stays in business and who closes their doors.

Anthony said that being in the middle of it feels like these companies are minimizing reimbursement costs to decrease competition and gain more control over the market. “When you control health, you control lives,” he shared. This is especially true in rural areas where the closest retail pharmacy is up to 45 minutes away. When people cannot easily access their medications, it’s more likely they will stop taking them.

What About Cost Savings?
The cost of prescription drugs seems to vary widely depending on where the patient is getting the drug, such as from a storefront versus a mail order.

Pharmacy Benefit Managers, especially those with a mail-order pharmacy component, appear to save customers money on the front end. In one case shared by a Blue Cross Blue Shield client on Facebook, the cost for a specific drug at his pharmacy was around $50, with a co-pay of $13.

Meanwhile, the same drug, dosage and quantity, were listed with a cost of $1,500 and a co-pay of $0 when filled through Prime Therapeutics (a PBM owned by Blue Cross that only fills prescriptions through mail order).

This price discrepancy begs the question: what is the real cost of the drug? Is it the amount being sent to insurance, or the amount sent to the pharmacy? And, if it’s the amount sent to the pharmacy, why is the PBM billing 300 times that amount to the insurance company?

Customers also have to consider that while a $0 copay saves on the front end, a $1,500 charge to insurance is likely to increase your premium over time.

How Will this Impact You?
Closing independent pharmacies reduces access to patient care. Even larger chain pharmacies are feeling the pinch. In November, The Happy Pharm D reported more than 2,300 pharmacies closed in 2024, representing closures across chains and independents.

Whitney Culpepper, who had to close her independent Hoover Hometown Pharmacy, said local pharmacies are the easiest points of contact, especially in rural and underserved communities, because people can easily walk in or call for help.

“A customer called one weekend, and his wife had a serious nosebleed,” recalled Whitney. “I was able to offer them a [temporary solution] to stop the nosebleed, saving them a costly visit to the ER, until they could follow up with their regular doctor.”

Independent pharmacies also invest in their communities by supporting local sports teams and youth programs; providing jobs, including summer and after-school work opportunities for teenagers and college students; reinvesting in the local economy; and offering free health clinics on topics like disease prevention, diabetes, diet, exercise and other niche topics specific to their community.

What Can We Do?
The best way we, as Alabama citizens, can protect independent pharmacies and preserve pharmacy choice is to contact our legislators. (If you’re not sure who your representatives are, pluralpolicy.com/find-your-legislator can help.)

“Send emails and letters to your representatives, your senators and to Governor Ivey,” encouraged Anthony. “Let them know you support PBM reform and want to keep local pharmacies open.”

It's important to act fast because, on March 20, members of the Alabama Senate voted and passed a new PBM reform bill: SB252. In just two weeks, the Alabama House of Representatives will vote on this bill. Note that a similar bill was introduced to the House in 2024. It passed unanimously 9-0 out of committee but was never brought to the floor for a vote.

This latest bill proposes that PBMs begin paying pharmacies a $10.64 dispensing fee, also referred to as a service cost, for each prescription filled; a fee that will be paid by Pharmacy Benefit Managers, and not by patients or employers.

Additionally, the bill aims to regulate reimbursement amounts to cover what the pharmacy actually paid for the drug so pharmacies are not filling prescriptions at a loss.

In Alabama, Medicaid already practices this model of a $10.64 dispensing fee. SB252 will extend these practices to apply to all insurance plans, bringing Alabama into the company of many other states that have passed similar reform bills – preserving pharmacies, promoting consistent drug costs and protecting patient access to pharmaceutical care.

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