State PBM Bans Would Devastate Pharmacy Access
State legislators across the country are addressing healthcare costs as a top priority during this legislative session. While making healthcare more affordable is a worthy goal, several bills that have been introduced claiming to lower healthcare costs would instead increase costs, reduce access to prescription drugs, and cause the loss of thousands of jobs.
Since the beginning of 2026, lawmakers in Louisiana, Oklahoma, and Tennessee have considered bills that would prohibit pharmaceutical chains that own a pharmacy benefit manager (PBM) from operating in the state. If these bills are signed into law, there would be fewer pharmacies especially in rural communities, job losses, the elimination of mail-order prescriptions which are critical to seniors and veterans, and less access to specialty drugs that are essential for many serious conditions.
PBMs serve a critical role in reducing the cost of pharmaceutical medicine for patients by negotiating lower prices on behalf of large groups. Today, PBMs administer plans for more than 289 million patients nationwide and save payers and patients an average of $1,154 per person per year. PBMs use various tools like rebates, pharmacy networks, drug utilization review, formularies, specialty pharmacies, mail-order pharmacies, and audits to drive down drug costs, improve quality, increase patient medication adherence, and prevent fraud. PBMs require pharmacies to compete on price, thus lowering costs for patients and for the various sponsors they serve including businesses, unions, state and local governments, associations, and other organizations that provide health insurance to their employees and members.
The Tennessee legislation would force more than 125 brick and mortar pharmacy locations to close across the state, and would eliminate cost-saving mail order and specialty pharmacy options for employers. Independent pharmacies lack the logistical ability or expertise to handle the storage and transportation that some specialty medications require. This would put patients who rely on specialty medications at risk of losing access to the medications they need. These bills would also put thousands of job losses, push pharmacy providers out of the states, and put business owners at a competitive disadvantage by restricting the benefits they would be able to offer their employees.
There are also significant legal challenges under the Commerce Clause and the impact on TRICARE, which covers members of the armed services. The nation’s veterans rely on the Department of Veterans Affairs’ mail order prescription drug program, which happens to be a PBM. In 2025, Arkansas lawmakers passed and the governor signed into law similar legislation that would ban a PBM from owning or operating a pharmacy in the state. On July 28, 2025, the United States District Court for the Eastern District of Arkansas issued an order enjoining enforcement of the law. If lawmakers in other states follow Arkansas’ example, they will likely run into a similar legal fate, making the legislative efforts not only bad policy but also a waste of the taxpayers’ money.
Legislators are right to be concerned about the cost of healthcare. However, legislation to ban a PBM from owning or operating a pharmacy in any state would have a devastating impact on pharmacy access and prescription drug costs, and these bills should be rejected.
