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Assembly committee advances bill to curb pharmacy benefit manager practices
Summary
The Assembly Judiciary subcommittee advanced Senate Bill 41, which would increase transparency of pharmacy benefit managers, ban steering practices and spread pricing, and require rebate pass-throughs after testimony from neighborhood pharmacists and industry opponents raised legal and implementation concerns.
Senate Bill 41, a measure to increase transparency and restrict certain business practices by pharmacy benefit managers, was advanced out of the Assembly Judiciary subcommittee and referred to the Assembly Appropriations Committee.
The bill’s author, Senator Wiener, told the committee SB 41 “will require transparency and put a stop to abusive practices by pharmacy benefit managers or PBMs,” and said those practices have driven up prescription costs and contributed to closures of neighborhood pharmacies. He said the bill’s language had been negotiated with the administration and that he would accept committee amendments.
Why it matters: Supporters said PBM business models can incentivize higher drug prices and reduce local access to medicines. Pharmacists who testified described patients forced into mail-order programs, reimbursements below acquisition cost and local pharmacy closures.
Independent pharmacists gave the hearing the most pointed testimony. Dr. Clint Hopkins, “pharmacist, owner of Pucci’s Pharmacy, independently owned in Sacramento since 1930,” said PBMs “dictate contracts, underpay and force pharmacies to close,” and described cases where patients had worse care and higher out‑of‑pocket costs when forced to use PBM-owned mail-order services. Owner Sonia Frosto, of 10 Acres Pharmacy, testified she will close her store in August, saying she is “under-reimbursed consistently from these PBMs.”
Opponents argued the bill is premature and may duplicate or conflict with recently enacted laws. Lisonbee Ramey of the Pharmaceutical Care Management Association told the committee SB 41 “steps in and ignores the opportunity that data brings you all” from new licensing and reporting requirements and urged a no vote. John Wenger of America’s Health Insurance Plans warned parts of the measure “are going to be preempted by ERISA” where they reach into health-plan administration.
Committee discussion centered on the relation between SB 41 and recent legislation requiring PBM licensure and data reporting; the bill’s author said the licensing provisions were placed in the budget to accelerate implementation and that SB 41’s policy provisions are complementary.
The committee recorded the measure as moving to appropriations. The transcript shows members asked for changes on confidentiality and legal exposure; the author said she would continue to work with the administration and interested parties on those items.
Notes: The hearing record includes multiple co-sponsors and health-sector supporters and opposition from PBM trade groups and payers. No final statutory text changes beyond committee amendments were adopted on the floor during this session.
