Arlington, VA – On behalf of the 12,000 supermarket pharmacies operated by our member companies, FMI – The Food Industry Association applauds U.S. Department of Health and Human Services (HHS) Secretary Xavier Becerra and U.S. Centers for Medicare and Medicaid Services (CMS) Administrator Chiquita Brooks-LaSure for releasing a proposed rule that would address the hidden “claw back” fees charged by drug middlemen that have caused pharmacies to shutter their doors and have cost patients more money at the pharmacy counter.

These payments, known as direct and indirect remuneration (DIR) fees, were designed to be applied at the point-of-sale to reduce the cost of prescription drugs for Medicare beneficiaries. However, a vast majority of DIR fees are “clawed back” from pharmacies by pharmacy benefit managers (PBMs) long after a drug has been dispensed to the customer, and therefore, are rarely used as intended to reimburse or otherwise reduce the cost of a drug. According to the federal government, pharmacy DIR fees have grown by 91,500% between 2010 and 2019.

FMI President and CEO Leslie G. Sarasin offered the following statement regarding the proposed rule:

“Supermarket pharmacies are proud to serve as health and well-being destinations, providing customers with the full range of pharmacy products and services – including COVID-19 tests and vaccines – at the same location where they already purchase nutritious food and other household items. Despite their essential role in serving communities, particularly during the last two years amid the pandemic, supermarket pharmacies are struggling to stay in business due to the anticompetitive practices of PBMs, such as the collection of DIR fees. As a result, some FMI members have been forced to close or sell their pharmacies while others are considering having to do so in the future, leading to significantly reduced access for consumers.

“This proposed rule would generate savings and increase price transparency for pharmacies and their customers alike by halting predatory practices among PBMs. These behemoths regularly impose fees on pharmacies long after the point of sale while charging patients more up front for their drugs. 

“FMI thanks CMS for its leadership and looks forward to working with the agency to advance this rulemaking."