California Passes First-in-Nation Law to Reduce Medication Errors, Address Pharmacy Staffing Concerns

Lanton Law speaks with Pharmacy Times on California's new Stop Dangerous Pharmacies Act (AB 1286). This new law aims to address understaffed chain pharmacies and reduce medication errors. Key aspects of the law included giving pharmacists more autonomy over staffing decisions, requiring reporting of unsafe conditions, and establishing a confidential medication error reporting system. Listen here for the interview.

California Privacy Regulator Releases Draft Regulations

The California Privacy Protection Agency, the regulator established by the California Privacy Rights Act in November 2020 has posted draft regulations for its upcoming June 8 Board meeting. The draft CPRA regulations can be viewed here. 

The draft regulations do need work to clarify several issues. The draft does address privacy notice requirements, as well as how companies must notify its contractors and vendors to delete personal information as well as how to respond to opt out preference signals. The rules are forecasted to take effect on January 1, 2023. 

Lanton Law is a national healthcare & technology law and government affairs firm. Our technology practice has been monitoring privacy developments nationwide. If you are a commerce, technology or healthcare/life science 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.

California Enacts Genetic Privacy Legislation

On October 6th, California Governor Newsom (D-CA) signed SB 41 titled Privacy: genetic testing companies. The bill can be viewed here. Below are the highlights of the bill:

This bill would establish the Genetic Information Privacy Act, which would require a direct-to-consumer genetic testing company, as defined, to provide a consumer with certain information regarding the company’s policies and procedures for the collection, use, maintenance, and disclosure, as applicable, of genetic data, and to obtain a consumer’s express consent for collection, use, or disclosure of the consumer’s genetic data, as specified.

This bill would require a direct-to-consumer genetic testing company to honor a consumer’s revocation of consent in accordance with certain procedures, and to destroy a consumer’s biological sample within 30 days of revocation of consent. The bill would further require a direct-to-consumer genetic testing company to implement and maintain reasonable security procedures and practices to protect a consumer’s genetic data against unauthorized access, destruction, use, modification, or disclosure, and develop procedures and practices to enable a consumer to access their genetic data, and to delete their account and genetic data, as specified. The bill would exclude from its provisions the California Newborn Screening Program, specific tests, and certain information, providers, entities, and activities subject to specified state and federal laws.

This bill would provide that the act does not reduce a direct-to-consumer genetic testing company’s duties, obligations, requirements, or standards under any applicable state and federal law for the protection of privacy and security and would further provide, if a conflict exists between the act and any other law, that the provisions of the law that afford the greatest protection for the right of privacy for consumers shall control.

This bill would impose civil penalties for a violation of those provisions, as specified. The bill would require actions for relief pursuant to these provisions to be prosecuted exclusively by the Attorney General, a district attorney, county counsel, city attorney, or city prosecutor, as specified, in the name of the people of the State of California upon their own complaint or upon the complaint of a board, officer, person, corporation, or association or upon a complaint by a person who has suffered injury in fact and has lost money or property as a result of the violation of the act. Because the bill would require local officials to perform additional duties, the bill would impose a state-mandated local program.

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

Legislation to Play Significant Role in Drug Pricing Across Specialty Pharmacy

Jennifer Nessel of Pharmacy Times has featured Lanton Law in an article titled “Legislation to Play Significant Role in Drug Pricing Across Specialty Pharmacy.” The article can be read here. In case you have difficulty reading the article, we have featured it below. This article appeared in Pharmacy Times on 2/17/20.

As utilization and drug spending continue to rise, health care providers are looking to resolve key questions that address drug pricing and biosimilar implementation in specialty pharmacy.

Hospital and health systems saw nearly 20% growth in the specialty drug market in 2018, according to Becker’s Hospital Review.2 The diversity of specialty pharmacies has resulted in variability across all operational areas, including tracking adherence, educating patients, dispensing medications, and ensuring drug safety.3

However, although the specialty industry has had a positive impact on health systems’ quality and continuity of care initiatives, the administration of specialty drugs is challenging and highly complex given the number of new therapies and payer requirements.

