Our April 29th post discussed the introduction of SB 966 that would have required PBMs doing business in California to be licensed and regulated. The Bill had passed all relevant committees and landed on the Governor’s desk in September of 2024. Surprisingly, Governor Newsom did not sign SB 966.
According to the Governor’s message we need “a clearer understanding of how much PBM practices are driving up prescription drug costs.” The message mentions (1) the new prescription program implemented by the State – CalRx – that is designed to curb rising pharmaceutical costs, and (2) the creation of the Office of Health Care Affordability that (according to the Governor) should address transparent pricing.
While acknowledging that PBM “must be held accountable to ensure that prescription drugs remain accessible throughout pharmacies across California,” Governor Newsom expressed doubt that SB 966’s expansive licensing scheme will achieve such results.
On a more positive note, the Governor has directed Cal Health and Human Services to gather data on PBMs’ practices by the end of 2025. “We need more granular information to fully understand the cost drivers in the prescription drug market and the role that PBMs play in pricing.”
According to many patient advocates, the bill would have helped lower the rising costs of prescription drugs through pro-consumer requirements and regulations of PBMs.
Governor’s veto came as a surprise in light of FTC’s legal action against PBMs and other public exposures of PBM practices.
As a side note: last year Governor Newsom vetoed SB 90 that would have capped the price of insulin at $35/month.