Full Breakdown
CVS Health Warns of Pharmacy Closures in Tennessee Due to New Legislation
3/6/2026, 1:11:48 AM
Proposed Legislation and Its Implications
CVS Health has announced that it may close all 134 of its pharmacy locations in Tennessee if Senate Bill 2040 is enacted. This proposed legislation aims to prohibit the co-ownership of pharmacies and pharmacy benefit managers (PBMs), which serve as intermediaries between pharmacies, health insurers, and drug manufacturers. The bill, sponsored by Tennessee State Senator Bobby Harshbarger, seeks to address perceived conflicts of interest that arise when PBMs own pharmacies while also influencing patient choices.
Harshbarger stated, “This legislation separates pharmacy benefit managers from owning or controlling the pharmacies they reimburse or steer patients toward.” He argues that the current structure leads to patient steering and reduced choices for consumers, ultimately disadvantaging local pharmacies.
CVS Health's Response
CVS Health has expressed strong opposition to the bill, claiming it would lead to significant negative consequences for patients and employees. Amy Thibault, a spokesperson for CVS Health, stated, “The only thing this legislation does is force the closure of 134 CVS pharmacies... It’s bad for Tennessee, for the more than 1.5 million patients we serve and for the more than 2,000 colleagues who will lose good paying jobs.” The company also indicated that it would close 25 in-store MinuteClinic locations, which provide essential health services.
Thibault emphasized that the legislation does not address broader issues within the PBM industry, such as spread pricing and reimbursement practices, which CVS believes are critical to improving the healthcare system.
Legislative Progress and Context
Senate Bill 2040 has already passed the Tennessee Senate Health and Welfare Committee and is moving through other legislative channels. This follows a similar bill in Arkansas, which was halted by a federal judge citing potential violations of the U.S. Constitution’s Commerce Clause. The Arkansas legislation aimed to prevent PBMs from operating retail pharmacies, a move that CVS contested in court.
In addition to state-level efforts, there have been national discussions regarding PBM regulations. In December 2024, U.S. Representatives Diana Harshbarger and Jake Auchincloss introduced a bill aimed at prohibiting joint ownership of PBMs and pharmacies, though it did not advance out of committee.
Criticism and Opposition
Critics of the proposed legislation, including CVS Health, argue that it could disrupt healthcare access, particularly in rural and underserved areas. They warn that the closures would lead to higher costs for consumers and limit access to essential medications. Supporters of the bill, however, contend that it is a necessary step to rein in the power of PBMs and ensure more equitable access to affordable medications.
What's Next
As the Tennessee Legislature continues to deliberate on Senate Bill 2040, further amendments and discussions regarding PBM regulations are anticipated in upcoming sessions. The outcome of this legislation could have significant implications for pharmacy access and the broader healthcare landscape in Tennessee.
