AN ACT to amend Tennessee Code Annotated, Title 53; Title 56; Title 63 and Title 71, relative to pharmacy benefits managers.
SB2574 would create a new Tennessee law regulating pharmacy benefits managers (PBMs) and their interactions with prescribers, pharmacists, and health plans. The bill states that medical decision-making belongs to healthcare prescribers and prohibits PBMs from modifying, restricting, or denying medications ordered by a prescriber except in limited prior-authorization or formulary-exception situations. It also bars PBMs from imposing requirements that delay prescribing based solely on clinical judgment, from using contractual or formulary structures to circumvent these protections, and from requiring pharmacists to obtain additional PBM approval before dispensing a valid prescription.
The bill also establishes timelines for PBM responses to prior authorization or formulary exception requests: 24 hours for urgent circumstances and 72 hours for non-urgent requests, with silence treated as approval. It requires PBMs to avoid retaliatory actions against pharmacies or prescribers, authorizes state agencies to request contract, rebate, and fee information, and requires annual reporting on prior authorization performance and rebate categories. Violations would be treated as unfair trade practices, subject to civil penalties and private lawsuits for injunctive relief and damages. The bill expressly excludes ERISA-governed plans from its direct application, while also amending existing law to clarify ERISA-related coverage under the affected part of the code.
SB2574 would add a new section to Tennessee insurance law governing PBM conduct, and it would amend related statutes in Titles 56 and 56-8 to align enforcement and ERISA coverage provisions. It would create new statutory duties for PBMs, new rights for pharmacies and prescribers, and new enforcement tools for the Department of Commerce and Insurance and the Department of Health, including rulemaking authority, civil penalties, and a private right of action. The bill would also make violations of the new PBM section an unfair trade practice under Tennessee law. Its practical effect would be to limit PBM control over prescription decisions and increase transparency around formulary design, prior authorization, rebates, and fees, while leaving ERISA-governed plans outside the section’s direct reach.
No committee transcripts or vote records were provided, so there is no documented debate or recorded legislative sentiment in the supplied materials. Based on the bill text alone, the measure appears to be framed as a patient-safety and transparency reform, with the sponsor emphasizing prescriber authority and limits on non-clinical interference by PBMs. The absence of votes or hearing testimony means support or opposition cannot be reliably characterized from the record provided.
The main points of contention likely concern the bill’s restrictions on PBM utilization management, prior authorization, formulary design, and rebate-driven contracting, because these provisions would significantly limit PBM discretion and could affect health plan cost controls. PBMs and insurers may object that the bill interferes with plan administration, increases costs, and creates operational burdens, while pharmacies and prescribers would likely support the protections against delays, denials, and retaliation. Another likely issue is the ERISA language: the bill excludes ERISA-governed plans from the new section, but also amends existing law to address ERISA coverage in related provisions, which could raise questions about scope and preemption.