Ron Lanton 1/31/24 Ron Lanton 1/31/24

Pharmaceutical Commerce Speaks with Lanton Law about New Drug Pricing Models

Pharmaceutical Commerce interviews Ron Lanton; Partner at Lanton Law on newly emerging pricing models such as the cost plus drug model.

Pharmaceutical Commerce interviews Ron Lanton; Partner at Lanton Law on newly emerging pricing models such as the cost plus drug model. Ron gives his insight on what impacts these emerging models will have on the pharmaceutical industry. The interview can be seen here.

Ron Lanton 8/29/23 Ron Lanton 8/29/23

New York Proposes New PBM Regulations

The New York State Department of Financial Services has proposed new rules surrounding pharmacy benefit managers (PBMs) that deal with establishing definitions; licensing; contracting with pharmacies; acquisition of PBMs; consumer protections and audit regulations regarding PBMs.

This rulemaking is one to monitor especially with the recent events from the 10th Circuit. We have written a recent blog post on this developments surrounding this decision.

Lanton Law is a national boutique law and lobbying firm that focuses on healthcare/life sciences and technology. Our pharmacy practice has been helping pharmacies nationwide with operational issues, mergers and acquisitions, regulatory inquiries, audits, licensure, employment issues and contracting. Our lobbying efforts help pharmacies nationwide achieve improved business climates through carefully crafted legislation as well as counseling clients on responding to relevant proposed rules.

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 8/18/23 Ron Lanton 8/18/23

Tenth Circuit Deals Pharmacy a Set Back Regarding Oklahoma PBM Law

This week The U.S. Court of Appeals for the Tenth Circuit issued a decision agreeing with the Pharmaceutical Care Management Association (PCMA) that Oklahoma's Patient's Right to Pharmacy Choice Act (the Act) is preempted by ERISA because it interferes with central matters of plan administration by restricting ERISA plans from structuring their pharmacy networks in a particular manner.

In 2020 the pharmacy industry witnessed much needed relief with the U.S. Supreme Court ruling on behalf of pharmacy in the unanimous Rutledge v. PCMA case. That decision held that a federal law, the Employee Retirement Income Security Act of 1974 (ERISA), does not prevent states from enacting laws regulating the abusive payment practices of PBMs.

However; this week The U.S. Court of Appeals for the Tenth Circuit issued a decision agreeing with the Pharmaceutical Care Management Association (PCMA) that Oklahoma's Patient's Right to Pharmacy Choice Act (the Act) is preempted by ERISA because it interferes with central matters of plan administration by restricting ERISA plans from structuring their pharmacy networks in a particular manner. The court also held that ERISA preempted the Act's provision that would bar pharmacy benefit managers (PBMs) from denying, limiting, or terminating a pharmacy's contract because one of its pharmacists is on probation with the state pharmacy board.

This is definitely an inconsistent decision from Rutledge and should be overturned due to recent U.S. Supreme Court precedent.

Lanton Law is a national boutique law and government affairs firm that closely monitors legislative, regulatory and legal developments in the healthcare and life science spaces. Contact us to learn about how either our legal or lobbying services can help you attain your goals.

Ron Lanton 6/17/22 Ron Lanton 6/17/22

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.

Ron Lanton 5/31/22 Ron Lanton 5/31/22

The Pharmacy Benefit Manager Transparency Act of 2022 Introduced in Congress

The Pharmacy Benefit Manager Transparency Act of 2022 was introduced by Senate Commerce Science, and Transportation Committee Chair Maria Cantwell and Senate Judiciary Committee Ranking Member Chuck Grassley.

The bill which can be viewed here, seeks to prevent unfair and deceptive acts or practices and the dissemination of false information related to pharmacy benefit management services for prescription drugs, and for other purposes.

According to the Senate Commerce Committee’s announcement the proposed bill seeks to specifically do the following:

PROHIBITS UNFAIR OR DECEPTIVE PRICING PRACTICES

The legislation would make it illegal for PBMs to engage in “spread pricing” in which they charge health plans and payers more for a prescription drug than what they reimburse to the pharmacy, and then pocket the difference – the “spread” – as profit.

