It’s not clear how the decision might affect those enrolled in Medi-Cal, the state’s health insurance program for low-income residents. Walgreens is a key provider of prescriptions for the program.
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Gov. Gavin Newsom’s surprise announcement via Twitter this week that California would not do business with pharmacy giant Walgreens caused widespread confusion in a state where more than one-third of the population pays for prescriptions with government-funded health insurance.
Walgreens confirmed last week it would not distribute abortion pills, which are also commonly used for miscarriages, in 20 states where it faces legal pushback. In some of these states, the abortion pill — mifepristone — remains legal. However, Republican governors in these states threatened Walgreens and a cadre of retail pharmacies with legal consequences if they sell the pills.
The first specifics surfaced by midweek: Newsom’s office announced that the state will not renew a $54 million contract with Walgreens for “specialty pharmacy prescription drugs,” primarily for state prisoners.
But his overall retaliatory declaration took health plans across the state by surprise and raised myriad questions about the ripple effects of his decision.
“I’ll be honest, you are the first person telling me about this,” said Penny Griego, spokesperson for the L.A. Care Health Plan, the state’s largest Medi-Cal plan, on Monday. Medi-Cal is the public insurance option for low-income Californians and people with disabilities.
It also raised questions about whether Walgreens would be excluded from distributing the state’s generic insulin.
In a statement, Brandon Richards, a spokesperson for Newsom’s office, said “California is reviewing all relationships between Walgreens and the state. We will not pursue business with companies that cave to right wing bullies pushing their extremist agenda or companies that put politics above the health of women and girls.”
No further details were provided.
Walgreens operates nearly 600 stores in California, accounting for about 10% of the state’s pharmacy market. It’s a key prescription provider for Medi-Cal insurers. Walgreens locations are listed in the state’s pharmacy directory for Medi-Cal enrollees.
In a statement, a Walgreens spokesperson said “From the outset, we have made our intentions clear to become a certified pharmacy to distribute Mifepristone wherever legally possible to do so.”
Earlier this year, the FDA approved rules allowing retail pharmacies like Walgreens to apply for certification to distribute the drug, something which the company is still pursuing. However, mifepristone remains legal in four of the states where attorneys general threatened Walgreens, contradicting its statement.
Mifepristone is part of a two-drug regimen used in medication abortions, which are legal up to 10 weeks gestational age in California. It is also commonly used and part of the recommended treatment for early-pregnancy miscarriages, according to the American Academy of Family Physicians and American College of Obstetricians and Gynecologists.
The drug has become the latest flashpoint for abortion rights in the U.S., with a federal judge in Texas poised to overturn FDA approval of mifepristone for use in terminating pregnancies. Medication abortions account for more than half of all abortions in the U.S., according to the Guttmacher Institute, a pro-choice policy research group.
Planned Parenthood of California, the local policy arm of the national organization, commended Newsom’s move.
“Planned Parenthood thanks Governor Newsom for continuing to stand strong in his support of abortion access and push back against the anti-abortion movement that will not stop until they ban and criminalize abortion nationwide,” spokesperson Jennifer Wonnacott told CalMatters.
It is unclear how far California can go in cutting ties with the nation’s second-largest pharmacy chain and how that will trickle down to consumers, but California is known to flex its market power and influence. With a population of nearly 40 million, California is the most populous state in the nation. Newsom’s threat to cease business with Walgreens could potentially influence how other pharmacies respond, but it also raises thorny access questions for the state.
Nearly 80% of the state’s population lives within 5 miles of a Walgreens, according to Blue Shield of California, which has a partnership with Walgreens to make its pharmaceutical and preventive health care benefits more accessible. Blue Shield did not respond to questions from CalMatters by deadline.
Blue Shield of California is one of several major Medi-Cal providers that contracts with Walgreens in addition to other companies for pharmaceutical benefits, according to their websites. Blue Shield, as well as Anthem Blue Cross, just received multi-million dollar contracts from the Department of Health Care Services to provide Medi-Cal benefits to residents across the Central Valley, San Diego and far northern counties, areas where access to health care is already limited by geography.
The Health Care Services department did not respond to questions about whether Medi-Cal contracts would be impacted by this decision.
Patients with L.A. Care also rely on Walgreens for in-network benefits.
“The first question we’ve encountered is: ‘What will this mean for patients on Medi-Cal who have their prescriptions at a Walgreens store currently?’ That’s a question where we’ll be seeking clarity,” said Susan Bonilla, the chief executive officer at the California Pharmacists’ Association, which represents pharmacists across the state.
Walgreens’ decision to not distribute the abortion pill in some Republican-led states, was a decision that does not put the patient first, Bonilla said. “That’s a real problem when you’re talking about health care.”
“We appreciate the governor standing strong on behalf of women and the access they need,” she said. “The fact that he is applying counter pressure is very important.”
Abortion rights have become a signature issue for Newsom and one that Democrats leaned on heavily in the last election. Last year, the state Legislature and the governor signed a package of a dozen bills that aim to expand access to abortion services and protect patients and providers. Voters also approved a measure that enshrined abortion rights in the state constitution.
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