CVS sued Tennessee state officials on May 22 to block legislation the pharmacy giant said would force the closure of the chain’s 136 Tennessee pharmacy locations.
CVS filed the U.S. District Court lawsuit in Nashville after Tennessee Gov. Bill Lee signed legislation to prohibit companies from owning both pharmacy benefit managers and retail pharmacies. The Tennessee legislation takes effect July 1, 2028.
CVS employs more than 2,000 at 134 retail pharmacy locations in Tennessee and two specialty pharmacies, which provide health services and medications for people with complex conditions such as cancer and multiple sclerosis. The company also owns CVS Caremark, a pharmacy benefit manager.
“We will exhaust all options we can to continue to provide pharmacy and health care services to our 1.5 million Tennessee pharmacy patients,” said CVS spokesperson Amy Thibault. “This unconstitutional law puts special interests and local politics ahead of patients, restricting their access to life-saving medications and undermining fair competition.”
What PBMs Are and Why They’re Under Fire
Pharmacy benefit managers, or PBMs, have drawn bipartisan scrutiny nationwide as Congress and states take aim at prescription drug prices and corporate health giants. PBMs act as a middleman between drug manufacturers, health insurance companies and retail pharmacies. Health insurers and employers that offer health insurance benefits use PBMs to negotiate prices and manage prescription drugs.
Sens. Elizabeth Warren, D-Massachusetts, and Josh Hawley, R-Missouri, this month reintroduced federal legislation that is similar to the Tennessee law. The bipartisan bill would forbid companies that own a PBM or an insurance company from owning a pharmacy.
What Supporters of the Law Say
The Tennessee legislation addresses an “enormous conflict of interest” when large companies control pharmacies and PBMs or insurers, said B. Douglas Hoey, CEO of the National Community Pharmacists Association, which represents independent pharmacies.
“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,” Hoey said in a statement.
Thibault said the Tennessee law targets CVS, hikes prescription drug costs for employers and won’t lower prescription drug costs for anyone.
The lawsuit names as defendants the Tennessee Board of Pharmacy, Tennessee Attorney General Jonathan Skrmetti and 10 pharmacy board officials. The lawsuit asks a federal judge to find the legislation violates federal laws and to halt the state from implementing it.
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