What This Story Is About
- Lawmakers are continuing to support the “FAIR Rx Act” amid a public opposition campaign from CVS Health.
Why It Matters
- CVS says a proposed law would force it to close more than 100 pharmacies, but lawmakers say it would just require them to adjust their business model.
What Happens Next
- The Senate Finance, Ways and Means Committee is set to vote Tuesday on senators’ version of the bill.
For Context
- The House Finance, Ways and Means Committee, which oversees the financial implications of all new legislation, unanimously approved the bill on Monday.
NASHVILLE, Tenn. (Story courtesy of WVLT / WSMV) – Financial leaders at the Tennessee House of Representatives unanimously moved forward a bill Monday that has sparked a battle between state lawmakers and one of the nation’s pharmaceutical giants.
The feud is over the House Bill 1959, dubbed the “FAIR Rx Act” by Tennessee Republicans. The bill would prohibit pharmacy benefit managers from also operating pharmacies in the state — a structure that CVS Health currently uses across its business.
CVS Health has waged an aggressive opposition campaign — including urging customers in text messages to push back on the proposal — by saying that if passed, the FAIR Rx Act would force the company to close more than 130 stores across the Volunteer State.
The campaign has not put off state lawmakers, however. Bill sponsors argue that the legislation would not force CVS to close stores, but would instead require the company to restructure its business model. Legislators say the goal is to create a fairer market for independent pharmacies.
The House Finance, Ways and Means Committee, which oversees the financial implications of all new legislation, unanimously approved the bill on Monday. The Senate Finance, Ways and Means Committee is set to vote Tuesday on senators’ version of the bill.
Here’s what the ‘Fair Rx’ Act does and does not do amid the battle between Tennessee legislators and CVS Health
The legislation was put forward by Rep. Rick Scarbrough (R-Oak Ridge) in the House and Sen. Bobby Harshbarger (R-Kingsport) in the Senate. It would make it illegal for pharmacy benefit managers to also operate pharmacies in Tennessee.
CVS Health owns pharmacies, operates as a pharmacy benefit manager and owns Aetna Insurance — a structure that allows the company to determine drug costs across its affiliated businesses. A state audit found CVS reimbursed affiliated pharmacies more than non-affiliated pharmacies. The company’s annual revenue totals in the hundreds of billions of dollars.
CVS sent text messages to customers across Tennessee asking them to contact their legislators and vote no on the bill. CVS argues that the passage of the bill and subsequent closure of their stores would hinder access to medication for Tennesseans across the state.
Candice Fifer, a CVS customer who picks up prescriptions at the store at least once every month, said she looked into the bill after receiving the text.
“They’re framing divestment as closure and they’re trying to use the consumer to try and persuade the legislators to be like, ‘divestment means that you’re not going to get your medication anymore,’ instead of divestment meaning that we are not allowed to monopolize the pharmaceutical culture,” Fifer said.
Fifer also addressed potential cost concerns. “It may be temporarily an increase [in cost]… but in the long term, this would be a good thing,” she said.
Bill sponsors said the legislation would not force CVS to close stores, but would require the company to restructure its business model.
“We’re not forcing PBMs to close, drug stores to close. It will not close specialty pharmacies. It won’t stop mail-order pharmacies… We hope it actually gains access as we move forward,” Rep. Scarbrough said.
“If we can remove the conflict of interest and make a clear, fair playing field for everyone involved in this business, I’ve got confidence… We’re going to gain access,” Rep. Scarbrough said.
Mom-and-pop pharmacies have testified before committees in the state house about how they believe the bill will allow for a fair market, one in which they can be a part.
CVS says bill threatens thousands of jobs, could ‘devastate’ pharmacy access across TN
More than 40 pharmacists, distribution center colleagues and MinuteClinic nurse practitioners visited lawmakers this week at the Capitol in Nashville to ask them to reject the bill.
“Senate Bill 2040 would devastate pharmacy care access and affordability in Tennessee. It endangers Tennesseans by eliminating access to 134 vital community pharmacies and the essential health and wellness products they provide,” a statement from CVS said in part. “People with chronic, complex conditions will have fewer home delivery options and less access to high-touch, expert specialty pharmacies.”
On top of limiting access to pharmacy care, the pharmaceutical giant said the law would cost more than 2,000 of its jobs, including hundreds of pharmacists.
CVS said the bill’s passage would also force the company to close 25 of its MinuteClinics, which would cause more than 500 patients to lose their primary care provider and mean “patients will have to find convenient access to acute care – for things like ear infections, strep throat, and flu – elsewhere.”
“The bill will cost thousands of jobs for people who live and work in Tennessee,” the CVS statement said. “Supporting SB 2040 is supporting health care chaos for working families, seniors, and people with disabilities.”
