Insurance, Health, Accident

Plain English Breakdown

The official source does not provide specific details about the potential impacts of the bill on TennCare and other government programs, only that there could be significant impacts due to unknown variables.

Law for Pharmacy Benefit Managers in Tennessee

This law stops pharmacy benefit managers who have been disciplined by certain state departments from working with TennCare and other parts of the government.

What This Bill Does

• It says that TennCare cannot work with a pharmacy benefits manager (PBM) if the PBM has been punished by the Department of Finance and Administration or the Department of Commerce and Insurance.
• It also stops state insurance committees, local education insurance committees, and local government insurance committees from working with PBMs who have been disciplined by these departments.
• The law says that a PBM cannot work on services for any part of the Tennessee state government if they have been punished by the Department of Finance and Administration or the Department of Commerce and Insurance.

Who It Names or Affects

• TennCare
• State insurance committees, local education insurance committees, and local government insurance committees
• Pharmacy benefit managers (PBMs)

Terms To Know

Pharmacy Benefit Manager (PBM)

A company that manages prescription drug benefits for health plans.

TennCare

The state's Medicaid program in Tennessee.

Limits and Unknowns

• This law only affects contracts made, changed, or renewed on or after July 1, 2026.
• There could be significant impacts to state and local government if this law stops them from working with certain PBMs.

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

HOUSE BILL 2331
By Butler

SENATE BILL 2577
By Harshbarger
SB2577
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.