2026 Health Care Outlook: Peter Matz, FMI – The Food Industry Association

By Peter Matz, Director of Food, Pharmacy and
Health Policy at FMI – The Food Industry Association

Pharmacies inside America’s grocery stores occupy a distinct and vital place in the health care landscape. They are the most accessible, most frequently visited health care touchpoints in many communities — open nights and weekends, staffed by trusted professionals and embedded in the places people rely on for daily living. For millions of families, the supermarket pharmacy is where preventive care, chronic condition management and everyday nourishment converge. In some underserved communities, these pharmacies are the only nearby health provider, the only spot to receive a flu shot, and the only place to pick up milk on the way home. That combination of care, convenience and community impact is a defining feature of the food-retail sector.

FMI represents these uniquely positioned operators — businesses that are both pharmacies and grocery stores, connecting the pharmacy counter to in-store dietitians, food-as-medicine programs and patient education efforts grounded in practical lifestyle support. The economic viability of supermarket pharmacies is not simply a business issue; it is the foundation for an integrated health ecosystem that serves consumers where they already are. That’s why the pharmacy reimbursement crisis is so alarming — and why pharmacy benefit manager (PBM) reform remains among FMI’s highest priorities.

In an FMI survey conducted earlier this year, 74% of pharmacy businesses reported they are either not at all or not very profitable in 2025 — a 13-point jump from 2023 in the share of pharmacies saying they are not profitable at all. The trend line is clear: 74% also say they are less profitable than last year, even though 91% filled more prescriptions over the past 12 months. Volume is rising. Reimbursement is falling. The math no longer works.

And the stakes are not theoretical, as 35% of respondents said some or most of their pharmacies are at risk of closing in the next two years. Perhaps even more concerning, 70% have already closed one or more pharmacy locations in just the past two years. These closures ripple through communities — eliminating access points for vaccinations, medication counseling and patient support, often in areas where no other providers exist.

Even where pharmacies remain open, they’re being forced to cut back on services. Seventy-four percent of operators have reduced hours at some or many locations, and 56% have reduced staffing. 

It is important to be explicit about the cause: Pharmacy reimbursement is set by PBMs, not by market forces. PBMs often claim that below-cost reimbursement only affects inefficient or poorly managed pharmacies. That narrative simply does not withstand scrutiny. Even FMI’s largest Fortune 500 members — with operational and supply chain expertise, scale efficiencies and significant negotiating power — struggle to keep pharmacies viable under current PBM contract terms. These pressures are not a function of business inefficiency — they are the predictable result of contract terms and reimbursement structures that no pharmacy, large or small, can sustainably absorb.

Against this backdrop, FMI continues pressing Congress for meaningful, comprehensive PBM reform. Despite a very challenging political environment, the policy fundamentals remain promising. The reform measures under consideration are the same bipartisan policies FMI and our pharmacy allies have championed for years: fair and predictable reimbursement; guardrails that prevent contract terms designed to push pharmacies out of networks; a ban on spread pricing; and transparency and accountability requirements throughout the supply chain. These policies have already cleared their committees of jurisdiction, and broad bipartisan support remains intact. FMI will continue working to advance these reforms, with the January 30 government funding agreement likely representing the next clear opportunity.

At the same time, legislative action is not the only path forward. FMI is also encouraging the executive branch to use its existing authorities to address PBM-driven harm, particularly within Medicare Part D. One leading example involves the long-standing Any Willing Pharmacy (AWP) law. AWP has been on the books since 2003, requiring PBMs to allow any pharmacy to join a Part D network if it accepts reasonable, relevant and non-discriminatory terms. The intent was clear: Prevent arbitrary exclusion of pharmacies and preserve patient access and pharmacy choice.

But in practice, the law has never been enforced as envisioned because “reasonable and relevant” have never been defined in the contract context. That gap has created a legal gray zone PBMs use to issue non-negotiable, below-cost contract terms — exactly the conditions Congress sought to prevent. One of the PBM reform bills FMI strongly supports directs CMS to define and enforce reasonable and relevant contract terms. While we continue advocating for that legislation, we also believe CMS already has the authority to clarify these terms through rule making today. Doing so would make the AWP statute meaningful, protect pharmacies from predatory contracting, and safeguard patient access.

Supermarket pharmacies have long served as the health care front door for millions of Americans, but their ability to continue doing so hinges on achieving PBM reform to ensure their reimbursement finally aligns with the value they provide. In 2026 and beyond, ensuring that America’s most accessible pharmacies remain strong must be a shared priority. Communities depend on it — and FMI will continue working to deliver the reforms they urgently need.

Peter Matz is director of food, pharmacy and health policy at FMI – The Food Industry Association.