Increasing health care costs is the last thing lawmakers should pursue

OPINION – At the start of California’s 2025 legislative session, lawmakers in Sacramento emphasized that making the state a more affordable place to live would be a top priority. One of the most impactful ways our representatives can address the cost of living is to crack down on sky-high prescription drug prices.

Unfortunately, even at a time when many Californians are struggling to pick up the pieces from the devastating wildfires in Southern California, some politicians in Sacramento are pushing the same Big Pharma-backed proposals that threaten affordable healthcare options for patients across the state.

Sen. Scott Wiener recently introduced Senate Bill 41 (SB 41), a bill mirroring legislation he authored last year (SB 966) that would have undercut access to affordable medication. Like SB 966, this new bill would restrict employers’ and unions’ ability to offer their employees affordable and flexible prescription drug plans. SB 41 would make it more difficult for employers and unions to incentivize their negotiating partners to extract lower costs on prescription drugs from Big Pharma.

Governor Gavin Newsom wisely vetoed SB 966, noting that increased transparency across the entire prescription drug supply chain must be the first step to tackling high prices. Proponents of SB 41 are pressing forward with little regard for the Governor’s recommendation or the serious consequences the legislation would have for working families and small businesses.

The most concerning element of SB 41 is that the bill would transform the system by which unions and employers partner with pharmacy benefit managers (PBMs) to reduce prescription drug costs for members and employees.

Plan sponsors such as unions, businesses, and government health plans contract with PBMs to administer critical pharmacy benefits to their employees and members. As part of this arrangement, PBMs play an essential role by negotiating against big drug companies to make medications available at the lowest possible cost for both employers and patients. PBMs are then often compensated according to the cost savings they deliver.

SB 41, however, would “delink” PBM compensation from their performance in achieving lower costs, effectively eliminating a significant source of leverage plan sponsors have to combat the high prices set by big drug companies. Without this leverage to negotiate against Big Pharma, businesses and unions will incur higher healthcare costs and struggle to offer the competitive benefits their employees and members expect.

Employers won’t bear the consequences of these price hikes alone. Ultimately, these costs will trickle down to employees through higher premiums and co-pays, harming working people and their families who rely on affordable prescriptions to stay healthy.

The biggest beneficiaries of SB 41 would be big drug companies. This bill would do nothing to address skyrocketing prices; rather, it would give them even more leverage to reap higher profits on the backs of hardworking Californians and job creators across the state.

What SB 41 fundamentally gets wrong is its singular focus on one aspect of the prescription drug supply chain, PBMs, and its support for pharmaceutical companies’ priorities – instead of seeking to hold these companies accountable. As the Governor advised, California lawmakers should seek to understand better the entire supply chain to enact good policies that address working families’ concerns.

If affordability is really a priority for Sacramento, lawmakers should not pass policies outlined in SB 41 that enable big drug companies to boost their profits while working families pay more for healthcare.

Marcus Gomez is President & Co-Founder of California Clothing Recyclers and Vice Chairman of the California Hispanic Chambers of Commerce.