Privacy & Technology Companies: Why You May Need an Attorney

Technology companies are constantly collecting and using personal data. This data can include everything from names and addresses to browsing history and financial information. As technology companies collect more data, the importance of privacy becomes even more critical.

There are a number of reasons why technology companies need a lawyer to help them with privacy. First, lawyers can help companies understand the laws that apply to them. These laws can vary depending on the country or region where the company operates. 

Second, lawyers can help companies develop and implement relevant policies and procedures. These policies and procedures should be designed to protect the company's users. 

Third, lawyers can help companies respond to privacy inquiries and complaints. If a user has a question or complaint about a company's privacy practices, the company needs to be able to respond promptly and effectively. 

Privacy is a complex issue, and technology companies need to take it seriously. By working with a lawyer, technology companies can ensure that they are compliant with the law and that they are protecting the privacy of their users.

If you are a technology company and you are concerned about how to navigate an evolving regulatory environment, contact Lanton Law today. We stay up-to-date on the latest technology policy and legal trends and can help you implement new business strategies.

FTC Takes Aggressive Policy Stance Against Drug Manufacturers and Pharmacy Benefit Managers (PBMs)

The Federal Trade Commission (FTC) has come out aggressively against both pharmaceutical manufacturers and pharmacy benefit managers (PBMs). The agency has released its policy statement seen here, announcing that the agency “will ramp up enforcement against any illegal bribes and rebate schemes that block patients’ access to competing lower-cost drugs.”  

Here is what the FTC is specifically targeting in its policy statement: 

• Exclusionary rebates that foreclose competition from lower-cost medicines may constitute unreasonable agreements in restraint of trade under Section 1 of the Sherman Act; unlawful monopolization under Section 2 of the Sherman Act; or exclusive dealing under Section 3 of the Clayton Act.

• Inducing prescription drug middlemen to place higher-priced drugs on formularies instead of lower-cost alternatives in a manner that shifts costs to payers and patients may violate the prohibition against unfair methods of competition or unfair acts or practices under Section 5 of the FTC Act. 

• Paying or accepting rebates or fees in exchange for excluding lower cost drugs may constitute commercial bribery under Section 2(c) of the Robinson-Patman Act, which prohibits compensating an intermediary to act against the interests of the party it represents in the transaction.

This follows the recently revealed PBM study by the FTC will officially examine the impact of vertically integrated PBMs on the access and affordability of prescription drugs. As part of this inquiry, the FTC will send compulsory orders to CVS Caremark; Express Scripts, Inc.; OptumRx, Inc.; Humana Inc.; Prime Therapeutics LLC; and MedImpact Healthcare Systems, Inc. 

Lanton Law is a national boutique regulatory 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.

Technology Industry Groups File Lawsuit Targeting Maryland Digital Ad Tax

A coalition of technology stakeholder associations that include the Computer & Communications Industry Association (CCIA), along with the U.S. Chamber of Commerce and the Internet Association, are suing Maryland Comptroller Peter Franchot (D), over the state’s recent enactment of the state’s online advertising tax; a first in the nation law. We previously wrote a blog post on this tax.

 According to the lawsuit, the plaintiffs “seek a declaration and injunction against enforcement of Maryland House Bill 732 (the Act) insofar as it imposes a “Digital Advertising Gross Revenues Tax” on sellers of digital advertising services. The Act is a punitive assault on digital, but not print, advertising. It is illegal in myriad ways and should be declared unlawful and enjoined.

 Additionally plaintiffs argue “The premise of the law is deeply flawed. Taxing digital advertising revenue will have the opposite of the Act’s intended effect, reducing resources to support the creation and availability of high-quality ad-supported content, leaving the online field overrun by low-quality “junk” content. Meanwhile, the Act will raise costs for consumers and make it more difficult for businesses to connect with potential customers. Simply put, the Act will harm Marylanders and small businesses and reduce the overall quality of internet content—all while doing nothing to stave off the dissemination of misinformation and hate speech.”

We’ll continue to monitor these events as it is almost a certainty that other states will attempt to pass similar legislation. Technology stakeholders including those in digital commerce will continue to be at risk. We at Lanton Law can help. Our legal and policy tools can help offer your organization a clear path forward to navigate what will be changing policies for technology stakeholders. Contact us today to discuss your options.

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.

The SAFE TECH Act Introduced into Congress

The ‘‘Safeguarding Against Fraud, Exploitation, Threats, Extremism, and Consumer Harms Act’’ or the "SAFE TECH Act" has been introduced into Congress. The proposal is led by Senators Warner (D-VA), Hirono (D-HI) and Klobuchar (D-MN), as the bill seeks changes to 47 U.S. Code § 230. 

The law which is part of the Communications Decency Act (CDA), also called Title V of the Telecommunications Act of 1996, provides ISP’s with federal immunity to any cause of action that seeks to make ISP’s liable for information that originated with a third party service user. 

Specifically, §230 states: “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” The additional specifics of this law describe the liability shield that these companies currently enjoy which is further protected by federal preemption law. 

We have written several blog post on this topic about prior legislation targeting the law as well as prior U.S. DOJ Scrutiny on the matter. 

Since the SAFE TECH Act has been unveiled there have been multiple stakeholders expressing concern with unintended consequences this proposal in its current form has that will likely result in chilling of expression. 

