On March 6, Gov. Gavin Newsom tweeted that “California won’t be doing business with Walgreens,” because of the company’s decision to not distribute an abortion pill in states that banned the medication.

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

The contract between the California Department of General Services (DGS) and Walgreens allows the State to procure specialty pharmacy prescription drugs, primarily used by the California Department of Corrections and Rehabilitation (CDCR) and its correctional health care system.

At Governor Newsom’s directive, DGS gave formal notice that it is withdrawing a planned renewal of that agreement set to take effect on May 1, 2023, and instead will explore other options for furnishing the same services. Under this contract, Walgreens has received about $54 million from the State. This contract with Walgreens was to purchase specialty pharmacy prescription drugs for California’s prison health care system, including antiviral and antifungal drugs and medication used for congestive heart failure

As CalMatters’ Kristen Hwang and Ana Ibarra reported, there are about 600 Walgreens stores in California, making up 10% of the state’s pharmacy market. And it was such a vital prescription provider for Medi-Cal insurers that store locations were listed on the state’s pharmacy directory for enrollees.

But as California Healthline reported Thursday, it appears that the governor’s proposal isn’t going to have as dramatic an impact on Walgreens as initially thought.

Walgreens is allowed to rebid on the contract Newsom said the state wouldn’t renew, and California paid Walgreens a total of $1.5 billion last year.

It is also “legally bound to continue doing business with Walgreens through the state’s massive Medicaid program.”

CalMatters said that it’s unclear what approach Newsom and his staff will take going forward – his office did not respond to a request for comment on Thursday. But if the governor continues his “panache for sweeping announcements” as California Healthline put it, his national profile will continue to rise as well.

USA Today reports that Walgreens was “deeply disappointed by the decision by the state of California not to renew our longstanding contract due to false and misleading information,” said representative Fraser Engerman.

“Walgreens is facing the same circumstances as all retail pharmacies, and no other pharmacies have said that they would approach this situation differently, so it’s unclear where this contract would not be moved,” Engerman said. “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.”

Walgreens said last week it assured 20 attorneys general that it would not dispense the pill in their states after the group sent a letter threatening the company with legal action. Abortion is legal in many of these states, including Kansas, Alaska, Iowa and Montana.

The company issued a statement Monday saying it would dispense the pill “where it is legally permissible” but did not respond to a request for comment on whether that included states with attorneys general who threatened legal action.

“We want to be very clear about what our position has always been: Walgreens plans to dispense Mifepristone in any jurisdiction where it is legally permissible to do so. Once we are certified by the FDA, we will dispense this medication consistent with federal and state laws. Providing legally approved medications to patients is what pharmacies do, and is rooted in our commitment to the communities in which we operate.”