On May 14, California Gov. Gavin Newsom proposed additional state oversight on pharmacy benefit managers, which negotiate drug prices between payers and drugmakers.
In a revised 2025-2026 budget, the governor penned several oversight strategies regarding PBMs, according to a news release. The proposal would allow the state’s Department of Managed Health Care to regulate PBMs through the authority to review their contracts, conduct financial audits and examine detailed reports of drug pricing data.
To enact these regulations, the California Legislature will need to pass the budget. The final decision is expected this summer.
Several other states are enacting PBM regulation tactics, including Arkansas banning PBMs from owning pharmacies and Alabama prohibiting PBMs from patient steering.
