Gov. Gavin Newsom declared final month that California was “done” doing business with Walgreens after the pharmacy chain stated it will not distribute an abortion tablet in 21 states the place Republicans threatened authorized motion. Since then, Kaiser Well being Information has realized that the Democratic governor should compromise on his hard-line tweet.

California is legally sure to proceed doing enterprise with Walgreens by way of the state’s huge Medicaid program, well being regulation specialists stated. And in response to a public data request, the state paid Walgreens $1.5 billion final 12 months.

Newsom’s administration confirmed it can “proceed to conform” with federal regulation by paying Walgreens by way of Medi-Cal, which gives well being protection to roughly 15 million residents with low incomes and disabilities. Have been California to cease masking Medi-Cal prescriptions stuffed at Walgreens shops, authorized students warned, the state would run afoul of federal regulation, which permits sufferers to get their medicines at any authorised pharmacy.

“California has no intention of taking any motion that might violate federal Medicaid necessities, or that might undermine entry for low-income people,” Tony Cava, a spokesperson for the California Division of Well being Care Providers, stated in a press release.

Newsom spokesperson Anthony York stated, “Tweeting will not be coverage.” He added the governor won’t “take any motion that hurts individuals who want entry to care.” Walgreens has even been reinvited to use for a specialty drug contract that Newsom pulled again on renewing final month, York stated. Walgreens has acquired about $54 million from the state beneath the contract.

The dust-up with the Illinois-based pharmacy chain illustrates Newsom’s panache for sweeping bulletins on social media, the place he garners nationwide headlines however provides few specifics and little follow-through, political strategists stated. Newsom has raised his nationwide profile — and hypothesis of a presidential bid — by touring to pink states and launching a brand new political motion committee.

“It’s rather more about appearances and magnificence and strategy than it’s about substance,” stated David McCuan, political science division chair at Sonoma State. Newsom and his administration “oversell their pronouncements and don’t truly ship.”

On March 6, the governor tweeted that “California received’t be doing enterprise with @walgreens — or any firm that cowers to the extremists and places girls’s lives in danger,” after the second-largest U.S. pharmacy chain stated it will not dispense mifepristone in states the place it’s unlawful to dispense the tablet or the place the corporate confronted potential lawsuits if it did so.

Democratic strategist Steve Maviglio stated persevering with to pay Walgreens by way of Medi-Cal doesn’t take away from Newsom’s help of abortion rights.

“He’s going to get the headline for shielding abortion rights, and this he can chalk as much as a technical issue,” Maviglio stated. “He can be rewarded for standing as much as a company.”

Federal regulation is designed to make sure Medicaid sufferers have decisions in the place they get healthcare, together with prescriptions. Authorised suppliers similar to Walgreens are protected by Medicaid statute, which says that no well being plan or entity can “prohibit the selection of the certified individual from whom the person might obtain companies.” Authorized and Medicaid specialists stated that makes it extraordinarily troublesome for the Newsom administration to disqualify Walgreens.

“So long as Walgreens is performing for Medicaid beneficiaries because it ought to, shelling out all authorized medicine in a fashion that’s in line with permissible pharmacy follow, then I don’t see the premise for excluding them,” stated Sara Rosenbaum, a professor of well being regulation and coverage at George Washington College.

The federal laws that shield Walgreens are the identical which have allowed Deliberate Parenthood to supply healthcare companies to Medicaid enrollees in conservative states the place leaders have sought unsuccessfully to exclude the community of clinics from receiving taxpayer funding.

An authorised pharmacy firm may be excluded from state networks provided that it has dedicated fraud or different contract violations, stated Edwin Park, a analysis professor at Georgetown College with experience in Medicaid regulation.

“Actually, that wouldn’t be the case for Walgreens,” Park stated.

It’s unclear whether or not Newsom was conscious of how troublesome it will be for California to unwind its Medi-Cal supplier settlement with Walgreens, stated Daniel Schnur, a Republican-turned-independent strategist who additionally teaches political science at USC.

“The unique announcement appeared like a seminal step for the state of California to tackle precept, even at nice monetary expense,” Schnur stated. “They’ve quietly backed away.”

By way of a data request, Kaiser Well being Information realized the state paid Walgreens $1.5 billion final 12 months to purchase and dispense prescriptions to Medi-Cal enrollees. The majority of the cost, $1.4 billion, reimbursed Walgreens for the prescriptions it distributed. And the remaining $123 million went to shelling out charges, a cost to pharmacists for every prescription they fill. The federal authorities covers at the very least half the state’s funds, that are additionally offset by rebates from drug producers.

A Walgreens spokesperson declined to touch upon its enterprise with California, referring to the identical assertion it issued in March: “Offering legally authorised medicines to sufferers is what pharmacies do, and is rooted in our dedication to the communities during which we function.”

Walgreens stated it plans to dispense mifepristone “in any jurisdiction the place it’s legally permissible to take action.” The corporate was responding to a Meals and Drug Administration rule finalized in January that permits licensed pharmacies to dispense the abortion tablet, which is the commonest approach individuals terminate pregnancies. Walgreens isn’t proposing to restrict abortion tablet gross sales in California or different states the place abortion is authorized and pharmacies are allowed to dispense it.

Democrats have urged pharmacy chains to promote the abortion tablet whilst GOP attorneys basic threaten authorized motion. However many, together with Walmart, Costco, Albertsons and Well being Mart, haven’t waded into the battle. Solely Ceremony Support and CVS have stated they plan to start certification to dispense the drugs.

Had Newsom been in a position to sever Medi-Cal’s relationship with Walgreens, he would have contradicted one in every of his signature well being initiatives. When he took workplace in 2019, Newsom proposed the state take over prescription drug protection for Medi-Cal sufferers, lots of whom had been coated by way of managed-care plans.

A part of Newsom’s pitch: Sufferers might go to almost any pharmacy in California.

This story was produced by Kaiser Well being Information, an editorially unbiased newsroom of the Kaiser Household Basis that gives in-depth protection of well being points.