A proposal in the Tennessee legislature could force CVS Health to sever a core piece of its business model or exit the state entirely. The bill would require companies to choose between operating retail pharmacies and running pharmacy benefit manager (PBM) services within the state.
The legislation targets the vertical integration model that has become central to major pharmacy chains like CVS Health. CVS operates both a vast network of retail pharmacies and Caremark, one of the largest PBMs in the country that negotiates drug prices and manages prescription benefits for health plans.