Tennessee Bans Pharmacy Benefit Managers From Owning Pharmacies
Supporters say the law ends a vertical conflict of interest they argue harms independent pharmacies and creates a near-term divestiture deadline that could trigger court challenges.
Overview
- Gov. Bill Lee signed the Freedom, Access and Integrity in Registered Pharmacy (FAIR Rx) Act on May 22, 2026, making Tennessee the second state after Arkansas to bar PBMs from owning or operating pharmacies.
- The law forbids PBMs from owning or running pharmacy locations and gives affected companies until January 1, 2027, to divest or restructure their pharmacy businesses.
- Pharmacy groups framed the measure as a patient-protection reform aimed at preserving community pharmacies and ending a practice they call a conflicted business model.
- PBMs and allied groups mounted an aggressive opposition campaign that reportedly spent more than $7 million and hired over 60 lobbyists, and companies such as CVS warned the law could force store closures and job losses — claims sponsors disputed.
- The Tennessee action follows Arkansas's ban, faces likely legal challenges, and comes as related federal legislation was reintroduced on May 13, signaling growing national pressure on PBM-pharmacy vertical integration.