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California to halt $54M Walgreens contract over company’s policy on abortion drug sales

California will not renew a $54 million contract with Walgreens in response to the company’s decision not to dispense an abortion drug in states where Republican officials have threatened legal action against them, Gov. Gavin Newsom said Wednesday.

The decision, which Newsom previewed in a tweet Monday, comes as the governor and lawmakers have taken broad measures in recent months to ensure abortion is available in California and to make the state a place where people from elsewhere can get the procedure following the June ruling by the Supreme Court to overturn Roe v. Wade.

“This is an attempt to call the question ‘Which side are you on? Whose side are you on?” Newsom said in an interview with POLITICO ahead of the announcement. “Are you going to just cower in the face of bullies? Are you going to just roll over?”

Walgreens will no longer provide medications to inmates in California’s sprawling correctional system as a result of the decision. A planned renewal of the contract was scheduled to take effect May 1.

Newsom says this is just the first step in an “exhaustive review” of all of the state’s ties with Walgreens, some of which he may need to work with the state Legislature to terminate.

Walgreens, which said in a statement Wednesday that it was disappointed by Newsom’s action, has faced criticism for saying it would not dispense the abortion drug Mifepristone even in some states where it is legal but officials have threatened legal action.

“Our position has always been that, once we are certified by the FDA, Walgreens plans to dispense Mifepristone in any jurisdiction where it is legally permissible to do so, including the state of California,” the company said.

Walgreens says it’s being unfairly singled out by California, noting that other major pharmacy chains have not yet said how they will respond to threats from GOP state attorneys general on the dispensing of abortion drugs.

“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,” the company said.

CVS, Albertsons, Rite Aid, Costco, Walmart and Kroger have not responded to POLITICO requests for comment.

Newsom said he was nixing the contract in part because Walgreens could not provide clear answers about its policy.

“They were unwilling or incapable of doing anything more than repeating a statement that only reinforces the ambiguity,” Newsom said. “That made me conclude they’re not serious about this, and we are.”

Newsom’s move also demonstrates his willingness to wield California’s financial might in an intensifying national battle over abortion access. The governor and legislative Democrats have already allocated hundreds of millions of dollars and enacted new laws to make California a sanctuary for abortion-seekers from other states.

“Ironically, we’re the size of 21 states’ populations combined,” Newsom said, referencing the 21 states where Walgreens has told GOP state officials that they do not plan to dispense the pills. “And likely, when the dust settles, we’ll be the fourth largest economy in the world. So, we have, we believe, moral authority, but we also have formal authority and will exercise it in partnership with the Legislature, and in the absence of that, through executive action.”

States have been on the frontlines of abortion policy struggles after the U.S. Supreme Court ended the federal right to the procedure. While California responded by aggressively expanding abortion access, Republican states have sharply restricted it.

Florida lawmakers this week introduced a bill that would ban abortions after six weeks. As national Democrats rebuked the proposal, California Attorney General Rob Bonta told Floridians repulsed by the “despicable” bill they would be “welcome in California.

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