Flak Over Nashville: How Tennessee’s FairRx Act Exposed the PBM Playbook
CVS Health’s aggressive push against landmark legislation—texts to patients, dark-money ads, and shell-corporation attacks on sitting senators—may have backfired spectacularly, uniting pharmacists, regulators, and lawmakers in a coalition that could reshape drug-benefit policy in all 50 states.
By the Dispense Times Editorial Staff | April 2026
In nearly three decades of reporting on pharmacy benefit managers, this publication has rarely witnessed a legislative battle as revealing—or as consequential—as the one unfolding right now in Nashville. The Tennessee Freedom, Access and Integrity in Registered Pharmacy Act, known universally as the FairRx Act (SB 2040 / HB 1959), has cleared subcommittee after subcommittee and is tracking toward a floor vote with the backing of the state’s most senior Republican leaders. But the story behind the story is the extraordinary campaign that CVS Health has mounted to stop it—and how that campaign appears to have done far more to advance the bill than to kill it.
What the FairRx Act Actually Does
The bill is, at its core, elegantly simple. As its lead Senate sponsor, Sen. Bobby Harshbarger (R-Kingsport)—himself an independent pharmacist—puts it: “This bill does one thing. It says the one that sets the reimbursement rules cannot also own the pharmacy being reimbursed. That’s it.”
CVS Health is the only company in Tennessee that owns all three pieces of the vertically integrated healthcare empire: a pharmacy benefit manager (CVS Caremark), brick-and-mortar retail pharmacies, and a major insurer (Aetna). That triple ownership gives Caremark the ability to set reimbursement rules for thousands of pharmacies across the state while simultaneously steering volume and margin to its own stores. The FairRx Act would require CVS to choose: keep Caremark in Tennessee or keep its retail pharmacies. Bill sponsors are clear that divestiture, not closure, is the intended outcome.
The legislation is co-sponsored by House Speaker Cameron Sexton and Lt. Gov. Randy McNally—two of the most powerful Republicans in state government—signaling that this is not a fringe effort. McNally, Sexton, and several Senate co-sponsors are pharmacists by trade. The bill has also moved with bipartisan support at every committee level.
The Audit That Changed Everything
The legislative debate did not happen in a vacuum. In February 2026, the Tennessee Department of Commerce and Insurance (TDCI) released the results of its first-ever audit of CVS Caremark’s operations for calendar year 2024. The findings were damning.
The audit identified 11 formal findings and 5 additional observations documenting what regulators described as extensive violations across reimbursement practices, spread pricing, transparency failures, and systemic noncompliance with Tennessee law. Among the most striking findings: Caremark reimbursed its own CVS pharmacies at a rate 16,510 percent higher than non-affiliated pharmacies for one chronic kidney disease medication, and roughly 100 times higher for an erectile dysfunction drug. Spread pricing—banned in Tennessee since 2021—was found to be ongoing. Rural pharmacies were paid below the legally required dispensing fee in more than 21 percent of tested claims.
“Pharmacy Benefit Managers such as CVS Caremark are profiting at the expense of Tennessee patients, pharmacies, employers and taxpayers,” said Tennessee Pharmacists Association (TPA) CEO Trey Pudlo following the audit’s release. “These findings reveal systemic, harmful, and unlawful practices that jeopardize public health, undermine patient access to their pharmacy of choice, and threaten the survival of non-PBM-affiliated pharmacies across our state.”
It is worth noting that Express Scripts (owned by Cigna) and Optum (owned by UnitedHealth) produced similar findings in prior TDCI audits—and those three companies collectively control roughly 80 percent of the U.S. PBM market. The FairRx Act targets all three, though CVS is the only one operating both a PBM and physical pharmacy locations in the state.
“When you start taking on flak, you know you’re over the target.” — Sen. Rusty Crowe (R-Johnson City)
CVS Goes on the Offensive
Faced with legislation backed by the state’s most powerful lawmakers and underpinned by a damaging regulatory audit, CVS Health launched what can only be described as an all-fronts influence campaign. The strategy combined television advertising, direct-to-patient text messaging, in-person lobbying at the Capitol, and—most controversially—the apparent funding of a dark-money political action committee to attack senators who supported the bill.
On the advertising front, CVS poured an estimated $1.3 million into television and digital ads across Tennessee. The messaging was consistent and stark: passage of SB 2040 would force the company to close all 134 of its Tennessee retail locations, shutter 25 MinuteClinic sites, eliminate more than 2,000 jobs, and cut off 1.5 million patients from their pharmacy. CVS CEO David Joyner sent a personal letter to every member of the Tennessee General Assembly, the governor, and both legislative leaders making the same argument: that because Caremark operates as a nationwide network, it is simply not possible to exit the PBM business in one state, leaving pharmacy closure as the only path to compliance.
