A bill aimed at tightening regulations on pharmacy benefit managers is gaining momentum in the California Legislature, with support from Sacramento-area pharmacists and patients who say unchecked PBM practices are reducing access to health care in the region.
Senate Bill 41, authored by Sen. Scott Wiener (D-San Francisco), cleared the Assembly Judiciary Committee last week after previously advancing through the State Senate and the Assembly Health Committee. The bill now heads to the Assembly Appropriations Committee, with a final vote expected after the Legislature returns from summer recess. The deadline to pass bills on the Assembly floor is Aug. 29.
At the heart of the bill is a series of reforms that would reshape how PBMs operate in California, including a ban on a controversial pricing practice, requiring business practice disclosures, and prohibiting steering patients to PBM-affiliated pharmacies.
Some Sacramento pharmacists are vocal backers of the bill, citing shrinking reimbursements and rising drug costs that are squeezing small businesses and limiting access for patients.
Sonya Frausto, owner of Ten Acres Pharmacy in the Land Park neighborhood, testified before the Assembly Judiciary Committee. She recently announced her pharmacy would close for good next month.
“We built a foundation with love and integrity, but we can’t survive without real PBM reform,” Frausto said. “I’m getting reimbursed $50 for medications that cost me $105. That’s not just unsustainable, it’s a death sentence for small pharmacies like mine.”
Ten Acres Pharmacy joins a growing list of closures across the state. San Joaquin Drug in Planada, Yosemite Drug in Coarsegold and Reliable Rexall Sunset Pharmacy in San Francisco have all recently shut their doors. The California Pharmacists Association says the closures are eroding health care access, particularly in areas like Sacramento, where options are rapidly disappearing.
Clint Hopkins, co-owner of Pucci’s Pharmacy in East Sacramento, told lawmakers the number of pharmacies operating in Sacramento’s downtown core has dropped dramatically in recent years. “We’ve become health care deserts,” he said.
The bill’s supporters argue that PBMs, which manage prescription drug plans for insurers, are using opaque pricing practices to increase profits while undermining independent pharmacies.
One key target of the bill is “spread pricing,” a practice where a PBM charges a health plan more for a drug than it reimburses the pharmacy that dispenses it, and keeps the difference as profit. Independent pharmacists in Sacramento say this practice has driven many to operate at a loss.
Frausto told lawmakers she has routinely been reimbursed less than what she paid to acquire medications. “People wonder why their pharmacy closed? This is why,” she said. “We’re operating at a loss every day.”
The bill also seeks to ban pharmacy steering, a practice where PBMs direct patients to pharmacies they own or are affiliated with. Several major PBMs, including CVS Caremark, Express Scripts and Optum Rx, are integrated with large pharmacy chains, raising concerns about competition and consumer choice.
The Pharmaceutical Care Management Association, which represents PBMs, opposes SB 41 and argues that the bill misdiagnoses the problem.
“SB 41 would only benefit Big Pharma and will cost over $1 billion in excess drug spending in the first year alone,” said Greg Lopes, spokesperson for the PCMA. “It will also increase premiums by $3 billion annually.”
Lopes said PBMs negotiate directly with drug manufacturers to promote generics and manage costs for nearly 29 million Californians, saving more than $100 billion over the next decade, including $11 billion in the Medi-Cal program alone.
He pointed to the 2025-26 state budget trailer bill, which already required PBMs to be licensed by the California Department of Managed Health Care, as evidence that additional legislation is unnecessary.
“The root issue is that drug companies alone set and raise prices,” Lopes said. “Policymakers should focus there.”
Lawmakers say SB 41 has drawn support from more than 30 organizations, including consumer groups, chronic illness advocates, and rural health coalitions.
Patient advocate Colleen Henderson, who lives in Auburn, told lawmakers her family is struggling to afford her daughter’s Humira prescription, which costs nearly $7,000 per month, even with insurance.
“The PBM tied to our plan doesn’t cover the full cost,” Henderson said. “It shouldn’t be this hard to get the medication your child needs.”
Wiener argued that while PBM licensure is already in place, the core reforms in SB 41, including transparency, pricing practices and anti-steering provisions, remain critical and must be passed separately.
“Licensing is just the beginning,” he said. “We need to bring daylight into how these massive corporations operate.”
If passed by the Assembly, the bill could reach Gov. Gavin Newsom’s desk by late summer.
Last year, Newsom vetoed a bill to regulate PBMs, saying at the time that he needed more information about how they influenced drug prices, CalMatters reported.