SB2574 • 2026

Pharmacy, Pharmacists

AN ACT to amend Tennessee Code Annotated, Title 53; Title 56; Title 63 and Title 71, relative to pharmacy benefits managers.

Healthcare

Active

The official status still shows this bill as active or still awaiting another formal step.

Sponsor: Harshbarger, Butler
Last action: 2026-03-03
Official status: Assigned to General Subcommittee of Senate Commerce and Labor Committee
Effective date: Not listed

Plain English Breakdown

Checked against official source text during the last sync.

Pharmacy Benefits Manager Regulations

This bill sets rules for pharmacy benefits managers to protect healthcare prescribers' authority and patient access to medications.

What This Bill Does

Prohibits pharmacy benefits managers from modifying, restricting, or denying a medication ordered by a healthcare prescriber unless the prescriber requests it.
Requires pharmacy benefits managers to respond within 24 hours for urgent cases and 72 hours for non-urgent cases when a formulary exception or prior authorization is requested.
Prevents pharmacy benefits managers from imposing requirements that delay or interfere with prescribing decisions made by healthcare providers based on clinical judgment.
Prohibits pharmacy benefits managers from retaliating against pharmacies or healthcare prescribers who exercise their rights under this bill.
Requires pharmacy benefits managers to disclose contract terms and rebate arrangements to state departments upon request.

Who It Names or Affects

Pharmacy benefits managers
Healthcare prescribers
Patients

Terms To Know

healthcare prescriber: A person authorized by law to prescribe drugs.
pharmacy benefits manager: An entity that administers the medication portion of pharmacy benefits coverage provided by a covered entity.

Limits and Unknowns

The bill does not apply to plans governed by the federal Employee Retirement Income Security Act (ERISA).

Bill History

2026-03-04 Tennessee General Assembly
Taken off notice for cal in s/c Insurance Subcommittee of Insurance Committee
2026-03-03 Tennessee General Assembly
Assigned to General Subcommittee of Senate Commerce and Labor Committee
2026-02-25 Tennessee General Assembly
Placed on s/c cal Insurance Subcommittee for 3/4/2026
2026-02-24 Tennessee General Assembly
Placed on Senate Commerce and Labor Committee calendar for 3/3/2026
2026-02-05 Tennessee General Assembly
Passed on Second Consideration, refer to Senate Commerce and Labor Committee
2026-02-05 Tennessee General Assembly
Assigned to s/c Insurance Subcommittee
2026-02-05 Tennessee General Assembly
P2C, ref. to Insurance Committee - Government Operations for Review
2026-02-04 Tennessee General Assembly
Intro., P1C.
2026-02-02 Tennessee General Assembly
Introduced, Passed on First Consideration
2026-02-02 Tennessee General Assembly
Filed for introduction
2026-02-02 Tennessee General Assembly
Filed for introduction

Official Summary Text

This bill prohibits a
pharmacy benefits manager
from engaging in any of the following conduct:



Exercis
ing
authority to modify, restrict, or deny a medication ordered by a
n individual authorized by law to prescribe drugs

("
healthcare prescriber
")
unless the healthcare prescriber has initiated a request for a formulary exception or prior authorization, which
such a
request must be granted or denied within
24
hours for an exigent or urgent clinical circumstance or within
72
hours for a non-urgent request. If a pharmacy benefits manager fails to respond within such time, then the request is deemed approved.


Impos
ing
requirements that delay or prevent a healthcare prescriber from prescribing or modifying a medication based solely on clinical judgment
.


Enforc
ing
or requir
ing
a policy that interferes with the prescribing authority of a healthcare prescriber
.


Requir
ing
a healthcare prescriber to obtain prior approval or perform a utilization management activity that directly alters, delays, or denies a medication unless authorized by a patient's health plan
.


Exercis
ing
, implement
ing
, or enforc
ing
any authority restricted under this
bill
through delegation, incorporation by reference, or contractual authorization contained in a health plan, plan document, or benefit design, unless such authority is expressly permitted by this
bill.


Structur
ing
formularies, cost-sharing requirements, tier placement, or utilization management criteria in a manner that has the purpose or effect of circumventing the prescribing protections of this
bill
, including through excessive cost-sharing or non-medical formulary exclusions.

This bill provides that only
a healthcare prescriber may issue, modify, or discontinue a medication.
Further, any
provision of a health plan or contract that purports to grant a pharmacy benefits manager authority in conflict with this
bill
is void and unenforceable as contrary to the public policy of this state.

