California will not renew $54 million contract with Walgreens over abortion pill policy

California will not renew a $54 million contract with Walgreens over the drug store chain’s decision not to sell the abortion pill in some states due to legal restrictions.

“California will not stand by as corporations cave to extremists and cut off critical access to reproductive care and freedom,” Gov. Gavin Newsom said in a statement Wednesday. “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.”

Newsom said on Monday that the state was “done” doing business with Walgreens. California used the contract to buy specialty prescription drugs for the prison system. The state is reviewing all of its business contracts with Walgreens.

Walgreens said it will sell the abortion pill, mifepristone, in any state where it is “legally permissible to do so.” Republican attorneys general in 21 states warned Walgreens in February that selling or distributing the abortion pill in their states would violate local laws.

The drug store chain told them it would not sell or mail mifepristone in their states.

The Food and Drug Administration in January allowed retail pharmacies like Walgreens to sell mifepristone so long as they become certified under an agency program that monitors how the pill is used and distributed. Walgreens and CVS have said they plan to become certified under that program.

At least 12 states have banned abortion since the Supreme Court overturned Roe v. Wade last year. Several other states have tighter restrictions on mifepristone than the FDA does.

Walgreens is also not selling the abortion pill in states like Alaska, Kansas or Montana where abortion is protected as a right under the states’ constitutions. The drug store will also not sell mifepristone in Iowa, where the state Supreme Court last year overturned state constitutional protections for abortion.

Alaska requires patients to get the pill from a doctor. In Kansas, the state had required patients to obtain the abortion pill in person from a physician, but a state court blocked that law in November. Montana’s requirement that patients visit a doctor to get mifepristone is also temporarily blocked by a court.

Join CNBC’s Healthy Returns on March 29th, where we’ll convene a virtual gathering of CEOs, scientists, investors and innovators in the health care space to reflect on the progress made today to reinvent the future of medicine. Plus, we’ll have an exclusive rundown of the best investment opportunities in biopharma, health-tech and managed care. Learn more and register today: http://bit.ly/3DUNbRo