Tennessee state Senator Bobby Harshbarger<\/a>, a pharmacist and Republican who sponsored this latest bill, told the Globe the legislation addresses a \u201cstructural conflict in the pharmacy marketplace.\u201d<\/p>\n \u201cThis legislation separates pharmacy benefit managers from owning or controlling the pharmacies they reimburse or steer patients toward,\u201d Harshbarger said in a statement. Pharmacies that own PBMs would need to divest from them to comply with the legislation, he said, but \u201cit does not eliminate PBMs, close pharmacies, or reduce access to medications.\u201d<\/p>\n CVS argues that kind of separation is not feasible. A spokeswoman said there is no obvious buyer for its pharmacies in Tennessee.<\/p>\n \u201cWhen Rite Aid filed for bankruptcy, CVS Pharmacy was one of the only pharmacies to buy and operate closing Rite Aid stores\u201d in Tennessee, said company spokesperson Amy Thibault. \u201cIt is unlikely another pharmacy could or would buy 134 CVS pharmacies, or the others impacted by the bill.\u201d<\/p>\n This bill is \u201cbad for Tennessee, for the more than 1.5 million patients we serve, and for the more than 2,000 colleagues who will lose good paying jobs,\u201d added Thibault.<\/p>\n Legal experts said having PBMs and pharmacies owed by the same company restricts price competition and hurts consumers. <\/p>\n \u201cWhen one company is negotiating drug prices and owns the pharmacy that fills the prescriptions, they have the ability to control both ends of the transaction,\u201d said Robert Tsigler<\/a>, an attorney of the Law Offices of Robert Tsigler in New York, who has years of experience on both sides of the courtroom involving federal and regulatory matters in New York and New Jersey.<\/p>\n But Greg Lopes, a vice president for the Pharmaceutical Care Management Association, a national trade association representing pharmacy benefit managers, called the Tennessee bill \u201cdangerous for patients\u2019 health\u201d and said the policy would not actually lower drug prices. <\/p>\n Lopes pointed to a study by Moiz Bhai<\/a>, an economics professor at the University of Arkansas at Little Rock, that suggested bills like the one in Tennessee could force mass pharmacy closures, increase drug costs nationwide by nearly $32 billion, and lead to 44,000 more hospitalizations. Bhai told the Globe that the Pharmaceutical Care Management Association funded the study.<\/p>\n Tennessee is not the only state moving to separate pharmacies and PBMs. <\/p>\n Last year, Arkansas passed a first-in-the-nation law<\/a> to prohibit PBMs from having an ownership interest in a pharmacy. CVS filed a lawsuit to block that law, which the company said would have shut down 23 of its stores. The law has been stayed because a federal judge granted a preliminary injunction to stop its implementation. <\/p>\n New York, Vermont, Texas, and Indiana all have serious legislative efforts to sever PBMs from pharmacy ownership underway. Louisiana commissioned a formal study, and bipartisan federal legislation has existed in both chambers. <\/p>\n \u201cThis has become a mainstream position, not a Tennessee-specific discussion,\u201d said Kelly Prymicz, the vice president of MacroHealth, a Washington-based company that works with insurers and health systems.<\/p>\n Massachusetts state Senator Cindy F. Friedman, the chairperson of the Health Care Finance Committee, believes the Tennessee bill is \u201can interesting proposal,\u201c her spokesperson, Stephen Acosta, said in an email Wednesday. <\/p>\n \u201dFrom her point of view any legislation that would reduce the impact a PBM has on a patient\u2019s wallet is worth looking at, especially as we see everything PBMs are doing with fees, assessments, and hidden clawbacks,\u201d he said.<\/p>\n In late 2024, the House Judiciary Committee opened an investigation<\/a> into possible anticompetitive practices by CVS Caremark, seeking to examine the company\u2019s relationship with pharmaceutical hubs, third-party online services designed to streamline patient access to complex specialty medication and increase price transparency. Earlier this year, the committee announced<\/a> it found that CVS Health may have violated federal antitrust laws by threatening independent pharmacies to keep them from using money-saving services outside Caremark. <\/p>\n The \u201cbig three\u201d PBMs \u2014 CVS Caremark, Cigna\u2019s Express Scripts, and UnitedHealth\u2019s OptumRx \u2014 control roughly 60 percent of the market. A Federal Trade Commission report released in January found that those three companies had generated billions of dollars in revenue<\/a> by hiking the cost of certain medications, including those used to treat heart disease and cancer.