Gov. Gavin Newsom declared last month that California was “done” doing business with Walgreens after the pharmacy chain said it would not distribute an abortion pill in 21 states where Republicans have threatened legal action. Since then, KHN has learned that the Democratic governor must compromise on his hard-line tweet.
California is legally bound to continue doing business with Walgreens through the state’s massive Medicaid program, health law experts said. And according to a public records request, the state paid Walgreens $1.5 billion last year.
Newsom’s administration confirmed it will “continue to comply” with federal law by paying Walgreens through Medi-Cal, which provides health coverage to roughly 15 million residents with low incomes and disabilities. Were California to stop covering Medi-Cal prescriptions filled at Walgreens stores, legal scholars warned, the state would run afoul of federal law, which allows patients to get their medications at any approved pharmacy.
“California has no intention of taking any action that would violate federal Medicaid requirements, or that could undermine access for low-income individuals,” said Tony Cava, spokesperson for the California Department of Health Care Services, in a statement.
Newsom spokesperson Anthony York said, “Tweeting is not policy.” He added the governor will not “take any action that hurts people who need access to care.” Walgreens has even been reinvited to apply for a specialty drug contract that Newsom pulled back on renewing last month, York said. Walgreens has received about $54 million from the state under the contract.
The dustup with the Illinois-based pharmacy chain illustrates Newsom’s panache for sweeping announcements on social media, where he garners national headlines but offers few specifics and little follow-through, political strategists said. 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 much more about appearances and style and approach than it is about substance,” said David McCuan, political science department chair at Sonoma State University. Newsom and his administration “oversell their pronouncements and don’t actually deliver.”
On March 6, the governor tweeted, “California won’t be doing business with @walgreens — or any company that cowers to the extremists and puts women’s lives at risk,” after the second-largest U.S. pharmacy chain said it would not dispense mifepristone in states where it is illegal to dispense the pill or where the company would face potential lawsuits if it did so.
Democratic strategist Steve Maviglio said continuing to pay Walgreens through Medi-Cal doesn’t take away from Newsom’s support of abortion rights.
“He’s going to get the headline for protecting abortion rights, and this he can chalk up to a technical difficulty,” Maviglio said. “He will be rewarded for standing up to a corporation.”
Federal law is designed to ensure Medicaid patients have choices in where they get health care, including prescriptions. Approved providers like Walgreens are protected by Medicaid statute (PDF), which states that no health plan or entity can “restrict the choice of the qualified person from whom the individual may receive services.” Legal and Medicaid experts said that makes it extremely difficult for the Newsom administration to disqualify Walgreens.