The bill would also prohibit PBMs from arbitrarily, unfairly, or deceptively clawing back payments made to pharmacies, or arbitrarily, unfairly, or deceptively increasing fees or lowering reimbursements to offset reimbursement changes in federally-funded health plans.

INCENTIVIZES FAIR AND TRANSPARENT PBM PRACTICES

The bill would encourage fair and transparent PBM practices that benefit local pharmacies and consumers by making clear that a PBM would not be in violation of the Act if it:

Passes along 100 percent of any rebate to the health plan or payer; and

Provide full and complete disclosure of:

The cost, price, and reimbursement of prescription drugs to the health plans and pharmacies;
All fees,markups, and discounts the PBM charges or imposes on health plans and pharmacies; or
The aggregate remuneration fees it receives from drugmakers to health plans, payers, and any federal agency.

MANDATES TRANSPARENCY

The bill would require PBMs to file an annual report with the FTC, shining a brighter light on how they charge health plans and pharmacies for prescription drugs. Specifically, it would require PBMs to disclose:

The aggregate amount of the difference between how much each health plan paid the PBM for prescription drugs, and how much the PBM paid each pharmacy on behalf of health plans for such drugs;
The aggregate total amount of fees the PBM charged to pharmacies and the total amount of reimbursements the PBM clawed back from pharmacies;
Why the cost, copay, coinsurance, or deductible for a consumer increased, or why the reimbursement rate to a pharmacy decreased for a prescription drug; and
For PBMs that control or are affiliated with a pharmacy, a description of any differences between what they reimburse or charge affiliated and nonaffiliated pharmacies.

ENFORCEMENT

The bill would authorize the FTC and state attorneys general to enforce its mandates, including by seeking civil penalties from PBM companies for each violation, plus an additional penalty of up to $1 million.

Ron Lanton 1/27/22 Ron Lanton 1/27/22

Lanton Law Speaks with Pharmacy Times About the Mark Cuban Cost Plus Drug Company

Lanton Law spoke with Pharmacy Times about the possible market implications of the new Mark Cuban Cost Plus Drug Company.

“In an interview with Pharmacy Times, Ron Lanton III, Esq, principal at Lanton Law, said entrepreneur Mark Cuban's new venture into the pharmacy field is very interesting, although it maybe just another player in the mail-order pharmacy market.

In the interview, Lanton discussed the company's steep discounts on drugs in a myriad of disease states, as well as the company's pharmacy benefits manager, which is expected to be operational in 2023. Ultimately, Lanton said the company's broader impacts on the pharmacy field and drug pricing remain to be seen, although several other legislative efforts to lower drug prices have been discussed in recent years.”

The interview can be seen by clicking here.

Ron Lanton 1/5/22 Ron Lanton 1/5/22

New York Enacts New Pharmacy Benefit Manager Law

Governor Kathy Hochul has issued a press release announcing the enactment of S3762/A.1396 which provides for PBM registration and licensure.

Governor Kathy Hochul has issued a press release announcing the enactment of S3762/A.1396 which provides for PBM registration and licensure. According to the release:

“Legislation S.3762/A.1396 requires licensure for pharmacy benefit managers and specifies their duties and obligations as service providers. This bill also allows the department of financial services to receive complaints when a PBM violates the law and will ensure PBMs abide by standards established by law and regulation.”

Why is this important?

Based on our experience and our clients, Lanton Law strongly believes that PBMs have been hindering pharmacy operations and reimbursement for far too long. This new law is a great step in the right direction. With PBMs there is always more work to be done. Pharmacy advocates can use this law as a model in their own respective states.

Ron Lanton 11/19/21 Ron Lanton 11/19/21

Pharmacy Celebrates Another Win Over PBMs in the 8th Circuit

This week the 8th Circuit issued a decision in the case of Pharmaceutical Care Management Association v. Wehbi, which supported North Dakota’s legislative actions to regulate pharmacy benefit managers (PBMs). PCMA v. Wehbi is the first case at the federal appellate level since the landmark Rutledge v. PCMA decision last year that upheld Arkansas law also regulating PBMs.

The PCMA v. Wehbi case can be found here.

