PBM Reform, Privilege Tax, and Opioids: Pharmacy Advocacy Wins Big in 2019

May 3, 2019

On behalf of the TPA Board of Directors and TPA staff, it is with great enthusiasm that I share this exciting news with you. The 2019 Tennessee General Assembly adjourned yesterday, bringing an end to one of the most successful legislative sessions for TPA and pharmacy in several years. TPA brought an aggressive slate of legislative priorities in 2019 to support our members and pharmacy practice. Thanks to our many member advocates and association supporters, we were successful in achieving many of our top legislative priorities while solidifying our voice and amplifying our presence at the State Capitol in Nashville.

TPA greatly appreciates the support from our three pharmacist legislators, Speaker Pro Tempore Ferrell Haile, Senator Shane Reeves, and Lieutenant Governor Randy McNally, as well as our many pro-pharmacy state Senators and state Representatives, all of whom stood in support of pharmacists and fought for pharmacy priorities during the 2019 legislative session. Below is a summary of the most important pro-pharmacy and pro-patient legislative wins for TPA and our members in 2019.

Building upon TPA-supported legislation enacted in 2018 requiring all PBMs operating in Tennessee to obtain a license from the Tennessee Department of Commerce and Insurance, TPA worked with state legislators to successfully enact legislation in 2019, which brings about several important reforms to PBM practices in Tennessee. This legislation is a significant step in the right direction, and TPA will continue to work to achieve meaningful Pharmacy Benefits Manager (PBM) reform. With strong support from pharmacy champion legislators Caucus Chairman Cameron Sexton and Senator Shane Reeves, and support from pharmacists and State Senators Ferrell Haile and Lieutenant Governor Randy McNally, the Tennessee General Assembly enacted House Bill 786 and Senate Bill 650 (link to full text). This important pro-pharmacy law now heads to the desk of Governor Bill Lee to be signed into law and will become effective on July 1, 2019.

Specifically, this new law will provide enhanced contract and audit protections for pharmacies, a state ban on retroactive, non-transparent fees charged by PBMs, and added network and contracting protections for our pharmacies and pharmacists here in Tennessee. We still have some work to get done at the federal level to bring reform to PBM practices within Medicare and other federally-protected plans, but this Comprehensive PBM Reform law is a huge step forward for pharmacy in Tennessee.

Pharmacists will be EXEMPTED from paying the professional privilege tax beginning in 2020 (YES…you read that right)! For several years, TPA has actively advocated to exempt pharmacists from the list of professionals who are required to pay the professional privilege tax (PPT). I want to specifically commend and thank each one of you, as our members, for supporting your association even when you were required to pay the $400 annual tax. It is because of your ongoing support and membership that we were successful in seeing this priority through to the finish line! It is not a random occurrence, but rather the success of a multi-year campaign.

Since 2016, TPA has worked with a coalition of professionals affected by the PPT to collectively advocate for a repeal of this burdensome provider tax. In 2019, the Tennessee General Assembly responded by exempting 15 professions, including pharmacists, from having to pay the PPT. The Tennessee General Assembly allocated funding to offset the tax and enacted House Bill 1262 and Senate Bill 398, which specifically exempts pharmacists, along with 14 other professions, from paying the tax starting in 2020. TPA greatly appreciates the work of Senator Brian Kelsey and Representative Andy Holt, as well as the many state legislators who have worked to remove pharmacists from this tax over the years. The effort was supported by Senate Finance Chair Bo Watson, House Finance Chair Susan Lynn, Lieutenant Governor Randy McNally, House Speaker Glen Casada, and the members of the Tennessee General Assembly.

Please note that the new law applies to Professional Privilege Taxes due in 2020, so pharmacists will still need to pay their privilege tax by June 1, 2019. However, starting in 2020 and in subsequent years, pharmacists will NO LONGER be required to pay the professional privilege tax.

Based on member feedback and complaints received during the implementation phase of Governor Haslam’s 2018 TN Together Opioid law, TPA worked to successfully enact legislative changes in 2019 to simplify the law’s pharmacy-specific provisions, including a repeal of the mandate on partial filling of opioid prescriptions.

Public Chapter 124, championed by Caucus Chairman Cameron Sexton and Senator Shane Reeves, makes needed changes to Governor Haslam’s TN Together Opioid law, which was enacted in 2018. TPA worked closely with bill sponsors, the Tennessee Medical Association, Governor Lee’s administration, and the Tennessee Department of Health to enact this important law to ease burdens on the pharmacy community and our patients.

This year’s TN Together Opioid cleanup law became effective on April 9 upon signature by Governor Bill Lee. Once Public Chapter 124 was published on April 12, TPA emailed a communication to members detailing the key changes in the TN Together Opioid law and how the changes affect pharmacists. TPA members also have access to updated pharmacy resources reflecting these changes, on the TPA Practice-Based Resource Page on Opioid and Prescription Drug Abuse.

In addition to the successful passage of the Comprehensive PBM Reform law described above, the Tennessee General Assembly allocated $200,000 in state funds to direct the Tennessee Department of Commerce and Insurance (TDCI) to hire a consultant to develop best practices around state-licensed PBM practice. This initiative, led by Senator Ferrell Haile, Representative Bryan Terry, and our other pharmacy champion legislators, will be important in creating best practices around PBMs to ensure transparency and oversight of PBMs operating in our state.

Yours respectfully, Micah Cost, PharmD, MS
Executive Director

One more thing: Support for pharmacy practice only happens when our legislators recognize the value in our profession and show support for our priorities. Pharmacy practice is stronger and more advanced in Tennessee because of our collective advocacy efforts and the support from our state legislators. I am asking that every TPA member send a note, text, or email, or place a call, to your elected state Representative and state Senator as soon as possible, to thank them for their support for pharmacy. Please continue to cultivate relationships with your elected officials throughout the year. Solidifying your relationships with state legislators will ensure their future support for pharmacy priorities. Thank you!

• Personally Thank Your State Legislators for Supporting Pharmacy
• Invite Your State Legislators to Visit You at Your Pharmacy Practice Site
• Cultivate Strong Relationship with Your State Legislators 
• Tell Non-Member Colleagues About TPA’s Advocacy Wins Achieved by Our Members and Ask Them to Join Us