Ron Lanton 4/20/21 Ron Lanton 4/20/21

Two Biosimilar Bills Head to President Biden for Signature

Two Biosimilar Bills Head to President BIden for Signature

S. 164 titled the “Advancing Education on Biosimilars Act of 2021” sponsored by Senator Hassan (D-NH) has passed both the House and Senate and is on its way to the President. This bill requires the Food and Drug Administration (FDA) to advance education and awareness among health care providers about biological products as appropriate, including by developing or improving continuing education programs that address the prescribing of biological products and biosimilars. The FDA may also maintain and operate a website to provide educational materials about biological products.

Additionally, the Ensuring Innovation Act has passed both the House and Senate and is on its way to President for his signature. According to Senator Cassidy’s press release, the bill “would close loopholes to prevent awarding market exclusivity to products that do not represent true innovation and unduly delay cheaper generics from entering the market.”

Lanton Law is a national boutique law and lobbying firm that focuses on healthcare/life science and technology. If you are an industry stakeholder with questions about the current landscape or if you would like to discuss how your organization’s strategic initiatives might be impacted by either Congress, regulatory agencies or legal decisions, contact us today.

Ron Lanton 4/20/21 Ron Lanton 4/20/21

Massachusetts Launches First in the Nation Marijuana Product Catalog For Public Awareness of the Regulated Supply Chain

The Massachusetts Cannabis Control Commission has distributed a press release announcing the first in the nation of a “Product Catalog that will provide the public with a comprehensive database of regulated marijuana products that are sold through the Commonwealth’s licensed Medical Marijuana Treatment Centers (MTCs) and Marijuana Establishments (MEs). The regulatory platform, which is considered the first of its kind in the nation, is hosted through the state’s seed-to-sale system of record, Metrc, and will be embedded on the Commission’s website.”

Furthermore according to the Commission:

“The Commission’s Product Catalog was designed to assist engaged stakeholders, such as school administrators, public safety officials, medical professionals, and parents, with identifying the source of legally produced cannabis merchandise. Under the Commission’s regulations, licensed Marijuana Product Manufacturers must provide information about the marijuana products they will produce and make available at wholesale, after receiving a provisional license and prior to commencing operations in the Commonwealth. Information must include:

The marijuana product type and brand name;
A list of direct and indirect ingredients in the product;
Product serving size, including a description of what constitutes a serving size for a product that is not already a single serving;
Potency;
Photographs of the product both inside its packaging, and outside of and next to its packaging, plus any external or internal packaging; and
A list of marijuana products to be sold based on anticipated or executed agreements between the Marijuana Product Manufacturer and the retail or delivery licensee.

Users will be able to easily look up an item on the Commission’s platform to verify its packaging and labels, ingredients, manufacturing information, which Product Manufacturers produce and wholesale the product in Massachusetts, and more. Marijuana product searches can be completed based on a product name, category, keywords, or other unique identifiers.”

Lanton Law is a national boutique law and lobbying firm that focuses on healthcare/life sciences and technology. Specifically our cannabis practice helps all supply chain entities from growers, financiers, suppliers, dispensers to ancillary services.

If you are an industry stakeholder with questions about the current landscape or if you would like to discuss how your organization’s strategic initiatives might be impacted by either Congress, regulatory agencies or legal decisions, contact us today.

Ron Lanton 4/12/21 Ron Lanton 4/12/21

Cybersecurity & FY 22 Discretionary Funding Request

The President’s request for fiscal year 2022 discretionary funding has been released. Below are a few mentions for cybersecurity:

To support agencies as they modernize, strengthen, and secure antiquated information systems and bolster Federal cybersecurity the discretionary equest recommends $500 million for the Technology Modernization Fund, an additional $110 million for the Cybersecurity and Infrastructure Security Agency, and $750 million as a reserve for Federal agency information technology enhancements.

With increased hacking and ransomware attacks, cybersecurity is going to be more front and center for both policy and legal discussions. For example in this request by the Administration, the attack on SolarWinds Corp. and Microsoft Exchange’s email servers were expressly mentioned. For stakeholders that traffic in data, cybersecurity policies are essential. Ensuring compliance with federal and state requirements are key and we can help.