According to Ron Lanton, III, Esq, principal of Lanton Law and biologics committee chair of the New York State Bar Association, policymakers on the federal level understand that the issue of drug pricing needs to be resolved but they are having a hard time coming to an agreement on how this reform should be done.

The Drug Price Conundrum
Due to the fact that the legislative session has recently begun in many states and in Congress and that it is an election year, it is difficult to determine whether there will be a unifying drug-legislative solution for drug prices.

However, California’s Governor Gavin Newsom (D-CA) has recently proposed that California become the first US state to manufacture its own generic prescription label, with a goal of making affordable medications available to the state’s almost 40 million residents. However, the governor’s proposal has yet to pass the California legislature.

According to Lanton, a manufacturer could leverage its influence over smaller states to stop legislation such as Governor Newsom’s from advancing. However, due to its size and the fact that its policies may influence other state legislatures, California may be a harder market for a manufacturer to confront.

“I [have to] question as to whether California’s efforts would further drive down an already deflated generic drug market and whether California would be able to determine how much it will charge for generics once manufacturing costs, such as raw materials, are concerned. Not to mention how much this is going to cost since that remains unknown at this point in time,” Lanton explained to Directions in Specialty PharmacyTM.  

Although the proposal marks the first state-wide attempt to lower prescription drug prices, there have been attempts within federal legislation to corral drug prices. The Trump administration recently attempted to lower drug costs through its Blueprint to Lower Drug Costs, and the FDA has recently been an advocate for greater generic and biosimilar utilization.

“To date, there has been no silver bullet to deal with rising prescription drug costs. Notwithstanding whether I agree with this plan, I applaud California in trying to solve a problem that refuses to go away quietly,” Lanton said.

Biosimilar Implementation
Specialty drugs, with nearly 700 therapies currently under development for treatment areas such as cancer, hepatitis C virus, HIV, autoimmune disorders, and multiple sclerosis, are expected to claim 9 of the top 10 spots among bestselling drugs in 2020.3 Although specialty drugs have been hallmarked as important treatment options for patients with cancer or other complex diseases, there can be issues surrounding access and affordability.

The cost of specialty medications and the increased adoption of high-deductible health plans have placed a higher financial burden on patients. As out-of-pocket costs increase, including insurance denials, patients are more likely to abandon their treatment plans.4

Biosimilars are potentially more affordable specialty medications for patients with complex disease states. According to Managed Health Executive, biosimilars could bring approximately $250 billion in savings by 2024.3

Pending legislation may have a large impact on biosimilar implementation across the specialty pharmacy landscape. There are several bills that Lanton singled out for the 2020 year1:
 

• HR 4597 Acting to Cancel Co-pays and Ensure Substantial Savings for Biosimilars (ACCESS) Act would eliminate a patient’s co-pay for a biosimilar if they normally would pay full cost of a biologic drug under Medicare Part B. The bill seeks to drive down medical costs by increasing access to lower-cost biosimilar drugs and give Americans more treatment options.

• HR 4629 Star Rating for Biosimilar Act would require the Secretary of Health and Human Services to add a new set of measures to the 5-star rating system under the Medicare Advantage program in order to encourage increased access to biosimilar biological products.

• HR 4913 would require Medicare prescription drug plan (PDP) formularies to include covered generic drugs and biosimilars for which the wholesale acquisition cost is less than that of the reference (ie, brand-name) product. PDP sponsors must also establish specific cost-sharing tiers that apply lower cost-sharing requirements for such covered generic drugs and biosimilars as compared to those for brand-name products. The bill also prohibits PDP sponsors from instituting certain requirements relating to access to such covered generic drugs and biosimilars that are more restrictive than those for brand-name products (eg, prior authorization requirements).

• HR 2375 would prohibit prescription drug companies from compensating other prescription drug companies to delay the entry of a generic drug, biosimilar biological product, or interchangeable biological product into the market.

• S 1681 proposes to educate health care providers and the public on biosimilar biological products. Under this bill, the Secretary shall establish, maintain, and operate a website consisting of educational materials regarding the meaning and use of biosimilar biological products and interchangeable biological products.

