California Gov. Gavin Newsom announced on Monday that the state of California will no longer do business with Walgreens—or, for that matter, with any other company “that cowers to the extremists and puts women’s lives at risk.” Walgreens had promised that it wouldn’t carry mifepristone, a drug used for abortions, among other things, in states where it could face legal action for doing so.
Planned Parenthood celebrated Newsom’s response in a statement to CalMatters, framing recent legal threats from Republican attorneys general as part of an ongoing effort to ban abortion nationwide. Walgreens expressed disappointment.
There are a few ways that California engages with Walgreens, and it’s unclear if Newsom’s mandate will put a stop to all of them. The state of California and the federal government jointly administer Medi-Cal, for example, which recipients can use to fill prescriptions at drugstores including, currently, Walgreens. Then there are research partnerships, like a collaboration between Walgreens and the University of California, San Francisco.
But at the very least, if California wants to boycott Walgreens, it should probably stop shopping there. Which raises the question: What is the state of California buying from Walgreens, anyway?
Thanks to Cal eProcure, which documents most spending by California state agencies, we can see that purchases vary widely. In 2019, for example, the Department of Transportation bought a bottle of hydrogen peroxide “to clean up from a dead skunk.” The same year, the California Conservation Corps spent $3.99 to print a photo of Gov. Gavin Newsom.
In 2020, the DMV spent $1,500 on gloves, Clorox wipes, and hand sanitizer. In 2021, the Emergency Medical Service Authority bought three thermometers and four pregnancy tests. This fall, the California Conservation Corps bought a bag of Skittles; CAL FIRE, California’s Department of Forestry and Fire Protection, bought a pulse oximeter.
The state’s purchases at other drug stores look similar: groceries and COVID tests at CVS; Post-its and lightbulbs at Rite Aid. Since 2015, incidentals like these have accounted for around 3 percent of California’s Walgreens spend.
Mostly, California is using Walgreens to buy medicine for prisoners. The California Department of Corrections and Rehabilitation has turned to Walgreens for prescription drugs used to treat diseases like leukemia, lung cancer, Hodgkin’s disease, multiple sclerosis, asthma, hypertension, and age-related macular degeneration. In 2022, the corrections department spent more than $11 million at the store’s pharmacy, enough to make Walgreens the third-largest supplier of drugs and pharmaceutical products in Cal eProcure’s database.
This drug contract with Walgreens was set to be renewed in May, but on Wednesday, Newsom announced that California will withdraw. Who might get the drug contract next? California’s second-largest drug supplier isn’t even in the running: Emergent Devices, which received $51 million from the state last year, mostly just produces Narcan spray and vaccines for diseases like smallpox, anthrax, and typhoid.
The state’s top drug supplier could be an option. In 2022, California spent around $52 million with AmerisourceBergen Drug Corp., a pharmaceutical wholesaler. The California departments of corrections, public health, and state hospitals all use AmerisourceBergen for some bulk orders already.
Walgreens and AmerisourceBergen have a close relationship. Walgreens uses AmerisourceBergen to stock its own pharmacies. Walgreens actually owns about 17 percent of AmerisourceBergen, and AmerisourceBergen bought Walgreens’ European wholesale arm in 2021. While doing business with AmerisourceBergen is not the same as “doing business with Walgreens”—it’s also not that different. As California has learned in previous forays into principled boycotts, the moral high ground can get muddy fast.