PCMA Sues California Over SB 41, Challenging PBM Fiduciary Duties Under ERISA

California’s most ambitious pharmacy benefit manager (PBM) reform effort has drawn an immediate legal challenge, as the Pharmaceutical Care Management Association (PCMA) filed a federal lawsuit contesting key provisions of Senate Bill 41 (SB 41), including the law’s imposition of fiduciary duties on PBMs servicing self-insured employer health plans.

PCMA filed the complaint on January 2, 2026, in the US District Court for the Central District of California, arguing that SB 41 is preempted by the federal Employee Retirement Income Security Act (ERISA). The lawsuit places California’s PBM reform squarely at the intersection of state regulatory authority, ERISA preemption, and pharmacy access—issues with nationwide implications for independent pharmacies and patients.

Background: California’s SB 41 and PBM Reform Efforts

Signed by Governor Gavin Newsom in October 2025 and scheduled to take effect on January 1, 2026, SB 41 was meant to be a step forward in PBM reform. Rather than focusing solely on licensure or reporting requirements, the law sought to change PBM incentives by imposing substantive duties designed to address long-standing concerns about PBM business practices in California and across the country.

Under SB 41, PBMs servicing self-insured employer plans were required to act in the best interests of their clients, be fair and truthful, avoid conflicts of interest, and perform their duties with care, skill, prudence, and diligence. Although these obligations were framed within the PBM–plan relationship, supporters argued the law would have downstream benefits for patient access and independent pharmacy participation.

PCMA's Legal Challenge

PCMA’s lawsuit does not seek to invalidate SB 41 in its entirety. Instead, it targets the statute’s fiduciary duty provisions, contending that California exceeded its authority by imposing state-law fiduciary standards on PBMs operating within ERISA-governed self-insured plans.

According to the complaint, ERISA exclusively governs fiduciary status for employer-sponsored health plans, and PBMs are generally considered non-fiduciary administrative service providers under federal law. PCMA argues that allowing states to redefine fiduciary duties in this context would undermine ERISA’s uniform regulatory framework.

This legal strategy mirrors prior challenges brought by PCMA against state PBM laws that attempt to impose substantive accountability measures.

Implications for Independent Pharmacies

For independent pharmacies, the lawsuit underscores a recurring reality in PBM reform efforts: ERISA preemption frequently becomes the central battleground when states attempt meaningful regulation.

SB 41 reflected growing legislative recognition that PBM practices—including network steering, reimbursement pressure, and conflicts tied to PBM-owned pharmacies—directly affect pharmacy access, patient choice, and the sustainability of community pharmacies. If PCMA succeeds, California may be limited in its ability to impose fiduciary accountability on PBMs servicing self-insured employer plans, which represent a significant portion of the commercial insurance market.

While such a ruling would not negate the policy rationale behind SB 41, it would constrain one of the law’s most powerful enforcement mechanisms.

How the Lawsuit Shapes the PBM Reform Landscape

The challenge to SB 41 does not suggest that PBM reform lacks merit or that independent pharmacy concerns are unfounded. Rather, it highlights the structural limitations of state-based reform efforts when federal preemption doctrines are invoked.

The case reinforces a broader takeaway for policymakers and pharmacy stakeholders: durable and comprehensive PBM reform may ultimately require federal action, not solely state legislation.

Conclusion

PCMA v Bonta is expected to be closely watched by states considering PBM fiduciary standards, conflict-of-interest restrictions, or expanded PBM oversight. The case raises a fundamental question for regulators and courts alike: should PBMs be permitted to operate without enforceable duties to act in the best interests of plans, pharmacies, and patients?

California answered that question decisively through SB 41. The courts will now determine how far states may go in implementing that answer.

Key Takeaways

• PCMA has filed a federal lawsuit challenging California’s SB 41, focusing on PBM fiduciary duty provisions.
• The lawsuit argues that ERISA preempts state laws imposing fiduciary obligations on PBMs servicing self-insured employer plans.
• The outcome could limit states’ ability to impose substantive PBM accountability measures.
• Independent pharmacies should closely monitor the case due to its potential impact on PBM regulation, reimbursement practices, and patient access.

Reference

Pharmaceutical Care Management Association v. Bonta et al. US District Court for the Central District of California. Case No. 2:2026cv00012. 

Lee DY, Morgan LW. California’s PBM fiduciary law faces an ERISA challenge – why this matters for independent pharmacies and patients. Buchanan. Published January 26, 2026. Accessed January 27, 2026. https://www.bipc.com/california%E2%80%99s-pbm-fiduciary-law-faces-an-erisa-challenge-%E2%80%93-why-this-matters-for-independent-pharmacies-and-patients