On October 11, 2025, Governor Gavin Newsom signed into law SB 41, enacting changes to the ways in which pharmacy benefit managers (PBMs) can do business in the State of California.

Effective January 1, 2026, the bill will impose new requirements on PBMs and the plans they work with.

The Bill includes:

• Prohibits the requirement of the use of only an affiliated pharmacy
• Prohibits imposing requirements, conditions or exclusions that discriminate against a nonaffiliated pharmacy
• Requires a PBM to use a passthrough pricing model 
• Prohibits a contract between a PBM and a health care service plan or health insurer that is executed, amended, or renewed on or after January 1, 2026 from authorizing spread pricing (definition of spread pricing - when PBMs charge payers more than they pay pharmacies for a medication, keeping the difference as profit)

More detailed is noted in the Bill.

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