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Senate committee advances bill to bar PBMs from owning pharmacies after heated testimony
Summary
The Health and Welfare Committee advanced SB2040, the Fair RX Act, to finance after testimony from pharmacists, oncologists, business groups and TennCare that split over whether PBM ownership causes conflicts of interest or would force closures and disrupt access. The vote was 8–1 to advance.
Sen. Harshbarger presented SB2040 to prohibit entities that set reimbursement policies from simultaneously owning or controlling dispensing pharmacies in Tennessee, urging the panel to remove a structural conflict he said has produced regulator findings of uneven reimbursement and other violations. "It says the one who sets the reimbursement rules cannot also own the pharmacy being reimbursed," he said in closing, asking for a positive vote.
The bill drew sharply divided testimony. Supporters — including oncology and independent pharmacy witnesses — said vertical integration lets PBMs steer patients and retain rebates at the expense of local pharmacists and patient care. Dr. Johnnetta Blakely, a medical oncologist, told senators that delays caused by PBM practices can harm patients: she described a case where a needed oral oncology drug took more than four weeks to reach a patient because a vertically integrated PBM would not allow a local pharmacy to fill the prescription. Pharmacists representing independent and specialty pharmacies cited a January 2026 state audit alleging underpayment and unfair practices by PBM-affiliated pharmacies.
Opponents — retail and PBM representatives, small-business advocates and minute-clinic clinicians — warned SB2040 could force closures and eliminate access if large chains cannot or will not restructure ownership quickly. Adam Rogers, a CVS district leader, testified the bill "would in fact indeed close 134 pharmacies across the state," and Minute Clinic staff said closures would disrupt convenient care and the jobs of hundreds of clinicians.
TennCare's chief pharmacy officer, Renee Williams Clark, told the committee the agency's assessment shows a potential "significant member impact and access to treatment and a significant fiscal impact to our program," pointing to procurement differences, limited-distribution specialty drugs and increased nonemergency transportation costs that could flow from pharmacy-network changes.
After extensive questioning and a mixture of technical and policy testimony, the committee voted to advance the measure to the finance committee (8 ayes, 1 nay). Chairman Crow noted that additional adjustments can be made in finance if members want to reconcile unintended consequences.
What happens next: SB2040 will be reviewed further in the finance committee, where members may offer amendments to address concerns about veterans, limited-distribution drugs and fiscal impacts to TennCare.