Lanton Law is a national boutique law and lobbying firm that focuses on technology and healthcare. If you are an industry stakeholder with questions about the current landscape or if you would like to discuss how your organization’s strategic initiatives might be impacted by either Congress, regulatory agencies or legal decisions, contact us today.

Ron Lanton 4/8/21 Ron Lanton 4/8/21

Oregon Proposes New Policy to Control Drug Prices

Drug prices have been fiercely debated in Congress and in various state capitols before COVID-19 brought everything to a halt. Vermont was the first state in the country to require pharmaceutical manufacturers to explain drug price increases. That initiative was followed by Maryland in 2019 as the state created its five member Prescription Drug Affordability Board to monitor prices. It seems now the attention is focused on Oregon.

SB 844 proposes to establish a Prescription Drug Affordability Board in the Department of Consumer and Business Services to review prices for prescription drug products meeting specified cost criteria. Business Services will review prices for prescription drug products meeting specified cost criteria. The bill also requires the board to establish an upper payment limit for drugs that are or are expected to create affordability challenges for health systems and patients in Oregon or health inequities for communities of color.

An insurer, pharmacy benefit manager or other person that pays for or reimburses the cost of prescription drugs in this state may elect to opt out of the upper payment limit for specific drugs to allow the payer to negotiate with a manufacturer for the cost of the drug.

Additionally, the Prescription Drug Affordability Board shall annually assess fees to be paid by manufacturers that sell prescription drug products in this state. The fees shall be established in amounts necessary to meet the costs of the board. The fees shall be imposed based on a manufacturer’s share of gross revenue from sales of prescription drug products in this state.

Lanton Law is a national boutique law and lobbying firm that focuses on healthcare/life science and technology. If you are an industry stakeholder with questions about the current telemedicine landscape or if you would like to discuss how your organization’s strategic initiatives might be impacted by either Congress, regulatory agencies or legal decisions, contact us today.

Ron Lanton 4/8/21 Ron Lanton 4/8/21

Verizon Enters the Telehealth Market

According to a Verizon press release, the company announced its new telehealth venture called BlueJeans Telehealth.

“According to the “The Future of Telehealth - Balancing Security and Ease of Use” white paper, healthcare organizations (81%) expect to see a greater investment in telehealth solutions over the next 2-3 years, with 85% of decision-makers identifying “ease of use” as a top-five driver in producing good outcomes from telehealth. While many hospitals and health clinics have adopted video conferencing services during the pandemic for providing patient care, BlueJeans Telehealth was designed from the ground up for healthcare organizations to simplify the virtual join and visit experience and offer greater access to care, provide more flexibility for providers and patients, improve safety and extend the reach of services available.”

Verizon went on to describe the service.

“BlueJeans Telehealth delivers an intuitive experience for patients, providers and administrators. Using the device of their choice, patients can easily and quickly meet with their providers through their desktop or mobile browser or the BlueJeans app. BlueJeans with Dolby Voice Audio® provides high-quality audio, minimizing disruptions to the visit so patients and providers can communicate important clinical information clearly. Providers and administrators will also benefit from a streamlined experience, as visits are embedded directly within their existing Electronic Health Record (EHR) workflows.

To simplify administrations and reimbursements, licensing is based on a per-visit model, which allows for straightforward data capture and reporting—an important aspect considering 59% of survey respondents cited uncertainty about telehealth reimbursement as a top challenge for adoption and utilization moving forward. BlueJeans Telehealth licenses will also be available in a named host format.”

Lanton Law has been active with telehealth/telemedicine policy advocacy as well as interpreting current laws while giving clients strategic advice on potential regulatory pitfalls.

Lanton Law is a national boutique law andlobbying firm that focuses on healthcare/life science and technology. If you are an industry stakeholder with questions about the current telemedicine landscape or if you would like to discuss how your organization’s strategic initiatives might be impacted by either Congress, regulatory agencies or legal decisions,contact us today.

Ron Lanton 3/31/21 Ron Lanton 3/31/21

New York Enacts Legislation Legalizing Adult Use Cannabis

New York Governor Cuomo (D-NY) has signed (S.854-A/A.1248-A) which legalizes adult-use cannabis.

