Governor Newsom signs SB 41 to lower the cost of prescription drugs

What you need to know: Governor Newsom today announced that he signed SB 41 to reduce prescription drug prices by regulating the practices of pharmacy benefit managers (PBMs), which negotiate prices between drug manufacturers, health care insurance providers, and pharmacies.

SACRAMENTO - Governor Gavin Newsom today announced that he signed SB 41 by Senator Scott Weiner (D-San Francisco), regulating pharmacy benefit managers (PBMs) to prevent inflated prescription drug prices.

This bill enacts a sweeping reform of the allowable business practices for PBMs, which will be licensed by the Department of Managed Health Care (DMHC) in accordance with trailer bill legislation enacted this year. The bill reforms the revenue generating abilities of PBMs, including prohibiting the practice of spread pricing, requiring manufacturer rebates to be passed through to health plans, and allowing only administrative fee charges to be assessed to health plan and health insurer clients.

I am pleased to sign SB 41, a bill that will lower health care costs for all Californians. This bill, together with related efforts in the 2025 budget and CalRx, represents the most aggressive effort in the country to lower prescription drug costs. California continues to lead the way in lowering costs, increasing transparency, and ensuring that the savings are passed on to payers and consumers.

Governor Gavin Newsom

"With SB 41, California is standing up for consumers against giant mega corporations trying to rip them off on essential medications," said Senator Scott Wiener. "This new law builds on the licensing framework we established earlier this year to begin holding PBMs accountable for abusive behavior. I'm grateful for Governor Newsom's leadership in fighting to ensure neighborhood pharmacies get a fair shot and that no family is ever forced to choose between lifesaving medications and putting food on the table."

For full text of SB 41, visit: https://http://leginfo.legislature.ca.gov.