Regardless of your political viewpoint, if you are a tech stakeholder that has ISP capabilities or you are providing services that deal with the exchange of ideas, you should be monitoring this type of legislative action to avoid unnecessary surprises to your business model. We at Lanton Law can help. 

Our legal and policy tools can help offer your organization a clear path forward to navigate what will be changing policies for technology stakeholders. Contact us today to discuss your options.

New York Proposing Its Own Biometric Law

The New York State legislature has introduced Assembly Bill 27, which seeks to make New York the fourth state to enact a biometric privacy law. If successful it will be the second state that will allow consumers a private right of action to see companies for improper data handling. 

New York is definitely taking its cue from Illinois, as that state became the first to require businesses to collect biometric data to provide notice and obtain the owner’s written consent prior to using this information. We have written about the Illinois Information Privacy Act or (BIPA) in a previous post. 

The New York proposal seeks to do the following: 

Establishes 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. 

New York has enacted facial recognition laws in the past. In December 2020 Governor Cuomo released a press statement where he signed A6787-D/S5140-B into law that suspended “the use of facial recognition technology and other kinds of biometric technology in schools, directing a study of whether its use is appropriate in schools and issuing recommendations. The legislation places a moratorium on schools purchasing and using biometric identifying technology until at least July 1, 2022 or until the report is completed and the State Education Commissioner authorizes its use, whichever occurs later. It applies to both public and private schools in New York State.” 

Proposed Assembly Bill 27 shows that New York will continue to press forward in this area and will likely inspire other states. If you are a biometric, Health IT/digital health or technology stakeholder, your interests will be impacted.    

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

Surprise Medical Billing Law Takes Effect January 1, 2022

The No Surprises Act was quietly a part of the omnibus spending bill that was signed into law on December 27, 2020 has caught several people by surprise (no pun intended). The law was created with the goal of shielding patients from receiving surprise medical bills after an emergency room or provider visit. Any disputes would now be left to their plan and provider to resolve via arbitration. 

Prior to the enactment of the No Surprises Act, state balanced billing laws have been debated throughout state legislatures, especially in 2020 when more patients were being admitted to hospitals during the start of the pandemic. According to the Commonwealth Fund: 

“Balance bills” primarily occur in two circumstances: 1) when an enrollee receives emergency care either at an out-of-network facility or from an out-of-network provider, or 2) when an enrollee receives elective nonemergency care at an in-network facility but is inadvertently treated by an out-of-network health care provider. Since the insurer does not have a contract with the out-of-network facility or provider, it may decide not to pay the entirety of the bill. In that case, the out-of-network facility or provider may then bill the enrollee for the balance of the bill. No federal law currently limits this practice, but 32 states have enacted laws to protect enrollees from it.” Click here for more on their analysis. 

If you are an insurer, employer, health system/hospital, physician or air ambulance operator, your interests are definitely impacted by this law. 

Lanton Law is a national boutique law and lobbying firm that focuses on healthcare/life sciences and technology. 

With a law this new and complex, ensuring compliance will be key. Lanton Law is an expert in healthcare regulatory compliance and has tools to help. Contact us today for answers to your questions.

New York State of the State 2021 Calls for Proposal to Safeguard Data Security Rights

Last month as part of the State of the State 2021, Governor Cuomo announced a comprehensive law around personal data and privacy protections for New York state residents.

So what does this proposal outline?

According to the Governor’s proposal “This law will mandate that companies that collect information on large numbers of New Yorkers disclose the purposes of any data collection and collect only data needed for those purposes. Governor Cuomo will also establish a Consumer Data Privacy Bill of Rights guaranteeing every New Yorker the right to access, control, and erase the data collected from them; the right to nondiscrimination from providers for exercising these rights; and the right to equal access to services.”  

“The proposal also expressly protects sensitive categories of information including health, biometric and location data and creates strong enforcement mechanisms to hold covered entities accountable for the illegal use of consumer data. New York State will work with other states to ensure competition and innovation in the digital marketplace by promoting coordination and consistency among their regulatory policies. 

New York’s proposal seems to be following a trend set by California’s Privacy Rights and Enforcement Act. We believe that we are witnessing a slow moving transition towards similar oversight in other states. 

The increasing demands around data security and data privacy has presented new challenges to business operations and compliance efforts. Not to mention there are new rising risks around consumer data privacy expectations. 

Lanton Law is a national boutique law and lobbying firm that focuses on healthcare/life sciences and technology. We are the dedicated business partner that you need behind you to help you confront the changing regulatory landscape around data. 

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!

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.  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.

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

The Department of Justice Releases Proposed Section 230 Legislation

For some time now we have been forecasting that technology stakeholders had to be aware of looming regulatory oversight, especially around the issues of antitrust and Section 230. 

Last week the Department of Justice (DOJ) sent draft legislation to Congress to reform Section 230 of the Communications Decency Act.  The draft legislative text implements reforms that the Department of Justice deemed necessary in its June Recommendations. 

The Justice Department’s proposals available here focus on two issues: addressing illicit activity online and promoting transparency and open discourse. 

Regardless of whether this or other legislation gets enacted this year, Section 230 comes under increasing scrutiny by policymakers. It’s a question of when for technology regulation, so if you are a technology stakeholder it is better to be prepared.

Lanton Law is a national boutique law and government affairs 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.