New York Governor Cuomo (D-NY) has signed (S.854-A/A.1248-A) which legalizes adult-use cannabis. According to the Governor’s press release the “bill signing comes after the Governor, Senate Majority Leader Andrea Stewart-Cousins and Assembly Speaker Carl Heastie announced this past Sunday, March 28, that an agreement had been reached on the legislation. The bill establishes the Office of Cannabis Management to implement a comprehensive regulatory framework that covers medical, adult-use and cannabinoid hemp. The bill also expands New York State's existing medical marijuana and cannabinoid hemp programs. The legislation provides licensing for marijuana producers, distributors, retailers, and other actors in the cannabis market, and creates a social and economic equity program to assist individuals disproportionately impacted by cannabis enforcement that want to participate in the industry.”

Ron Lanton 3/26/21 Ron Lanton 3/26/21

SAFE Banking Act introduced Into the U.S. Senate

U.S. Senators Merkley (D-OR) and Daines (R-MT) have introduced the Secure and Fair Enforcement (SAFE) Banking Act, to ensure that legal cannabis operators have access to banking services. The bill can be viewed here.

According to the press release, the proposed bill prevents federal banking regulators from the following:

Prohibiting, penalizing or discouraging a bank from providing financial services to a legitimate state-sanctioned and regulated cannabis business, or an associated business (such as an lawyer or landlord providing services to a legal cannabis business);
Terminating or limiting a bank’s federal deposit insurance solely because the bank is providing services to a state-sanctioned cannabis business or associated business;
Recommending or incentivizing a bank to halt or downgrade providing any kind of banking services to these businesses; or
Taking any action on a loan to an owner or operator of a cannabis-related business.

Furthermore, the press release states that bill also:

Creates a safe harbor from criminal prosecution and liability and asset forfeiture for banks and their officers and employees who provide financial services to legitimate, state-sanctioned cannabis businesses, while maintaining banks’ right to choose not to offer those services. The bill also provides protections for hemp and hemp-derived CBD related businesses.
Requires banks to comply with current Financial Crimes Enforcement Network (FinCEN) guidance, while at the same time allowing FinCEN guidance to be streamlined over time as states and the federal government adapt to legalized medicinal and recreational cannabis policies.

The House version has already been filed for this Congressional session. Additional background on this bill and issue can be found on Congressman Perlmutter’s website.

Ron Lanton 3/18/21 Ron Lanton 3/18/21

HHS Delays Rebate Rule to 2023 Due to a Court Order

Health and Human Services (HHS) has announced that the Trump administration’s directive that would have implemented the drug rebate rule against pharmacy benefit managers (PBMs).

According to the final rule:

“As required by an order issued by the U.S. District Court for the District of Columbia, this action provides notice of the delay of the effective date of certain amendments to the safe harbors to the Federal anti-kickback statute that were promulgated in a final rule (“Fraud And Abuse; Removal of Safe Harbor Protection for Rebates Involving Prescription Pharmaceuticals And Creation of New Safe Harbor Protection for Certain Point-of-Sale Reductions in Price on Prescription Pharmaceuticals and Certain Pharmacy Benefit Manager Service Fees”) published on November 30, 2020. The new effective date for these certain amendments is January 1, 2023.”

Ron Lanton 3/12/21 Ron Lanton 3/12/21

New Congressional Cannabis/Marijuana Bill Introduced

Senators Dianne Feinstein (D-Calif.), Chuck Grassley (R-Iowa) and Brian Schatz (D-Hawaii) have introduced the Cannabidiol and Marijuana Research Expansion Act.

Senators Dianne Feinstein (D-Calif.), Chuck Grassley (R-Iowa) and Brian Schatz (D-Hawaii) have introduced the Cannabidiol and Marijuana Research Expansion Act. This proposed legislation seeks to improve the process for conducting valid medical research on marihuana, and to streamline the development of safe and effective FDA-approved medicines. The bill is cosponsored by Senators Dick Durbin (D-Ill.), Amy Klobuchar (D-Minn.), Thom Tillis (R-N.C.), Tim Kaine (D-Va.), Joni Ernst (R-Iowa), Jon Tester (D-Mont.) and Lisa Murkowski (R- Alaska). A one page summary of the proposal can be found here.

