MANY MINDEDTennessee Targets PBM-Pharmacy Ownership Consolidation Amid CVS Opposition
Tennessee state legislators, led by Republican pharmacist Senator Bobby Harshbarger, are pursuing legislation to prohibit pharmacy benefit managers from owning brick-and-mortar pharmacies. This follows similar efforts in Louisiana, where CVS Health’s text messaging campaigns helped overturn a comparable ban. CVS Health, which reported $400 billion in revenue for the prior year and includes Aetna as an insurer, has spent $7 million advertising in Tennessee to oppose the law and threatened closure of all 134 Tennessee pharmacies if the legislation passed. State researchers warn the ban could increase short-term healthcare costs, while nearly 40 state attorneys general wrote a letter last year urging federal action on PBM consolidation. The law has co-sponsors including Senator Elizabeth Warren and Senator Josh Hawley, though CVS’s claims about pharmacy closures depend on the legislation passing.
This move addresses PBM conflicts of interest by separating ownership of prescription drug plans from physical pharmacies—a structural change that could reduce price manipulation in the drug market. If implemented, it might lower drug costs for patients by curbing vertical integration that concentrates power among a few pharmacy benefit managers.
The potential impact on drug affordability is significant: reducing PBM-pharmacy consolidation could make medications more accessible without increasing out-of-pocket costs for patients. However, short-term cost spikes and CVS’s threat of pharmacy closures create friction. Next, the legislature must resolve the state researchers’ cost concerns and address how the ban affects CVS’s Tennessee operations. The Louisiana precedent shows that aggressive opposition can reverse state-level changes, but Tennessee’s approach may yield longer-term savings if the short-term cost risks are managed.
Source: KFF Health News