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Tennessee bill forcing separation of PBMs and pharmacies passes; lawmakers dispute fiscal impact
Summary
Lawmakers at a Policy Talks forum described a bill that bans ownership of both pharmacy benefit managers (PBMs) and pharmacies in Tennessee, now on the governor's desk; some legislators warned state insurance and TennCare cost estimates of roughly $53 million were not reflected in fiscal review.
Panelists at the Policy Talks forum in Williamson County described recent legislation that prohibits vertical integration between PBMs and pharmacies in Tennessee and reported the measure has passed the legislature and is on the governor's desk.
Senator Joey Hensley, a physician who sponsored or supported the policy changes discussed, explained the bill's intent: PBMs manage drug lists, negotiate rebates with manufacturers and reimburse pharmacies, and vertical integration "favors" pharmacy chains that are owned by insurers or PBMs. "This legislation just merely says that in Tennessee we...can't own a PBM and a pharmacy," Hensley said, adding the change aims to help independent pharmacies and lower drug costs by letting rebates flow to pharmacies and patients.
Senator Jack Johnson said he voted against the bill over fiscal concerns. He recounted testimony from the commissioner of Finance and Administration and the director of TennCare estimating combined annual costs to the state insurance plan and TennCare of about $53 million; fiscal review, however, assigned a zero fiscal note. "We don't go from $53 million to zero," Johnson said. "If we want to fix the policy, that's fine, but we need to pay for it."
Panelists noted the bill faced significant industry opposition and that major pharmacy companies spent on advertising opposing it. Supporters said the companies can change business models and that the law will protect independent pharmacies.
The forum did not include a formal roll-call vote for the session-level discussion, but legislators present described the bill's passage, the presence of two Senate no votes, and that it sits on the governor's desk awaiting signature.
The forum included pushback on any suggestion legislators supported the measure for personal gain; leaders said pharmacist-legislators recused personal-interest implications and emphasized this was policy-driven debate.
Next steps for the policy will include the governor's decision and future oversight as implementation details and fiscal effects are tracked.
