Tennessee FAIR Rx Act Marks Major Step in PBM Reform

Tennessee Fair Rx Act - Tennessee with prescription and prohibition sign

NCPA – Online Article – May 22, 2026

Tennessee has officially become the second state in the nation to prohibit pharmacy benefit managers (PBMs) from owning or operating pharmacies.

Gov. Bill Lee recently signed the Freedom, Access and Integrity in Registered Pharmacy (FAIR Rx) Act into law, marking a significant victory for independent pharmacies, patients, and advocates pushing for greater transparency in healthcare.

The legislation follows a similar law passed in Arkansas in 2025 and comes amid growing national scrutiny surrounding PBM business practices.

What the FAIR Rx Act Does

The FAIR Rx Act aims to address what many critics view as a major conflict of interest within the healthcare system.

Under the law, companies will no longer be allowed to simultaneously:

Operate as a PBM
Own or operate pharmacies

Supporters argue that vertically integrated PBM models allow large corporations to control multiple parts of the prescription drug supply chain, creating incentives that may not always prioritize patients or independent providers.

As NCPA CEO B. Douglas Hoey stated:

“You can be a PBM or you can be a pharmacy, but you can’t be both.”

A Hard-Fought Legislative Battle

The FAIR Rx Act did not pass without opposition.

According to reports, PBMs and affiliated organizations spent more than $7 million and hired over 60 additional lobbyists in efforts opposing the legislation.

Despite that pressure, Tennessee lawmakers moved forward with the bill, supported by pharmacists, independent pharmacy advocates, and healthcare organizations across the state.

The National Community Pharmacists Association (NCPA) praised the leadership of the Tennessee Pharmacists Association for helping advance the legislation.

Why PBM Ownership Is Under Scrutiny

PBMs play a major role in determining:

Pharmacy reimbursement rates
Prescription formularies
Pharmacy network participation
Medication access pathways

Critics argue that when PBMs also own pharmacies, it creates incentives for:

Patient steering
Reduced competition
Preferential treatment for affiliated pharmacies
Pressure on independent pharmacies

As a result, lawmakers in multiple states are increasingly examining whether vertical integration contributes to rising healthcare costs and reduced patient choice.

Growing Bipartisan Momentum

Importantly, PBM reform continues gaining support across party lines.

Among those supporting the FAIR Rx Act were:

Bobby Harshbarger
Rick Scarbrough
Shane Reeves
Ferrell Haile
Cameron Sexton
Randy McNally

At the federal level, lawmakers also recently reintroduced legislation that would require companies owning PBMs or insurers to divest pharmacy businesses nationwide.

Why This Matters for Patients and Pharmacies

Supporters of the FAIR Rx Act believe the legislation could help:

Protect patient choice
Improve competition
Support independent pharmacies
Reduce conflicts of interest
Increase transparency within the prescription drug system

For many independent pharmacies, these reforms represent an important effort to preserve local healthcare access and stabilize reimbursement pressures.

RescueMeds Supports Transparency and Patient Access

At RescueMeds, we support efforts that prioritize:

Patient access to medications
Transparency within the pharmacy system
Fair competition
Reduced barriers to care

As the national conversation around PBM reform continues to evolve, legislation like Tennessee’s FAIR Rx Act reflects growing concern over how healthcare consolidation impacts patients, providers, and pharmacies alike.

Tennessee’s FAIR Rx Act represents another major milestone in the expanding movement for PBM reform.

With both state and federal lawmakers increasingly focused on transparency and conflicts of interest, the future of vertically integrated PBM ownership models may continue to face significant scrutiny.

For patients, providers, and independent pharmacies, these reforms could play an important role in improving access, accountability, and fairness throughout the healthcare system.

Rescuemeds