What Employers Should Watch For In TN’s PBM Reform Bill:

A Tennessee Senate bill targeting pharmacy benefit managers (PBMs) is quietly becoming one of the more important healthcare policy conversations of 2026.

At its core, the legislation asks a straightforward question: should employers and members be able to see exactly how their pharmacy dollars are being spent, and by whom?

What the Bill Is Actually About

The Tennessee PBM reform bill takes aim at three areas of PBM practice that have long operated with little scrutiny.

1. Spread Pricing

Spread pricing is when a PBM charges a health plan more for a drug than it pays the pharmacy, keeping the difference. The plan never sees it. The member never knows. Multiple states have moved to restrict or ban the practice, and Tennessee is the latest to address it legislatively.

2. How Rebates Move Through the Supply Chain

Drug manufacturers pay rebates to PBMs based on how drugs are placed on a formulary. Whether those rebates flow back to the employer and members, or get absorbed somewhere along the way, is a question this bill puts directly on the table.

3. Independent Pharmacy Reimbursement

When reimbursement rates are set below a pharmacy's cost to dispense, closures follow. In rural communities where a single local pharmacy serves an entire population, low reimbursement is not just a business problem. It is a patient access problem.

Not a Simple Fix

Reform is rarely clean.

Supporters see this bill as a necessary correction to practices that have cost employers and members more than they realize.

Opponents argue that some PBM tools, however opaque, do help manage costs, and removing them without a replacement strategy could create new problems.

The debate reflects how deeply entangled financial incentives have become inside pharmacy benefits.

What Employers Should Watch For

As this legislation takes shape, there are a few things worth keeping an eye on.

• Whether spread pricing restrictions pass and how they are enforced. If spread pricing is restricted in Tennessee, expect similar bills to follow in other states. Employers should know whether their current PBM contract allows spread pricing at all.

• 
  

• Where rebates are going. The bill shines a light on rebate flow. Employers should be asking whether they receive 100% of rebates earned on their plan's drug spend, and whether that is spelled out in their contract.

  
  

• How their PBM responds. PBMs opposed to reform often argue that restrictions raise costs. If your PBM is making that argument loudly, it is worth asking why Full Disclosure threatens their model.

  
  

• Independent pharmacy access in their member population. If members depend on local or rural pharmacies, reimbursement policy directly affects access to medications. Employers with geographically dispersed workforces should pay particular attention here.

• 
  

Full Disclosure Is Not a Feature. It Is the Standard.

At DisclosedRx, we operate as The Fiduciary and The Fully Disclosed PBM®.

Every rebate passes through to the client. Every drug price reflects what we pay, nothing more.

One admin fee. No spread. No shell games. It is all in the contract.

The Tennessee Senate bill is a signal the broader market is moving toward what we have been doing since day one.

Employers do not need to wait for legislation to demand better.