Mar 17, 2023

Arlington, VA – Today, on behalf of the roughly 12,000 supermarket pharmacies its member companies operate, FMI – The Food Industry Association applauded the introduction of the bipartisan Drug Price Transparency in Medicaid Act of 2023 (H.R. 1613) by Reps. Buddy Carter (R-GA), Vicente Gonzalez (D-TX), along with Reps. Elise Stefanik (R-NY), Deborah Ross (D-NC), Rick Allen (R-GA), and Jake Auchincloss (D-MA) that would prevent pharmaceutical middlemen known as pharmacy benefits managers (PBMs) from engaging in spread pricing in the Medicaid program. 

According to the U.S. Centers for Medicare & Medicaid Services (CMS), “Spread pricing occurs when health plans contract with pharmacy benefit managers (PBMs) to manage their prescription drug benefits, and PBMs keep a portion of the amount paid to them by the health plans for prescription drugs instead of passing the full payments on to pharmacies.” Because neither the plan nor the pharmacy knows what the other side was paid or charged, the practice allows PBMs to secretly collect large margins at the expense of pharmacies, plans and patients. In turn, this practice increases Medicaid costs paid by taxpayers. 

FMI President and CEO Leslie G. Sarasin stated, “We continue to express deep concern about the anticompetitive practices used by some of the largest PBMs, which are negatively affecting customers, supermarket businesses and communities. Spread pricing significantly increases prescription drug costs for patients – in this case, vulnerable Medicaid beneficiaries – and hides the true cost of medications from health plans, with taxpayers left to foot the bill.” 

Sarasin continued, “While some PBMs use spread pricing as a hidden revenue stream, the opaque practice threatens the country’s most accessible and trusted health care professionals – pharmacists and their pharmacies. Supermarket pharmacies are especially important access points for consumers in underserved, low-income, rural, and urban communities, but spread pricing is one of the many PBM tactics preventing FMI member companies from opening new pharmacies and causing some to leave the pharmacy business altogether.” 

Sarasin concluded, “This important legislation provides Congress with a meaningful opportunity to bring greater drug pricing transparency to Medicaid, to the benefit of patients, pharmacies, health plans and all taxpayers. We applaud the bill sponsors for their leadership and look forward to working with them and Congressional leadership to ensure this important legislation becomes law in the 118th Congress.”