Overview

• Gov. Gavin Newsom has included proposals in the 2025-26 state budget to license and regulate pharmacy benefit managers (PBMs) to increase transparency and curb hidden drug costs.
• The proposals would require PBMs to report financial and operational data to state agencies and allow audits and penalties for violations.
• Newsom also seeks to expand the CalRx program, originally focused on generics, to include name-brand drugs like mifepristone to protect abortion access and reduce costs.
• The measures align with a recent federal executive order directing HHS to negotiate lower drug prices, signaling a coordinated push on prescription affordability.
• The proposals are set for legislative debate this summer, with Newsom urging lawmakers to approve them as part of the state budget process.