NASHVILLE, Tenn. – State Rep. Rick Scarbrough, R-Oak Ridge, successfully passed legislation to eliminate conflicts of interest in the pharmacy marketplace and protect patient choice in Tennessee.
The Freedom, Access, and Integrity in Registered Pharmacy Act, or FAIR Rx Act, prohibits a company from owning or controlling both a pharmacy and a pharmacy benefits manager (PBM) or a health insurer beginning on July 1, 2028.
“The FAIR Rx Act ensures that entities setting the rules for prescription drug benefits are not also operating pharmacies within that system,” Scarbrough said. “This is an important step toward greater transparency and fairness in the pharmacy marketplace while protecting patients’ access to affordable, reliable care across Tennessee.”
This proposal does not prevent independently owned or unaffiliated pharmacies from offering mail-order, specialty or delivery services and does not restrict hospital pharmacies.
It also does not apply to employers administering pharmacy benefits for their own employees, retirees and dependents under an employee benefit plan or pharmacy services provided pursuant to contracts with the U.S. Department of Defense, Department of Veterans Affairs, Indian Health Service or Office of Personnel Management for federal healthcare programs.
If enacted, pharmacies currently operating under ownership structures prohibited by the bill may continue operating through Dec. 31, 2028, while pursuing a good-faith sale to an unaffiliated owner.
The legislation allows for a possible six-month extension if substantial progress toward a sale is demonstrated.
Violations under this legislation can result in civil penalties of up to $10,000 per day per violation.
The bill now heads to Gov. Bill Lee’s desk for his signature.
Rick Scarbrough represents District 33 in the Tennessee House of Representatives which includes part of Anderson County.
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