California enacts SB 41, targeting pharmacy benefit manager practices to lower drug costs, boost transparency, and set new rules for prescription pricing and oversight.
October 30, 2025
Source:
Pixabay / fernandozhiminaicela
Major Changes for Pharmacy Benefit Managers
New Requirements and Bans
Spread pricing is prohibited: PBMs can't charge health plans more for a drug than they reimburse pharmacies (Keenan briefing).
Rebates must go to health plans: PBMs must pass all manufacturer rebates to payers, ending opaque profit-taking.
Anti-steering rules: Patients gain more pharmacy choice; PBMs are barred from limiting them to PBM-owned pharmacies.
Effective Dates
New contracts: Most major provisions start January 1, 2026. Existing contracts: Spread pricing ban applies fully by January 1, 2029 (Official bill text).
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Unsplash / National Cancer Institute
Transparency and Oversight Measures
Enforcement and Financial Controls
Licensing required for PBMs: All PBMs must be licensed and report finances to California's Department of Managed Health Care (Governor's press release).
Attorney General powers: Enforcement includes civil penalties and injunctions for violations.
Fiduciary duty to employers: PBMs now owe a duty to act in best interest of self-insured employer plans.
Management fees only: PBMs' income is restricted to explicit, agreed-upon fees.
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Pixabay / stevepb
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