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California Will Not Renew $54 Million Contract With Walgreens Amid Battle Over Abortion Access

By LawCommentary | Posted on March 15, 2023

Walgreens Store

Walgreens Store

California Democratic Governor Gavin Newsom announced earlier this week that the state would not renew its $54 million contract with Walgreens after the company announced it would adhere to a request made by Republican states to stop the sale of abortion medications including Mifepristone.

Governor Newsom announced the news via a formal notice that shared the state will withdraw from renewing the contract effective May 1, 2023, and that the state “will explore other options for furnishing the same services.” In the past, California has contracted with Walgreens to provide prescription medications to the state’s healthcare system serving inmates through the California Department of Corrections and Rehabilitation.

“California will not stand by as corporations cave to extremists and cut off critical access to reproductive care and freedom,” the Governor shared. “California is on track to be the fourth largest economy in the world and we will leverage our market power to defend the right to choose.”

Walgreens, one of the nation's biggest pharmaceutical retailers, has been caught in the crosshairs of the political discussion about abortion after the company responded to a letter issued by Missouri’s Republican Attorney General Andrew Bailey on behalf of Missouri and 20 other Republican states. The letter was sent to CVS and Walgreens and advised them that sending abortion pills via the federal mail system was Illegal, going as far as threatening legal action if they did so.

The letter detailed, “As Attorney General, it is my responsibility to enforce the laws as written, and that includes enforcing the very laws that protect Missouri’s women and unborn children. My Office is doing everything in its power to inform these companies of the law, with the promise that we will use every tool at our disposal to uphold the law if broken.”

Both CVS and Walgreens announced that they were seeking FDA approval to use the mail system to sell abortion medication. The company’s mission to seek FDA approval came after the Biden administration announced that it would turn to the mail system as a way to circumvent the recently overturned Roe v. Wade supreme court decision last year.

The letter from the Attorneys General explains, “Federal law expressly prohibits using the mail to send or receive any drug that will ‘be used or applied for producing abortion’… the text could not be clearer: ‘every article or thing designed, adapted, or intended for producing abortion … shall not be conveyed in the mails.’ And anyone who ‘knowingly takes any such thing from the mails for the purpose of circulating’ is guilty of a federal crime.”

Shortly after receiving the letter, Walgreens responded with a letter of its own explaining, “Walgreens does not intend to dispense Mifepristone within your state and does not intend to ship Mifepristone into your state from any of our pharmacies. If this approach changes, we will be sure to notify you.”

Not long after Walgreens’ response, public outrage exploded, as many pointed to Walgreens’ swift obeisance to the Republican demands, even in states where abortion was still legal.

California was first to condemn Walgreens’ response after Governor Newsom announced via a tweet “California won't be doing business with @walgreens -- or any company that cowers to the extremists and puts women's lives at risk.”

At the time, it was not clear what was meant by the state no longer doing business, but days later Newsom followed through on his promise by ending plans to renew a multi-million dollar contract with the company.

After the Governor's announcement, Walgreens spokesman Fraser Engerman shared that the company was "deeply disappointed by the decision by the state of California not to renew our longstanding contract" due to what he called "false and misleading information.”

“Walgreens is facing the same circumstances as all retail pharmacies, and no other retail pharmacies have said that they would approach this situation differently, so it’s unclear where this contract would now be moved.”

This latest move by California's governor has only added to the pressure surrounding the national debate on abortion and access to medication. A number of Democratic states also came together to draft a letter of their own, countering Republican demands.

On Thursday, New York Governor Kathy Hochul and Attorney General Letitia James sent a letter to Walgreens, CVS, and Rite Aid asking the companies whether they will continue to provide abortion medication to citizens of New York. The letter posed, "Will you commit to dispensing mifepristone via mail with a doctor’s prescription to patients in the State of New York? If not, what is the legal basis for this decision?" James gave the companies ten days to respond.

As Walgreens remains caught in the crosshairs of the abortion debate, new questions arise regarding how this series of events will impact other pharmacies in states, especially those that currently still allow abortion.

Until then, Walgreens’ Engerman maintains, “We will dispense this medication consistent with federal and state laws. Providing legally approved medications to patients is what pharmacies do, and is rooted in our commitment to the communities in which we operate.”

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