Tennessee Senate Bill SB2577

Tennessee 2025-2026 Regular Session

• Introduced: 2/2/26

Caption

AN ACT to amend Tennessee Code Annotated, Title 4, Chapter 3; Title 8, Chapter 27; Title 56 and Title 71, relative to pharmacy benefits managers.

Summary

SB2577 would restrict the State of Tennessee and certain state-related entities from contracting with a pharmacy benefits manager (PBM) that has been disciplined by the Department of Finance and Administration or the Department of Commerce and Insurance. The bill applies this prohibition to the bureau of TennCare, to committees covered under Title 8, Chapter 27, and to any department, agency, or other state entity entering into a PBM service contract. The measure is prospective only: it would take effect on July 1, 2026, and would apply to contracts entered into, amended, or renewed on or after that date. In practical terms, the bill creates a state contracting eligibility standard for PBMs based on prior regulatory discipline, rather than directly changing PBM licensing or market conduct rules.

Impact

The bill would amend Tennessee Code Annotated in three areas to add a contracting restriction tied to regulatory discipline. It would affect TennCare, state committees, and other state departments or agencies by limiting their ability to hire or retain a PBM that has been disciplined by either the Department of Finance and Administration or the Department of Commerce and Insurance. The bill does not impose new penalties on PBMs themselves, but it could reduce the pool of eligible vendors for state pharmacy benefit contracts and influence how PBMs maintain compliance with state regulators.

Sentiment

There is no recorded committee transcript or vote history in the provided materials, so no direct public debate or formal sentiment can be identified from the record here. Based on the bill text alone, the measure appears framed as a consumer-protection and procurement-integrity provision, aimed at ensuring the state does business only with PBMs that have not been subject to state discipline.

Contention

The main point of potential contention is the breadth of the contracting ban: any prior discipline by either named state department would make a PBM ineligible for state contracts, which could be viewed as a strong exclusionary standard. Stakeholders likely to scrutinize the bill include PBMs, state procurement officials, TennCare administrators, and insurers or vendors that rely on PBM services, especially if the term "disciplined" encompasses a wide range of regulatory actions. Another possible issue is implementation, including how far back discipline is considered and how the rule would apply when contracts are amended or renewed after the effective date.