SACRAMENTO, Calif. – Gov. Gavin Newsom announced last month that California “Thrives” Doing Business With Walgreens The pharmacy chain said it would not distribute the abortion pill in the 21 states where Republicans threatened legal action. Since then, Kaiser Health News has learned that the Democratic governor must compromise on his hard-line tweets.
Health law experts said California is legally bound to continue doing business with Walgreens through the state’s massive Medicaid program. And according to a public records request, the state paid Walgreens $1.5 billion last year.
RELATED: Why Walgreens’ Decision to Ban the Abortion Pill Could Hurt Its Growth Strategy
Newsom’s administration has confirmed that it will “continue to comply” with the federal law by paying Walgreens through Medi-Cal, which provides health coverage to nearly 15 million residents with low incomes and disabilities. Legal scholars warned that if California stopped covering Medi-Cal prescriptions filled at Walgreens stores, the state would be violating federal law, which allows patients to get their drugs at any approved pharmacy. .
“California has no intention of taking any steps that would violate federal Medicaid requirements, or that would undermine access for low-income individuals,” Tony Kava, a spokesman for the California Department of Health Care Services, said in a statement. “
Newsom spokesman Anthony York said, “Tweeting is not a policy.” He said the governor would “not take any action that would hurt people who need care.” York said Walgreens has been invited again to apply for an exclusive drug contract, which Newsom held back on renewal last month. Walgreens has received about $54 million from the state under the contract.
Political strategists said the dust-up with the Illinois-based pharmacy chain reflects Newsom’s penchant for broad announcements on social media, where he garners national headlines but offers few specifics and little follow-through. Newsom has raised his national profile — and speculation of a presidential bid — by traveling to red states and launching a new political action committee.
“It’s as much about appearances and style and attitude as it is about substance,” said David McCuan, chair of the political science department at Sonoma State University. Newsom and his administration “oversell their announcements and don’t actually deliver.”
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On March 6, the governor tweeted “California will not do business with @walgreens – or any company that serves extremists & puts women’s lives at risk,” US’s second largest pharmacy chain said. It will not be distributing Mifepristone in India. Indicates where distribution of the pill is illegal or where the company faces potential lawsuits for doing so.
Democratic strategist Steve Maviglio said that continuing to pay Walgreens through Medi-Cal does not undermine Newsom’s support of abortion rights.
Maviglio said, “He’s going to make headlines for defending abortion rights, and he can do it on a technical difficulty.” “She will be rewarded for standing up to a corporation.”
Federal law is designed to ensure that Medicaid patients have options for obtaining health care, including prescriptions. Approved providers like Walgreens are protected by the Medicaid law, which states that no health plan or institution “may restrict an eligible person’s choice of which services that person may receive.” Legal and Medicaid experts said it is extremely difficult for the Newsom administration to disqualify Walgreens.
“As long as Walgreens is performing for Medicaid beneficiaries as it should, dispensing all legal drugs in a manner that is consistent with permissible pharmacy practice, I do not see a basis for excluding them,” said one of the Health Sarah Rosenbaum, professor of law and policy at The George Washington University.
The federal rules protecting Walgreens are the same ones that have allowed Planned Parenthood to provide health care services to Medicaid enrollees in conservative states where leaders have unsuccessfully sought to exclude the network of clinics from receiving taxpayer money.
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An approved pharmacy company can be excluded from the state network only if it has committed fraud or other contract violations, said Edwin Park, a research professor at Georgetown University specializing in Medicaid law.
“Certainly, that would not be the case with Walgreens,” Park said.
It’s not clear whether Newsom was aware of how difficult it would be for California to open its Medi-Cal provider agreement with Walgreens, said Daniel Schnur, a Republican-independent strategist who teaches politics at the University of Southern California. He also teaches science.
Schnur said, “The original announcement seemed like a fundamental step for the state of California to take on principle, even at great financial expense.” “They have quietly retreated.”
Through a records request, KHN learned that the state paid $1.5 billion last year to buy and distribute prescriptions to Medi-Cal enrollees. The bulk of the payment, $1.4 billion, reimbursed for prescriptions dispensed by Walgreens. And the remaining $123 million went to dispensing fees, payments to pharmacists for each prescription they fill. The federal government covers at least half of the state’s payments, which are also offset by rebates from drug makers.
A spokesperson for Walgreens declined to comment on its business with California, citing the same statement it issued in March: “Providing legally approved drugs to patients is what pharmacies do, and it’s important for the communities they serve.” lies in our commitment to those in which we operate.”
Walgreens said it plans to distribute mifepristone “in any jurisdiction where it is legally permitted to do so”. The company was responding to an FDA rule finalized in January that allows certified pharmacies to dispense the abortion pill, the most common way people end pregnancies. Walgreens is not proposing to limit sales of the abortion pill in California or other states where abortion is legal and pharmacies are allowed to dispense it.
Democrats have urged pharmacy chains to stop selling the abortion pill, while the GOP’s attorney general has threatened legal action. But many, including Walmart, Costco, Albertsons and Health Mart, have not entered the fight. Only Rite Aid and CVS have said they plan to introduce certification for distributing the pills.
If Newsom were able to sever Medi-Cal’s relationship with Walgreens, he would be contradicting one of his niche health initiatives. When he took office in 2019, Newsom proposed that the state take away prescription drug coverage for Medi-Cal patients, many of whom were covered through managed-care plans.
Part of Newsom’s pitch: Patients can walk into almost any pharmacy in California.
Kaiser Health News is a national health policy news service. This is Henry J. is an editorially independent program of the Kaiser Family Foundation that is not affiliated with Kaiser Permanente.