The Bipartisan Push to Split PBMs From Pharmacies — and Why CVS Has the Most to Lose

Republican governors have signed the first state bans, a Democrat–Republican Senate team wants to take the idea national, and CVS Health is fighting back in court.

In an era when Republicans and Democrats agree on very little, one health care target has drawn fire from both sides of the aisle: the pharmacy benefit manager, or PBM. Lawmakers from both parties are now going beyond regulating what PBMs charge and are trying to change who is allowed to own them. Two states have enacted laws barring companies from running a PBM and a pharmacy at the same time, and a bipartisan bill in Congress would do the same nationwide.

No company is more exposed to that idea than CVS Health, which owns one of the country's largest PBMs (CVS Caremark), a major health insurer (Aetna) and thousands of retail pharmacies.

What PBMs do — and why ownership matters

PBMs sit between drug manufacturers, health plans and pharmacies. They negotiate rebates, build formularies, set the networks of pharmacies a plan's members can use, and decide how much those pharmacies get paid. The three largest — CVS Caremark, Cigna's Express Scripts and UnitedHealth's Optum Rx — process the large majority of U.S. prescriptions.

Each of the big three also owns pharmacies, from mail-order and specialty operations to, in CVS's case, a national retail chain. Critics argue that this creates a built-in conflict of interest: the company that decides how much competing pharmacies are paid also runs a pharmacy that competes with them. Independent pharmacists say that structure lets PBMs steer patients to their own stores and squeeze out local competitors. The PBMs reject that charge, saying the conflict-of-interest allegations are unfounded and that they reimburse unaffiliated pharmacies at levels similar to or higher than their own.

Arkansas goes first

In April 2025, Arkansas Gov. Sarah Huckabee Sanders, a Republican, signed HB 1150 — now Act 624 — making Arkansas the first state to ban PBMs from owning pharmacies. The law directs the state Board of Pharmacy to stop issuing or renewing permits for pharmacies owned by a PBM or its affiliates, and was set to take effect January 1, 2026.

It never did. CVS, Express Scripts, Optum and the PBM trade group PCMA sued, and on July 28, 2025, U.S. District Judge Brian Miller issued a preliminary injunction. He found the law likely violates the Constitution's Commerce Clause by favoring in-state businesses over out-of-state companies, and that it is likely preempted by TRICARE, the federal health program for military families. Before the ruling, CVS said the law would force it to close 23 Arkansas stores.

Arkansas appealed to the Eighth Circuit, which heard arguments in September 2026. As of this writing, the appeals court has not ruled, and Act 624 remains on hold.

Tennessee writes the "CVS Bill"

Tennessee lawmakers studied Arkansas's legal troubles and wrote a narrower law. On May 22, 2026, Gov. Bill Lee, also a Republican, signed the Freedom, Access and Integrity in Registered Pharmacy (FAIR Rx) Act, making Tennessee the second state to bar this kind of ownership.

The bill drew broad support in both parties, passing the House 86–7 and the Senate 24–9. Rather than banning every PBM-owned pharmacy, it bars any single company from holding a 5% or greater stake in a pharmacy, a health insurer and a PBM all at once. The rule begins July 1, 2028, and affected companies have until December 31, 2028 to sell (with one possible six-month extension). The law also includes language stating that it regulates only pharmacy licensing and ownership, an attempt to avoid the federal preemption arguments that sank Arkansas's law in district court.

Because CVS is the company that combines all three businesses, critics quickly nicknamed the measure the "CVS Bill." CVS filed a federal lawsuit within hours of the signing, arguing the act protects local pharmacies from out-of-state competition. The company says the law would force it to close more than 100 Tennessee locations, along with 25 MinuteClinics, and would put more than 2,000 jobs at risk. Express Scripts and PCMA filed their own suits in June; PCMA called the law a "paradigm of unconstitutional economic protectionism."

