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SB 604

Insurance, Health, Accident - As introduced, requires a pharmacy services administrative organization or similar entity that receives maximum allowable cost list or related information from a contracted pharmacy to destroy the shared information within five business days of receipt of a written request for destruction from the sharing pharmacy. - Amends TCA Title 4 and Title 56.

114th Regular Session (2025-2026) Introduced by Paul Bailey

Tennessee bill requires pharmacy administrative organizations to destroy pricing data within five business days of pharmacy request, protecting proprietary competitive information.

Passed on Second Consideration, refer to Senate Commerce and Labor Committee
#accident #health #insurance
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Bill Summary · SB 604

Legislative bill overview

SB 604 requires pharmacy services administrative organizations (PSAOs) and similar entities to destroy maximum allowable cost (MAC) lists and related pricing information within five business days of receiving a written destruction request from a pharmacy. The bill amends Tennessee's insurance and commercial code statutes to enforce this data destruction requirement.

Why is this important

Pharmacies often share sensitive pricing and cost data with PSAOs to negotiate with insurers, but that information can represent competitive advantages. This bill protects individual pharmacies by ensuring they can control how long intermediaries retain their proprietary information, addressing concerns about data misuse, competitive disadvantage, or unauthorized sharing of pricing strategies.

Potential points of contention

  • Operational burden: Five business days may create administrative challenges for PSAOs managing data across multiple pharmacy clients, potentially increasing compliance costs passed to members
  • Data integrity and disputes: Requiring destruction could complicate audits, dispute resolution, or legal proceedings if pricing information is needed as evidence of prior agreements
  • Scope ambiguity: "Related information" is undefined—unclear whether it covers aggregated data, historical records, backup systems, or metadata, creating compliance uncertainty

Compiled from official sources — confirm details with the bill’s official record.

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