Gov. Bill Lee signed the Freedom, Access and Integrity in Registered Pharmacy (FAIR Rx) Act into law on May 22, making Tennessee the second state to prohibit pharmacy benefit managers from owning or operating pharmacies.
The legislation aims to address concerns about conflicts of interest when companies both manage pharmacy benefits and operate their own pharmacies. Supporters say this will help protect patients, independent pharmacists, and community health care providers.
Anthony Pudlo, CEO of the Tennessee Pharmacists Association, said, “Today marks a historic step forward for patients and pharmacists across Tennessee. We’re grateful to Gov. Bill Lee, the General Assembly, and our pharmacist and technician members for standing together to push back on PBMs, strengthen patient protections, and uphold fair, community-focused health care.”
B. Douglas Hoey, CEO of the National Community Pharmacists Association (NCPA), said: “An enormous conflict of interest exists when a giant corporate PBM or insurance plan owns and operates its own pharmacy. This legislation simply gives these health care giants a choice — you can be a PBM or you can be a pharmacy but you can’t be both. The FAIR Rx Act provides structural change that strikes at the crux of that conflict. We applaud the governor and legislators for their courage, withstanding tremendous pressure from the PBM-insurer lobby to pass this bill and defend Tennessee’s patients, taxpayers, and pharmacies.”
The bill was introduced by Sen. Bobby Harshbarger in the Senate with support from Rep. Rick Scarbrough as well as Sens. Shane Reeves and Ferrell Haile—both pharmacists—and other legislative leaders including House Speaker Cameron Sexton and Lt. Gov. Randy McNally.
This new law follows similar legislation enacted in Arkansas last year; meanwhile federal lawmakers reintroduced a bill on May 13 requiring companies that own health insurers or PBMs to divest their pharmacy businesses.
Looking ahead, supporters believe this move could set an example for other states considering similar measures aimed at separating pharmacy management operations from retail ownership.
