NASHVILLE, TN (May 22, 2026) — The Tennessee Pharmacists Association (TPA) applauds Governor Bill Lee for signing into law Senate Bill 2040/House Bill 1959, the Freedom, Access and Integrity in Registered Pharmacy (FAIR Rx) Act, preventing pharmacy benefit managers (PBMs) from owning pharmacies in Tennessee.
With this landmark legislation, Tennessee becomes the latest state to enact laws that restore fairness and transparency to the pharmacy marketplace while promoting quality patient care and choice and protecting community pharmacies.
“Today marks a historic day for patients and pharmacists across the state,” Tennessee Pharmacists Association CEO Anthony Pudlo said. “We are grateful to Gov. Bill Lee and our General Assembly for taking a stand against the greedy corporate interests of PBMs and helping to restore a system that protects patients, healthcare providers and the pharmacies that care for their communities.”
Introduced by Sen. Bobby Harshbarger (Kingsport) and Rep. Rick Scarbrough (Oak Ridge), the FAIR Rx Act eliminates an entrenched conflict of interest in the pharmacy market — one in which PBMs set drug prices and also profit from owning the very pharmacies that fill prescriptions.
The law prohibits PBMs from holding pharmacy licenses and requires those corporations to divest pharmacy ownership by July 1, 2028. The House and Senate approved the legislation on April 20 and April 21, respectfully, with strong bipartisan support (24-9 House, 86-7 Senate).
“Today, we sent a clear message: the days of the fox guarding the henhouse in pharmacy benefit administration are coming to an end,” Harshbarger said. “No company should be able to write the rules, steer the patient, set the payment, and then own the pharmacy that profits from the transaction. The FAIR Rx Act addresses that conflict by separating financial control from patient care decisions and protecting access to quality pharmacy services across Tennessee.”
The law is designed to curb harmful practices that have harmed pharmacies and patients alike, including below-cost drug reimbursement, patient steering and excessive drug pricing. A recent audit by the Tennessee Department of Commerce and Insurance found that one PBM, CVS Caremark, reimbursed its affiliated pharmacies up to 16,000% more than non-affiliated pharmacies for the same medications. Another audit found Express Scripts generated $30 million in spread pricing revenue from Tennessee employers — costs ultimately borne by patients.
Since 2017, PBM abuses have contributed to the loss of 620 Tennessee pharmacies, reducing the number of critical access points for care. Many closures have been driven by unsustainable reimbursements imposed by PBMs, which pay their affiliate pharmacies at better rates. By eliminating this conflict of interest, the FAIR Rx Act helps level the playing field and supports non-PBM owned pharmacies across the state.
“We’re grateful to our pharmacist, student pharmacist, and pharmacy technician members for their strong support,” Pudlo said. “Their voices, along with the work of lawmakers to craft meaningful, bipartisan legislation, remind us that Tennessee is a place of integrity — where quality healthcare is valued and fair business practices are expected.”
SB2040 was also co-sponsored by Sens. Ferrell Haile, Shane Reeves, Randy McNally, Tom Hatcher, Adam Lowe, Bo Watson, Ken Yager, Joey Hensley, Janice Bowling, and Mark Pody.
HB1959 was co-sponsored by Reps. Cameron Sexton, Fred Atchley, Lowell Russell, Jay D. Reedy, Ed Butler, Tom Stinnett, Mike Sparks, Ryan Williams, Pat Marsh, Jeremy Faison, Tandy Darby, Gary Hicks, Justin Lafferty, John Crawford, Rusty Grills, Sabi Kumar, Tim Hicks, Mark Cochran, Kevin D. Raper, Rush Bricken, Kip Capley, Paul Sherrell, Debra Moody, Rebecca K. Alexander, Esther Helton-Haynes, Michele Carringer, Kirk Haston, Aftyn Behn, Jody Barrett, Dennis Powers, Rick Eldridge, Greg Martin, Michele Reneau, and Mark White.
About the Tennessee Pharmacists Association
The Tennessee Pharmacists Association represents the profession of pharmacy across the state, united for the purpose of promoting safe and effective medication use to improve the health of patients. Since 1886, the Tennessee Pharmacists Association has preserved and advanced the interests of the profession and has served the professional needs of all pharmacists, student pharmacists, and pharmacy technicians. For more information, please visit tnpharm.org.