March 16, 2026

Tennessee Senate
Finance, Ways and Means Committee
Cordell Hull State Office Building
425 Representative John Lewis Way North
Nashville, Tennessee 37243

Dear Senator,

On March 17, 2026, the Finance, Ways and Means Committee will hold a hearing on SB 2040.  On behalf of the 5,441 members and supporters of the Council for Citizens Against Government Waste (CCAGW) in Tennessee, I urge you to oppose SB 2040, which would ban any pharmacy that has an affiliation with a pharmacy benefit manager (PBM) from doing business in the state.

PBMs save money for patients by negotiating lower prices on behalf of large groups.  Today, PBMs administer plans for more than 289 million Americans nationwide.  PBMs 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, 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 government, associations, and other organizations that provide health insurance to their employees or members.

SB 2040 would close more than 125 brick and mortar retail pharmacies across the state, eliminating cost-saving mail order and specialty pharmacy options for employers.  Because many independent pharmacies lack the logistical ability or expertise to handle the storage and transport requirements that some specialty medications require, this will put patients who rely on specialty pharmacies for the treatment of complex and serious conditions at severe risk of not being able to access their medications.  These government-mandated pharmacy closures would also put pharmacists and thousands of other people out of work, push providers out of the state, and put Tennessee business owners at a competitive disadvantage by restricting the benefits they would be able to offer their employees.

For the above reasons, I urge you to oppose SB 2040 and protect Tennesseans from its destructive impact on pharmacy access and prescription drug costs throughout the Volunteer State.

Sincerely,
Tom Schatz
President, CCAGW