A Tuesday letter from the Tennessee Chamber of Commerce to the General Assembly urges state lawmakers to oppose Senate Bill (SB) 2040 and House Bill (HB) 1959 on the grounds that the pharmacy ownership legislation is an affront to free market principles and would drive up prescription drug prices.
Introduced by State Senator Bobby Harshbarger (R-Kingsport) and State Representative Rick Scarbrough (R-Oak Ridge), the legislation would prohibit companies that own or operate pharmacies in Tennessee from owning or operating pharmacy benefit managers (PBMs), the third-party companies that negotiate pharmacy benefits and drug prices between insurance providers and pharmacies.
“The Chamber supports a free-market business environment in Tennessee where employers can operate with minimal government intervention and have the freedom to contract with providers that offer services and benefits they deem best for their business and their employees,” the chamber wrote in its letter. “As drafted, this legislation raises concerns on both fronts.”
According to the letter, SB 2040 “represents an unnecessary expansion of government control over Tennessee’s economies,” and notes that the ban would include both “mail-order and specialty pharmacies serving Tennessee customers.”
They wrote, “This legislation establishes a new precedent for the state to dictate a private corporation’s structure and contractual relationships even when such structure has been deemed legal by federal authorities such as the Federal Trade Commission.”
In addition to the intrusion into the private sector and potential legal concerns, the chamber said the legislation could fail to achieve its goal of lowering drug prices and instead drive them up higher due to less competition for PBMs in the Tennessee marketplace.
“By forcing PBMs to divest from pharmacy ownership in order to do business in Tennessee, it could dramatically narrow the options and benefits available to employers in our state,” warned the Chamber. They told lawmakers, “This would result in significantly increased healthcare costs to Tennessee businesses and reduced access for Tennessee consumers.”
In the letter’s conclusion, the chamber noted that lawmakers are considering the proposed new regulations for Tennessee “at a time when the legislature is moving towards fewer and more streamlined regulations.”
It stated, “Therefore, we respectfully ask you to oppose SB 2040/HB 1959.”
The opposition from the Tennessee Chamber comes amid concern from a national advocacy group for special forces veterans, the Special Operations Association of America (SOAA), whose chief of staff told The Tennessee Star last week that the bill could complicate the fulfillment of prescriptions for disabled veterans.
“If this goes into effect, it’s not an instantaneous day one change, there is a phased approach. By the end of that phased approach, vets would no longer be able to get their mail order meds from these big companies,” said SOAA Chief of Staff Nate Wisan. “For myself as a veteran, that’s a big deal. Our family personally uses Express Scripts to get our meds in the mail.”
Almost 400,000 veterans are estimated to be in Tennessee, including around 120,000 disabled veterans, who Wisan said would be most impacted.
“For those veterans who live far away from a pharmacy and get their stuff in the mail, they’re not gonna be able to get that anymore, they’re going to have to get in a vehicle and drive to a pharmacy and pick it up in person,” said Wisan.
Citing the stay issued by a U.S. District Court in Arkansas in response to a similar law, the SOAA spokesman told The Star that he expects Tennessee will see the same results if lawmakers pass the legislation. Wisan added that SOAA would join any Tennessee-based veterans organization in a legal challenge, should the bill become law.
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Tom Pappert is a 2025 recipient of the Dao Prize and the lead reporter for The Tennessee Star. He also reports for the Star News Network. Follow Tom on X. Email tips to [email protected].
Sounds to me like the UN controlled Chamber wants to keep the big box stores from having any real competition. Squeeze out the little mom and pop pharmacies and our compound pharmacies.
“The Chamber supports a free-market business environment in Tennessee where employers can operate with minimal government intervention and have the freedom to contract with providers that offer services and benefits they deem best for their business and their employees,” What a crock!!