{"id":146835,"date":"2026-04-30T18:36:04","date_gmt":"2026-04-30T22:36:04","guid":{"rendered":"https:\/\/medcitynews.com\/?p=146835"},"modified":"2026-04-30T18:36:05","modified_gmt":"2026-04-30T22:36:05","slug":"tennessee-pbm-bill-arkansas","status":"publish","type":"post","link":"https:\/\/medcitynews.com\/2026\/04\/tennessee-pbm-bill-arkansas\/","title":{"rendered":"Will Tennessee\u2019s PBM Bill Face the Same Fate as Arkansas\u2019 Law?"},"content":{"rendered":"\n

Pharmacy benefit manager reform is not isolated to Congressional action<\/a>. Even states such as Tennessee are wading in. <\/p>\n\n\n\n

Last year, Arkansas became the first state to sign a law that would have prevented PBMs from owning and operating pharmacies in the state. However, CVS Caremark, Express Scripts and lobbying group Pharmaceutical Care Management Association quickly challenged<\/a> the law, leading to a judge blocking it<\/a> from being enacted. The judge stated that the law violates the Commerce Clause, which says that states cannot pass laws that unfairly hurt or discriminate against businesses from other states. Arkansas appealed this decision.<\/p>\n\n\n\n

Now, Tennessee is taking a stab at a similar type of PBM reform. Tennessee lawmakers passed the FAIR Rx Act<\/a> last week, which also prohibits a PBM from owning a pharmacy. It passed in the Senate with a 24-9 vote and in the House with an 86-7 vote. It is now awaiting a decision from Republican Governor Bill Lee.<\/p>\n\n\n\n

If signed into law, will it fare as poorly as its counterpart in Arkansas? CVS Health has already said that it\u2019s prepared to challenge the constitutionality of this potential law like it did in Arkansas. And one legal expert believes it could be difficult for the state to defend the bill.<\/p>\n\n\n\n

\u201cI do think that it may be an uphill battle to convince a court that it does not violate the Commerce Clause,\u201d said Eric Knowles, partner at Frier Levitt.<\/p>\n\n\n\n

Tennessee\u2019s bill<\/strong><\/p>\n\n\n\n

There are minor differences between the Tennessee bill and the Arkansas law. One is that Tennessee\u2019s bill does not apply to pharmacy services provided under contracts with the federal government, according to Knowles. <\/p>\n\n\n\n

This is partially why the judge issued a preliminary injunction on the Arkansas law, arguing that it conflicts with the federal TRICARE program, which is a healthcare program for active duty service members.<\/p>\n\n\n\n

Separately, the Tennessee bill also has a two-year implementation lag, compared with the Arkansas law. If the Tennessee Governor signs it into law, companies impacted by the bill would have until July 1, 2028, to make changes, according to Anthony Pudlo, CEO of the Tennessee Pharmacists Association, which supports the bill passed by the state legislature. By contrast, the Arkansas law would have gone into effect January 1, 2026, about nine months after it was passed.<\/p>\n\n\n\n

Pudlo noted that due to the vertical integration of PBMs, numerous pharmacies have closed in the state. In 2024 alone, 62 pharmacies closed.<\/p>\n\n\n\n

\u201cWe have seen the impact of those closures in terms of access for patients, reduced choice, even reduced hours for those pharmacies that have been able to stay open,\u201d he said.<\/p>\n\n\n\n

He added that there have also been cases of PBMs paying their own affiliated pharmacies at a much higher rate than other pharmacies, sometimes upwards of 16,000% more.<\/p>\n\n\n\n

The major PBMs, meanwhile, argued that this bill will harm patient care if it\u2019s signed into law. CVS said that it will lead to the closure of 25 MinuteClinic locations and the loss of 2,000 jobs.<\/p>\n\n\n\n

\u201cIt\u2019s up to [Governor Lee] to ensure 1.5M+ Tennesseans can continue to be cared for by their trusted CVS pharmacist, 25 MinuteClinic retail medical clinics continue to provide acute and primary care for patients, and 2,000+ Tennesseans can keep their jobs,\u201d said Amy Thibault, executive director of corporate communications at CVS. \u201c<\/strong>A veto will protect Tennessee communities, ensuring pharmacy and health care is not disrupted and Tennesseans can continue to get the medicines and care they need.\u201d<\/p>\n\n\n\n

