NASHVILLE, Tenn. (WTVF) — CVS pharmacies in Tennessee are not closing — at least for now — following a major corporate announcement this week that the company will split into two separate businesses.
The announcement comes after one of the most contentious legislative battles of the year at the Tennessee statehouse. Lawmakers passed a bill banning large pharmacy chains like CVS from also owning a pharmacy benefit manager (PBM) — a middleman that negotiates drug prices between insurance companies and pharmacies.
"This is not a simple bill, this is not an easy bill," said Sen. Jeff Yarbro, D-Nashville, said back in February.
"This is very challenging for me," said Sen. Becky Massey, R-Knoxville, said during the same debate.
Small, independent pharmacies pushed for the legislation, arguing that allowing large chains to own PBMs gave them an unfair competitive advantage. "This vertical integration is tearing our profession apart. Surely you see that?" said Sen. Shane Reeves, R-Murfreesboro, who is also a pharmacy owner earlier this year.
CVS fought the bill aggressively, spending millions on television ads and warning that the law could force the company to shut its Tennessee locations entirely. "It would just essentially result in us closing all of our CVS locations," said Adam Rodgers, district leader for CVS Health, earlier this year.
The bill passed, and CVS took the state of Tennessee to court. Then came this week's announcement: CVS will split into two companies. One would include the PBM and insurance business. The other would include CVS's retail pharmacies.
A company spokesperson said nothing changes for Tennessee patients right now. "This week’s announcement does not impact our pharmacies and clinics in Tennessee. Patients and customers will keep receiving great care and service, with no disruption, as the two companies prepare to launch. As we’ve stated previously, we’ll exhaust all options we can to continue to provide pharmacy and health care services to our 1.5M+ Tennessee pharmacy patients and have filed a lawsuit challenging the constitutionality of this law in federal court. This unconstitutional law puts special interests ahead of patients, restricting their access to life-saving medications and undermining fair competition," said Amy Thibault, a spokesperson for CVS.
I emailed CVS back asking whether the company believes its 134 Tennessee pharmacies will comply with the new law once the separation is complete. So far, CVS has not answered.
CVS's own lawsuit may offer a clue about what comes next. In that filing, the company said a complete corporate separation from Caremark or Aetna could preserve its ability to hold pharmacy licenses in Tennessee.
For CVS customers, here is what is known for certain: Nothing will change at your pharmacy, at least for now. But in the long run, things are less certain.
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