Who Killed the Corner Drug Store? In One Ruby Red State, PBMs Are Under Fire

Alabama’s independent pharmacies fight to survive against big health insurers and their pharmacy benefit managers.

Ginger Barron, an independent pharmacist in Gadsden, Ala., spent years jumping through all kinds of hoops to convert what was once a medical clinic for thousands of workers at a now-shuttered Goodyear tire factory into a standalone drug store serving her struggling community.

Her loyal customers know next to nothing about today’s tortured economics of the prescription-drug industry that has driven other standalone drug stores similar to Barron’s Cornerstone Pharmacy out of business, but they knew something big was up when the doors were closed and the lights were turned off on what would normally be a busy Tuesday afternoon in late February.

Barron and her workers at Cornerstone had joined about 100 other “mom-and-pop” pharmacies across Alabama in an unprecedented one-day walkout, meant to dramatize how the industry’s middlemen known as pharmacy benefit managers, or PBMs, are crippling their business, and to win public support for state legislation they say is needed to keep the lights on permanently.

“We’ve got to educate,” Barron said in a recent phone interview. “The general population doesn’t understand how this works. Sometimes I don't understand how it is,” she added, referring to a system in which she and her colleagues frequently get less money from the PBMs for a prescription than they can charge their customers.

Barron has also tied a black ribbon around the door to the Cornerstone, which has proved to be a huge conversation starter. “It’s like, ‘Who died?,’ and I say, ‘We’re fixing to die’...If we don’t get some legislation, then we’re not going to be here.”

This veteran Alabama pharmacist isn’t joking around. Advocates for PBM reform say that, on average, three independent drug stores across the state go out of business every single month, squeezed by a monopolistic system of vertical integration in the way medicine is sold today in America. At that rate, these small businesses that used to be the bedrock of small rural towns or city neighborhoods across this southern state could be wiped out in another couple of years.

Three giant PBMs call the shots — and grab the money

Currently, three PBMs control nearly 80% of the market, and all are now owned by health care giants – UnitedHealth Group, CVS Health (Aetna) and Cigna – that own and operate health insurance plans and administer many other plans for large employers and federal and state governments.

This stranglehold on the business of filling prescriptions has allowed the PBMs who supply drug stores to enact policies that favor their large-chain pharmacies – including using their monopolies to exact rebates from drugmakers but not passing the savings on to consumers – but don’t add up for small, independent outlets.

In Alabama, retail pharmacists like Barron and their trade group, the Alabama Pharmacists Association, or APA, have been pushing now for several years at the state capitol in Montgomery for legislation that could prevent their slow but inexorable demise. It’s been an uphill climb because both the insurer that dominates the state and wields massive clout with lawmakers – Blue Cross and Blue Shield of Alabama – and the powerful business lobby say the proposals will raise their costs.

But this year, the rising crisis – and smart publicity moves like the one-day walkout and the black ribbons – have finally put pressure on Montgomery to take action. Senate Bill 99, or SB99, aims to ensure independent pharmacists don’t lose money on filling a prescription, with a $10.64 dispensing fee on each transaction. It recently passed the State House on a 34-0 vote and has cleared a Senate committee.

The proposal would also eliminate onerous “gag clauses” on pharmacists that prevent them from telling their customers that PBM overpricing is the issue when they are unable to stock their medication – a practice that points to the political clout that big corporations have long held in Alabama and other states.

Bobby Giles, who is the APA’s legislative director and also, with his wife, owns a pharmacy in northern Alabama, said about 11 pharmacies across the state had already closed in the first 10 weeks of 2025, and some lawmakers are likely getting feedback from constituents in small towns that no longer have a drug store.

“There's not a pharmacy within 15 or 20 miles of Ragland” – a small town in east-central Alabama where the local pharmacy recently went out of business – “so that's where it's hard, and it leads to serious issues with access to care,” Giles said in a phone interview. He added that “a lot of pharmacies have stopped stocking certain drugs because they cannot take a $70 loss when they dispense it. And because of gag clauses in PBM contracts you can't tell patients the truth.”

For example, Desak Hicks, owner and pharmacist of Frisco City Pharmacy in rural Monroe County, told the AL.com website on the day of the February walkout that on a recent business day, he’d lost money on 48 of the 247 prescriptions that he’d filled, which is no formula for surviving as an independent.

Indeed, Alabama may serve as the ultimate David-vs. Goliath story. The so-called “mom and pop” pharmacists are fighting not only the power of giant national health care conglomerates but also the clout of the big-business lobby and the market dominance of Blue Cross and Blue Shield of Alabama, in a state that the American Medical Association in 2024 rated the least competitive in the nation.

BCBS in Alabama has since 2020 contracted with the giant Express Scripts, owned by Cigna, as its PBM. Giles charges that the large pharmaceutical middleman is opaque when it comes to the manufacturer rebates that it collects while not passing savings down to customers. Last year, several Alabama independent pharmacists filed a federal lawsuit against Express Scripts and three other large PBMs, accusing them of price fixing. The suit also targeted GoodRx, a popular discount card that the pharmacists say often leads to instances where they aren’t fully reimbursed.

A personal fight for community health

Behind the battles in courtrooms and the statehouse is a story of the unique bond between smaller independent drug stores and their longtime customers, who appreciate working with a pharmacist who knows them by their first names and has a better understanding of what they need to stay healthy.

That’s especially true for Barron and her small operation in Gadsden, which for years was the health clinic for more than 5,000 workers employed at Goodyear’s massive tire factory, the first and largest in the southern U.S.  But Goodyear decided to stop operating its clinic in a cost-cutting move at the plant, which shuttered completely in 2020. Barron – who worked there as a pharmacist and stayed on in a short-lived effort to run the location through CVS – ultimately found the means to keep it open independently about 15 years ago. She named it the Cornerstone Pharmacy both because of her religious faith but also because she saw the site as a lynchpin of her hometown.

When the COVID-19 pandemic struck in 2020, Barron said, “You know how many days I missed of work? Zero! We were open every single day. We came in here and I was wearing an N95 mask for two years…You've got to take care of your patients, so we took it very seriously.”

Earlier this year, the Gadsden pharmacist testified before the Senate committee that was considering SB99. She told the lawmakers that a closure of the Cornerstone Pharmacy would be devastating for about 50 of her customers who take the drug suboxone to combat opioid addiction – one of Alabama’s most stubborn public-policy problems – and might drift away from taking the medication.

That’s far from the only personal service that Barron and her staff offer to their devoted customers. She also told legislators about the timely deliveries to her hospice patients, who can’t afford a long wait time at an impersonal chain pharmacy, and her work in educating her many customers with diabetes.

Barron described diabetes customers who walk in saying, ‘“I have no idea what to do. Where do we start from? I’m scared of needles.’ I'm like, ‘Oh no, this is going to be awesome.” She even offers them advice on a healthier diet – the kind of touch that’s a lot less likely from a national retailer.

The fact that Alabama pharmacists have a chance of legislative victory this year may reflect a turning tide nationally. In Congress, lawmakers in both parties hope to revive landmark legislation to rein in PBMs that appeared on the brink of passage in January before it was torpedoed by incoming President Donald Trump and his close ally, Elon Musk. But officials in two other politically red states, Kentucky and West Virginia, report saving a cumulative $500 million since enacting PBM reforms there.

Giles said he’s optimistic that his member pharmacists coming to Montgomery and lobbying lawmakers can put SB99 over the top. He said the local druggists can say “things like, ‘I employ 12 people who live in your district,’ or ‘I see 250 of your constituents every single day’ –  showing the impact of the touch that pharmacists have within their communities. It’s been an incredible effort so far.”