A spokesman for CVS Health told The Tennessee Star on Wednesday that the potential closure of more than 130 CVS pharmacies in the Volunteer State, which the company says would follow passage of the Freedom, Access, and Integrity in Registered Pharmacy (FAIR Rx) Act, would disrupt the annual fulfillment of 26 million retail prescriptions for about 1.5 million patients.
The legislation, SB 2040 and HB 1959, would prohibit vertical integration between pharmacies and pharmacy benefit managers (PBMs), the third-party businesses that negotiate benefits and drug prices between pharmacies and insurance companies.
Amy Thibault, the corporate communications executive director for CVS Health, has warned the FAIR Rx Act would prompt the company to close 134 CVS pharmacy locations in Tennessee, as well as over 25 MinuteClinic locations, due to integration with its PBM, CVS Caremark.
Thibault told The Star on Wednesday that these pharmacies, combined with CVS Specialty and Omnicare, serve about 1.5 million customers in Tennessee.
“Those CVS Pharmacy patients fill more than 26 million retail prescriptions a year,” said Thibault.
Supporters of the bill argue such vertical integration has led to higher drug prices for consumers and harsh competition for independent pharmacies, but Thibault told The Star that CVS Caremark typically reimburses independent pharmacies at higher rates than the company’s.
“PBM ‘steering’ prohibited under Tennessee law. We do not ‘steer’ patients from our PBM, CVS Caremark, to CVS Pharmacy or advantage them in reimbursement,” said Thibault. “In fact, independent pharmacies in Tennessee receive 24 percent higher reimbursements from our PBM for generics than CVS Pharmacy locations,” and 15 percent higher reimbursements for brand-name drugs.
Thibault also pointed The Star to testimony before the State Senate Finance Committee on Tuesday, when TennCare representatives said costs to the taxpayer-funded state medical program could increase by up to $24 million per year due to the legislation.
The legislation has drawn opposition from the broader business community, in addition to CVS, with the Tennessee Chamber of Commerce last month sending lawmakers a letter urging them to vote against the bill, citing concerns that it would betray free-market principles.
A veterans advocacy group, the Special Operations Association of America (SOAA), also said last week that more than 35,000 veterans have joined its opposition to the bill.
SOAA has warned that the FAIR Rx Act would impact Tennessee veterans who receive their prescription drugs through the mail, and compared the bill to similar legislation in Arkansas, which was stayed, in part, due to concerns over constitutional concerns related to the PBM used by TRICARE, the medical system for active duty military, veterans, and their families.
One pundit has also speculated that the legislation could undermine TrumpRx, the White House’s prescription drug pricing initiative unveiled earlier this year.
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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].
They’re not going anywhere. And if they did, someone else would fill the void. Buh-bye!
All this hysteria! CVS would not have to close any location! They would have to sell their stores to a private company, or form a separate corporation to own the current stores and keep operating them. No one need lose their pharmacy. I will add, if you are using CVS, you are paying way too much and need to shop around.
I use CVS and they are the preferred provider for BCBS. Can you guarantee what you say?
No one has spelled out the true reasons for this Bill. What are they? How will it save people money? I think it’s fishy and suspect the independent pharmacies are pushing it so they can charge higher prices.