Cigna Files Lawsuit Against Tennessee
Express Scripts, the pharmacy benefit manager (PBM) owned by Cigna’s Evernorth Health Services, has filed a federal lawsuit against the state of Tennessee. The company seeks to block the recently enacted Freedom, Access and Integrity in Registered Pharmacy Act, commonly known as the FAIR Rx Act. The lawsuit argues that the law could disrupt prescription drug access for more than 180,000 Tennessee residents who rely on Express Scripts pharmacies and services.
The legal challenge marks another major battle in the growing national debate over pharmacy benefit managers and their influence on the healthcare industry. Tennessee lawmakers say the legislation promotes fair competition and lowers drug costs. However, Cigna argues the measure unfairly targets integrated healthcare companies and violates federal law.
Understanding the FAIR Rx Act
What Does the Law Require?
The FAIR Rx Act prohibits companies from simultaneously owning:
- A pharmacy benefit manager (PBM)
- A health insurance company
- A pharmacy or drug dispensing business
Beginning in July 2028, companies that exceed a 5% ownership stake across these sectors must divest their pharmacy operations or sell them to an independent entity. Tennessee lawmakers say the goal is to eliminate conflicts of interest and prevent PBMs from steering patients toward affiliated pharmacies or higher-cost medications.
Why Tennessee Passed the Law
State legislators have increasingly scrutinized PBMs, arguing that vertically integrated companies possess excessive market power. Independent pharmacies have long complained that PBMs reimburse affiliated pharmacies more favorably than independent competitors.
Supporters believe the FAIR Rx Act will create a level playing field and increase transparency in prescription drug pricing. Critics, however, warn that the law could reduce patient choice and disrupt existing pharmacy services.
Why Cigna Opposes the Law
Concerns Over Patient Access
Cigna claims the law could significantly limit healthcare access across Tennessee. According to the company, more than 180,000 Tennesseans rely on Express Scripts pharmacies for medications and clinical support services. If the law takes effect, patients may need to switch pharmacies or lose access to specialized care.
Susan Peppers, Vice President of Pharmacy Practice at Evernorth, warned that the legislation could leave patients scrambling to find new ways to obtain essential medications and clinical assistance. The company believes such disruptions could particularly affect individuals with chronic illnesses or rare diseases.
Potential Impact on Accredo
The lawsuit also highlights the future of Accredo, Express Scripts’ specialty pharmacy facility located in Memphis. Accredo distributed approximately 2.3 million prescriptions nationwide in 2025 and specializes in medications for complex and rare conditions.
Cigna estimates that relocating or closing the facility could cost nearly $113 million and require up to 18 months to complete. Additionally, the company warns that the move could affect jobs and healthcare services throughout the region.
Legal Arguments Behind the Lawsuit
Claims of Constitutional Violations
Cigna argues that Tennessee’s law violates the U.S. Constitution by favoring in-state businesses over out-of-state competitors. The company also claims that federal programs and regulations preempt the state law.
Specifically, the lawsuit cites:
- Medicare Part D regulations
- TRICARE requirements
- The Employee Retirement Income Security Act (ERISA)
According to Cigna, these federal frameworks supersede Tennessee’s restrictions, making the FAIR Rx Act unenforceable in its current form.
A Broader Industry Trend
This is not the first legal challenge against Tennessee’s PBM reforms. Earlier this year, CVS Health filed a similar lawsuit against the state, arguing that the FAIR Rx Act unfairly discriminates against out-of-state companies. Both lawsuits reflect a broader national debate over the role and structure of pharmacy benefit managers.
Meanwhile, Arkansas enacted comparable legislation in 2025. That law was later blocked through a court injunction after PBMs challenged its legality, setting a precedent that may influence Tennessee’s case.
What This Means for Patients
Potential Benefits
Supporters of the FAIR Rx Act argue that separating PBMs from pharmacies could:
- Reduce conflicts of interest
- Increase competition
- Improve pricing transparency
- Support independent pharmacies
- Limit prescription steering practices
Possible Risks
On the other hand, opponents warn that the law could:
- Disrupt specialty pharmacy services
- Force patients to change pharmacies
- Reduce access to mail-order prescriptions
- Create shortages in rural areas
- Increase operational costs for healthcare companies
Healthcare experts believe the outcome of this lawsuit could shape future PBM reform efforts across the United States.
What Happens Next?
The lawsuit has been filed in the U.S. District Court for the Middle District of Tennessee. The court’s decision could have far-reaching implications for healthcare companies, pharmacies, insurers, and millions of patients nationwide.
As lawmakers continue to push for PBM reforms, the legal battle between Cigna and Tennessee may become a defining case in determining how integrated healthcare organizations operate in the future. Whether the FAIR Rx Act survives judicial scrutiny could influence similar legislation in other states and reshape the prescription drug marketplace for years to come.
