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Scarborough bill bars PBM ownership of pharmacies in Tennessee, advances from subcommittee
Summary
The Insurance Subcommittee voted to advance House Bill 19-59 as amended, a licensure-focused measure that would prohibit the same corporate entity from controlling a pharmacy and a pharmacy benefit manager or covered insurer; supporters said it protects patients, opponents warned of closures and reduced access.
Representative Ryan Scarborough, sponsor of House Bill 19-59, told the Insurance Subcommittee the measure is a narrow, prospective licensure reform under Title 63 that seeks to separate financial control from patient-care decision-making.
"This bill does 1 core thing beginning in 01/01/2028," Scarborough said, describing a delayed effective date, a structured divestiture window and civil (not criminal) enforcement. He said the proposal "separates financial control from patient care decision making." The committee adopted an amendment before taking testimony and later voted to advance the bill.
Business groups and pharmacy stakeholders offered sharply different accounts of the bill's likely impact. Michael Power of the Pharmaceutical Care Management Association, representing PBMs, said the legislation "as written and amended... will result in retail and specialty pharmacies closing across the state," warning closures could number in the hundreds and reduce patient access.
Several speakers told personal stories to illustrate what specialty pharmacy services provide. Natalie Elliott Handy described her mother's experience with early-onset Parkinson's and emergency shipments of specialty medication: "They are her life," Handy said, emphasizing the clinical logistics—refrigerated cartridges, overnight shipping and pump supplies—that accompany some specialty therapies.
Supporters representing pharmacy associations argued consolidation and PBM practices have narrowed competition and harmed independent pharmacies. Anthony Pudlow, CEO of the Tennessee Pharmacists Association, said the state has seen roughly 600 pharmacy closures in recent years and urged the board of pharmacy be given authority to regulate abusive practices.
Opponents, including speakers from CVS and Lumicera Health Services, urged caution and recommended narrower transparency or anti‑steering rules rather than an ownership ban. After questions from committee members about alternatives and potential patient disruption, the clerk announced a 5–2 subcommittee vote to send HB 19-59, as amended, to full Insurance.
The bill's provisions include a ban on simultaneous ownership or control of a Tennessee pharmacy and a PBM or covered insurer for newly licensed entities, a transition/divestiture structure and civil penalties for noncompliance. The measure does not change pricing, mail order rules, specialty pharmacy practice itself, employer self‑funded plans, TRICARE, or hospital pharmacies, according to the sponsor.