Lawmakers on both sides of the aisle rejected that framing. “They’re framing divestment as closure,” said CVS customer Candice Fifer, who received one of the company’s text messages and researched the bill herself. “They’re trying to use the consumer to try and persuade the legislators.” Independent pharmacist Robbie Eskridge was equally direct: “It sounds like they’re being put in a hard spot, when actually they would choose to close every store in order to keep their PBM business because it is so lucrative.”
For context: when Arkansas passed nearly identical legislation in 2025, CVS made the same closure warnings about its 23 stores in that state—then filed a federal lawsuit to block the law rather than close a single pharmacy. That case is ongoing. The pattern was not lost on Tennessee legislators.
Texts to Patients: A Line the AG Would Not Allow CVS to Cross
Perhaps no element of CVS’s campaign generated more blowback than its use of pharmacy text-message systems to send political advocacy messages directly to patients. CVS sent texts to customers across Tennessee asking them to contact their legislators and vote against SB 2040, with warnings that their pharmacy could close. Some constituents reported receiving these political messages embedded within the same text thread as their prescription-ready notifications—a juxtaposition that struck many as a profound breach of trust.
Tennessee Attorney General Jonathan Skrmetti moved quickly. In a March 27 letter to CVS CEO David Joyner, Skrmetti pointed out that CVS had conducted an identical text campaign in Louisiana over similar legislation, which led to an AG lawsuit there and triggered a U.S. House Oversight Committee investigation that remains ongoing. “Nevertheless, CVS chose to do the same thing in Tennessee when similar legislation was introduced,” Skrmetti wrote.
The AG accused CVS of exploiting patients’ personal health information to target them with political messages they never consented to receive, stating that “when Tennesseans choose a pharmacy, they place significant trust in that pharmacy to safeguard their most sensitive health information.” Skrmetti’s letter closed with a direct warning: stop sending these messages, or his office would consider “all available enforcement options.”
State Representative Aftyn Behn (D-Nashville) simultaneously sent a formal letter to the AG requesting a full investigation of CVS under the Tennessee Consumer Protection Act and the Tennessee Trade Practices Act, citing potential antitrust violations and consumer deception. She also referenced a $45 million settlement CVS reached with Louisiana over PBM misconduct—including, notably, contact with patients during that state’s legislative debates.
Dark Money, Shell Corporations, and Attacks on Sitting Senators
The most explosive chapter in the CVS playbook involves a dark-money political group called “Shaping Health Initiatives for Tomorrow” (SHIFT), which spent an estimated $500,000 on television advertisements targeting Republican senators who supported SB 2040. The ads ran in the Nashville, Knoxville, Jackson, and Tri-Cities media markets and deployed a clever wedge strategy: they praised President Trump’s prescription drug pricing initiative (dubbed “TrumpRx”) and then accused the targeted senators of being anti-Trump by supporting the PBM bill.
Three senators—Rusty Crowe (R-Johnson City), Adam Lowe, and Richard Briggs—were targeted with near-identical ads. All three are up for re-election. SHIFT is registered under a post office box in Oklahoma linked to other political organizations, with no identifiable company behind it. The group filed no paperwork with Tennessee election finance authorities despite spending roughly half a million dollars in the state.
Senate Republican Caucus Chair Ken Yager filed a formal ethics complaint with the Tennessee Registry of Election Finance (TREF), requesting that TREF investigate SHIFT and assess civil penalties for what he described as a complete failure to report its spending. Bill Young, Director of the state’s Bureau of Ethics and Campaign Finance Ethics Committee, told reporters that complaints about dark-money political spending are on the rise. Young indicated that the Registry Board may pursue an audit, an investigation, or refer the matter to the Tennessee Attorney General given the apparent complexity of untangling who is actually funding SHIFT.
Sen. Crowe himself was unbothered. A Vietnam veteran who chairs the Senate Health and Welfare Committee, Crowe told local news: “I learned a long time ago—when you start taking on flak, you know you’re over the target.” He then doubled down on his support for the bill. Sen. Harshbarger, who filed the original legislation, admitted he expected significant pushback from PBMs but said he never anticipated attacks of this magnitude on individual legislators.
The Coalition That Made It Work
What has perhaps surprised observers most is not CVS’s aggression but how effectively the pro-FairRx coalition has held together under it. The Tennessee Pharmacists Association has been the organizing spine of the legislative effort, touting the TDCI audit findings and providing technical expertise to lawmakers. TPA’s political action committee has directed roughly $225,000 to legislative allies since 2020. Beyond TPA, the coalition includes the state Insurance Commission (through the TDCI audit process), independent community pharmacy owners, bipartisan legislative support, and now—inadvertently—the Tennessee Attorney General’s office.