<\/p>\n PBMs have drawn bipartisan scrutiny as the Trump administration, Congress, and states are looking for ways to lower prices on prescription drugs. Over the last decade, lawmakers have devoted significant attention to the business practices of PBMs, and in the last year, 63 bills<\/a> overhauling the industry passed in 18 states, according to the National Conference of State Legislatures<\/a>. However, none of the reforms that focus on separating pharmacies and PBMs owned by the same company have been enacted.<\/p>\n \u201cWhile threats of CVS pharmacy closures are challenged with assertations of fear-mongering, the implications of this bill are really unknown,\u201d said Catherine Cooke<\/a>, a research professor at the University of Maryland\u2019s School of Pharmacy.<\/p>\n Rhode Island, where CVS is headquartered, is taking a much softer approach. Lawmakers this year have introduced a package of bills that focus on the transparency, oversight, and the state study of drug costs. But the package lacks any sort of reform around CVS\u2019s business model.<\/p>\n When asked why Rhode Island would not go as far as the bill in Tennessee, Senate President Val Lawson told the Globe, \u201cWe\u2019re not exploring that at all.\u201d<\/p>\n In fact, Lawson said CVS representatives were given a heads up before lawmakers introduced the bills, and members of her policy team discussed the contents with them. <\/p>\n \u201cI think it\u2019s beneficial to both parties,\u201d Lawson said of Rhode Island\u2019s PBM legislation.<\/p>\n Rhode Island Speaker K. Joseph Shekarchi, who is also a full-time attorney, filed a class-action lawsuit in the US District Court of Rhode Island on Wednesday on behalf of Roofers\u2019 Unions Welfare Trust Fund, alleging that CVS operated a RICO enterprise as it relates to the corporation\u2019s PBM contracts. <\/p>\n The complaint claims CVS operated PBM contracts \u201cthat falsely and\/or misleadingly conceal Caremark\u2019s side agreements with the drug companies that participate in the PBM Fraud Enterprises to give favorable formulary placements in return for bribes and kickbacks to Defendants through Zinc.\u201d Zinc Health Services is a group purchasing organization established in 2020 by CVS to help negotiate drug rebates with manufacturers on behalf of Caremark. <\/p>\n Shelly Bendit, a CVS spokesperson, said Thursday that the lawsuit did not have any merit.<\/p>\n \u201cCVS Caremark is committed to lowering prescription drug costs for our clients and their members through negotiations with pharmaceutical manufacturers,\u201d said Bendit. \u201cWe intend to vigorously defend against these claims.\u201d<\/p>\n But the debate playing out hundreds of miles away could have outsize implications for CVS, and the patients who depend on its pharmacies.<\/p>\n \u201cCVS is a billion-dollar-a-year PBM with vast operations across the US,\u201d said Kent McKinney<\/a>, a health care economist at Columbia University and former executive at Johnson & Johnson.<\/p>\n Losing its Tennessee stores \u201cwould not produce the doomsday scenario they claim that it will,\u201d said McKinney. \u201cBut if the bill ignites interest across the county or if there is federal legislation, that would be a problem for them.\u201d<\/p>\n Alexa Gagosz can be reached at alexa.gagosz@globe.com<\/a>. Follow her @alexagagosz<\/a> and on Instagram @AlexaGagosz<\/a>.<\/p>\n![\"A](\"https:\/\/www.europesays.com\/ie\/wp-content\/uploads\/2026\/03\/76XLSKDKF5I7WG3DPE5NRGZRFA.jpg\")
A customer visits a CVS pharmacy in Miami, Florida. Joe Raedle\/Getty<\/p>\n![\"Massachusetts](\"https:\/\/www.europesays.com\/ie\/wp-content\/uploads\/2026\/03\/MQCB5FD4FYMVIJEJGGJOSGW4MY.JPG\")
Massachusetts state Senator Cindy F. Friedman, the chairperson of the Health Care Finance Committee, believes the Tennessee bill is \u201can interesting proposal.”Carlin Stiehl for The Boston Globe<\/p>\n![\"In](\"https:\/\/www.europesays.com\/ie\/wp-content\/uploads\/2026\/03\/BAR4SZVZ4MBT6K3XZBBBY4H6FU.JPG\")
In his capacity as a private attorney, Rhode Island Speaker K. Joseph Shekarchi filed a class-action lawsuit in US District Court of Rhode Island on Wednesday on behalf of Roofers\u2019 Unions Welfare Trust Fund, alleging that CVS operated a RICO enterprise as it relates to the corporation\u2019s PBM contracts. Matthew Healey for The Boston Globe<\/p>\n