Governor Bill Lee plans to sign the pharmacy benefit manager (PBM) bill passed by the Tennessee General Assembly, according to State Affairs, which reported on Tuesday that the governor confirmed his intentions during a visit to Humphreys County.
The governor’s reported comments follow the Tennessee General Assembly’s passage of Senate Bill (SB) 2040 on April 20. Once signed into law, the legislation will prohibit vertical integration between pharmacies and pharmacy benefit managers (PBMs), third-party companies that negotiate drug prices and benefits between insurance companies and pharmacies.
“I have heard from stakeholders on both sides of that,” said Lee during a visit to Humphreys County, according to the outlet. “It’s quite an important issue. But I plan on signing it.”
Lee’s statement followed support last week from pharmacist groups, including the Tennessee Pharmacists Association, which sent the governor a letter signed by 16 other pharmacy organizations urging him to sign the legislation. Legislation passed by the General Assembly automatically becomes law if the governor does not sign or veto legislation within 10 days.
The governor’s plan to sign the legislation comes amid the threat of litigation from CVS Pharmacies, which has so far successfully sued to block similar legislation from taking effect in Arkansas.
“While disguised as anti-PBM, this misguided legislation will NOT lower drug costs and is solely designed to benefit independent pharmacies, with no thought about the patients who’d lose access to the pharmacist who they know and trust,” said a CVS Pharmacies spokesman in a statement sent to The Tennessee Star last month. “This misguided policy will lead to serious consequences for the state, including the closure of 25 MinuteClinic locations, where Tennesseans get acute and primary care, and the loss of more than 2,000 jobs. We’re prepared to challenge the constitutionality of this law in federal court, as we did in Arkansas.”
U.S. District Court Judge Brian Miller, an appointee of former President George W. Bush, blocked Arkansas’ legislation, determining CVS is likely to prove its argument that the state’s legislation targets out-of-state businesses in violation of the dormant Commerce Clause of the U.S. Constitution, which has been interpreted to prohibit states from passing legislation that interferes with interstate commerce.
The judge similarly said the plaintiffs were likely to prove their argument that Arkansas violated the federal preemption for TRICARE, the official health system for uniformed servicemembers, retirees, and their families.
While proponents argue the legislation will help lower drug prices and support local businesses, critics have argued it could jeopardize the TrumpRx drug pricing program.
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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].
