California Code, Health and Safety Code - HSC § 130403

(a) The department shall attempt to negotiate rebate amounts with drug manufacturers for all prescription drugs purchased by Medicare beneficiaries.As part of these agreements, the department shall negotiate a separate fee in an amount required to administer each pharmacy claim reimbursement submitted to the department pursuant to Section 130405.

(b) If the department determines that it is unable to negotiate rebates with a sufficient number of drug manufacturers, it may cease to continue the implementation or operation of this division.