Testimony Before the Tennessee Senate Committee on Health and Welfare

Testimony Before the Committee on Health and Welfare

Tennessee Senate

February 25, 2026

Chair Crowe, Vice Chair Haile, and Vice Chair Reeves,

Thank you for the opportunity to discuss SB 2040. My name is Eric Maus, and I am the Director of Health and Science Policy for the Council for Citizens Against Government Waste (CCAGW), and I am here to urge you to oppose SB 2040. This legislation would force more than 125 businesses in Tennessee to shut down and make prescription medication more expensive and less accessible for patients in the Volunteer state, especially seniors, veterans, and patients who rely specialty drugs.

CCAGW is a private, nonpartisan, nonprofit organization representing more than one million members and supporters nationwide, including 5,441in Tennessee. Founded in 1984, CCAGW was established to continue the work of the President’s Private Sector Survey on Cost Control, also known as the Grace Commission, to eliminate waste, fraud, abuse, and mismanagement in government.

Pharmacy Benefit Managers (PBMs) save money for patients by negotiating lower prices on behalf of patients who receive health insurance coverage from their employers, labor unions, and federal and state government health care plans which rely on PBMs to administer their prescription drug plans. Today, PBMs administer plans for more than 289 million Americans nationwide and save payers and patients an average of $1,154 per person per year. PBMs use a variety of tools like rebates, pharmacy networks, drug utilization reviews, formularies, specialty pharmacies, mail-order pharmacies, and audits to drive down drug costs, improve quality increase patient medication adherence, and prevent fraud. SB 2040 would substantially diminish or completely erase these savings for Tennesseans.

SB 2040 goes beyond PBM transparency reforms enacted by legislators in other states by prohibiting PBMs from owning or operating pharmacies in Tennessee. This bill would not only increase government control in healthcare, but also have several negative economic effects. According to a February 3, 2026, WSMV News article, SB 2040 would force 134 CVS locations in the state to close, but CVS is not the only pharmacy chain that would be forced to shutter its business in the state. These closures will cause the loss of thousands of jobs in the state and put business owners at a competitive disadvantage by limiting the benefits they are able to offer their employees.

SB 2040 would also significantly decrease access for patients, particularly in rural areas that are typically served by few local pharmacies and where residents often utilize mail-order pharmacies to receive their medications. If this bill is enacted, your constituents in these regions will have fewer options and will have to travel further to access the medicine they need.

Forcing chain pharmacies to close will also undermine one of President Donald Trump’s Make America Healthy Again initiatives. The TrumpRx platform, which he announced on February 6, 2026, allows patients to find discounted medications in one place. The majority of discounted prescriptions on TrumpRx are filled by chain pharmacies that own or operate a PBM. If these pharmacies are prohibited from operating in the state, Tennesseans will not be able to access discounted medication and President Trump’s plan will not be as effective.

There are also serious legal questions raised by SB 2040 under the Commerce Clause and the legislation’s impact on TRICARE, which covers members of the armed services residing in the state. In 2025, lawmakers in Arkansas passed and the governor signed into law similar legislation to 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 SB 2040 is enacted, it will likely face the same legal and constitutional challenges, which would be a waste of the taxpayer’s money.

Enactment of SB 2040 will lead to thousands of lost jobs in Tennessee, higher healthcare costs, and decreased patient access to vital medications by forcing more than 125 pharmacies to close their business in the state. Further, this legislation would undermine President Trump’s goal of delivering discounted medicines to the patients who need them and would likely be struck down by the courts. For these reasons, I urge you to oppose SB 2040. Thank you for your consideration of CCAGW’s views on this issue, and I am happy to respond to any questions you may have.