California’s Medicaid program will continue to pay Walgreens about $1.5 billion each year despite Democratic Gov. Gavin Newsom declaring last month the state was done doing business with the pharmacy giant.
SACRAMENTO, Calif. — California’s Medicaid program will continue to pay Walgreens about $1.5 billion each year despite Democratic Gov. Gavin Newsom declaring last month the state was done doing business with the pharmacy giant after it indicated it would not sell abortion pills by mail in some states.
But cutting ties with Walgreens WBA, -0.94% wasn’t as clear cut as the governor first indicated. Walgreens has a much more lucrative connection to California’s Medicaid program — the joint federal and state health insurance program for people who are disabled or have low incomes. Federal law says Medicaid patients have the right to fill prescriptions from any willing and qualified provider.Last year, California’s Medicaid program paid the company more than $1.5 billion.
This is not the first time Newsom has made a splashy announcement without first working out all of the details behind it. At the beginning of the pandemic, the Newsom administration quickly signed a contract to purchase masks and other personal protective equipment, frustrating some lawmakers who did not know the details.
Several states have taken steps to restrict mifepristone, after the U.S. Supreme Court struck down federal abortion protections last year. Earlier this year, attorneys general in 20 states, mostly with Republican governors, warned Walgreens it could face legal consequences if it distributed mifepristone in their states. Walgreens responded by saying it would not distribute mifepristone in states where it is not legal to do so.
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