Washington, D.C., September 15, 2025– The ERISA Industry Committee expressed appreciation today for efforts taken by the California State Legislature to amend SB 41 and avoid conflict with federally-governed, self-insured ERISA plans. The bill, which aims to address rising prescription drug costs by regulating the network and reimbursement practices of pharmacy benefit managers (PBMs), is now structured to uphold the uniformity and flexibility that employers have to design and administer multi-state plans under the Employee Retirement Income Security Act (“ERISA”). Both the Assembly and the Senate adopted the legislation unanimously after amendments were reconciled, and it has been sent to Governor Newsom (D-CA), who has until October 13 to sign the bill or issue a veto. The statement below is attributable to Dillon Clair, Director of State Advocacy, ERIC.
“The California Legislature has taken important steps to address a key concern – that the original proposal, though well-intentioned, would overstep state authority to regulate self-funded ERISA plans. Instead, the amended legislation applies accountability and affordability reforms to PBM practices while maintaining the flexibility and independence that ERISA provides to employer plan sponsors. We welcome the application of fiduciary responsibilities to PBMs – employers have been expected to meet these same requirements for 50 years, and ERIC has long supported making this same policy change at the federal level. ERIC appreciates the opportunity to work with California lawmakers to achieve this critical balance, and remains committed to ensuring any future regulations reflect the intent of this legislation.”
In addition to its work in the states, ERIC continues to call on Congress to move with greater urgency to enact strong PBM transparency and accountability reforms at the federal level that would provide relief for employers and workers nationwide, including:
- Providing for comprehensive PBM transparency.
- Banning so-called “spread pricing.”
- Requiring 100% pass-through of rebates and payments from drug manufacturers.
- Applying fiduciary standards to PBMs, in the same way such standards apply to employers.