NASHVILLE, Tenn. (WTVF) — The Tennessee House passed a bill today that would ban pharmacies from owning Pharmacy Benefits Managers (PBMs). It already passed in the Tennessee Senate so the legislation now heads to to Gov. Bill Lee's desk for consideration.
The bill, known as the Fair RX Act, passed the House with 86 votes in favor and 7 against. PBMs act as middlemen that negotiate drug prices between pharmacies and insurance providers.
State Rep. Antonio Parkinson (D-Memphis) spoke on the House floor about why an independent pharmacist told him the ban is crucial for their business.
"He said but I have to pay a higher price to them than the pharmacies that they own, but I have to deal with them. I don’t have a choice in the matter or I won’t be in business at all. This is almost like some mafia stuff," Parkinson said.
CVS Pharmacy, which owns a PBM called Caremark, has repeatedly stated that if the bill passes, they will shut down all of their Tennessee locations rather than divest their PBM in the state.
"While disguised as anti-PBM, this misguided legislation will NOT lower drug costs and is solely designed to benefit independent pharmacies, with no thought about the patients who’d lose access to the pharmacist who they know and trust. This misguided policy will lead to serious consequences for the state, including the closure of 25 MinuteClinic locations, where Tennesseans get acute and primary care, and the loss of more than 2,000 jobs. We’re prepared to challenge the constitutionality of this law in federal court, as we did in Arkansas," CVS Health said in a statement.
Critics of the bill worry it could cause prescription costs to go up and invite a court challenge. State Rep. Robert Stevens (R-Smyrna) expressed concern over the legislation's potential impact.
"We’re dealing with an out of state company here and part of the crux of this legislation seems to be that we’re trying to protect local pharmacies and punish the big ones, so I think that’s going to lead us into one of these companies and PBMs and we’re probably going to be on the losing end of that," Stevens said on the floor.
The Tennessee Employer Benefits Alliance also opposed the passage of the legislation.
"The Tennessee Employer Benefits Alliance is disappointed that the Tennessee General Assembly would throw hardworking Tennesseans under the bus to enrich a small group of well-connected independent pharmacists despite opposition from patient advocates, veterans, business leaders, and everyday taxpayers stuck holding the bag," the Tennessee Employer Benefits Alliance said.
"This legislation will shutter pharmacies, raise drug prices, and increase costs to the state by $60 million, all so a small handful of well-connected 'independent pharmacists' can seize market share," the Tennessee Employer Benefits Alliance said. "It is shameful to see lawmakers act in such a craven, self-dealing manner, ignoring the consequences for the people they represent. This law would give any business, big or small, pause when considering making a home in the Volunteer State."
It is likely the legislation will get tied up in court. Arkansas passed a similar ban last year. A federal court blocked the implementation of the bill, and it is currently being appealed.
NewsChannel 5 has done previous, in-depth reporting on this issue. You can read that reporting here.
Do you have more information about this story? You can email me at Chris.Davis@NewsChanne5.com.
It's has been a dry spring for us. Nashville is over 6 inches below normal for rainfall for the year with Clarksville over a 9 inches deficit. Kim Rafferty went to a nursery to get a couple of tips that may be useful for you.
- Lelan Statom
