CVS cautions that the proposed legislation could result in the closure of 134 pharmacies within this state

CVS Threatens to Shut Down Tennessee Pharmacies Over Proposed Legislation

CVS has announced plans to close 134 of its pharmacy locations across Tennessee if a new state law targeting its business structure is enacted.

The proposed bill, introduced by a Tennessee state senator, would ban companies from simultaneously owning both retail pharmacies and pharmacy benefit managers (PBMs). CVS, which employs over 2,000 people at its 134 Tennessee pharmacies, also owns CVS Caremark, a major PBM.

PBMs, which serve as intermediaries between drug manufacturers, insurers, and pharmacies, have come under bipartisan scrutiny nationwide as lawmakers and federal officials search for ways to reduce prescription drug costs. Health insurers and employers rely on PBMs to negotiate drug prices and manage pharmacy benefits.

Senator Bobby Harshbarger, the bill's sponsor and a pharmacist himself, argues that the legislation is intended to resolve what he calls a "structural conflict in the pharmacy marketplace."

“This bill ensures that PBMs cannot own or control the pharmacies they reimburse or direct patients to,” Harshbarger stated. “It does not eliminate PBMs, force pharmacy closures, or restrict access to medications.”

According to Harshbarger, the measure would not mandate any pharmacy closures. Instead, companies with both PBM and pharmacy operations could choose to separate those businesses to comply with the law.

The bill recently cleared the Tennessee Senate health committee and the House insurance subcommittee. It must still pass additional committees in both chambers before reaching the full Senate and House for a vote.

CVS spokesperson Amy Thibault said the company is willing to collaborate with lawmakers but criticized the bill for failing to address core PBM industry concerns such as spread pricing, reimbursement rates, or drug formularies.

“The only outcome of this legislation is the closure of 134 CVS pharmacies,” Thibault said. “This would be a significant loss for Tennessee, impacting more than 1.5 million patients and over 2,000 employees who would lose their jobs.”

In addition to shuttering pharmacies, CVS indicated it would also close 25 in-store Minute Clinic locations that offer primary care services.

Efforts to Regulate PBMs in Arkansas and at the Federal Level

In 2025, Arkansas enacted a similar law barring companies that own PBMs from operating retail pharmacies. CVS challenged the law in court, resulting in a federal judge temporarily blocking its enforcement. The company continues to run more than 20 pharmacies in Arkansas.

Federal Legislative Actions

In December 2024, Representatives Diana Harshbarger of Tennessee and Jake Auchincloss of Massachusetts introduced a bill in Congress to prohibit joint ownership of PBMs and pharmacies, but the measure did not advance out of committee.

In February, Congress passed legislation to end a partial government shutdown, which also included new rules to increase PBM transparency and regulate their business practices.

• PBMs are now barred from receiving compensation based on drug prices, rebates, or discounts under Medicare Part D. Starting in 2028, they may only collect service fees, according to a health policy nonprofit.
• PBMs managing Medicare drug plans must disclose drug prices, revenue, affiliated pharmacies, and contracts with drug manufacturers.
• Those overseeing employer pharmacy benefits are required to pass 100% of manufacturer rebates to employers and report detailed data on prescription drug use and spending to most employer health plans.

Originally published by USA TODAY: CVS would close over 100 pharmacies if Tennessee enacts law