Affordable Care Act (ACA) Transition 
On March 23, 2020, the life sciences industry will undergo “the transition,” according to Lanton. Currently, the FDA has and will continue to regulate biologics, but historically the agency regulated biologics as drugs under the Food, Drug and Cosmetic Act instead of as products licensed under the Public Health Service (PHS) Act.

“In order to bring all biologics under the same legal and regulatory system, the Biologics Price Competition and Innovation Act of 2009 found in the ACA included the ‘Deemed to be a License’ provision,” Lanton said.

This meant that 10 years after enactment, on March 23, 2020, applicable biologics will automatically be deemed biologics licensed under the PHS Act. Unfortunately, the statute did not provide instructions to the FDA on how to do this, meaning the agency will decide on which products transition and how, according to Lanton.

“This basically means no more new drug applications or abbreviated new drug applications for select biologics, only biologic license applications of the 351(a) and 351(k) varieties. Also, not only will they be categorized as biologic[s], but they will be subject to the biosimilar, not generic competition. Specifically, drugs [to] be transitioned are insulins and other naturally occurring proteins, such as hyaluronidase, human growth hormones, and menotropins,” Lanton said.

Reference

1. Lanton, Ron, III, Esq. Interview with Pharmacy Times [email]. Accessed February 11, 2020.

2. 5 Trends Health System Pharmacies Can Expect in 2020. Becker’s Hospital Review. Published December 9, 2020. https://www.beckershospitalreview.com/pharmacy/5-trends-health-system-pharmacies-can-expect-in-2020.html. Accessed February 12, 2020.

3. Biologics Build Oncology Drug Pipeline. Managed Healthcare Executive. Published November 1, 2019. https://www.managedhealthcareexecutive.com/news/biologics-build-oncology-drug-pipeline. Accessed February 12, 2020.

4. Galante, Dominic. Accreditation Explosion Among Top Specialty Pharmacy Trends. J Clin Pathways. 2018;4(7):35-38. doi:10.25270/JCP.2018.09.00037. Accessed February 12, 2020.

Will California’s Bold Proposal to Manufacture its Own Generic Drugs Be the Answer to Lower Prescription Drug Costs?

California’s Governor Newsom (D-CA) has made a bold budgetary proposal to become the first state in the Union to manufacture its own generic prescription drug label. The purpose behind this is to make affordable medications accessible to the state’s 40 million residents.

His plan to essentially create a single market for prescription drug pricing where companies would likely have to bid in order to sell their particular medications at a low price. 

According to the Governor’s Proposed 2020-21 State Budget “The Administration has announced a new CalRx generic drug program making California the first state to create its own generic drug label and making the state’s generic prescription drugs available for sale to all Californians. The Budget transforms Medi-Cal to a more consistent and seamless system by reducing complexity and increasing flexibility and establishes a single market for drug pricing within the state.” (Governor Newsom Proposes 2020-21 State Budget; January 10, 2020 click here for reference

The Governor’s bold approach has been foreshadowed by his plans announced last year via his Executive Order of N-01-19. This Executive Order established a few major policy objectives: 

• The Department of Health Care Services shall take all necessary steps to transition all pharmacy services tor Medi-Cal managed care to a fee-for-service benefit by January 2021

• The Department of Health Care Services, in consultation with the Health and Human Services Agency and California Pharmaceutical Collaborative, shall review all State purchasing initiatives and consider additional options to maximize the State's bargaining power, including the Medi-Cal program.

• The Department of General Services, in consultation with the California Pharmaceutical Collaborative, shall develop a list of prescription drugs that could appropriately be prioritized tor future bulk purchasing initiatives or reexamined tor potential renegotiation with the manufacturer.