Ron Lanton 3/9/21 Ron Lanton 3/9/21

New Psychedelic ETF About To Hit the Market

There is a new March 5, 2021 U.S. Securities Exchange Commission (SEC) filing that will allow investors to gain exposure to the psychedelic and cannabis industries.

There is a new March 5, 2021 U.S. Securities Exchange Commission (SEC) filing that will allow investors to gain exposure to the psychedelic and cannabis industries. According to the fling, the Defiance Next Gen Altered Experience ETF is:

The Index is a rules-based index that tracks the performance of a portfolio of life sciences companies conducting federally legal medical activities in the psychedelics, medical cannabis, hemp, and cannabidiol (“CBD”) industries whose common stock or depositary receipts are listed on a U.S. or Canadian exchange. Psychedelic drugs, also known as hallucinogens, are a group of substances, including psilocybin, that are used to change and enhance sensory perceptions, thought processes, and energy levels. Medical cannabis, also known as medical marijuana, refers to the use of parts of the marijuana plant, such as hemp and the plant’s chemicals, for the treatment of a variety of diseases or medical conditions. Hemp is a type of cannabis plant whose stalks and seeds are used for a variety of commercial products.

While Lanton Law is not making any statements about whether people should invest in this or not, we are simply monitoring the industry to let interested stakeholders know about the developments within the cannabis market.

Ron Lanton 3/2/21 Ron Lanton 3/2/21

Virginia Votes to Legalize the Sales & Recreational Use of Marijuana

Virginia has taken one step closer to becoming the first southern state to legalize marijuana. If enacted Virginia would follow Washington D.C. along with fifteen other states to do so. The proposed legislation would allow the possession of up to one ounce of marijuanato become legal starting January 1, 2024. This would be at the same time as sales and a regulatory scheme overseeing the new marijuana marketplace would take off. The bill is awaiting Governor Northam’s signature who is expected to sign the measure into law.

Ron Lanton 2/24/21 Ron Lanton 2/24/21

PBM Lobby Has 8th Circuit Win Vacated & Remanded

The U.S. Supreme Court ruled in a February 22, 2021 decision against the Pharmaceutical Care Management Association (PCMA); the Washington D.C. based trade group that represents pharmacy benefit managers (PBMs).

The Court described the merits of Dirk Wilke, Interim State Health Officer of North Dakota, et al., Petitioners v. Pharmaceutical Care Management Association below:

In Rutledge v. Pharmaceutical Care Management Association, No. 18-540 (U.S.), this Court granted a writ of certiorari to decide whether the Employee Re- tirement Income Security Act of 1974 preempts an Arkansas law that regulates the rates that pharmacy benefit managers (PBMs) reimburse pharmacies for dispensing generic drugs. In that case, the Eighth Circuit had held that Arkansas’s law made a prohib- ited “reference to” ERISA plans and had a forbidden “connection with” such plans.

In this case, Respondent sought to enjoin two North Dakota laws that regulate, among other things, certain fees that PBMs charge pharmacies, which drugs pharmacists are allowed to dispense, and what pharmacists are allowed to say to their pa- tients. These laws apply the same standards regard- less of whether PBMs are providing services to an ERISA or non-ERISA plan.

In ruling in Respondent’s favor, the Eighth Cir- cuit applied its decision in Rutledge to do two things. First, it held that, under Rutledge’s logic, North Da- kota’s laws make an impermissible “reference to” ERISA plans because they apply to PBMs serving plans that “include[]” ERISA plans. Second, the court held that a finding of preemption under ERISA nullifies a State law “in its entirety”—even as ap- plied to non-ERISA plans. Because of the first hold- ing, the Eighth Circuit elected not to decide whether North Dakota’s laws also had a forbidden “connection with” ERISA plans. And because of the second hold- ing, the Eighth Circuit stated that it did not reach Respondent’s separate claims of preemption under Medicare Part D.

The questions in this case are: 1) Whether, contrary to decisions of this Court and every other court of appeals that has addressed the issue, ERISA preempts a State law simply be- cause it is broad enough to “include[ ]” ERISA plans among those affected by the law; 2) Whether, contrary to the text of ERISA and deci- sions of this Court and every other court of ap- peals to consider the issue, ERISA preempts a State law “in its entirety”—even as that law ap- plies to non-ERISA plans.

