TPA and NCPA praise Tennessee law banning PBMs from owning pharmacies

ALEXANDRIA, Va. – Gov. Bill Lee signed the Freedom, Access and Integrity in Registered Pharmacy (FAIR Rx) Act (Senate Bill 2040/House Bill 1959) into law today, making Tennessee the second state to pass legislation prohibiting pharmacy benefit managers from owning or operating pharmacies. This comes after a hard-fought battle during which PBMs and their allies reportedly spent over $7 million and hired more than 60 additional lobbyists to oppose the legislation.

Tennessee enacts FAIR Rx Act targeting PBM vertical integration

“The signing of the FAIR Rx Act is a testament to what is possible when lawmakers, stakeholders, and advocates come together around good public policy,” said Steven C. Anderson, president and CEO of NACDS.

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The National Community Pharmacists Association, which represents the country’s independent pharmacies, supported the Tennessee Pharmacists Association’s leadership on the FAIR Rx Act as it moved through the legislative process.

“Today marks a historic step forward for patients and pharmacists across Tennessee,” said TPA CEO Anthony Pudlo. “We’re grateful to Gov. Bill Lee, the General Assembly, and our pharmacist and technician members for standing together to push back on PBMs, strengthen patient protections, and uphold fair, community-focused health care.”

“An enormous conflict of interest exists when a giant corporate PBM or insurance plan owns and operates its own pharmacy,” said NCPA CEO B. Douglas Hoey, pharmacist, MBA. “This legislation simply gives these health care giants a choice — you can be a PBM or you can be a pharmacy but you can’t be both. The FAIR Rx Act provides structural change that strikes at the crux of that conflict. We applaud the governor and legislators for their courage, withstanding tremendous pressure from the PBM-insurer lobby to pass this bill and defend Tennessee’s patients, taxpayers, and pharmacies.”

Among those leading and supporting the FAIR Rx Act in Tennessee were Sen. Bobby Harshbarger, who introduced the bill and led SB 2040 through the Senate; Rep. Rick Scarbrough; and Sens. Shane Reeves and Ferrell Haile, both of whom are pharmacists. Also advocating for the legislation were House Speaker Cameron Sexton and Lt. Gov. Randy McNally (also a pharmacist). A complete list of bill sponsors can be found here.

This follows a similar piece of legislation signed into law in Arkansas last year. A federal bill to require companies that own health insurers or PBMs to divest their pharmacy businesses was reintroduced in Congress on May 13.