May 24, 2023

Arlington, VA – On behalf of the approximately 12,000 supermarket pharmacies its member companies operate, FMI - The Food Industry Association expressed its strong support for the U.S. House of Representatives Energy & Commerce Committee’s bipartisan approval of the PATIENT Act of 2023 (H.R. 3561), which included FMI-backed language prohibiting pharmacy benefits managers (PBMs) from engaging in spread pricing in the Medicaid program. 

In Medicaid, spread pricing refers to a practice in which PBMs charge a state or Medicaid managed care program more for a drug while reimbursing pharmacies at lower rates for dispensing the drug, retaining the difference or “spread.” Led by Reps. Buddy Carter (R-GA), Vicente Gonzalez (D-TX), Elise Stefanik (R-NY), Deborah Ross (D-NC), Rick Allen (R-GA), and Jake Auchincloss (D-MA), and included as Section 303 of the PATIENT Act, the legislation would also ensure that all pharmacies participating in state Medicaid programs are fairly reimbursed to, at minimum, cover their costs to acquire and dispense medications. 

FMI Chief Public Policy Officer Jennifer Hatcher offered the following statement: 

“Spread pricing in Medicaid inflates the cost of prescription drugs, with both patients and taxpayers left to foot the bill. It is also one of the many PBM anticompetitive tactics preventing FMI member companies from opening new pharmacies and causing some to have to leave the pharmacy business altogether. 

“FMI greatly appreciates the House Energy & Commerce Committee’s bipartisan passage of this important legislation, which offers yet another opportunity to address one of the opaque and harmful practices that some PBMs use to secure greater profits at the expense of patients, pharmacies and employers. We thank the bill sponsors for their leadership and call on both chambers of Congress to pass this legislation this year to provide relief to patients and small businesses while preserving access to supermarket pharmacies for millions of Americans.”