With these huge decisions serving as tailwinds for pharmacy there is still more work to be done.

Ron Lanton 8/23/21 Ron Lanton 8/23/21

Oral Arguments Scheduled for North Dakota PBM Case

Oral arguments have been scheduled for September 1, 2021 at 2:00 PM CST for PCMA v. Wehbi. Earlier this year, the U.S. Supreme Court vacated this 8th Circuit case formerly known as Wilke v. PCMA.

A group of nine pharmacy associations have filed an amicus curiae (friend of the court) brief in the 8th Circuit matter known as PCMA v. Wehbi. This case is formerly known as Wilke v. PCMA. The amicus brief argues that ERISA does not preempt North Dakota PBM laws.

How did we get here? Last year (August) the 8th Circuit struck down contested North Dakota PBM laws due to ERISA. This is the argument that PBM attorneys advanced as a reason that the contested PBM laws in North Dakota could not stand. This decision was prior to the now landmark Rutledge case.

Surprisingly and much to the relief of the pharmacy community, the U.S. Supreme Court’s 2021 PCMA v. Rutledge decision determined that the 8th Circuit decision could not stand due to the Supreme Court’s Rutledge decision and its ERISA interpretations.

Oral arguments PCMA v. Wehbi have been scheduled for September 1, 2021 at 2:00 PM CST.

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.”

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 12/10/20 Ron Lanton 12/10/20

Lanton Law Quoted in Law360 Article titled "High Court Gives Green Light to Regulate PBMs"

Lanton Law was quoted in law 360’s article titled "High Court Gives Green Light to Regulate PBMs".

Lanton Law was quoted in law 360’s article titled "High Court Gives Green Light to Regulate PBMs". The article was written by Emily Brill.

For those that have trouble with the link we have provided the story below.

Law360 (December 10, 2020, 10:08 AM EST) -- The U.S. Supreme Court backed an Arkansas law Thursday that bans insurers' affiliates from shortchanging pharmacies, clearing the way for other states to regulate pharmacy benefit managers and throwing a lifeline to small pharmacies that said PBMs' business practices were bankrupting them.

Pharmacies' advocates celebrated Arkansas' 8-0 win as "a historic moment for pharmacies, patients and state's rights," saying the ruling allows states such as New York to move forward with long-discussed plans to regulate the industry that manages insurers' drug components.

The ruling clarifies that PBMs can't use their ties with employee benefit plans to argue that only the federal Employee Retirement Income Security Act can regulate their business dealings. ERISA only preempts states' ability to regulate employee benefit plans, leaving states free to oversee PBMs and other members of the health care supply chain, the justices said.

In an opinion authored by Justice Sonya Sotomayor and joined by all the justices except newcomer Justice Amy Coney Barrett, who sat out from considering the case, the court clarified that ERISA won't preempt a regulation simply because it could increase a benefit plan's operating costs. The regulation actually has to affect the way the plan works to trigger ERISA's preemption provision, the court wrote.

"ERISA does not preempt state rate regulations that merely increase costs or alter incentives for ERISA plans without forcing plans to adopt any particular scheme of substantive coverage," Justice Sotomayor wrote.

Justice Clarence Thomas authored a concurring opinion, saying he favors more of a textualist approach to applying ERISA's preemption provision — Section 1144 of the sprawling law — than his colleagues have applied in the past.

"I write separately because I continue to doubt our ERISA preemption jurisprudence. The plain text of ERISA suggests a two-part preemption test … but our precedents have veered from the text, transforming §1144 into a vague and potentially boundless … preemption clause," Justice Thomas wrote. "That approach … offers little guidance or predictability. We should instead apply the law as written."

The ruling overturns a 2018 decision by the Eighth Circuit, which had held that ERISA preempted Arkansas' Act 900. That law, passed in 2015, forbade PBMs from reimbursing pharmacies for drugs at rates below the drugs' acquisition costs. Arkansas passed it in response to community pharmacies' complaints that PBMs were reimbursing them less than they were shelling out to purchase drugs, while reimbursing PBM-affiliated pharmacies at significantly higher rates.