A spokesperson for Optum Rx echoed this.<\/p>\n\n\n\n

\u201cThis law would force some pharmacies to close and take options away from patients,\u201d the spokesperson said. \u201cMany patients\u2014especially those with cancer, HIV, neurological conditions, or serious mental health needs\u2014depend on specialized pharmacy care and pharmacists who know their treatment well. Disrupting that care can make it harder for patients to get the medications and support they rely on, including seniors and people on Medicaid.\u201d<\/p>\n\n\n\n

The road ahead<\/strong><\/p>\n\n\n\n

It\u2019s difficult to predict whether the governor will pass or veto the bill, but the fact that it passed with overwhelming bipartisan support in the House and Senate may be a good omen for the bill, according to Knowles. That said, the likelihood of a lawsuit from the PBMs may influence his decision, Knowles added.<\/p>\n\n\n\n

However, even if the governor vetoes the bill, the veto can be overridden by a majority vote of the membership, according to the Tennessee General Assembly<\/a>.<\/p>\n\n\n\n

If it becomes law, it\u2019s not a question of if PBMs will challenge it, but when. The PBMs may sue right away, or wait until closer to the implementation date, according to Knowles. And Tennessee may have a very difficult time arguing against the Commerce Clause, which led to Arkansas\u2019 preliminary injunction.<\/p>\n\n\n\n

However, Tennessee is in a different appeals district than Arkansas, meaning it could face a different outcome, noted Shawn Gremminger, president and CEO of the National Alliance of Healthcare Purchaser Coalitions, an employer advocacy organization. The judge for Tennessee\u2019s potential case could have a differing opinion from the judge for Arkansas\u2019 case, he said.<\/p>\n\n\n\n

Even if the PBM reform bill <\/strong>does get blocked in Tennessee, Gremminger expects to see more state efforts like this in the future. <\/p>\n\n\n\n

\u201cOnce an idea catches on, it seems like it’s hard to stanch out,\u201d he said. \u201cMy expectation is they would look at, why did Arkansas fail, why did Tennessee fail? And they would continue to refine the statute until they could find a way to break through. I don’t think that people are just going to throw their hands up and be like, \u2018Oh, well, it looks like we can’t force the divestiture of these gigantic companies.\u2019 Like they’ve lost the goodwill that they may have previously had within state legislators.\u201d<\/p>\n\n\n\n

In fact, there have been other states to introduce bills banning PBMs from owning pharmacies, including New York, Texas, Vermont, Oklahoma, Indiana and Louisiana. However, most of these bills have stalled, failed to advance or remain under consideration.<\/p>\n\n\n\n

On a federal level, Senators Elizabeth Warren (D-Massachusetts) and Josh Hawley (R-Missouri) introduced the Break Up Big Medicine Act earlier this year. It would ban a parent company from owning a medical provider or management services organization and a PBM or an insurer. However, experts previously told<\/a> MedCity News that they don\u2019t see this one passing anytime soon.<\/p>\n\n\n\n

In other words, once the genie of vertical integration is out of the bottle, it might be hard to put it back in.<\/p>\n\n\n\n

Photo: bong hyunjung, Getty Images<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Tennessee lawmakers recently passed a bill banning PBMs from owning pharmacies in the state, though like a similar Arkansas law, it is expected to face legal challenges if enacted.<\/p>\n","protected":false},"author":31767,"featured_media":7803,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"om_disable_all_campaigns":false,"featured_image_focal_point":[],"homepage_placement":"top","homepage_placements":{"top":true,"featured":true,"sidebar":false},"homepage_alternative_layout":false,"featured_categories":[57],"hide_from_feed":false,"footnotes":""},"categories":[156,75,57,36,24],"tags":[52069,48785,40137,22428,990,53598],"class_list":["post-146835","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-consumer-employer","category-payers","category-politics-channel","category-syn","category-top-story","tag-frier-levitt","tag-national-alliance-of-healthcare-purchaser-coalitions","tag-pbms","tag-pharmacies","tag-tennessee","tag-tennessee-pharmacists-association"],"acf":[],"yoast_head":"\nWill Tennessee\u2019s PBM Bill Face the Same Fate as Arkansas\u2019 Law? 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