Regulation of Pharmacy Benefit Managers in California
Pharmacy benefit managers (PBMs), also known as prescription drug middlemen, have been largely unregulated in California for years.
However, with Governor Gavin Newsom's signature on October 11th of a PBM regulation bill (SB 41) authored by Sen. Scott Wiener (D-San Francisco), this is set to change significantly.
PBMs are companies that manage prescription drug benefits for millions of Americans by contracting with health insurers and employers.
- Maintaining formularies
- Processing claims
- Negotiating with manufacturers and pharmacies
For instance, PBMs negotiate with manufacturers to include their drugs on a list of covered prescriptions at a lower price than the manufacturer's list price.
They also negotiate with pharmacies to include them in their network if the pharmacy accepts their prices for drugs.
Author's summary: California regulates PBMs with SB 41.Capitol Weekly — 2025-10-29