California Passes Critical PBM Reforms

California’s SB 41 is a major win for PBM accountability, passing the legislature with broad bipartisan support and earning Governor Newsom’s signature this month. 

This legislation is one of the strongest protections to date against anti-consumer PBM practices and includes important provisions to:

• require PBMs in California to be licensed and subject to oversight, ending their near-total lack of regulation in the state

• ban spread pricing – the practice where PBMs charge insurers more than they pay pharmacies for drugs

• prohibit PBMs from deriving income from services provider to insurer except from a fee for services provided 

• prevent PBMs from steering patients to affiliated pharmacies, protecting patient choice and limiting anti-competitive behaviors

• Increase transparency and enhance public reporting and data disclosure to help track prescription drug spending and improve oversight

  
  

With three in ten adults rationing prescriptions due to cost and drug spending in California up 12% last year, these reforms are urgently needed. SB 41 puts patients, employers, and independent pharmacies first, helping restore affordability and fairness to the prescription marketplace in California.