Grocers Among Voices Calling for PBM Reform to Include Medicare, Medicaid

FMI, NGA sign letter urging Congress to act now

2/7/2024

Along with major pharmacy trade organizations, FMI and NGA believe that “the harmful and aggressive tactics of some PBMs affecting Americans and their pharmacists and pharmacies seem to have gotten even worse.”

Influential grocery industry trade organizations FMI – The Food Industry Association and the National Grocers Association (NGA) have joined forces with major pharmacy trade groups to encourage Congress to include Medicare and Medicaid in its pharmacy benefit manager (PBM) reform efforts. FMI and NGA were signatories to a Feb. 7 letter sent to Majority Leader Chuck Schumer, D-N.Y., and Minority Leader Mitch McConnell, R-Ky., in the Senate, and Speaker of the House Mike Johnson, R-La., and House Democratic Leader Hakeem Jeffries, D-N.Y., in the House of Representatives.

The other signatories were the National Association of Chain Drug Stores, the National Community Pharmacists Association, the American Pharmacists Association and the National Association of Specialty Pharmacy.

In their letter, the associations acknowledged that “with bipartisan and overwhelming support, PBM reforms to protect Americans in Medicare and Medicaid have advanced in the U.S. Senate and U.S. House of Representatives.” These include:

Medicaid managed care pharmacy payment reform and a ban on spread pricing
Defining and enforcing reasonable and relevant Medicare Part D pharmacy contract terms
Establishing relevant, standardized and transparent pharmacy quality measurements in Medicare Part D

However, “the harmful and aggressive tactics of some PBMs affecting Americans and their pharmacists and pharmacies seem to have gotten even worse,” the letter noted. “Many of our members report that some PBMs now are reimbursing pharmacies even further below the pharmacies’ cost for the prescriptions that they fill – especially in Medicare.”

That being the case, “Americans deserve and expect protection from inflated prescription drug costs, from forced pharmacy closures and from barriers to their pharmacy of choice that result from PBM tactics,” the organizations asserted, urging Congress to act now on crucial Medicare and Medicaid reforms.

Asked for comment by Progressive Grocer, FMI and NGA discussed in greater detail their support for such legislation.

“FMI has long advocated for PBM reform measures in Congress to help address the anticompetitive practices of PBMs, which have extremely harmful impacts on supermarket pharmacies,” noted Peter Matz, director, food, pharmacy and health policy at Arlington, Va.-based FMI. “As highlighted by a recent FMI survey, although 81% of FMI member pharmacies filled more prescriptions over the past year, 80% were less profitable than the year before. This landscape prevents many of our members from opening new locations and has forced others out of the pharmacy business altogether. Many are also forced to reduce hours and staff to offset the losses from PBMs. As the survey suggests, the situation is dire and urgent action is needed.”

“Independent grocers serve at the heart of their communities providing essential products and services such as food and medications,” said Stephanie Johnson, VP, government relations at Washington, D.C.-based NGA. “For years, pharmacy benefit managers have forced retail pharmacies to accept unaffordable prices that have led many pharmacies to close. The PBM reforms that enjoy bipartisan support safeguard both seniors and pharmacies from burdensome tactics, ensuring continued assistance to those in need.”

Late last year, FMI expressed its appreciation to the U.S. Senate Finance Committee for passing the Better Mental Health Care, Lower-Cost Drugs, and Extenders Act, which includes drug pricing reforms addressing several opaque and anticompetitive business practices used by certain PBMs in the Medicare and Medicaid markets that prevent many supermarket pharmacies from opening new locations and drive others out of business. This legislation builds on the FMI-endorsed Modernizing and Ensuring PBM Accountability (MEPA) Act, which was passed by the committee in July 2023, after FMI led more than 2,000 employers, patient advocates, pharmacies, providers and businesses in sending a letter to Congress strongly urging passage of reform legislation.