Express Scripts sues Tennessee over PBM law

NASHVILLE — Express Scripts, Inc. and its affiliated pharmacies have filed a lawsuit against a new Tennessee law requiring pharmacy benefit managers (PBMs) to divest ownership in pharmacies — making it the second PBM to do so. The Cigna-owned company, which has contracts with a number of Northeast Tennessee pharmacies, argued in a complaint filed Friday in the U.S. District Court for the Middle District of Tennessee that the FAIR Rx Act is unconstitutional. The suit names the Tennessee Board of Pharmacy and state attorney general as defendants. "It will inflict enormous harm not only on Plaintiffs and their thousands of patients, partners, and employees in Tennessee, but also on their patients and partners beyond Tennessee," the complaint stated. Express Scripts argues that the law violates the U.S. commerce clause by burdening interstate commerce and is preempted by federal law. It additionally disputes that the act will force hundreds of pharmacies to close or relocate, including its affiliate Memphis facility, which reportedly shipped over 128,000 prescriptions to nearly 26,000 patients in Tennessee last year. "We're deeply troubled by this law's blatant prioritization of special interests and political agendas over the health of patients and a competitive marketplace," said Andrea Nelson, general counsel and corporate secretary of The Cigna Group, in a news release. "We owe it to our patients and colleagues across the state who are proud to call Tennessee home to do everything in our power to stop this unconstitutional law." Both the bill sponsor, state Sen. Bobby Harshbarger, R-Kingsport, and independent pharmacists have pushed back on the narrative that the law requires pharmacy shutdowns. Harshbarger has said the policy is meant to address the vertical integration model used by PBMs. The top three PBMs, including Express Scripts, controlled 80% of the national market as of 2021. CVS Pharmacy also challenged the act in court, just hours after the governor signed the bill into law. Harshbarger said he trusts the state to defend the new policy in court in response to that lawsuit. "I disagree with [CVS'] characterization of the law and its purpose, but I will not litigate the case in the press," Harshbarger said in an emailed statement May 22. "My focus has been, and remains, on ensuring that Tennessee patients have meaningful pharmacy access and choice, transparent prescription drug practices, and access to care in their communities." Harshbarger, the Tennessee Office of the Attorney General and the state Board of Pharmacy did not immediately provide a statement by press time regarding the new complaint.