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Legislators debate PBM bill to bar pharmacy benefit managers from owning pharmacies
Summary
Delegation members described a bill prohibiting PBMs from owning pharmacies to prevent anti-competitive steering, while fiscal reviewers and agencies produced conflicting cost estimates for state health plans.
Legislators at the Policy Talks forum described a bill that would prohibit vertical integration by pharmacy benefit managers (PBMs) — specifically, barring PBMs from owning retail pharmacies in Tennessee.
Sen. Jack Johnson summarized the policy rationale: supporters argue vertical integration can be anti-competitive and disadvantage independent neighborhood pharmacies. "This legislation is supported by the pharmacy association representing a lot of independent pharmacies," he said.
Johnson also described fiscal concerns that shaped his opposition in committee. He recounted that the states commissioner of finance and administration submitted a fiscal impact finding saying it would cost the state health plan about $29,000,000 and TennCare estimated $24,000,000, but the fiscal-review office reported no state-level impact — a gap that led Johnson to vote "no" in finance committee on fiscal grounds.
Proponents say the measure is necessary to preserve competition for consumers; opponents have pushed back with advertising and warnings about store closures, according to the discussion. Johnson said he expected the legislation to pass despite his vote against it on fiscal grounds.
No formal vote was taken at the forum. The conversation focused on the bill's policy purpose, committee votes and the differing fiscal estimates that are still being reconciled in the legislative process.
What happens next: lawmakers said the bill had passed out of health committees and was advancing through finance committee stages; panelists expected continued debate on fiscal effects.
