In The News | CVS wrote the rules. Tennessee is rewriting them.

Tennessee Lookout

Author: Hendrell Remus

Today’s political climate is defined by soaring polarization, corporate capture and politicians who too often put donors and special interests before the people they serve. I saw it (and lived it) during my four years as Chair of the Tennessee Democratic Party.

But the FairRx Act is different. In the face of a fierce corporate pressure campaign, legislators on both sides of the aisle stood up for Tennesseans struggling to afford and access prescription drugs.  

The FairRx Act will prohibit Pharmacy Benefit Managers, PBMs, from owning or operating pharmacies in Tennessee. PBMs are middlemen that negotiate drug prices between manufacturers, insurers and pharmacies, but these middlemen have been taken over by corporate giants.

Companies like CVS Health–who own drug manufacturers, PBMs, pharmacies, and providers control over 80% of the market, giving them complete authority over the pricing, reimbursement and distribution of prescription drugs. As bill author Sen. Bobby Harshbarger, a Kingsport Republican, said “the one that sets the reimbursement rules cannot also own the pharmacy being reimbursed.” 

The concentration of power lets companies determine reimbursement rates that favor their own pharmacies over independent competitors, restrict patient access to outside options and jack up costs for Tennesseans who depend on life-saving medications. 

The FairRx Act doesn’t just inconvenience CVS, it threatens their entire business model. CVS calls it vertical integration, but monopolization is a more accurate term. By making CVS choose a single role in the pharmaceutical network, this landmark legislation introduces two things the company is terrified of: fair competition and affordable medicine.

As evidence of their trepidation, CVS went to extraordinary lengths to ensure this bill never becomes law.

CVS used just about every tool available to oppose the FairRx Act:over $4 million on ads, mass texts to customers, paper signs in stores, paid social media influencers and an army of lobbyists working the statehouse. And while CVS ran its public campaign, a separate dark money group has spent at least $500,000 more in attack ads hammering legislators supporting the bill, with no disclosure of who was funding them.

But most strikingly (and disturbingly) CVS threatened to close all 134 of its Tennessee pharmacy locations if the bill passed. CVS’ repeated failed attempts at public persuasion, influence peddling, and fear mongering have exposed where their priorities lie. They would rather keep prices sky-high, cut off patients from their pharmacies and put thousands out of work than surrender a profit model built on rigging the game. 

And it’s also a lie: When the FairRx Act is signed into law, Tennesseans will not suddenly be without access to pharmacies, and CVS won’t simply lock their doors and leave. Instead, if CVS chooses to remain a PBM rather than own a pharmacy chain, it will undoubtedly sell off its pharmacies to new owners who will continue to provide pharmacy access.

Intimidation is a familiar tactic for CVS... Continue Reading