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Pharmacy company CEO discusses legislative probe

An Alabama pharmacy company named in connection with a grand jury investigation of legislative corruption is not a giant business located in a fancy office park.

American Pharmacy Cooperative is located in a light industrial area of Bessemer, Ala., in a two-story metal building with a brick facade front. The company has about 40 employees. Its CEO, Tim Hamrick, wears casual clothes to work instead of a dark suit.

"We view ourselves as a corporate office for community-owned pharmacies," Hamrick said in an interview with The Associated Press.

APCI works with 1,300 independently owned pharmacies in 23 states as a buying cooperative for medications. It also helps with handling insurance business, marketing and improving sales of non-pharmacy products.

While APCI operates across nearly half the country, there was no reason for anyone outside the drug store business to know about it until Alabama House Speaker Mike Hubbard came under investigation and state Rep. Greg Wren pleaded guilty to a misdemeanor ethics charge.

A special Lee County grand jury convened at the request of the state attorney general has been at work since last year investigating possible legislative corruption. The focus of the grand jury became clear June 13 when a judge released a letter from Attorney General Luther Strange saying the criminal investigation relates to Hubbard. Hubbard was the only legislator mentioned in the letter.

The work of the grand jury surfaced in April when Wren, R-Montgomery, resigned his seat in the Legislature, pleaded guilty to a misdemeanor ethics charge and agreed to cooperate with the investigation.

Wren acknowledged in his plea agreement that he took action in the Legislature that could have steered state Medicaid business to APCI, which had business ties to RxAlly, a company that hired Wren as an $8,000-a-month consultant. Wren's plea agreement said APCI helped him craft language for a state budget proposal that could have resulted in APCI being hired to work with the state's Medicaid Agency.

Wren said Hubbard, R-Auburn, endorsed the language and took steps to get it into the General Fund budget. The language ended up getting cut before the full Legislature approved the budget. In the end, Alabama didn't hire a pharmacy benefits manager to handle Medicaid prescriptions.

Wren also said he didn't know until later that the speaker's marketing company, the Auburn Network, was doing work for APCI at the same time.

Wren also admitted giving RxAlly confidential state documents that showed proposals submitted to the state Medicaid agency by competing companies and Medicaid's analysis of those proposals.

Wren's plea agreement does not mention any APCI or RxAlly officials by name.

Hubbard has disputed Wren' account. He told the AP that his company's work for APCI involved only its member pharmacies in other states. He said the investigation is politically motivated and designed to influence this year's legislative elections.

In a recent interview, Hamrick said Wren's plea deal "was a shock to us." He declined to discuss Hubbard's work for APCI because of the investigation and would not say whether he or anyone with the cooperative has been subpoenaed to testify to the grand jury.

But he said APCI only owned 2 percent of RxAlly, the company that paid Wren.

He said APCI, nine other pharmacy buying cooperatives and Walgreen helped start RxAlly to find ways to help companies address the problem of employees not taking their prescriptions and ending up in the emergency room, which drives up their health insurance costs. He said RxAlly never made money and closed in August 2013.

He said the head of RxAlly and Wren met at an APCI convention where both were speakers. RxAlly was looking for someone to help with insurance issues, and he supported the decision by RxAlly to hire Wren because he had a lengthy background in the insurance business.

"What happened from there I have no idea," Hamrick said.

The CEO said APCI has worked in the past with Alabama's Medicaid program to control prescription costs. Hamrick said APCI was trying to work with Medicaid again in 2013 when there was lots of talk in the Legislature about switching to a pharmacy benefits manager to try to control prescription costs. He said lots of big numbers about potential savings were getting tossed around, and he didn't think they were correct.

Hamrick said he was also concerned that a large pharmacy benefits manager would come into Alabama and cut dispensing fees. That would put about 20 percent of the small, independently owned pharmacies out of business.

He said he tried — unsuccessfully— to work with state Health Officer Don Williamson, who oversees Medicaid, to give APCI a chance to develop a plan that would save money while maintaining the dispensing fee.

"We were concerned that Medicaid was not hearing our concerns that what was being offered sounds really good, but it's just not sustainable," he said. "So that is when we started turning to the Legislature."

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