The Court granted the petition then vacated the prior Court’s decision and remanded the case for further consideration in light of Rutledge v. Pharmaceutical Care Management Assn. Rutledge was a December 2020 unanimous decision that ruled ERISA did not preempt Arkansas’ law on reimbursing pharmacies below acquisition costs, ruling that ERISA does not preempt rate regulations.

Lanton Law was quoted by Law360’s article describing the Court’s Rutledge decision.

Lanton Law is a national boutique law and government affairs firm that closely monitors and counsels clients on legislative, regulatory and legal developments in the LTC, specialty and retail pharmacy space. If you are in industry stakeholder with questions about strategy or simply need advice,contact us today.

Ron Lanton 2/17/21 Ron Lanton 2/17/21

New York Privacy Act Introduced into the New York State Legislature

A680 titled the New York Privacy Act has been introduced into the New York State Assembly. The bill is sponsored by Assemblywoman Rosenthal (D-District 67).

The proposed bill seeks to enact the NY privacy act to require companies to disclose their methods of de-identifying personal information, to place special safeguards around data sharing and to allow consumers to obtain the names of all entities with whom their information is shared. Furthermore the proposed bill creates a special account to fund a new office of privacy and data protection.

While the bill has echoes of Europe’s General Data Protection Regulation consent requirements, this bill takes a hard line approach on the subject which requires consent for all processing activities and third-party disclosures, with no exceptions, the proposed bill as currently written raises significant concerns with how businesses would realistically be able to comply with the proposal’s requirements.

Penalties are very strong under this proposal as seen below:

The attorney general may bring an action in the name of the state,or as parens patriae on behalf of persons residing in the state, to enforce this article.

In addition to any right of action granted to any governmental body pursuant to this section, any person who has been injured by reason of a violation of this article may bring an action in his or her own name to enjoin such unlawful act, or to recover his or her actual damages, or both such actions. The court may award reasonable attorney's fees to a prevailing plaintiff.

Any controller or processor who violates this article is subject to an injunction and liable for damages and a civil penalty. When calculating damages and civil penalties, the court shall consider the number of affected individuals, the severity of the violation, and the size and revenues of the covered entity. Each individual whose information was unlawfully processed counts as a separate violation. Each provision of this article that was violated counts as a separate violation.

Privacy is a hotly trending topic that is showing now signs of slowing down. Bills like this one will require significant work as it makes its way through the legislature in order for New York to achieve consumer protection while enacting a workable law that businesses will be able to comply with.

We at Lanton Law can help. Our legal and lobbying tools can help offer your organization a clear path forward to navigate what will be changing policies for healthcare, technology and clean energy stakeholders. We are a D.C. based firm with no state boundaries as we are active nationwide. Contact us today to discuss your options.

Ron Lanton 2/16/21 Ron Lanton 2/16/21

Virginia on Track to Become Second Second State to Pass Data Privacy Laws

Lanton Law’s privacy practice has been closely monitoring the various state conversations around data privacy. We previously wrote a blog post titled California’s Consumer Privacy Act Could Be Coming to a State Near You, where we traced how California took the first step to create a consumer privacy law in the wake of Europe’s General Data Protection Regulation.

So what’s going on with Virginia? Earlier this month the Virginia Senate passed

Senate Bill 1392, titled the Consumer Data Protection Act. The Virginia House of Delegates approved a companion (identical) House Bill H.B. 2307 by an 89-9 vote. Each bill likely will be heard in committee next week by the opposite chamber, which provides additional opportunities to make amendments. The state General Assembly will adjourn on March 1, it is expected that Governor Northam will sign the legislation.

