CVS Health has filed a federal lawsuit challenging the constitutionality of Tennessee’s recently passed Freedom, Access and Integrity in Registered Pharmacy Act, also known as the Fair Rx Act.
The complaint, filed May 22 in the U.S. District Court for the Middle District of Tennessee, alleges the bill unconstitutionally favors in-state businesses over out-of-state competitors, conflicts with federal rules governing employer health plans and Medicare, and that forcing the company to close or sell its Tennessee pharmacies amounts to a taking of property without compensation. CVS is asking the court to strike down the law and permanently block it from taking effect.
Gov. Bill Lee signed the law May 22, making Tennessee the second state to ban PBMs from owning pharmacies. CVS had warned throughout the legislative process that the law could force the closure of all 134 of its Tennessee locations. The company estimates the law puts $3.7 billion in annual Tennessee revenue at risk and would result in more than $400 million in asset write-offs.
CVS argues the law is designed to benefit Tennessee’s independent pharmacies at the expense of out-of-state chains — the same argument a federal judge sided with when he blocked Arkansas’ similar law in July 2025. The complaint also alleges several key legislative sponsors stand to personally benefit if the law takes effect, including state Sen.Bobby Harshbarger, who manages his family’s independent pharmacy.
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