Prescription Drug Bill Advances Statewide

CHATTANOOGA, Tenn. (WDEF) – Tennessee lawmakers have passed the “Fair Rx Act,” legislation that would restrict certain types of ownership within the prescription drug industry in the state.

The bill would prohibit a company from owning a pharmacy while also owning a pharmacy benefit manager and a health insurer if ownership exceeds five percent.

Pharmacy benefit managers, or PBMs, serve as intermediaries between insurance companies and pharmacies in the prescription drug system.

The legislation now moves to Governor Bill Lee for consideration. If signed, the law would take effect on July 1, 2028.

CVS Health declined an interview but issued a statement in response to the legislation. In that statement, CVS said the bill would not lower drug costs and could result in pharmacy closures. 

The company also said it is prepared to challenge the law in federal court.

The bill applies to ownership stakes above five percent across the regulated entities outlined in the legislation.