What does the bill do? The proposed legislation seeks the following:

“Establishes a framework for controlling and processing personal data in the Commonwealth. The bill applies to all persons that conduct business in the Commonwealth and either (i) control or process personal data of at least 100,000 consumers or (ii) derive over 50 percent of gross revenue from the sale of personal data and control or process personal data of at least 25,000 consumers. The bill outlines responsibilities and privacy protection standards for data controllers and processors. The bill does not apply to state or local governmental entities and contains exceptions for certain types of data and information governed by federal law. The bill grants consumer rights to access, correct, delete, obtain a copy of personal data, and to opt out of the processing of personal data for the purposes of targeted advertising. The bill provides that the Attorney General has exclusive authority to enforce violations of the law, and the Consumer Privacy Fund is created to support this effort. The bill has a delayed effective date of January 1, 2023.”

As with major policy issues that have yet to have a federal solution, states like California, Virginia and others are creating piecemeal policies, which will create compliance issues for entities that operate in several jurisdictions. New York, Oklahoma, Washington State, Minnesota, and North Dakota are jurisdictions that we continue to monitor with brewing policies on point.

As we become more reliant on technology which crosses several sectors now, businesses are finding that they have to increase their awareness of state and federal policy in order to remain compliant. We at Lanton Law can help. Our legal and lobbying tools can help offer your organization a clear path forward to navigate what will be changing policies for healthcare, technology and clean energy stakeholders. We are a D.C. based firm with no state boundaries as we are active nationwide. Contact us today to discuss your options.

Ron Lanton 2/7/21 Ron Lanton 2/7/21

Senator Klobuchar Introduces Sweeping Omnibus Antitrust Reform Legislation

U.S. Senator Amy Klobuchar (D-MN), the lead Democrat on the Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights, recently introduced sweeping proposed legislation targeting antitrust reform.

According to her office’s release, the Competition and Antitrust Law Enforcement Reform Act will strengthen regulator oversight tools, reform enforcement and strengthen prohibitions on anticompetitive mergers and conduct.

Specifically the bill seeks to accomplish the following:

Increase enforcement resources
Strengthen prohibitions against anti competitive mergers
Prevent harmful dominant firm conduct
Establishes a new, independent FTC division to conduct market studies and merger retrospectives
Implement additional reforms to enhance antitrust enforcement

Interestingly, the The bill also clarifies that the law applies not only to monopoly power, but also to monopsony power, a company's power as a buyer or employer in the market.

There have been several mergers and acquisitions over the years that have raised questions about the long term effects of specific sectors, but the fears of a more aggressive regulator has not been of concern until now.

Lanton Law is a national boutique law and lobbying firm that focuses on healthcare/life sciences, technology and clean energy. Contact us today to learn about your organization’s options to prepare for additional regulatory antitrust oversight.

Ron Lanton 2/6/21 Ron Lanton 2/6/21

Cannabis Reform Legislation Anticipated in 117th Congress

We at Lanton Law have been closely monitoring cannabis policy developments as we fully anticipate federal action on this issue in 2021. How much activity remains to be seen.

We were encouraged by the joint statement issued by Senators Booker (D-NJ), Wyden (D-OR) and Schumer (D-NY) on comprehensive cannabis reform legislation in the 117th Congress. The statement in full reads:

“The War on Drugs has been a war on people—particularly people of color. Ending the federal marijuana prohibition is necessary to right the wrongs of this failed war and end decades of harm inflicted on communities of color across the country. But that alone is not enough. As states continue to legalize marijuana, we must also enact measures that will lift up people who were unfairly targeted in the War on Drugs.

“We are committed to working together to put forward and advance comprehensive cannabis reform legislation that will not only turn the page on this sad chapter in American history, but also undo the devastating consequences of these discriminatory policies. The Senate will make consideration of these reforms a priority.

"In the early part of this year, we will release a unified discussion draft on comprehensive reform to ensure restorative justice, protect public health and implement responsible taxes and regulations. Getting input from stakeholder groups will be an important part of developing this critical legislation.”

The promise of possible Congressional action on this issue is stronger this session than it has even been.

Lanton Law is a national boutique law and lobbying firm that focuses on healthcare/life sciences and technology. Specifically we have expertise in cannabis and CBD related issues.

Ron Lanton 1/28/21 Ron Lanton 1/28/21

Lanton Strategies: D.C. Based Lobbying Firm with No State Boundaries

COVID-19 has changed the way that we interact in a variety of ways. One of them being the way that businesses large and small interact with the government. Gone are the days where we can meet people in person without having to worry about travel restrictions and COVID-19 protocol. What remains is that businesses still need to get their voices heard. This is where Lanton Strategies has a strategic advantage.