Contrast that with CVS’s situation: the company spent roughly $1.3 million on advertising alone, hired influencers and PR strategists, mobilized pharmacists in red scarves to attend hearings, coordinated a mass-texting campaign, and—allegedly—funneled money to a dark-money group to attack its legislative opponents. The result has been a string of committee victories for the bill, the alienation of the state AG, a formal ethics investigation, and multiple calls for antitrust scrutiny.
The Senate Finance, Ways and Means Committee approved the bill 9-2. The House Finance, Ways and Means Committee passed it unanimously. The bill heads to the Senate floor with the backing of the Lt. Governor and the House Speaker.
The Tennessee formula—audit data, pharmacist-legislators, a unified trade association, and a regulatory partner—is a replicable model for advocates in all 50 states.
The National Implications
For pharmacy advocates watching from other states, the Tennessee battle holds lessons that extend well beyond Nashville. The FairRx Act demonstrates that the PBM divestiture argument—long considered politically difficult—can win in a conservative state when it is built on a foundation of rigorous audit data, pharmacist-legislator champions, a unified trade association, and a regulator willing to do its job.
The TDCI audit framework, created by 2022 legislation that TPA championed, gave the current legislative fight its empirical credibility. Hard numbers—16,510 percent reimbursement differentials, spread pricing violations, rural dispensing fee failures—are far harder to dismiss than abstract arguments about conflict of interest. When CVS’s own CEO’s letters contradict findings sitting in an official state audit report, the rhetorical ground underneath the company’s closure warnings collapses.
Arkansas showed that CVS will sue rather than divest. Tennessee may show that when a coalition is broad and determined enough, the litigation risk becomes acceptable. The Tennessee Pharmacists Association, state pharmacy commissions, and pharmacy advocates in all 50 states would do well to study the formula being assembled in Nashville: commission the audit, find the pharmacist-legislators, build the coalition across party lines, and don’t flinch when the flak starts flying.
CVS Health, for its part, may have done more to advance PBM reform nationally than any advocacy group could have managed on its own. By overplaying its hand—weaponizing patient health data, funding mystery political operations through Oklahoma-registered P.O. boxes, and targeting decorated veterans with misleading political ads—the company has provided reformers in every state a cautionary tale and a roadmap in a single package.
What Comes Next
The FairRx Act faces a full Senate floor vote and final House action. CVS has additional legal and lobbying options, including the federal lawsuit strategy it employed in Arkansas. The TREF investigation into SHIFT is pending, with the Tennessee Registry Board’s next meeting scheduled for May 12. The AG’s warning to CVS remains on the table, as does Rep. Behn’s antitrust referral.
However this particular legislative session ends, the precedent being set in Tennessee is already reverberating. Multiple states are tracking SB 2040 closely. The audit methodology, the legislative architecture, and—perhaps most instructively—the evidence of what an aggressive PBM defense campaign actually looks like in practice: all of it is now part of the public record, available to reformers nationwide.
Sen. Crowe’s Vietnam-era axiom applies beyond the halls of the Tennessee State Capitol. The pharmacy community has been taking flak from vertically integrated PBMs for years. In Nashville, for the first time in a long time, the flak is flying in the other direction.
Sources & Further Reading
• Tennessee Pharmacists Association — TDCI Audit of CVS Caremark (tnpharm.org)
• WJHL / News Channel 11 — Ethics complaint filed over dark-money ads targeting Sen. Rusty Crowe
• The Tennessean — Opinion: Big PBMs and the FairRx Act (April 6, 2026)
• Kingsport Times News — PBM bill heads to floor vote in TN Senate
• Tennessee Lookout — CVS says bill will force closure of 134 pharmacies; Dark money group running $500k in TV ads
• WPLN / WKMS News — What to know about the flurry of CVS pharmacy ads in Tennessee
• Nashville Post — CVS spends $1.3M on anti-FAIR Rx Act ads; State audit reveals Caremark violated reimbursement practices
• WSMV — TN House finance committee unanimously moves forward FairRx Act; Tennessee AG warns CVS to stop sending political texts
• NewsChannel 5 / NewsChannel 9 — Tennessee AG: CVS texts on pharmacy bill could violate state law
• Tennessee Star — Tennessee PBM Bill Could Disrupt 26 Million Prescriptions
© 2026 Dispense Times. All rights reserved. Reproduction in whole or in part requires written permission.
Related reading: Explore more coverage in our Policy section and browse the latest analysis on Dispense Times.