If a healthcare prescriber determines that a medication is medically necessary, then
this bill requires
the pharmacy benefits manager
to
ensure that a clinically appropriate and affordable access pathway exists for the patient.

DISPENSING REQUIREMENTS

This bill requires a
pharmacist
to
dispense a medication only upon presentation of a valid prescription issued by a healthcare prescriber.
However, a
pharmacist is not required to obtain additional approval from a pharmacy benefits manager for dispensing medication.

RETALIATORY ACTION PROHIBITED

This bill prohibits

a
pharmacy benefits manager
from
tak
ing
retaliatory action against a pharmacy or healthcare prescriber for exercising rights pursuant to this
bill. As used in this paragraph, a "retaliatory action" includes n
etwork termination or exclusion
, r
eimbursement reductions
, t
argeted audits
, p
erformance or quality penalties
,
or
a
delay of claims processing.

If
such
a
n
action
as listed in the prior sentence
occurs within 180 days of an activity protected pursuant to this
bill
, then the action i
s presumed to be a retaliatory action and the pharmacy benefits manager bears the burden of proving by clear and convincing evidence that the action was not retaliatory.

DISCLOSURES

This bill authorizes the
department
of commerce and insurance
or the department of health
to
request a pharmacy benefits manager operating in this state to disclose
(i) the
terms and conditions of any contract the pharmacy benefits manager has with a pharmacy and payer, including all formulary and prior authorization policies and
(ii) a
ny rebate and fee arrangements that may influence formulary decisions.

If the department
of commerce and insurance
or the
department
of health requests
such
information, th
en the pharmacy benefits manager
must
disclose such information to the requesting department within 10 days.

ANNUAL REPORT

This bill requires a
pharmacy benefits manager operating in this state
to
report annually to the department
of commerce and insurance (i) the
average prior authorization response times
,
(
ii
)
t
he approval rates compared to the denial rates
,
(
iii
)
t
he number of formulary exception requests
,
and

(
iv
)
t
he aggregate rebate and fee categories.

VIOLATIONS

This bill provides that a violation of this bill
constitutes an unfair trade practice under the Tennessee Unfair Practices and Unfair Claims Settlement Act of 2009
.
The department
of commerce and insurance
may impose a civil penalty not to exceed $10,000 per violation.

A pharmacy or healthcare prescriber harmed by a violation may
also
bring a civil action for injunctive relief and actual damages.

EXEMPTED PLANS

This bill provides that its provisions
do not apply to or affect a plan governed by the
federal
Employer Retirement Income Security Act of 1974 (ERISA) or the administrator of such plan.
Further, this bill exempts such plans from the entirety of present law relative to pharmacy benefits managers.

RULEMAKING

This bill authorizes

t
he department
of commerce and insurance
and the department of health
to
promulgate rules to effectuate this
bill
.

Current Bill Text

Read the full stored bill text

HOUSE BILL 2333
By Butler

SENATE BILL 2574
By Harshbarger
SB2574
010828
- 1 -

AN ACT to amend Tennessee Code Annotated, Title 53;
Title 56; Title 63 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, Title 56, Chapter 7, Part 31, is amended by
adding the following as a new section:
56-7-3125.
(a) As used in this section, unless the context otherwise requires:
(1) "Department" means the department of commerce and insurance;
(2) "Healthcare prescriber" means an individual authorized by law to
prescribe drugs; and
(3) "Pharmacy benefits manager" means a person, business, or other
entity and any wholly or partially owned subsidiary of the entity that administers
the medication or device portion of pharmacy benefits coverage provided by a
covered entity.
(b) The general assembly finds and declares that:
(1) A pharmacy benefits manager is not a healthcare prescriber;
(2) The medical decision-making belongs to a healthcare prescriber;
(3) Interference by non-clinical entities threatens patient safety;
(4) Transparency and accountability are necessary to protect customers;
and
(5) This section regulates pharmacy benefits managers as market
participants and does not mandate health plan benefits.

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(c)
(1) A pharmacy benefits manager shall not:
(A) Exercise authority to modify, restrict, or deny a medication
ordered by a healthcare prescriber unless the healthcare prescriber has
initiated a request for a formulary exception or prior authorization, which
must be granted or denied pursuant to subdivision (c)(5);
(B) Impose requirements that delay or prevent a healthcare
prescriber from prescribing or modifying a medication based solely on
clinical judgment;
(C) Enforce or require a policy that interferes with the prescribing
authority of a healthcare prescriber;
(D) Require a healthcare prescriber to obtain prior approval or
perform a utilization management activity that directly alters, delays, or
denies a medication unless authorized by a patient's health plan;
(E) Exercise, implement, or enforce any authority restricted under
this section through delegation, incorporation by reference, or contractual
authorization contained in a health plan, plan document, or benefit
design, unless such authority is expressly permitted by this section; or
(F) Structure formularies, cost-sharing requirements, tier
placement, or utilization management criteria in a manner that has the
purpose or effect of circumventing the prescribing protections of this
section, including through excessive cost-sharing or non-medical
formulary exclusions.
(2) Only a healthcare prescriber may issue, modify, or discontinue a
medication.