For years our firm has made connections nationwide that have allowed us to tap our business and industry rolodex in order to get client goals realized. Our unique holistic approach enables us to lobby legislators and regulators, no matter the state. In essence we are that “digital lobbyist firm” that you need.

If you are looking for federal or state solutions and you’re unsure how to get something done, contact Lanton Strategies; a division of Lanton Law

Ron Lanton 1/19/21 Ron Lanton 1/19/21

National Community Pharmacists Association (NCPA) Files Lawsuit Against HHS Seeking to Eliminate Pharmacy DIR Fees

NCPA has sued the Department of Health and Human Services (HHS) over DIR fees. The lawsuit can be viewed here.

NCPA has sued the Department of Health and Human Services (HHS) over DIR fees. The lawsuit can be viewed here. Specifically the crux of the case is found below:

This is an action for judicial review of a policy of the Department of Health and Human Services (“HHS”) that undermines Medicare beneficiaries’ access to negotiated prices for prescription drugs and otherwise alters Medicare payment for those drugs in a way that reduces their availability.

Despite having been reopened time and time again over the last several years, the agency’s current definition of “negotiated prices” continues to enable Medicare Part D plans under the Medicare program (and the pharmacy benefit managers (“PBMs”) with which they contract) to downward-adjust reimbursement to pharmacies for prescription drugs months after a patient has paid cost-sharing for the prescription drugs based on an artificially inflated price. This dynamic results from an exception to the definition of “negotiated prices” for pharmacy price concessions that cannot “reasonably be determined” at the time of sale, an exception that HHS said would be narrow but never was. In reality, this exception swallows the rule and hereby threatens the solvency of independent community pharmacies and drives up the cost of prescription drugs for Medicare patients nationwide. Plaintiff asks this Court to set aside that invalid exception and the agency’s guidance on it.

Lanton Law applauds NCPA’s leadership in filing this much needed lawsuit. Lanton Law has been assisting pharmacies on the state level with issues such as DIR via lobbying. If you are a pharmacy that would like to discuss your advocacy options, contact Lanton Law to discuss your lobbying and legal strategies.

Ron Lanton 1/11/21 Ron Lanton 1/11/21

Biometric Policies Will Likely Be Debated Nationwide in 2021

New York has introduced Assembly Bill 27. According to the proposed bill, AB 27 seeks “to establish the biometric privacy act;

New York has introduced Assembly Bill 27. According to the proposed bill, AB 27 seeks “to establish the biometric privacy act; requires private entities in possession of biometric identifiers or biometric information to develop a written policy establishing a retention schedule and guidelines for permanently destroying biometric identifiers and biometric information when the initial purpose for collecting or obtaining such identifiers or information has been satisfied or within three years of the individual's last interaction with the private entity, whichever occurs first.”

Currently, the Illinois Biometric Information Privacy Act, commonly known as BIPA, is the only state with a biometric privacy statute that provides for a similar private right of action. We have been writing in previous posts about how state policies have been taking shape regarding this subject.

We expect this and other technology questions to be debated in various state houses throughout 2021. It is imperative for interested stakeholders to be prepared for what new potential legislation requires. Contact Lanton Law to discuss your lobbying and legal strategies.

Ron Lanton 12/8/20 Ron Lanton 12/8/20

Lanton Law quoted in Bloomberg Law Article

We were quoted in Bloomberg Law’s article titled “States Risk Losing Power to Regulate Pharmacy Drug Middlemen” by Lydia Wheeler. The article discusses the pros and cons of Rutledge v. PCMA, which is currently being debated at the Supreme Court.

For those that have trouble accessing the article we have provided it below.

States are going to have a hard time controlling the cost of prescription drugs if the Supreme Court broadens a federal law prohibiting states from regulating employee benefit plans.

A challenge to an Arkansas law meant to protect independent pharmacies from abusive reimbursement practices of rate-setting pharmacy middlemen is testing the bounds of the Employee Retirement Income Security Act. A decision striking down Arkansas’s law could cripple state efforts to control the cost of prescription drugs and other health-care services. That could lead to a flood of litigation challenging dozens of similar laws in other states, health policy experts say.

