CVS Sues Tennessee to Block Law Separating Pharmacy and Benefit Manager Ownership

CVS sued Tennessee state officials on May 22 to block legislation the pharmacy company said would force the closure of its 136 pharmacy locations in the state. S. District Court in Nashville after Gov. Bill Lee signed the measure. The law prohibits companies from owning both pharmacy benefit managers and retail pharmacies and takes effect July 1, 2028.

CVS operates 134 retail pharmacies and two specialty pharmacies in Tennessee that employ more than 2,000 people. The company also owns CVS Caremark, a pharmacy benefit manager.

The complaint names the Tennessee Board of Pharmacy, Attorney General Jonathan Skrmetti and 10 board officials as defendants. It asks the court to declare the law violates federal statutes and to prevent its enforcement. 5 million Tennessee pharmacy patients.

Pharmacy benefit managers negotiate drug prices between manufacturers, insurers and pharmacies. Health insurers and employers use them to manage prescription benefits. Sens. Elizabeth Warren and Josh Hawley reintroduced similar federal legislation this month that would bar companies owning a pharmacy benefit manager or insurer from also owning pharmacies. B.

Douglas Hoey, CEO of the National Community Pharmacists Association, said the Tennessee law addresses an enormous conflict of interest and gives companies a choice between operating a pharmacy benefit manager or a pharmacy, but not both.