Home Economy Economic Activity CVS challenges Tennessee law banning PBMs from owning pharmacies

CVS challenges Tennessee law banning PBMs from owning pharmacies

CVS HEALTH Corp. is suing the Tennessee Board of Pharmacy over a new law that prohibits pharmacy benefit managers from owning or operating pharmacies in that state. 

PROVIDENCE – CVS Health Corp. is suing the Tennessee Board of Pharmacy over a new law that prohibits pharmacy benefit managers from owning or operating pharmacies in that state.  In the complaint filed on May 22 in U.S. District Court for the Middle District of Tennessee, CVS argues the act, which Tennessee Gov. Bill Lee signed into law the

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PROVIDENCE – CVS Health Corp. is suing the Tennessee Board of Pharmacy over a new law that prohibits pharmacy benefit managers from owning or operating pharmacies in that state.  In the complaint filed on May 22 in U.S. District Court for the Middle District of Tennessee, CVS argues the act, which Tennessee Gov. Bill Lee signed into law the same day, is protectionism designed to shield in-state independent pharmacies from legal competition.  The company also added it would be forced to close its 136 retail and specialty pharmacies in the state and halt mail-order operations if the law is implemented.  “A law that will close over 160 pharmacies (including the 136 CVS retail and specialty pharmacies), eliminate thousands of jobs, ban certain out-of-state pharmacies (like CVS) from providing mail-order pharmacy services, and force over a million patients to find new providers neither expands patient choice nor increases access to pharmacy services. It does precisely the opposite,” CVS wrote in its lawsuit. Tennessee is the second state trying to ban PBMs, which act as the middleman between drug manufacturers, pharmacies and health insurers, from owning pharmacies. Critics of CVS owning a PBM called CVS Caremark argue such arrangements create an anti-competitive conflict of interest because it allow PBMs to steer patients toward pharmacies they also own. Arkansas passed a similar bill in April 2025, which CVS legally challenged as well on May 22, 2025. A federal judge issued a preliminary injunction in June 2025, halting enforcement of that law. 
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