A federal lawsuit claims Tennessee’s new law prohibiting vertical integration between pharmacies and pharmacy benefit managers (PBMs) violates the dormant Commerce Clause of the U.S. Constitution, federal law governing employer-sponsored health plans, rules specific to Medicare Advantage and Medicare Part D plans, and the Constitution’s Takings Clause, which prohibits private property from being taken for public use without compensation.
The lawsuit was filed by CVS and affiliated PBM and insurance companies in the U.S. Court for the Middle District of Tennessee last Thursday, shortly after Governor Bill Lee signed Senate Bill (SB) 2040, the Freedom, Access, and Integrity in Registered Pharmacy (FAIR Rx) Act, beginning the countdown for vertically integrated companies to divest by January 1, 2027, ahead of a complete prohibition that will start in January 2028.
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