Nashville, Tennessee — A proposed state law meant to rein in pharmacy benefit managers could have an unintended consequence that alarms long-term care operators across Tennessee: the closure of two Omnicare pharmacies that serve nearly 18,000 nursing home and assisted living residents.
CVS Health, which owns Omnicare, is pushing back hard against Senate Bill 2040, known as the FAIR Rx Act. The legislation targets the relationship between pharmacy benefit managers and the pharmacies they own, arguing that the arrangement creates conflicts of interest that drive up costs and limit patient choice. CVS says the bill would do the opposite.
If SB 2040 passes, CVS warns, it would be forced to close its Omnicare long-term care pharmacies in Nashville and Cleveland, Tennessee — facilities that currently supply medications to residents at 87 senior living and care settings across the state. That disruption wouldn’t just affect a few facilities. It would leave roughly 18,000 vulnerable residents scrambling to find a new pharmacy provider, often with little notice.
Jobs and Care Access on the Line
The stakes go beyond residents. CVS says the closures would put approximately 2,000 employees out of work in Tennessee. The company also warned that more than 25 MinuteClinic locations would shut down under the bill, eliminating convenient access to acute care and leaving more than 500 patients in need of a new primary care provider.
“Senate Bill 2040 would devastate pharmacy care access and affordability in Tennessee,” the company said in a statement.
Testifying before the state Senate’s Health and Welfare Committee last week, CVS said the legislation contains no language that actually addresses the spread pricing, reimbursement rates, or formulary practices that critics of pharmacy benefit managers typically target. The company’s position: the bill’s stated goals and its real-world effects point in completely different directions.
A Debate Playing Out in Statehouses
The Tennessee fight reflects a broader national tension between lawmakers trying to break up PBM consolidation and large pharmacy chains defending their integrated models. SB 2040 argues that letting a PBM both set reimbursement rates and own the pharmacies receiving those payments is — in its own words — “the fox guarding the henhouse.”
CVS counters that its model actually lowers costs and improves access, especially for long-term care residents who depend on specialized pharmacies like Omnicare. These pharmacies operate very differently from retail locations — they deliver medications on tight schedules, manage complex drug regimens, and coordinate directly with nursing home staff around the clock.
The concern that state legislation could inadvertently destabilize pharmacy services in nursing homes isn’t new. It’s the kind of regulatory pressure facing operators that often plays out in statehouses far from the facilities it ultimately affects.
Whether Tennessee lawmakers move forward with the FAIR Rx Act — and whether CVS follows through on its warnings — remains to be seen. But for administrators running facilities that rely on Omnicare, the message is hard to ignore: state pharmacy policy debates can land directly at a resident’s bedside.
