Governor Gavin Newsom is set to introduce measures aimed at reducing prescription drug costs and enhancing access to medication abortion as part of the 2025-26 May Revision. The initiative focuses on increasing transparency for Pharmacy Benefit Managers (PBMs) and expanding the authority of CalRx.
“Prescription drug prices are out of control and we’re shining a light on hidden costs — while also giving CalRX more tools to respond to supply chain disruptions, market manipulation, or politically motivated abortion restrictions,” said Governor Newsom.
The proposal targets PBMs, which act as intermediaries between drug manufacturers, pharmacies, and insurers. These entities will now be subject to state oversight designed to enhance transparency and reduce expenses. Key aspects include:
– Licensing and regulation by the Department of Managed Health Care (DMHC).
– Mandatory reporting of operational and financial details.
– A fiduciary duty imposed on PBMs towards their clients.
– Regular financial audits conducted by DMHC.
– Detailed drug pricing data reported to the Department of Health Care Access and Information (HCAI).
The expanded role for CalRx includes purchasing brand-name drugs, enabling California to better manage supply chain issues or political actions that could impact access to critical medications such as mifepristone.
This expansion aims to secure affordable supplies of both generic and brand-name drugs, maintain uninterrupted access amid potential shortages or political interference, and strengthen reproductive health care options in California.
Press members interested in attending the release event can find more information online.
