Image Credit: John Partipilo/Tennessee Lookout
***Note from The Tennessee Conservative – this article posted here for informational purposes only.
By Adam Friedman [Tennessee Lookout -CC BY-NC-ND 4.0] –
Express Scripts and the Pharmaceutical Care Management Association each filed separate lawsuits against the state of Tennessee this month over legislation that bans a pharmacy benefits manager, PBM, from owning a pharmacy.
The new suits now mean the bill signed into law by Gov. Bill Lee in May faces three separate legal challenges, with a likelihood that they will all be consolidated into one lawsuit. In 2025, Arkansas passed a similar ban and faced legal challenges from the same companies and associations, and a judge ultimately consolidated the cases into a single lawsuit.
A federal judge in Arkansas blocked the law from taking effect, arguing the legislation likely violated the U.S. Constitution’s Commerce Clause, which prevents states from hindering interstate commerce. The case is still ongoing.
Tennessee’s co-ownership ban, called the Fair Rx Act, came after lawmakers pushed the state’s commerce and insurance department to audit all the state’s PBMs. The probe found that many of them reimbursed affiliated pharmacies, which in some cases they owned, at significantly higher rates than they did non-affiliated pharmacies, often independently owned.
A PBM is the middleman that negotiates drug reimbursement rates between insurance companies and pharmacies. The market is highly concentrated, according to KFF, which found CVS Health, Express Scripts and Optum control nearly 80% of the PBM market.
The bill passed with relative ease and bipartisan support in the Tennessee legislature, where an influential group of top lawmakers has ties to local pharmacies and the Tennessee Pharmacists Association, which lobbied for the regulation.
The family of the bill’s Senate sponsor, Kingsport Republican Bobby Harshbarger,owns a local pharmacy. The bill was also co-sponsored by Republicans Lt. Gov. Randy McNally of Oak Ridge, Sen. Shane Reeves of Murfreesboro and Sen. Ferrell Haile of Gallatin, all pharmacists by trade.
In the state House, Crossville Republican Speaker Cameron Sexton co-sponsored the bill, and his wife, through her consulting firm TruPharm, is a member of the state pharmacists association.
CVS was a particular target of Tennessee’s law, as the company operates 134 stores in the state and is vertically integrated, owning an insurance company (Aetna), a PBM (CVS Caremark) and pharmacies.
The company spent over $1.3 million on an advertising campaign earlier this year to try and stop the law from passing.
CVS was the first company to file a suit against the law.
