Tennessee and Oklahoma Advance PBM Pharmacy Ownership Bans

Key Takeaways

• Tennessee HB 1959 PBM legislation passed the House Insurance Committee with a 16-3 vote and aims to prohibit PBMs from owning pharmacies in the state. House Speaker Cameron Sexton argued that PBM pharmacy ownership creates conflicts of interest that harm independent pharmacists and patient choice.
• Oklahoma HB 3538 pharmacy benefit managers legislation was unanimously adopted by the Health and Human Services Oversight Committee and includes an exception for limited-use licenses covering rare, orphan, or limited-distribution medications. The bill now awaits a full floor vote in the House of Representatives.
• The Pharmaceutical Care Management Association opposed the Tennessee measure, warning that the PBM pharmacy ownership prohibition could lead to job losses, pharmacy closures, and disruptions to patient access for specialty drugs.
• State PBM regulation vertical integration efforts are expanding nationwide, with similar ownership prohibition bills pending in Alabama, Arizona, Louisiana, Mississippi, New York, Pennsylvania, and West Virginia.

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PBM Prohibition on Pharmacy Ownership Moves Ahead in Tennessee and Oklahoma

Efforts to regulate pharmacy benefit managers (PBMs) are gaining momentum in several states, with Tennessee and Oklahoma advancing significant legislation aimed at prohibiting PBMs from owning pharmacies. These measures reflect a growing trend among state lawmakers to address concerns about vertical integration and its impact on independent pharmacists and patient access.

Tennessee HB 1959 Advances Through Committee Process

The legislative efforts to regulate pharmacy benefit managers (PBMs) in Tennessee advanced this past week as the House Insurance Committee held a crucial hearing on HB 1959. The legislation aims to prohibit PBMs from owning pharmacies within the state. The bill is co-sponsored by House Speaker Cameron Sexton, who spoke extensively in favor of the measure during the committee hearing. Speaker Sexton emphasized the need to curb anti-competitive practices and address concerns about vertical integration in the pharmaceutical supply chain, arguing that PBM ownership of pharmacies creates conflicts of interest that ultimately harm independent pharmacists and patient choice.

Industry Opposition Raises Concerns About Job Losses and Access

In opposition to the bill, Michael Power, representing the Pharmaceutical Care Management Association (PCMA), voiced strong concerns. Power highlighted several potential negative consequences should HB 1959 become law, including the possible loss of jobs within the pharmacy sector, the closure of existing retail pharmacies, and potential disruptions to patient access, particularly concerning specialty drugs. The PCMA argues that these integrated models lead to efficiencies and cost savings for health plans and consumers, and that the legislation would dismantle these benefits.

Committee Approves Bill Despite Opposition Arguments

Despite the arguments presented against it, HB 1959 received overwhelming support from the committee. Following the debate, the bill successfully passed out of the House Insurance Committee by a decisive vote of 16-3. The legislative journey for HB 1959 continues as it is now slated to be heard by the Government Operations Committee.

Oklahoma Legislation Includes Exception for Specialty Medications

A significant legislative development is also unfolding in Oklahoma, where a similar measure, HB 3538, has successfully navigated a key committee vote.

The Health and Human Services Oversight Committee adopted language that would specifically prohibit PBMs from holding ownership stakes in pharmacies. A notable feature of the language is the inclusion of an exception. The bill allows for the issuance of limited-use licenses. These licenses are specifically designed for drugs that fall into the categories of rare, orphan, or limited-distribution medications. This provision ensures that patients requiring these highly specialized or difficult-to-obtain therapies do not face barriers to access that might otherwise be created by the blanket prohibition on PBM ownership.

The committee’s language was adopted by a unanimous vote. The bill is currently awaiting a full floor vote in the House of Representatives.

Multi-State Movement Targets PBM Pharmacy Ownership

The progress of HB 3538 demonstrates a growing, multi-state legislative focus on reforming PBMs. Other ownership prohibitions are pending in Alabama, Arizona, Louisiana, Mississippi, New York, Pennsylvania, and West Virginia.

Track Health Care Policy

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