California Gov. Gavin Newsom signed a law that aims to curb inflated drug pricing by pharmacy benefit managers on Oct. 11.
The legislation restricts “spread pricing,” wherein PBMs charge a plan or insurer more than the total paid to the pharmacy for prescription drugs. The law mandates a passthrough pricing model to further align spending.
Under the law, PBMs also cannot exclude or limit nonaffiliated pharmacies from dispensing drugs.
“This new law builds on the licensing framework we established earlier this year to begin holding PBMs accountable for abusive behavior,” said State Sen. Scott Wiener, an author of the bill. “I’m grateful for Gov. 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.”
