Bill advances in TN that would keep pharmacy benefit managers from also holding a pharmacy license

The Tennessee House Finance, Ways, and Means Committee on Monday advanced a bill that would prohibit pharmacy benefit managers (PBMs) from owning or controlling a Tennessee pharmacy license. If it becomes law, the legislation would mean a company could operate as a PBM or own retail pharmacies in Tennessee, but not both. Such a model is used by companies like CVS Health, which owns CVS Caremark, one of the largest PBMs in the country. PBMs are a middleman in the subscription drug supply chain by negotiating prices between drug manufacturers and setting reimbursement rates for pharmacies. The American Medical Association says PBMs can help control drug spending, but also reduce competition and lead to higher insurance premiums. CVS has previously said the legislation would force the closure of more than 130 CVS pharmacies in Tennessee, affecting more than 1.5 million patients as well as the company’s employees. If passed, the ownership restriction would be phased in, with compliance required by 2027.