WOONSOCKET, R.I. — A proposal in the Tennessee legislature could force CVS Health to sever a core piece of its business model or exit the state entirely, and it’s emerging as a key test of how far lawmakers nationally might be willing to go to rein in pharmacy benefit managers.
Pharmacy benefit managers, or PBMs, play a key role negotiating drug prices, processing pharmacy claims, handling prescription authorizations, and managing drug benefits for health insurers and employers. In addition to owning approximately 9,000 retail pharmacy locations across the US, CVS Health owns Aetna, a health insurer, and Caremark, a PBM.
The Tennessee bill would prohibit a single company from owning both a retail pharmacy and a pharmacy benefit manager. If enacted, Woonsocket, R.I.-based CVS says it could close more than 130 stores in Tennessee, putting more than 2,000 jobs at risk.
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