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.

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.

Maryland One Step Closer to Implementing a Digital Ad Tax

For a while we have seen the European Union (EU) grapple with the development of digital ad taxes which have had a significant impact on U.S. Big Tech companies. Now, Maryland is showing similar regulatory oversight on digital ads as the EU. 

Last year HB 732 was passed which would have imposed a graduated tax on the annual gross revenue derived from digital advertising in Maryland. The graduated tax would be: 

• For persons with global annual gross revenues of $100 million through $1 billion, the rate would be 2.5% of the assessable base.

• For persons with global annual gross revenues of more than $1 billion through $5 billion, the rate would be 5% of the assessable base.

• For persons with global annual gross revenues of more than $5 billion through $15 billion, the rate would be 7.5% of the assessable base.

• For persons with global annual gross revenues exceeding $15 billion, the rate would be 10% of the assessable base.

Last year Maryland Governor Hogan vetoed the bill stating “These misguided bills would raise taxes and fees on Marylanders at a time when many are already out of work and financially struggling. With our state in the midst of a global pandemic and economic crash, and just beginning on our road to recovery, it would be unconscionable to raise taxes and fees now.” 

Besides looking at this from a political lens of whether technology companies are regulating content speech and whether Section 230 should be revisited, there is also an economic lens. The pandemic has caused people to migrate from physical office space to digital commerce platforms, meaning that states are now grappling with the virus and shrinking taxable income. 

As far as Maryland goes the House of Delegates has voted to override the Governor’s veto of HB 732. The next step is for the Senate to override the legislation to implement it. The problem is there will be legal challenges to this law.  

Additionally, we believe that this is not the last time that we’ll see legislation like this. Similar efforts in New York and West Virginia have failed while Connecticut, Indiana have been the latest to introduce 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.

Online Marketplaces Will Benefit from November 2020 Sports Betting Ballot Initiatives

Online stakeholders in the sports betting market have made policy inroads from the November 2020 ballot initiatives. Below are three states that expanded sport betting capabilities.   

Maryland: The State of Maryland has joined both Virginia and the District of Columbia in legalizing sports betting. Voters passed Ballot Question 2 which allowed for legalized sports betting while having the revenue generated from this to go towards funding public education.

Louisiana: The State of Louisiana approved sports betting in the major cities of Baton Rouge, New Orleans and Lafayette. The following parishes approved the measure as well including: St. Tammany, Jefferson, Ascension, Livingston, St. Bernard, West Baton Rouge, Plaquemines, St. Charles and Terrebonne parishes.

South Dakota: Voters in South Dakota have allowed sport betting as early 2021. By approving Amendment B  sports betting is legal in the city of Deadwood as well as the state’s Native American gaming facilities.

Lanton Law’s fintech and online marketplace practice helps stakeholders understand and navigate regulatory complexities. Contact us today to learn more about how our services can help you.