“This is really the tip of the iceberg because states are trying to control drug costs in all kinds of different ways,” said Katherine Gudiksen, a senior health policy researcher at the Source on Healthcare Price and Competition, a project of the University of California Hastings College of Law.

The case could be one of the first decided by the Supreme Court this term. Arguments were heard Oct. 6.

Drawing the Line

Arkansas’s fighting to save its law, which regulates the rates at which pharmacy benefit managers reimburse pharmacies for drugs and gives pharmacies a right to appeal the rates they set.

The U.S. Court of Appeals for the Eighth Circuit held the law was preempted by ERISA, which prohibits states from passing laws that reference an ERISA plan or have an impermissible connection to an ERISA plan. But Arkansas argues pharmacy reimbursement regulation is basic rate regulation, which the Supreme Court has ruled isn’t preempted by ERISA.

“It’s hard to see how a law that directly affects benefits claims processing isn’t central to ERISA plan administration,” said Stacey Cerrone, a principal in the New Orleans office of Jackson Lewis PC.

“The court is struggling on where to draw the line with preemption,” she said.

Patchwork of State Laws

A win for Pharmaceutical Care Management Association (PCMA)—the trade group for PBMs that’s aggressively fighting this law and others—would likely open the door for more legal challenges. Laws regulating PBMs have passed in 36 states.

“There’s no agency that oversees federally a pharmacy benefit manager,” said Ron Lanton, principal at Lanton Law, which helped lobby for some state PBM laws. “That’s the problem, so the states have had to come up with their own solution on how to regulate this problem.”

But PCMA argues Congress set out to create a uniform set of standards in administering ERISA plans, which include most private sector health plans. The trade group said employers will have to spend more money on administrative services and compliance, increasing the cost of care, if laws like the one in Arkansas remain.

“More than 266 million Americans rely on the prescription drug benefits PBMs administer, and now more than ever we’re committed to protecting accessible, affordable health care,” JC Scott, PCMA’s president and CEO, said in a statement after oral arguments in October.

In addition to Arkansas, PCMA has challenged laws in North Dakota, Oklahoma, and Iowa in recent years.

The trade group has been successful in winning challenges in the Eighth Circuit. The appeals court ruled Iowa’s law and two North Dakota lawsare preempted by ERISA. Iowa’s law regulates how PBMs establish generic drug pricing, and requires certain disclosures on their drug pricing methodology. North Dakota’s laws regulate the fees PBMs can charge pharmacies. North Dakota officials have appealed the court’s decision to the Supreme Court.

In July, a federal judge blocked part of Oklahoma’s law. PCMA filed an appeal to the U.S. Court of Appeals for the Tenth Circuit, which it later had dismissed. The case is still playing out in the district court.

Lanton, who represents independent pharmacies, said his clients hope the Supreme Court provides some uniformity to what’s become a patchwork of state laws. He’s also hoping for a clear definition of what a pharmacy benefit manager is and isn’t.

“It comes down to this split in the court of whether or not the court sees a pharmacy benefit manager as an insurer that provides benefits or as an administrator that simply regulates reimbursement and cost.”

Market Power

The three largest PBM companies are OptumRx, a subsidiary of UnitedHealth Group; CVS Caremark, a subsidiary of CVS Health; and Express Scripts, a subsidiary of Cigna Corp. They control 85% of the market share for PBM services, according to the National Association of Specialty Pharmacy’s brief in support of Arkansas.

That market power gives health plans very little bargaining power, said Erin Fuse Brown, director of the Center for Law, Health and Society at Georgia State University College of Law.

PBMs say they use their size and power to negotiate discounts with the pharmaceutical manufacturers, but it’s not clear they’re passing along those savings to the health plans, she said.

The case is Rutledge v. Pharm. Care Mgmt. Ass’n, U.S., No. 18-540.

To contact the reporter on this story: Lydia Wheeler in Washington at lwheeler@bloomberglaw.com

To contact the editors responsible for this story: Fawn Johnson at fjohnson@bloombergindustry.com; Brent Bierman at bbierman@bloomberglaw.com