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Assembly committee advances SB 41 targeting pharmacy benefit manager practices seen as driving up drug costs
Summary
SB 41 would restrict certain PBM practices including steering to PBM-owned mail-order pharmacies, ban spread pricing and limit PBMs’ ability to pocket rebate-derived revenue; the Health Committee passed the bill to Judiciary after extensive testimony from independent pharmacists, patient groups, payers and PBM/insurer representatives.
SB 41, presented by Senator Wiener on July 8, aims to increase transparency and limit certain practices by pharmacy benefit managers (PBMs) that witnesses said have contributed to rising drug costs and closures of independent pharmacies. The Assembly Health Committee voted to pass the measure to the Judiciary Committee after amendments and extended testimony.
Independent pharmacists gave emotional testimony about financial strain. "PBMs often reimburse us under what we paid for the drug... This is truly unsustainable," said Sonia, owner of 10 Acres Pharmacy in Sacramento. Pharmacist Dr. Clint Hopkins described patients forced into PBM-owned mail-order pharmacies, delayed shipments of critical medication, and scenarios where PBMs reimbursed amounts that left pharmacists unpaid for acquisition costs.
Supporters included patient and provider groups, community organizations, and large insurers such as Blue Shield of California (which testified in support). Opposition came from PBM trade association PCMA, national health-plan associations and others who argued the bill could raise costs and remove negotiation tools. PCMA and America's Health Insurance Plans urged caution and pointed to recent licensure and reporting provisions placed in the state’s health budget trailer bill, which they said will create data-driven oversight.
Committee action and next steps
The committee approved SB 41 by roll call and sent it to the Judiciary Committee. Supporters said licensure and reporting in the budget are a step forward but not sufficient to prohibit practices they contend distort markets; opponents urged using the newly required data to inform further action.
Why this matters
Witnesses argued PBM contracting and rebate structures can incentivize higher list prices and favor PBM-owned pharmacies over community pharmacies, contributing to pharmacy closures and access issues. Opponents argued some questioned provisions may increase costs or raise ERISA preemption concerns; the committee vote advances the bill so legal and budgetary impacts can be reviewed in later committees.
Votes at a glance
Action: Motion to pass SB 41 to Judiciary — Passed (committee roll call recorded)
