Bipartisan Warren-Hawley Bill Threatens CVS Pharmacy Closures in Tennessee

Context The Patients Before Monopolies Act would bar companies that own a pharmacy benefit manager (PBM) or an insurer from also owning a retail pharmacy. CVS Health owns Caremark, one of the three largest PBMs in the United States, and operates thousands of drugstores nationwide. Lawmakers argue that such vertical integration lets middlemen inflate drug prices and squeeze independent pharmacies.

Context A similar bill passed the Tennessee Legislature and awaits Governor Bill Lee’s signature. In December 2024 Warren and Hawley introduced a version that stalled, but the current proposal shortens the divestment period from three years to one year. The bill also outlines enforcement steps for the Federal Trade Commission, Health and Human Services Department, Justice Department and state attorneys general.

Context PBMs manage prescription drug benefits for insurers, deciding which medications are covered and what patients pay at the counter. The legislation has attracted cosponsors from both parties, including Senators John Fetterman and Roger Marshall, and Representatives Diana Harshbarger and Jake Auchincloss.

Key Facts CVS Health said it would close all 134 of its Tennessee pharmacies if the legislation is enacted. Senator Warren said lowering health care costs requires tackling corporate greed and reining in health care middlemen who raise drug prices and hurt small pharmacies. A CVS spokesperson noted that any closures would not happen immediately because the law would not take effect until July 2028.

What It Means If Congress enacts the bill, CVS would have one year to divest its pharmacy business or risk losing its Tennessee locations. The company has signaled it may sue to block the law and has prepared a legal challenge. Small pharmacy groups welcome the prospect of reduced competition from large chains, while industry groups warn the change could increase complexity for patients navigating insurance and prescriptions.

What It Means The legislation would also affect other integrated firms such as UnitedHealth’s Optum Rx and Cigna’s Express Scripts, potentially reshaping the national pharmacy benefit market. Supporters claim the measure could lower out‑of‑pocket drug costs by reducing PBM‑driven price spreads, though critics say it might disrupt care coordination for patients with chronic conditions. Some analysts estimate that a forced divestment could shift billions of dollars in prescription revenue away from integrated players.

What It Means Such a shift could influence premium calculations for employer‑sponsored plans and Medicare Part D offerings.

What to watch next Watch for the bill’s progress in Senate committees, any companion action in the House, and Tennessee Governor Bill Lee’s decision on the similar state legislation that awaits his signature. Monitor CVS’s potential litigation and any amendments that could alter the divestment timeline.

What to watch next Also track the response of state attorneys general, who in 2025 urged Congress to pass PBM reform, and watch whether Arkansas’s recent law limiting PBM‑owned pharmacies influences other states. Finally, observe how insurers adjust their formularies and pricing strategies if the divestment requirement takes effect.