CVS opens small pharmacy stores
This year, the pharmacy chain plans to open about 12 stores, about half the size of its previous locations.
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CVS announced it would close all 134 of its pharmacies in Tennessee if the state enacts legislation that targets the pharmacy giant’s business model.
A Tennessee state senator has proposed a bill that would prohibit corporations from owning retail pharmacies and pharmacy benefit managers. CVS employs more than 2,000 people at 134 retail pharmacies in Tennessee and also owns CVS Caremark, a pharmacy benefits manager.
Pharmacy benefit managers (PBMs) are drawing bipartisan scrutiny across the country as the Trump administration, Congress and states look for ways to rein in spending on prescription drugs. PBMs act as intermediaries between pharmaceutical companies, health insurance companies, and retail pharmacies. Health insurance companies and employers that provide health insurance benefits use PBMs to negotiate prices and manage prescription drugs.
Tennessee Republican Sen. Bobby Hershberger, the sponsor of a bill that would ban joint ownership of PBMs and pharmacies, said the bill addresses “a structural conflict in the pharmacy market.”
“This law separates pharmacy benefit managers from owning and managing the pharmacies that provide reimbursement and patient guidance,” Hershberger, the pharmacist, said in a statement. “It does not eliminate PBMs, close pharmacies, or reduce access to medicines.”
Hershberger said the bill does not require pharmacies to close. PBMs and companies that own pharmacies may choose to sell parts of their businesses to comply with the law, he said.
Hershberger’s bill recently passed the Tennessee Senate Health Committee and the state House Insurance Subcommittee on March 4th. The bill must pass committees in both chambers before going to the state Senate and House for a full vote.
CVS spokeswoman Amy Thibault said the company is committed to working with policymakers, but said the Tennessee bill does not address common issues in the PBM industry, such as spread pricing, reimbursement and the list of drugs covered by health plans.
“The only thing this law does is force the closure of 134 CVS pharmacies,” Thibault said. “It’s bad for the state of Tennessee, it’s bad for the more than 1.5 million patients we care for, and it’s bad for the more than 2,000 colleagues who will lose their good-paying jobs.”
In addition to closing pharmacies, CVS announced it will also close 25 in-store MinuteClinic locations that provide primary care medical services to people.
Arkansas and Congress take aim at PBMs
In 2025, Arkansas passed a similar bill banning companies that own PBMs from operating retail pharmacies. CVS filed a lawsuit seeking to block the bill, and a federal judge issued an order halting enforcement of the law. The pharmacy giant continues to operate more than 20 pharmacies in the state.
In December 2024, Rep. Diana Hershberger (R-Tenn.) and Rep. Jake Auchincloss (D-Mass.) introduced legislation that would ban joint ownership of PBMs and pharmacies. The bill did not advance out of committee.
In February, Congress passed a bill ending the partial shutdown of the federal government that also included provisions addressing PBM transparency and business practices.
The law prohibited PBMs from collecting compensation based on drug prices, rebates, or discounts under Medicare Part D, according to KFF, a health policy nonprofit. Instead, PBMs will only be able to collect service fees starting in 2028.
PBMs that serve Medicare drug plans must also meet several transparency requirements. KFF said it must disclose drug prices and revenues, partner pharmacies, and contracts with drug companies.
PBMs that manage employer pharmacy benefits are also required to share 100% of the rebates they request from drug companies with employers. PBMs are also required to report details about prescription drug use and expenditures to most employer health plans.
