States Take Aim at Drug Price Gatekeepers

States across the U.S. are implementing new laws targeting pharmacy benefit managers (PBMs), which manage prescription drug coverage for health insurers, due to growing concerns over high medication costs. These PBMs, including major players like CVS, also often own pharmacies. As of June 27, 2026, legislative efforts have resulted in laws in at least a dozen states to regulate PBMs. These regulations include capping compensation, mandating minimum payments to pharmacists, and increasing transparency. A significant development is a Tennessee law, effective July 1, 2028, that will prohibit PBMs from operating retail pharmacies within the state. CVS Health Corp. has initiated legal action, filing a federal lawsuit to challenge this specific law, arguing it constitutes "naked protectionism."

These regulatory actions come as a significant portion of the U.S. population grapples with prescription affordability. A recent poll indicated that approximately six in 10 adults are concerned about their ability to afford medications, with many reporting that cost has led them to alter their prescribed dosages or not fill prescriptions altogether. In response to these state-level initiatives, PBMs and their allies have reportedly spent at least $24 million on advertising campaigns since early 2025 to influence public opinion. CVS alone allocated $4 million this year to oppose Tennessee's new law. The company has faced similar legal battles in other states, including Arkansas and Louisiana, where its laws were challenged or settled with fines, highlighting the intense conflict over PBM practices. Independent pharmacies, however, argue that these PBMs squeeze their reimbursement rates, jeopardizing their businesses and potentially limiting patient access to medications, particularly in rural areas.