TennesseeTennessee law restricts pharmacy and insurer-benefit manager ownership ties
Starting July 1, 2028, people and businesses with more than a 5% ownership stake face limits on owning pharmacies and on owning both insurers and pharmacy benefits managers.
What it does
People and businesses with more than a 5% ownership interest may not own or control a pharmacy, or own or control both a health insurer and a pharmacy benefits manager. Some employer and federal health program arrangements are excluded. Affected pharmacies may have extra time to sell if they meet specific conditions.
The attorney general may enforce the restrictions. A violation may bring a civil penalty of up to $10,000, with each continuing day counted separately.
Argument forSeparating pharmacy ownership from insurer and benefit manager control could help protect patients' choice and pharmacists' independent decisions.
Argument againstA pharmacy linked to both a health insurer and a benefit manager may need to find an unaffiliated buyer, which could disrupt service if a sale is delayed.
More detail
The law bars covered people and businesses from owning or controlling a pharmacy, or from owning or controlling both a health insurer and a pharmacy benefits manager. The restriction covers people and businesses, including their affiliates, that have the ownership interest described in the law. The restriction applies when the person, business, or an affiliate holds more than 5% ownership; an affiliate is under common ownership or control. The restriction does not apply to employer plans serving only their own employees, retirees, and dependents, or to specified federal health program contracts. A hospital or health-system pharmacy is not treated as a pharmacy benefits manager. The law does not limit independent or unaffiliated pharmacies from providing mail-order, specialty, or delivery services to their own patients. It also excludes certain FDA-designated orphan drugs and drugs with an FDA-required limited-distribution safety program. A pharmacy affiliated with both a health insurer and a pharmacy benefits manager may continue operating through December 31, 2028, if it shows the pharmacy board that it is actively pursuing a bona fide sale to an unaffiliated buyer. The board may grant one extension of up to six months if the sale is making substantial progress. The restrictions apply on and after July 1, 2028. A qualifying pharmacy may continue through December 31, 2028, while pursuing a sale, with one possible extension of up to six months.
The attorney general may enforce the restrictions, and violations may bring civil penalties of up to $10,000 per violation. These enforcement rules apply to violations of the pharmacy ownership restrictions. Each day a violation continues counts as a separate violation. The pharmacy board must refer information about possible violations to the attorney general. These enforcement rules apply to the restrictions that begin July 1, 2028.
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Where it stands
- Introduced
- Passed Senate
- Passed House
- To Governor
- Became Law
Looking ahead
No hearings or votes scheduled.
History
- 2026
- May 27Pub. Ch. 1111Latest
- May 27Effective date(s) 05/22/2026
- May 22Signed by Governor Bill Lee.Became Law
- May 11Transmitted to Governor for action.To Governor
- May 7Signed by H. SpeakerMajor
- Apr 30Signed by Senate SpeakerMajor
- Apr 27Enrolled and ready for signaturesMinor
- Apr 21Subst. for comp. HB.Major
- Vote recorded FLOOR VOTE: REGULAR CALENDAR PASSAGE ON THIRD CONSIDERATION 4/21/2026 Passed. Result: pass.Lower
- Apr 21Am. withdrawn. (Amendment 1 - HA0648)Minor
- Apr 21Am. withdrawn. (Amendment 2 - HA0649)Minor
- Apr 21Am. withdrawn. (Amendment 3 - HA1228)Minor
- Apr 21Passed H., Ayes 86, Nays 7, PNV 0Passed House
- Apr 20Senate adopted Amendment (Amendment 2 - SA0841)
- Vote recorded FLOOR VOTE: as Amended Third Consideration 4/20/2026 Passed. Result: pass.Upper
- Apr 20Senate adopted Amendment (Amendment 3 - SA0842)
- Apr 20Senate adopted Amendment (Amendment 4 - SA1052)
- Apr 20Amendment withdrawn. (Amendment 1 - SA0533)
- Apr 20Passed Senate as amended, Ayes 24, Nays 9Passed Senate
- Apr 20Engrossed; ready for transmission to HouseMinor
- Apr 20Sponsor(s) Added.Minor
- Apr 17Placed on Senate Regular Calendar for 4/21/2026
- Apr 17Placed on Senate Regular Calendar for 4/20/2026
- Mar 24Recommended for passage with amendment/s, refer to Senate Calendar Committee Ayes 9, Nays 2 PNV 0
- Vote recorded SENATE FINANCE, WAYS AND MEANS COMMITTEE: Recommended for passage with amendment/s, refer to Senate Calendar Committee Ayes 9, Nays 2 PNV 0 3/24/2026 Passed. Result: pass.Upper
- Mar 23Sponsor(s) Added.Minor
- Mar 17Action deferred in Senate Finance, Ways, and Means Committee to 3/24/2026
- Mar 17Placed on Senate Finance, Ways, and Means Committee calendar for 3/24/2026
- Mar 10Placed on Senate Finance, Ways, and Means Committee calendar for 3/17/2026
- Feb 25Recommended for passage with amendment/s, refer to Senate Finance, Ways, and Means Committee Ayes 8, Nays 1 PNV 0
- Vote recorded SENATE HEALTH AND WELFARE COMMITTEE: Recommended for passage with amendment/s, refer to Senate Finance, Ways, and Means Committee Ayes 8, Nays 1 PNV 0 2/25/2026 Passed. Result: pass.Upper
- Feb 18Placed on Senate Health and Welfare Committee calendar for 2/25/2026
- Feb 17Sponsor(s) Added.Minor
- Feb 9Sponsor(s) Added.Minor
- Feb 5Passed on Second Consideration, refer to Senate Health and Welfare CommitteeMinor
- Feb 2Sponsor(s) Added.Minor
- Feb 2Introduced, Passed on First ConsiderationMinor
- Jan 22Filed for introductionIntroduced
Healthcare