Insurance, Health, Accident

Plain English Breakdown

The official source does not provide detailed information on the exact impact of the bill, leaving room for interpretation regarding its effects on future contracts and federal funding.

Law About Pharmacy Benefit Managers

This law stops certain state entities from working with pharmacy benefit managers who have been disciplined by specific state departments.

What This Bill Does

• It says the TennCare bureau can develop prescription drug programs and contract with pharmacy benefit managers (PBMs) to run these programs, but only if the PBM hasn't been punished by the department of finance and administration or the department of commerce and insurance.
• It stops local education insurance committees from working with PBMs who have been disciplined by those same state departments.
• It prevents state government groups from making deals with PBMs that have been disciplined by the finance and administration and commerce and insurance departments.
• The rules start on July 1, 2026, for new or changed contracts.

Who It Names or Affects

• TennCare bureau
• Local education insurance committees
• State government groups

Terms To Know

Pharmacy Benefit Manager (PBM)

A company that manages prescription drug programs for health plans.

Disciplined

When a state agency punishes someone or something for breaking rules.

Limits and Unknowns

• The exact impact on the state and local governments depends on future actions by state agencies and federal funding, which are hard to predict.

Official Summary Text

Present authorizes the
bureau of
TennCare to develop prescription drug programs and to contract with one or more pharmacy benefit managers (
"
PBM
"
) or other appropriate third party contractors to administer all or a portion of such programs for TennCare.
This
bill prohibits the bureau
from
contract
ing
with a PBM if the PBM has been disciplined by the department of finance and administration or the department of commerce and insurance.

This bill also prohibits the state insurance committee, the local education insurance committee, and the local government insurance committee from contracting with a PBM if the PBM has been disciplined by the department of finance and administration or t
he department of commerce and insurance.

PROHIBITED CONTRACTING BY PBM

This bill prohibits a
PBM
from
contract
ing
for a service with a department, agency, or entity of this state if the PBM has been disciplined by the department of finance and administration or the department of commerce and insurance.

APPLICABILITY

Th
e
prohibition
s described above
appl
y
to contracts entered into, amended, or renewed on or after July 1, 2026.

Current Bill Text

SENATE BILL 2577
By Harshbarger

HOUSE BILL 2331
By Butler
HB2331
012385
- 1 -

AN ACT to amend Tennessee Code Annotated, Title 4,
Chapter 3; Title 8, Chapter 27; Title 56 and Title
71, relative to pharmacy benefits managers.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 4-3-1013, is amended by adding the
following as a new subsection:
(g) Notwithstanding subsection (a), the bureau of TennCare shall not contract
with a pharmacy benefits manager if the pharmacy benefits manager has been
disciplined by the department of finance and administration or the department of
commerce and insurance.
SECTION 2. Tennessee Code Annotated, Title 8, Chapter 27, Part 1, is amended by
adding the following as a new section:
A committee shall not contract with a pharmacy benefits manager if the
pharmacy benefits manager has been disciplined by the department of finance and
administration or the department of commerce and insurance.
SECTION 3. Tennessee Code Annotated, Title 56, Chapter 7, Part 31, is amended by
adding the following as a new section:
A pharmacy benefits manager shall not contract for a service with a department,
agency, or entity of this state if the pharmacy benefits manager has been disciplined by
the department of finance and administration or the department of commerce and
insurance.
SECTION 4. This act takes effect July 1, 2026, the public welfare requiring it, and
applies to contracts entered into, amended, or renewed on or after that date.