FMI applauds reintroduction of bipartisan PBM reform act

Arlington, Va. – FMI – The Food Industry Association has expressed strong support for the bipartisan reintroduction of the Protecting Pharmacies in Medicaid Act, a pivotal piece of legislation aimed at reforming Medicaid pharmacy benefit manager (PBM) practices. The bill, introduced by Senators Roger Marshall (R-KS), Peter Welch (D-VT), Bill Cassidy (R-LA), and Mark Warner (D-VA), seeks to enhance pricing transparency and ensure fair pharmacy reimbursement.

Senators join on bipartisan bill to curb PBM price abuse

The Protecting Pharmacies in Medicaid Act will require Medicaid’s payments to PBMs to be passed directly to pharmacies, excluding administrative fees.

Mass Market RetailersMMR

The proposed legislation specifically targets eliminating spread pricing in Medicaid-managed care. In this practice, PBMs charge Medicaid more than they reimburse pharmacies for medications, retaining the difference as profit. Additionally, it mandates that pharmacies be fairly compensated for the cost of acquiring and dispensing prescription medications.

Jennifer Hatcher, FMI’s Chief Public Policy Officer, emphasized the significance of this reform in a public statement:

"For too long, PBMs have exploited opaque pricing models to drive up prescription drug costs while underpaying pharmacies, threatening their ability to serve communities and vulnerable populations. This legislation takes a crucial step toward correcting these unfair practices by requiring that 100% of the ingredient cost and professional dispensing fee be passed through to pharmacies. It also establishes much-needed reimbursement transparency to ensure pharmacies are fairly compensated for the essential care they provide."

Hatcher further highlighted the essential role of supermarket pharmacies, particularly in underserved rural and urban areas, and the damaging impact of PBM practices on pharmacy viability.

"Supermarket pharmacies are vital health access points for millions of Americans, particularly in underserved, rural, and urban communities. Yet, predatory PBM tactics have driven many of these pharmacies out of business, limiting patient access to medications and trusted pharmacy care. By eliminating spread pricing and tying Medicaid reimbursement to actual drug acquisition costs, this bill will help ensure that pharmacies can continue to serve Medicaid beneficiaries and their communities."

FMI commended the bill’s sponsors for their leadership in advancing Medicaid PBM reform and pledged to collaborate with Congress to secure its passage in the 119th Congress.