Nashville, Tennessee (Story courtesy of WVLT / WSMV) – Tennessee lawmakers have passed a bill that would block certain companies from owning a pharmacy while also owning a pharmacy benefit manager and health insurance issuer.
What This Story Is About
Tennessee lawmakers have passed the “Fair Rx Act” which, in its final form, blocks companies from owning pharmacies while also owning a pharmacy benefit manager and health insurance issuer.
Why It Matters
The bill would prohibit companies from owning or controlling a pharmacy while also owning both a pharmacy benefit manager and a health insurer in the state (with ownership exceeding 5%).
What Happens Next
It will head to Gov. Bill Lee’s desk and, if signed, will take effect on July 1, 2028.
For Context
CVS Health has been outspoken against the bill, so much in fact that Tennessee Attorney General Jonathan Skrmetti sent a warning letter to the CEO over “political advocacy messages” the company sent through its pharmacy text system.
Tennessee lawmakers have passed a bill that, if signed by Gov. Bill Lee, will block companies from owning a pharmacy while also owning a pharmacy benefit manager and a health insurance issuer.
Upon it becoming law on July 1, 2028, a person or entity will be blocked from directly or indirectly owning, operating, controlling or directing part of a pharmacy and also controlling a pharmacy benefit manager and a health insurer in the state (with ownership exceeding 5%).
Supporters of the bill say that the measure is aimed at limiting corporations in the prescription drug system from controlling insurance coverage, pharmacy benefit management and pharmacies themselves.
The bill does include exceptions for hospital and health-system pharmacies, employer-operated pharmacies (serving only employees and dependents), certain federal healthcare program arrangements and more.
Existing pharmacies that would be in violation of this law could operate through Dec. 31, 2028, if they show the Tennessee Board of Pharmacy they are actively pursuing a sale to an unaffiliated entity. The board would be able to grant one six-month extension if progress is being made.
If violations occur, the state would issue civil penalties up to $10,000 per violation, per day. The bill also gives the state pharmacy board the authority to create rules for the implementation of the new requirements.
CVS Health has been outspoken against the bill, so much in fact that Tennessee Attorney General Jonathan Skrmetti sent a warning letter to the CEO over “political advocacy messages” sent through its pharmacy text system.
The major pharmaceutical company said the law’s passage would force the closure of more than 100 CVS locations across the state, resulting in the loss of more than 2,000 jobs.
“CVS Caremark’s threat to close its pharmacies is a desperate attempt to protect the unfair system from which it has profited and driven out more than 600 Tennessee pharmacies, reducing access to care for patients in our state. CVS’s threat is also a signal that, given the choice between being a pharmacy or a PBM, it will always choose profits over patients. We are grateful to our legislators for taking strong, bold and necessary action to stand up to the abusive corporate greed of PBMs and put Tennessee patients first.”
Anthony Pudlo, Pharm.D., M.S., CEO of the Tennessee Pharmacists Association
