Dec 11, 2023

Arlington, VA – Today, FMI – The Food Industry Association welcomed passage by the U.S. House of Representatives of the Lower Costs, More Transparency Act, a wide-ranging health care package that includes FMI-endorsed reforms prohibiting and bringing transparency to harmful practices used by pharmacy benefits managers (PBMs). Of particular significance to our members that collectively operate thousands of supermarket pharmacies, the legislation bans PBMs from engaging in spread pricing in the Medicaid program while requiring fair and transparent reimbursements to pharmacies. The legislation also includes transparency requirements that would help ensure patients and employers get the best deal possible on prescription medications. 

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.”  

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

“Spread pricing in Medicaid leads to inflated prescription drugs costs, leaving patients and taxpayers to foot the bill. It also results in pharmacies being reimbursed less for dispensing medications than their costs to acquire them — an unsustainable situation that prevents FMI member companies from opening new pharmacies and causing some to have to leave the pharmacy business altogether, reducing patient access to prescription drugs and other pharmacy services. 

“FMI greatly appreciates the House passing this important legislation and urges the U.S. Senate to follow suit.  The time is now to deliver on PBM reform to preserve health care, increase transparency, and drive down costs.”