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Bill

SB 41

AN ACT FOR THE OFFICE OF THE GOVERNOR APPROPRIATION FOR THE 2025-2026 FISCAL YEAR.

2025 Regular Session

SB 41 reforms pharmacy benefit managers in California, ensuring fair pricing, reducing discrimination against nonaffiliated pharmacies, and lowering consumer drug costs.

Notification that SB41 is now Act 892
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WeVote Research Nonpartisan
Bill Summary · SB 41

Summary of SB 41 - Pharmacy Benefits

Purpose and Intent

SB 41, introduced by Senator Wiener, aims to reform the regulation of pharmacy benefit managers (PBMs) in California. The bill seeks to enhance transparency, prevent discriminatory practices against nonaffiliated pharmacies, and ensure fair pricing models in the management of prescription drug benefits.

Key Provisions

  1. Licensing Requirements:

    • PBMs must secure a license from the Department of Managed Health Care (DMHC) by January 1, 2027, or when the DMHC establishes the licensure process.
    • Contracts between health insurers and PBMs issued or renewed after this date must require the PBM to be licensed and in good standing.

  2. Prohibitions on Discriminatory Practices:

    • PBMs are prohibited from requiring the exclusive use of affiliated pharmacies and from imposing discriminatory conditions against nonaffiliated pharmacies.

  3. Income Limitations:

    • PBMs can only derive income from pharmacy benefit management fees for services provided, eliminating other revenue sources that could create conflicts of interest.

  4. Passthrough Pricing Model:

    • PBMs must adopt a passthrough pricing model, ensuring that the costs passed on to consumers reflect the actual rates paid by the plan or insurer for prescription drugs.

  5. Cost Sharing Regulations:

    • Health care service plans and insurance policies must not calculate an enrollee’s cost sharing at an amount exceeding the actual rate paid for the drug, effective for contracts issued or renewed after January 1, 2026.

  6. Spread Pricing Ban:

    • Contracts between PBMs and health insurers executed after January 1, 2026, cannot authorize spread pricing, which can lead to inflated costs for consumers.

  7. Enforcement and Penalties:

    • The Attorney General is empowered to recover civil penalties and seek equitable relief for violations of the licensing provisions.

  8. Severability and Legislative Findings:

    • The bill includes provisions that ensure its parts can stand independently if any section is found unconstitutional, and it makes legislative findings regarding the necessity of these regulations.

Impact

  • Pharmacies: Nonaffiliated pharmacies will benefit from reduced discrimination and increased opportunities to compete with affiliated pharmacies.
  • Consumers: Patients may experience lower out-of-pocket costs for prescription drugs due to the prohibition of excessive cost-sharing and the implementation of a passthrough pricing model.
  • Health Insurers: Insurers will need to adjust their contracts with PBMs to comply with the new licensing and pricing regulations.

Procedural Timeline

  • Introduced: December 3, 2024
  • Status: The bill was reported as "Inexpedient to Legislate" on October 22, 2025, with a unanimous vote of 16-0.
  • Key Dates: The bill underwent various amendments and committee reviews throughout 2025, with significant discussions in health and judiciary committees.

This summary provides an overview of SB 41, highlighting its objectives, key provisions, and potential impacts on the pharmacy benefits landscape in California.

Compiled from official sources — confirm details with the bill’s official record.

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