California PBM Legislation Vetoed by Governor

Governor Gavin Newsom (D) vetoed SB 966, an omnibus PBM regulation bill pushed by PhRMA. With his veto, the governor recognized the real intent of the bill, but more importantly, that SB 966 failed to achieve lower costs or improve efficiency of health care services for our clients and customers. 

Cigna initiated client activation campaigns in April and again in August. As a result, several harmful provisions were removed from the bill, including a spread pricing prohibition and a delinking requirement, but the final bill was still very problematic and would have reduced the ability of PBMs to deliver value and lower costs to patients. Once the bill moved out of the legislature, Cigna worked closely with clients and industry partners to secure a veto. In the governor’s veto message, he called for greater transparency throughout the supply chain, more data collection from PBMs, and a greater understanding of what is causing higher drug costs overall. 

With this veto, Cigna pledged to work alongside Governor Newsom and lawmakers to craft a bill in 2025 that achieves the governor’s goals but does not needlessly raise drug costs, reduce competition, or take away the tools used to drive affordability and improve outcomes.