California’s PBM Legislation Adding More Cost on Employers

SB 41, which was vetoed by Gov. Gavin Newsom (D) last September, was amended to replace the affiliate reimbursement parity requirement with a mandatory minimum reimbursement requirement of NADAC plus the state’s Medicaid dispensing fee of $10.05-$13.20 per script. The measure, which attempts to regulate self-funded ERISA plans, already includes a host of restrictions on PBMs, health plans, and employers including a delinking provision; bans on spread pricing, the use of affiliated networks, and exclusivity contracts with manufacturers; and eliminates client choice concerning rebate pass-through.

The bill’s first committee hearing is expected to take place in mid-April and SGA is using its client engagement process to reach out to impacted clients. Moreover, a large public affairs campaign is underway to educate stakeholders on how this Pharma-backed legislation will raise drugs costs, reduce quality, and limit consumer’s choice and services.