California Governor Vetoes Tougher Rules for Pharmacy Middlemen

California Gov. Gavin Newsom vetoed new restrictions on pharmacy benefit managers Saturday, rejecting a bipartisan measure that would have made the Golden State the latest to impose tighter rules on the multibillion-dollar sector.

Pharmacists argued PBMs, which negotiate with drug manufacturers and manage prescription benefits for employers, have undermined competition while financially squeezing independent drug stores.

The industry countered that the companies help employers navigate the complex world of drug pricing to keep costs down and that the new law would have taken away options for containing prices.

Newsom has made the high cost of drugs a central issue of ...