(The Center Square) – Another pharmaceutical company is suing Tennessee over its law that requires pharmacies to divest their benefit managers.
Express Scripts by Evernorth said Friday that if Senate Bill 2040 took effect as planned in 2028, it would be forced to close its Accredo Specialty Pharmacy’s Memphis facility.
The company’s affiliated pharmacies employ more than 1,200 Tennesseans. Accredo Specialty Pharmacy shipped prescriptions to more than 3,200 Tennessee patients, the company said.
“Tennessee lawmakers are risking the health and well-being of Tennesseans who rely on the medicines and care they receive from our family of pharmacies,” said Susan Peppers, RPh, vice president of Pharmacy Practice for Evernorth Health Services. “If this misguided law takes effect, hundreds of thousands of patients could be left scrambling to navigate pharmacy closures and find new ways to access their medications and essential clinical support.”
The company is seeking an injunction to prevent the law from taking effect.
CVS Health also asked for an injunction in a federal lawsuit filed shortly after Gov. Bill Lee signed Senate Bill 2040 into law, saying it would force 160 retail and specialty pharmacies, including 136 of its own, to close.
“To what end? The Act’s stated goals are to expand ‘patient choice’ and ‘rural and community pharmacy access,'” the company said in the filing. “But a law that will close over 160 pharmacies (including the 136 CVS retail and specialty pharmacies), eliminate thousands of jobs, ban certain out-of-state pharmacies (like CVS) from providing mail-order pharmacy services, and force over a million patients to find new providers neither expands patient choice nor increases access to pharmacy services.”
The Tennessee Pharmacists Association said pharmacy benefit managers, known commonly as PBMs, hurt independent pharmacists.
“If you talk to any independently owned pharmacy, they struggle to have any level of negotiation with the big PBMs,” Anthony Pudlo, CEO of the Pharmacists Association, said in an interview with The Center Square before the bill passed. “They’re also being audited by that company and then they can see everything that they’re doing and then they can control how much that pharmacy wants to get paid. I even refer to it as you have a PBM that ends up being the judge, jury and executioner of a local, independent pharmacy because they control the contracts as well as they audit their competition and then change the rules to make it work for their own pharmacies.”
State officials disagreed over the bill’s cost to the state during committee meetings.
Tennessee could be on the hook for as much as $24 million, largely due to specialty drug costs, TennCare Director Stephen Smith testified to the Senate Finance, Ways and Means Committee.
Bojan Savic, executive director of the Tennessee Fiscal Review Committee, said there is a disagreement about the cost.
“I would say the main reason for the disagreement is behind the assumption that pharmacies will close,” Savic said. “The assumption in the fiscal note is that those pharmacies have options to restructure, divest and that they can remain in operation, at least for the most part.”
Both lawsuits are in the U.S. District Court for the Middle District of Tennessee.
