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California to End $54 Million Contract With Walgreens After Chain Limits Access to Abortion Pill

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People walk out of a Walgreens store.
Customers leave a Walgreens pharmacy on Gough Street in San Francisco on Oct. 13, 2021. The store has since closed. (Justin Sullivan/Getty Images)

Updated 10 a.m. Thursday, to include the response from Walgreens.

California will not renew its $54 million contract with pharmacy giant Walgreens after the company recently decided it would no longer dispense a commonly used abortion medication in 21 states.

“California will not stand by as corporations cave to extremists and cut off critical access to reproductive care and freedom,” Gov. Gavin Newsom said Wednesday in a press release announcing the action. “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.”

The move will sever the contract between Walgreens and the California Department of General Services, through which California procures medications and other health care supplies for people incarcerated in the state’s 34 prisons.

On Wednesday, Newsom directed the department to formally notify Walgreens that it would not renew the multimillion-dollar contract, effective May 1, 2023. The state will explore other pharmacy options for the same services, the press release said.

Newsom told Politico that terminating the Walgreens contract with California’s expansive prison system is just the first step in an “exhaustive review” of all the state’s ties with the company.

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Walgreens is the second-largest pharmacy chain in the country. Earlier this month, the Illinois-based company announced it would stop dispensing mifepristone — the first pill used in a two-drug abortion procedure — after Republican attorneys general in the nearly two dozen states signed a letter (PDF) threatening to take legal action against pharmacies that continue to offer it. In several of those states, abortion in general, and the medication specifically, remains legal, including in Alaska, Iowa, Kansas and Montana.

The face-off comes less than a year after the U.S. Supreme Court voted to overturn Roe v. Wade, the landmark 1973 decision that granted the right to an abortion. Since the court’s ruling last June, 13 states have outlawed abortion procedures, and several others, including Florida, have significantly limited access to them.

“We are deeply disappointed by the decision by the state of California not to renew our longstanding contract due to false and misleading information,” Walgreens told KQED in an email, following Wednesday's announcement.

The company is “facing the same circumstances as all retail pharmacies,” none of whom have said they would approach the situation any differently, it added.

“Once we are certified by the FDA, Walgreens plans to dispense Mifepristone in any jurisdiction where it is legally permissible to do so, including the state of California,” it said. “We will dispense this medication consistent with federal and state laws.”

It’s not the first time Walgreens has been at the center of a political and cultural battle in California. Since 2019, the chain has closed 11 stores in San Francisco — among the scores that have been recently shuttered across the state — citing shoplifting as the primary reason for winding back business in the city.

But earlier this year, Walgreens’ chief financial officer told investors during an earnings call that the company may have overstated some of those concerns.

And in 2022, San Francisco’s city attorney won a major case against Walgreens for over-dispensing opioids and failing to report or investigate suspicious orders from pharmacists, as required by law.

Newsom’s jab at Walgreens is the latest in a long-winded effort he has made to position California as an abortion sanctuary. Last year, the governor, who is widely believed to have presidential ambitions, bought billboard and TV ads in Texas and other states where abortion had recently been prohibited, promoting the Golden State as a safe destination for people seeking reproductive services. His administration also created a website for abortion seekers to locate providers and find related travel and child care resources.

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