California to drop $54 million Walgreens contract after abortion pill controversy
Gov. Gavin Newsom on Wednesday announced the state would not renew a multi-million dollar contract with Walgreens after the giant pharmacy chain said it would not dispense abortion pills in some states.
“California will not stand by as corporations cave to extremists and cut off critical access to reproductive care and freedom,” Newsom said in a statement. “California is on track to be the fourth largest economy in the world and we will leverage our market power to defend the right to choose.”
California’s Department of General Services gave Walgreens formal notice on Wednesday that it was withdrawing from the planned renewal of an agreement set to take effect on May 1. That contract, which began in 2017, has allowed the state to buy specialty prescription drugs from America’s second-largest pharmacy retail chain. Those purchases were primarily made by the California Department of Corrections and Rehabilitation for incarcerated individuals.
Under this contract, Walgreens has received about $54 million from the state over the past eight years, including more than $11 million in 2022, according to the governor’s spokesperson, Brandon Richards.
The impending contract termination comes two days after Newsom vowed to cut ties with Walgreens — “or any company that cowers to the extremists and puts women’s lives at risk,” he wrote in a tweet.
The announcement was in response to a recent decision by Walgreens that it would not sell the abortion medication mifepristone by mail in 20 states, including some states where abortion remains legal, because conservative attorneys general have threatened to sue if sales continue.
The company, however, appeared to walk that back on Monday, saying that it would dispense mifepristone “in any jurisdiction where it is legally permissible to do so.”
In a statement Wednesday, Walgreens spokesperson Fraser Engerman said the company was “deeply disappointed” by California’s decision not to renew the longstanding contract, saying it was based on “false and misleading information.”
“Walgreens is facing the same circumstances as all retail pharmacies, and no other retail pharmacies have said that they would approach this situation differently, so it’s unclear where this contract would now be moved,” Engerman said.
The governor’s surprise announcement earlier this week caused confusion over what state contracts would be affected and whether Californians who use Medi-Cal, the state’s public insurance option for low-income Californians and people with disabilities, would see any adverse consequences.
On Wednesday, Newsom’s administration said state officials were exploring options with other major pharmacy chains to meet the needs of the state’s corrections system. Whether the state will be able to match the cost of the Walgreens contract remains to be seen and could become an issue given the state’s projected $22.5 billion budget shortfall.
Following Newsom’s announcement, Planned Parenthood commended the governor for “continuing to use his office to push back against the extreme anti-abortion agenda.”
“Companies must make decisions based on science & what is best for patients, not extremist political pressure,” Jennifer Wonnacott, spokesperson for Planned Parenthood Affiliates of California, said in a statement. “When they don’t, consumers, voters, and leaders will respond.”
The battle over a key abortion pill
In 2000, the U.S. Food and Drug Administration initially approved the use of mifepristone as a method to end pregnancies up to seven weeks gestation, extending it to 10 weeks in 2016.
In early January, the FDA expanded its regulations to allow pharmacies — pending a certification process — to dispense the drug. That would pave the way for people to not only pick up the pills at retail pharmacies but also order online and receive the pills by mail.
Both Walgreens and CVS started the certification process. But shortly after the announcement, a group of attorneys general in 20 states signed letters on Feb 1 threatening to sue the companies if they distribute abortion pills by mail. Those states are Alabama, Alaska, Arkansas, Florida, Georgia, Indiana, Iowa, Kentucky, Louisiana, Mississippi, Montana, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Texas, Utah and West Virginia.
Since the U.S. Supreme Court’s decision last year to overturn the constitutional right to abortion through Roe v. Wade, abortion pills were seen by reproductive rights advocates as a way to continue ensuring access to abortion.
Medication abortions have surpassed surgical procedures and now account for more than half of the abortions nationwide, according to the Guttmacher Institute.
But now the fate of the pills is in the hands of a Trump-appointed federal judge in Texas who is presiding over a case that could disrupt abortion access across the nation, including in California.
The lawsuit, filed in November by a handful of anti-abortion groups and doctors, alleges that mifepristone is unsafe for inducing abortions. The suit states that the FDA “exceeded its regulatory authority” and “chose politics over science” when it initially approved its use in 2000.
No matter the final ruling, the losing side is likely to file an appeal, which could bring the case up to the Supreme Court.
This story was originally published March 8, 2023 at 3:14 PM.