Tennessee Banned PBM Ownership of Retail Pharmacies

The new law impacts large chains like CVS Health, forcing a structural shift in how Tennessee pharmacies may be owned.

Updated on Sept. 28, 2026 in Healthcare

Bold flat-color editorial illustration of a steel mortar and pestle, rendered in a striking high-contrast geometric style. — Tennessee passed a law banning pharmacy benefit managers from owning retail pharmacies, prompting a legal challenge from CVS Health over the ownership mandate. AI Illustration. Upload story photo >

Live Poll

Should federal law prohibit pharmacy benefit managers from owning retail pharmacies?

Tennessee legislators passed a law prohibiting pharmacy benefit managers (PBMs) from owning retail pharmacies, a move aimed at fostering competition and reducing healthcare costs. The legislation, which does not take effect until 2028, has already triggered a legal challenge from CVS Health.

Why it matters

Lawmakers pursued this mandate to protect small pharmacies and limit the influence of integrated corporate entities that they argue stifle competition. Legislative researchers project that the transition could lead to higher healthcare costs in the short term.

CVS Health, which reported $400 billion in annual revenue, operates 134 pharmacies in Tennessee. To combat the legislation, the company launched a $7 million television advertising campaign.

The players

CVS Health

A major healthcare company operating retail pharmacies and a large pharmacy benefit management business.

Sen. Bobby Harshbarger

A Tennessee state legislator involved in the public hearing process for the pharmacy ownership legislation.

The details

The law forces a separation between the PBM entity and retail storefronts to prevent potential conflicts of interest in medication access and pricing. CVS Health has responded to the state-level pressure by filing a lawsuit to overturn the ban and running consumer-facing campaigns, including text messages to customers, to lobby lawmakers. This legislative action follows similar efforts in other states, such as Arkansas, where a 2025 ownership ban is currently being contested in court.

2025: Arkansas lawmakers passed a pharmacy benefit manager ownership ban.
February 2026: Sen. Bobby Harshbarger spoke at a legislative hearing.
2028: Tennessee ownership ban takes effect.

Market Landscape

The Tennessee legislation follows the pattern set by the 2025 Arkansas ownership ban, representing a broader movement across nearly 40 states and territories to restrict PBM integration. This regulatory push signals a departure from existing market models that have dominated pharmacy retail for decades.

Operators in the pharmacy and benefit management space should monitor the outcome of the CVS lawsuit, as it sets the legal precedent for similar bans. Owners should factor in a significant shift in the compliance landscape ahead of the 2028 enforcement date.

The takeaway

Legislative scrutiny of PBM-owned retail networks is intensifying, signaling a long-term shift in market structure for pharmacy operators. Business owners should monitor the progress of current court challenges in Arkansas and Tennessee to understand potential future compliance requirements.