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SB 1403

Pharmacy, Pharmacists - As introduced, extends from two to three weeks the period of notice that must be provided to a pharmacist or pharmacy prior to an initial on-site audit for each audit cycle by a covered entity, pharmacy benefits manager, the state or its political subdivisions, or an agent of such entity by sending written notice to the pharmacist or pharmacy. - Amends TCA Title 4, Chapter 3; Title 10, Chapter 7, Part 5; Title 53; Title 56; Title 63; Title 68 and Title 71.

114th Regular Session (2025-2026) Introduced by Joey Hensley

Tennessee bill extends pharmacy audit notice requirement from two to three weeks, giving pharmacies additional preparation time before on-site audits by PBMs, regulators, and covered entities.

Assigned to General Subcommittee of Senate Commerce and Labor Committee
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Bill Summary · SB 1403

Legislative bill overview

SB 1403 increases the mandatory advance notice period for pharmacy audits from two weeks to three weeks. The bill applies this requirement to audits conducted by pharmacy benefits managers (PBMs), covered entities, state agencies, and their authorized agents across multiple Tennessee code sections regulating pharmacy operations.

Why is this important

Pharmacies often face operational disruptions during audits, and additional preparation time can help them organize records, staff, and operations more thoroughly. The extra week may reduce audit-related business interruptions and allow pharmacies to present more complete compliance documentation, potentially affecting audit outcomes and pharmacy profitability.

Potential points of contention

  • Audit effectiveness: PBMs and state regulators may argue that longer notice periods allow pharmacies more time to conceal non-compliance issues or manipulate records before audits occur
  • Compliance burden: Auditing entities would need to adjust scheduling systems and timelines, potentially increasing administrative costs and extending the overall audit cycle duration
  • Selective enforcement concerns: Critics may question whether extending notice protections uniformly across all covered entities and PBMs creates inconsistent regulatory standards or advantages certain pharmacy operators over others

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

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