Tennessee has a real problem in its pharmaceutical marketplace. Over the past decade, 815 pharmacies have closed across the state, including 163 in the last three years alone. A 2024 audit by the Tennessee Department of Commerce and Insurance found that pharmacy benefit managers, the powerful middlemen who negotiate drug pricing between insurers, manufacturers, and pharmacies, were paying their own affiliated pharmacies higher reimbursement rates than they paid competing independent pharmacies for the identical drug. They were also engaging in spread pricing and other practices that undercut community pharmacists trying to serve Tennessee families.

Senator Harshbarger is right that this is a problem worth solving. The analogy he uses is apt: when the referee owns one of the teams, the game isn't fair. The conflict of interest built into a company that simultaneously sets reimbursement rates, audits competing pharmacies, and directs patients toward its own stores is structurally indefensible.

But SB2040 is the wrong prescription.

The bill would prohibit pharmacy benefit managers from owning pharmacy licenses in Tennessee, forcing companies like CVS, which owns both the CVS Caremark PBM and over 130 retail pharmacies in this state, to divest one or the other. The sponsors say this is about fairness for independent pharmacists, and they aren't wrong about the underlying disease. The problem is that this cure is already failing in the one state that tried it first.

Arkansas passed nearly identical legislation in April 2025. By July, a federal judge had issued a preliminary injunction blocking the law from taking effect. The court found it likely violated the Commerce Clause and, critically, that it was preempted by TRICARE, the federal health program that covers active-duty military, their families, and veterans. Express Scripts, which administers TRICARE pharmacy benefits, has done so for over two decades through an integrated mail-order model that the Arkansas law would have dismantled. Tennessee's bill carries the same vulnerabilities.

That last point deserves to sit for a moment. Tennessee is home to approximately 400,000 veterans, including roughly 120,000 with disabilities who depend on mail-order pharmacy delivery, often because they live in rural counties where driving to a retail pharmacy isn't simple. A bill intended to protect pharmacy access could, through constitutional overreach, disrupt the very delivery systems those veterans rely on while the state spends years and significant taxpayer resources defending litigation it is likely to lose.

There is a more surgical approach available. Tennessee already has PBM statutes on the books. The TDCI audit that documented the anti-competitive behavior, the differential reimbursement rates, the spread pricing, demonstrates those laws exist but aren't being enforced with adequate teeth. The state could strengthen enforcement mechanisms, increase transparency requirements, mandate rate parity between affiliated and unaffiliated pharmacies for identical drugs, and implement meaningful penalties for violations. That approach targets the documented misconduct directly, survives constitutional scrutiny, and doesn't put hundreds of pharmacy locations and thousands of jobs at risk while litigation plays out.

That's not an argument for more government intervention as a first principle. It's an acknowledgment that when existing law is being violated, enforcement is preferable to layering on new structural prohibitions that introduce greater disruption and constitutional risk.

As an employer, I want my workforce to have reliable, affordable access to the medications they need. That means stable pharmacy networks, predictable benefit costs, and mail-order options for employees who can't easily get to a retail location. SB2040 introduces years of legal uncertainty into all three. The practical cost of that uncertainty lands on Tennessee businesses and their employees long before any court reaches a final verdict.

Senator Harshbarger's diagnosis is correct. Tennessee's pharmaceutical marketplace has a referee problem, and the documented evidence supports taking it seriously. But the right response to documented violations of existing law is stronger enforcement, not a structural ban that federal courts have already flagged as constitutionally suspect and that puts military families' prescription access in the crossfire.

Tennessee deserves a fix that works. SB2040 isn't it.