Governor Newsom Completes $54 Million Department of General Services Contract with Walgreens

Gov. Gavin Newsom announced Wednesday that the state is terminating a $54 million contract with Walgreens, the first of many possible state actions against the pharmaceutical and retail company after announcing earlier this week that the state would no longer do business with them. affairs.

Following Walgreens’ decision last week to no longer sell abortion pills in the 20 states where they are illegal due to the threat of legal action, Gov. Newsom responded on Twitter:California won’t do business with Walgreens or any company that is hiding behind extremists and putting women’s lives at risk. Were made.”

The announcement left many confused as to what action California might take, with most suggesting that Newsom would pursue public insurance plans and government contracts. However, speculation ended Wednesday when Newsom announced a contract between the California Department of General Services (DGS) and Walgreens to purchase special pharmacy prescription drugs primarily used by the California Department of Corrections and Rehabilitation (CDCR) and its Correctional Healthcare. the system will not be updated. DGS has specifically advised Walgreens that the planned May 1, 2023 renewal will no longer be viable as the state instead hopes others will honor the contract. In total, Walgreens will lose $54 million a year from this contract alone.

“California will not stand by while corporations give in to extremists and cut off critical access to reproductive care and freedom,” the governor said in a statement Wednesday. “California is on track to become the world’s fourth largest economy and we will use our bargaining power to protect choice.”

While Walgreens continues to claim that they only comply with the laws of each individual state, it is likely that other state actions against the company will soon be taken.

“It wasn’t a surprise,” Roger Springer, a former executive at two companies that helped win contracts with local and county governments, told the Globe on Wednesday. “We knew that he would look at some of these contracts, and this one with prisons is something of a starting pistol. In a way, other states, especially dark blue ones, can do the same with the contracts they have with Walgreens. On the other hand, this is kind of just the first of many things that will be taken against them in California.

“They can still cripple a company with more contract endings and more severe repercussions they can do with National Insurance plans. Walgreens was caught up in a massive national fight over this, and they could either go along with the 20-plus states that threatened to sue them if they continued to sell abortion pills there, or they would have to face what California is doing. with them now. Either way, they could lose a lot of money and, if this continues, they could lose employees and more stores.

“This $54 million contract is just the beginning. And this is no picnic for the state, which now has to fight to secure another contract in less than two months, which is easier said than done.”

More statements from the state to cut ties with Walgreens are expected soon.

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