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(3) Any provision of a health plan or contract that purports to grant a
pharmacy benefits manager authority in conflict with this section is void and
unenforceable as contrary to the public policy of this state.
(4) If a healthcare prescriber determines that a medication is medically
necessary, then the pharmacy benefits manager must ensure that a clinically
appropriate and affordable access pathway exists for the patient.
(5)
(A) A request for a formulary exception or prior authorization, as
described in subdivision (c)(1)(A), must be granted or denied within
twenty-four (24) hours for an exigent or urgent clinical circumstance or
within seventy-two (72) hours for a non-urgent request.
(B) If a pharmacy benefits manager fails to respond within the
time frame as described in subdivision (b)(5)(A), then the request is
deemed approved.
(d)
(1) A pharmacist shall dispense a medication only upon presentation of a
valid prescription issued by a healthcare prescriber.
(2) A pharmacist is not required to obtain additional approval from a
pharmacy benefits manager for dispensing medication.
(e)
(1) For purposes of this subsection (e), "retaliatory action" includes:
(A) Network termination or exclusion;
(B) Reimbursement reductions;
(C) Targeted audits;
(D) Performance or quality penalties; or

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(E) A delay of claims processing.
(2) A pharmacy benefits manager shall not take retaliatory action against
a pharmacy or healthcare prescriber for exercising rights pursuant to this section.
(3) If an action listed in subdivision (e)(1) occurs within one hundred
eighty (180) days of an activity protected pursuant to this section, then the action
is presumed to be a retaliatory action and the pharmacy benefits manager bears
the burden of proving by clear and convincing evidence that the action was not
retaliatory.
(f)
(1) The department or the department of health may request a pharmacy
benefits manager operating in this state to disclose:
(A) The terms and conditions of any contract the pharmacy
benefits manager has with a pharmacy and payer, including all formulary
and prior authorization policies; and
(B) Any rebate and fee arrangements that may influence
formulary decisions.
(2) If the department or the department of health requests the information
in subdivision (f)(1), then the pharmacy benefits manager shall disclose such
information to the requesting department within ten (10) days.
(g) A pharmacy benefits manager operating in this state shall report annually to
the department the following:
(1) The average prior authorization response times;
(2) The approval rates compared to the denial rates;
(3) The number of formulary exception requests; and
(4) The aggregate rebate and fee categories.

- 5 - 010828

(h)
(1) A violation of this section constitutes an unfair trade practice under
the Tennessee Unfair Practices and Unfair Claims Settlement Act of 2009,
compiled in chapter 8, part 1 of this title.
(2) The department may impose a civil penalty not to exceed ten
thousand dollars ($10,000) per violation.
(3) A pharmacy or healthcare prescriber harmed by a violation may bring
a civil action for injunctive relief and actual damages.
(i) This section does not apply to or affect a plan governed by the Employer
Retirement Income Security Act of 1974 (ERISA) (29 U.S.C. § 1001 et seq.) or the
administrator of such plan.
(j) The department and the department of health may promulgate rules to
effectuate this section. The rules must be promulgated in accordance with the Uniform
Administrative Procedures Act, compiled in title 4, chapter 5.
SECTION 2. Tennessee Code Annotated, Section 56-7-3122, is amended by deleting
the section and substituting:
Notwithstanding another law and except as provided in § 56-7-3125, this part
applies to plans governed by the Employee Retirement Income Security Act of 1974
(ERISA) (29 U.S.C. § 1001 et seq.).
SECTION 3. Tennessee Code Annotated, Section 56-8-104, is amended by adding the
following as a new subdivision:
(24) Violating § 56-7-3125.
SECTION 4. If any provision of this act or the application of any provision of this act to
any person or circumstance is held invalid, then the invalidity does not affect other provisions or

- 6 - 010828

applications of the act that can be given effect without the invalid provision or application, and to
that end, the provisions of this act are severable.
SECTION 5. For the purposes of promulgating rules, this act takes effect upon
becoming a law, the public welfare requiring it. For all other purposes, this act takes effect July
1, 2026, the public welfare requiring it.