The California Department of General Services notified Walgreens on Wednesday, March 8, 2023. The notice advised the state would not renew its contract valued at $54 million. This contract was set to expire at the end of the fiscal year.
Why did California decide not to renew the contract?
The decision to not renew the contract was based on several factors, including Walgreens’ recent performance and its inability to meet the state’s standards for price, quality, and service. The Department of General Services will now work to find a new provider to serve the state’s needs. [i]
What was covered under the contract?
The contract between Walgreens and the state was initially scheduled to be renewed in May. The agreement allowed Walgreens to produce and supply specialty pharmacy prescription drugs, typically found within the prison health care system. [ii]
This includes drugs for treating inmates with mental health issues, chronic diseases, and other medical conditions. Walgreens was also responsible for providing quality assurance services throughout the contract. The renewal of this contract would have allowed Walgreens to continue supplying the necessary drugs and services to the prison health care system. [ii]
Governor Newsom also tweeted recently regarding the incident.
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Who were the major opponents of the dispensing of the abortion pill?
In response to the FDA’s modification of restrictions on the abortion pill Mifepristone in January, Walgreens, CVS, and Rite Aid announced they would begin dispensing the drug. This decision was met with immediate resistance from twenty Republican state attorneys general, who vowed to take legal action if Walgreens planned to distribute the abortion pill. [iii]
As a result, the attorneys general argued that the new restrictions on Mifepristone were not enough to ensure the safe use of the drug and that the decision to dispense the abortion pill was “irresponsible” and “reckless.” They urged Walgreens to reconsider its decision, warning that they would pursue legal action if necessary to protect the health and safety of the public. [iii]
How has Walgreens responded to the cancelation of its contract with California?
Now, Walgreens has recently been in the news due to their decision to not provide Mifepristone in all states. In a statement, the company claimed that the state needs to be more informed and will only dispense Mifepristone in those jurisdictions where it is legally allowed. [iv]
Similarly, all other retail pharmacies are taking the same approach, leaving Walgreens with the impression that any contract to distribute Mifepristone would be challenging to move. Walgreens’ Senior Director of External Relations, Fraser Engerman, could not further comment. [iv]
References
[i] Office of Governor Gavin Newsom, Governor Newsom: Cal. Pulls Back Renewal of Walgreens Contract (Mar. 8, 2023)
[ii] Samantha Kamman, Major pharmacy chain won’t dispense abortion pill in some states amid pro-life backlash (Mar. 6, 2023)
[iii] Nathaniel Meyersohn, Carma Hassan, Walgreens will not distribute abortion pill in 20 states (Mar. 3, 2023)
[iv] Office of Governor Gavin Newsom, Governor Newsom: Cal. Pulls Back Renewal of Walgreens Contract (Mar. 8, 2023)
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