Image Credit: ajay_suresh / CC
***Note from The Tennessee Conservative – this article posted here for informational purposes only.***
By Adam Friedman [Tennessee Lookout -CC BY-NC-ND 4.0] –
Tennessee lawmakers overwhelmingly passed legislation banning a pharmacy from owning a pharmacy benefit manager, PBM, effectively targeting one of the largest healthcare conglomerates in the country.
CVS Health is the only company in Tennessee that owns a pharmacy and PBM, which is a middleman used by insurance companies to negotiate drug prices with pharmacies.
Republican state lawmakers introduced the bill after a Tennessee Department of Commerce and Insurance audit found that CVS and other PBMs were reimbursing partner pharmacies for drugs at significantly higher rates than non-affiliated pharmacies.
The PBM industry is highly consolidated, with three companies making up almost 80% of the market, according to the health policy research organization KFF. Those three PBMs are owned by CVS, Cigna and UnitedHealth, which are also insurance companies.
CVS is the only one of those three to own an insurance company (Aetna), a PBM (CVS Caremark) and physical pharmacy locations.
Amy Thibault, a CVS spokesperson, said in a news release that the company plans to file a lawsuit against the state, as it did in Arkansas.
In 2025, Arkansas lawmakers passed legislation similar to Tennessee’s, with CVS threatening to close its nearly two dozen pharmacies in that state. CVS and several other PBMs sued, and a federal judge blocked the law from taking effect, citing federal laws that prevent states from enacting excessive regulations on out-of-state businesses. The case is ongoing.
“While disguised as anti-PBM, this misguided legislation will not lower drug costs and is solely designed to benefit independent pharmacies, with no thought about the patients who’d lose access to the pharmacist who they know and trust,” Thibault said in the release.
The Tennessee Pharmacy Association, a group backed by independent pharmacies, has been the chief advocate for the bill to rein in PBMs.
Kingsport Republican state Sen. Bobby Harshbarger, the primary sponsor of the legislation and pharmacist by trade, said during the bill’s debate that PBMs have been using their dominant position in the market to cause financial harm to independent pharmacies.
CVS had previously threatened to close its 134 pharmacies in Tennessee if the law went into effect.
“If you’re going to manage the system, you should not also be in a position to financially benefit from distorting that system,” Harshbarger said. “This legislation does not require a single closure. Any suggestion otherwise is a business decision being described as a policy outcome.”
Other co-sponsors of the bill who are also pharmacists include Republican Lt. Gov. Randy McNally of Oak Ridge, and GOP state Sens. Ferrell Haile of Gallatin and Shane Reeves of Murfreesboro.
The legislation passed in the state House 86-7 and in the state Senate 24-9.
One Response
Hope they lose.