Tennessee's pharmacists see it differently. Anthony Pudlo, CEO of the Tennessee Pharmacists Association, called the signing a "historic step forward for patients and pharmacists." The National Community Pharmacists Association and the National Association of Chain Drug Stores also backed the law.

Washington: Warren and Hawley team up

At the federal level, the push is led by an unlikely pair: Sen. Elizabeth Warren (D-Mass.) and Sen. Josh Hawley (R-Mo.). Their Patients Before Monopolies (PBM) Act was first introduced in December 2024 and died in committee at the end of that Congress. In May 2026, they reintroduced it, joined by Sens. John Fetterman (D-Pa.) and Roger Marshall (R-Kan.) and by Reps. Diana Harshbarger (R-Tenn.) and Jake Auchincloss (D-Mass.) in the House.

What the Patients Before Monopolies Act would do

Bar any parent company of a PBM or a health insurer from owning a pharmacy business.

Require companies in violation to divest their pharmacies within one year of enactment (the 2024 version allowed three years).

Let the FTC, HHS, the Justice Department's Antitrust Division and state attorneys general enforce divestiture.

"You can't lower healthcare costs without tackling corporate greed." — Sen. Elizabeth Warren (D-Mass.)

State law enforcement has also crossed party lines: in April 2025, a bipartisan coalition of 39 state and territorial attorneys general urged congressional leaders to ban PBMs from owning or operating pharmacies.

Why CVS is uniquely exposed

All three big PBMs own pharmacies, but CVS's footprint is different in kind. Express Scripts and Optum Rx are concentrated in mail-order and specialty pharmacy. CVS owns a national chain of storefront pharmacies, many with MinuteClinics attached, and also owns Aetna. That combination makes CVS the clearest target of Tennessee's three-way ownership test, and its lawsuit there argues it is the only company in the state with both a PBM and retail pharmacies.

If the federal bill passed in its current form, CVS would face a choice that would reshape the company: sell its pharmacy business, or sell both Caremark and Aetna. Either path would unwind the vertically integrated model CVS has spent nearly two decades building, beginning with its Caremark merger in 2007 and its Aetna acquisition in 2018.

The industry's case

PBMs and their allies argue that these laws would hurt patients, not help them. Their main points:

Access: Closing PBM-owned pharmacies could leave patients, including rural residents and military families who rely on mail-order service, with fewer options. Express Scripts says more than 180,000 Tennesseans use its pharmacies, and CVS says it serves more than 1.5 million Tennessee pharmacy patients.
Jobs: Forced closures would eliminate pharmacy and clinic jobs in the affected states.
Constitutionality: The companies argue the laws illegally discriminate against out-of-state businesses, and a federal judge has already agreed, at least preliminarily, in Arkansas.
Better alternatives: The Arkansas court noted the state already regulates PBM reimbursement and business practices. Opponents say transparency rules and payment reforms, such as the Medicare Part D PBM changes in the Consolidated Appropriations Act of 2026, target the problem without breaking up companies.

Supporters reply that rules on specific PBM practices have been tried for years without stopping the decline of independent pharmacies, and that only structural separation removes the conflict of interest itself.

What to watch

The momentum is real but not unlimited. In 2026, similar proposals failed to advance in Indiana, New Jersey and Texas, and bills in Arizona, New York and Vermont stalled. Louisiana lawmakers shelved an ownership ban in favor of a weaker transparency measure.

Three things will decide what happens next:

The Eighth Circuit's ruling on Arkansas. A decision upholding the injunction would discourage other states. A reversal would likely bring a wave of copycat bills in 2027.
The Tennessee lawsuits. With enforcement not set to begin until mid-2028, these cases have time to work through the courts — possibly to the Supreme Court.
Congress. The Warren–Hawley bill has unusually broad bipartisan support, but it still faces heavy industry lobbying and an uncertain path to a floor vote.

For now, CVS's pharmacies in Arkansas and Tennessee remain open. But the fact that Republican governors, a progressive Democrat and a populist Republican are all pursuing the same idea suggests the question of who should own the pharmacy counter will not go away.