Assembly panel considers SB 41 to curb PBM practices and boost pharmacy transparency

Sen. Wiener introduced Senate Bill 41 to require greater transparency from pharmacy benefit managers and to restrict practices he and witnesses say steer patients away from neighborhood pharmacies and drive up drug costs.

The bill, Wiener said, would “require transparency and put a stop to abusive practices by pharmacy benefit managers or PBMs,” and “put an end to” patient steering that limits local dispensing options.

Supporters said the bill would help preserve independent pharmacies and reduce outsize PBM influence. Dr. Clint Hopkins, pharmacist and owner of Pucci’s Pharmacy in Sacramento, told the committee, “PBMs own health plans, the pharmacy down the street, the mailer pharmacy to where they steer patients, and they dictate contracts with underpay and force pharmacies to close.” Hopkins described local patients forced onto mail-order specialty pharmacies, delayed refills and higher patient costs; he said many community pharmacies are reimbursed “below acquisition costs.”

Sonia Frosto, owner of 10 Acres Pharmacy, delivered a personal account of financial strain and closures: “I just announced my pharmacy will be closing, on August 20… I had patients that had just transferred from Rite Aid who had closed their doors just weeks ago…and I had to tell them yesterday that I can no longer serve them because we will also be closing on 08/20.” She asked the committee to support SB 41 so “my students can have a dream.”

Wiener said the bill would ban patient steering, require PBMs to pass through the full amount of manufacturer rebates, and prohibit spread pricing arrangements in which PBMs charge plans more than they reimburse pharmacies. He told the committee he had worked with the governor and administration on licensure language that was carried in the budget trailer bill, and that SB 41 builds on that work.

Opponents said the bill duplicates and risks undercutting recent statewide transparency measures. Lisonbee Ramey of the Pharmaceutical Care Management Association (PCMA) said AB 116—recently enacted—will require PBM licensing and reporting to the Office of Health Care Affordability (OHA) and the Department of Managed Health Care (DMHC), and she argued SB 41 “steps in and ignores the opportunity that that data brings you all.” John Wenger of America’s Health Insurance Plans said the bill raises “a risk of preemption” under ERISA for self‑insured plans and cautioned that state law that intrudes on plan design could be preempted.

Committee members asked about confidentiality provisions in the recently enacted reporting law and whether SB 41 duplicates or conflicts with that law. Wiener said the confidentiality provisions were negotiated as part of the budget and that he would continue to work with the administration and committee staff on those issues. Several members stressed concern about ensuring any savings actually reach consumers; Wiener said the bill aims to reduce overall system costs and preserve local pharmacies.

The committee later moved the bill out of Judiciary and onto the appropriations calendar.

Ending: The committee discussion combined farmer and patient stories with legal questions about state authority; supporters emphasized preserving neighborhood pharmacies while opponents urged reliance on new statewide PBM reporting and warned of ERISA preemption.