Newsom Signs SB 41 to Rein In Pharmacy Benefit Managers and Lower Prescription Drug Costs
On October 11, 2025, California Governor Gavin Newsom signed Senate Bill 41 (SB 41) in Sacramento, bringing pharmacy benefit managers (PBMs) — the middlemen that negotiate drug prices among manufacturers, insurers and pharmacies — under strict state regulation: they will be barred from profiting from drug price spreads, and manufacturer rebates must be passed through in full to health plans. The state called it the most aggressive effort in the country to lower prescription drug costs.
Pharmacy benefit managers negotiate prices and set coverage formularies on behalf of health plans and insurers, and the way they make money has long been questioned. Under the new law and a budget trailer bill enacted this year, every PBM operating in California must be licensed and regulated by the state Department of Managed Health Care.
The law has three core provisions: it prohibits spread pricing, meaning a PBM may not charge a health plan more for a drug than it pays the pharmacy; manufacturer rebates must be passed through in full to health plans and may not be withheld; and PBMs may charge health plan and insurer clients only administrative fees.
"I am pleased to sign SB 41, a bill that will lower health care costs for all Californians," Newsom said. He said the law, together with efforts in the 2025 state budget and the state's CalRx affordable-drug brand, amounts to the most aggressive effort in the country to lower prescription drug costs, ensuring the savings are passed on to payers and consumers.
The bill's author, state Senator Scott Wiener of San Francisco, said: "California is standing up for consumers against giant mega corporations trying to rip them off on essential medications." He said the law also gives neighborhood pharmacies a fair shot, adding that no family should be forced to choose between lifesaving medications and putting food on the table.
Source: Office of the Governor of California
Published by GSM · USA (original Chinese edition)
Photo: 图：药房工作人员清点处方药胶囊（资料照片）。美国空军第52医疗大队官方发布，公共领域，经 Wikimedia Commons。 / Photo: A pharmacy worker counts prescription capsules (file photo). By the U.S. Air Force 52nd Medical Group, public domain, via Wikimedia Commons.