• Based on the prioritized list, the Department of General Services, in consultation with the California Pharmaceutical Collaborative, shall develop and implement bulk purchasing arrangements tor high-priority drugs. (Governor Newsom Proposes 2020-21 State Budget; January 10, 2020 click here for reference

The Governor's plan has echoes of a plan that Senator Warren (D-MA) introduced in the 115th Congress via the proposed Affordable Drug Manufacturing Act of 2018. This bill’s purpose was to establish an Office of Drug Manufacturing within the Department of Health and Human Services for the purposes of lowering prices, increasing access, and addressing shortages of prescription drugs, including insulin. According to the Senator’s announcement, “Public manufacturing of pharmaceuticals will lower drug prices for millions while improving competition. The Affordable Drug Manufacturing Act tasks the Department of Health and Human Services with the public manufacturing of generic drugs in cases where the market has failed and strengthens the generic market for the long term by jump-starting competition.” (AFFORDABLE DRUG MANUFACTURING ACT; Senator Elizabeth Warren and Representative Jan Schakowsky. Click here for reference. While this bill did not get much traction in Congress, it served as a model of things to come. 

The question is whether the Governor’s proposal will pass the California legislature? At this point I think it is too early to tell. We have already seen multiple attempts to control prescription drug prices without having the government become a market player. We have seen the Administration via various policies such as the Administration’s Blueprint to Lower Drug Costs as well as an active FDA who has been advocating for greater generic and biosimilar utilization as ways to lower costs. 

We have also seen various Congressional attempts to lower prescription costs via legislation aimed at Medicare Part D negotiation to bills attempting to benchmark foreign countries prescription drug costs against our own. 

To date, there has been no silver bullet to deal with rising prescription drug costs. The difference here is that a manufacturer could leverage its influence over smaller states to stop legislation like Governor Newsom’s from advancing. California may be a harder market for a manufacturer to confront due to its size and the fact that its policies are very much likely to influence other state legislatures. I also have a question as to whether California’s efforts would further drive down an already deflated generic drug market and whether California would be able to determine how much it will charge for generics once manufacturing costs such as raw materials are concerned. Not to mention how much this is going to costs since that remains unknown at this point in time. 

Notwithstanding whether I agree with this plan, I applaud California in trying to solve a problem that refuses to go away quietly. Whether this idea works without solving other ancillary issues such as pharmacy benefit manager transparency, drug rebates and patient adherence is another.

California’s Consumer Privacy Act Could Be Coming to a State Near You

Oftentimes policy changes that sweep across the nation originate in policy “hot spots” like Massachusetts, California, New York, etc. This time its consumer privacy. As we rely more and more on the internet of things, artificial intelligence and fitness applications, we are unfortunately becoming more exposed to potential data breaches. If you operate in California, the California Consumer Privacy Act (CCPA) will be a defining factor in how you manage risks around consumer data. Approximately 500,000 businesses across all business sectors will have to comply with CCPA once the act goes into effect on January 1, 2020. 

So what is the CCPA? Passed in 2018 as AB 375, the Act models itself on Europe’s General Data Protection Regulation that went into effect recently. The bill awards California residents with the right to be informed on how companies collect and use their data. The law also allows their personal data to be deleted. CCPA creates a sliding scale approach by applying to California businesses who generate an annual gross revenue of $25 million with half of their annual revenue deriving from selling consumer information, or by companies that buy, sell or share personal information from at least 50,000 consumers, households or devices. 

Recently, the California legislature passed five bills seeking to amend CCPA in which Governor Gavin Newsom (D-CA) has until October 13, 2019 to sign or veto the legislation. Additionally, the state attorney general is expected to release draft regulations by the end of the year. Interestingly, an economic impact assessment prepared by a third party for the California Attorney General’s office stated that the new law could cost companies a total of up to $55 billion in initial compliance costs. 

So what is this important? Our society’s reliance on connectivity is not slowing down. The very companies that many of us interact with on a daily basis such as Amazon, Twitter and Facebook find themselves at the center of how they will comply with CCPA. But while this can be explained away as something that impacts only California, I have seen this type of legislation starting to spread to a cluster of other states. 

If you traffic in data, it will be a good idea to take inventory of your operational risks and whether your company will be able to comply if a similar law is enacted in your state. If you need assistance with regulatory compliance or are interested in finding out how your company can best engage with policymakers on this issue, don’t hesitate to reach out to us at either Lanton Strategies or Lanton Law.