The win is significant for states, which had banded together in a bipartisan coalition to back Arkansas' position in the case. Forty-seven attorneys general told the high court in the spring that preserving states' ability to regulate PBMs was essential for curbing harmful business practices in health care and protecting consumers' access to medication. Arkansas Attorney General Leslie Rutledge called the ruling "a win for all Arkansans and Americans."

The ruling also hands a victory to local pharmacists, who say PBMs' practice of shortchanging them on drug reimbursements while overpaying PBM-affiliated pharmacies has threatened to put them out of business. The National Community Pharmacists Association cheered the high court's decision Thursday, saying it was thrilled that the Supreme Court had greenlit states to clamp down on that practice.

"This is a historic victory for independent pharmacies and their patients. And it confirms the rights of states to enact reasonable regulations in the name of fair competition and public health," said National Community Pharmacists Association CEO B. Douglas Hoey, who is a pharmacist himself.

The Pharmaceutical Care Management Association, the PBM industry lobbying group that sued over Act 900, said Thursday that it was disappointed in a decision that it claimed would "result in the unraveling of federal protections under ERISA."

"As states across the country consider this outcome, we would encourage they proceed with caution and avoid any regulations around prescription drug benefits that will result in higher health care costs for consumers and employers," the group said in a statement.

Attorneys said the decision provides much-needed clarity on the scope of ERISA's preemption provision. The ruling preserves Section 1144's broad reach in the context of benefit plan legislation but establishes that preemption can't be wielded as a weapon to knock out regulation of "middlemen somewhere in the [health care] supply chain," as James Gelfand, senior vice president of health policy at the ERISA Industry Committee, put it.

"For far too long, the PBM industry has confused both legislators and regulators with overly broad interpretations of ERISA in order to dodge oversight," said health care attorney Ron Lanton. "We have been arguing for years that ERISA should not be interpreted to where it would be virtually impossible to regulate PBMs."

Linda Clark, a health care attorney and partner at Barclay Damon LLP, seconded that notion. "The fact you have a tangential relationship with entities that are regulated by ERISA doesn't make you completely immune from state regulation of anything you do," she said, adding that PBMs need to be regulated to prevent them from "employ[ing] even more draconian practices in management of their pharmacy networks."

Michael Klenov, a benefits attorney and partner at Korein Tillery, said Thursday that the ruling will likely discourage challenges to other states' attempts to regulate PBMs. But "it may also embolden states to push the boundaries of health care-related legislation further, thus leading to new challenges that will test where the courts draw the preemption boundaries," he said.

The federal government, which weighed in as an amicus in support of Arkansas, did not respond to a request for comment Thursday.

Arkansas is represented by Attorney General Leslie Rutledge, Nicholas Jacob Bronni and Shawn J. Johnson of the Arkansas Attorney General's Office.

The federal government is represented by Kate O'Scannlain, G. William Scott, Thomas Tso, Wayne Berry and Stephanie Bitto of the U.S. Department of Labor and by Edwin Kneedler and Frederick Liu of the U.S. Department of Justice.

The Pharmaceutical Care Management Association is represented by Michael B. Kimberly, Sarah P. Hogarth and Matthew Waring of McDermott Will & Emery LLP and by Seth P. Waxman, Catherine M.A. Carroll, Paul R.Q. Wolfson, Justin Baxenberg, Claire H. Chung and Hillary S. Smith of WilmerHale.

The case is Rutledge v. Pharmaceutical Care Management Association, case number 18-540, in the Supreme Court of the United States.

--Editing by John Oudens and Haylee Pearl.

Update: This article has been updated with additional comments and more information about the case.

Ron Lanton 8/3/20 Ron Lanton 8/3/20

Lanton Law Newsletter is Out

We have released our August newsletter.

We have released our August newsletter. This month we discuss our presentations at the National Association of Specialty Pharmacy, the new Executive Order aimed at PBMs, our recent Blogcast with Ken Kaitin, Professor and Director at the Tufts Center for the Study of Drug Development, the new LTC Congressional pharmacy bill and our interview with Pharmacy Times on Rutledge v. PCMA. Click here to view it.

Ron Lanton 7/27/20 Ron Lanton 7/27/20

Lanton Law Speaks with Pharmacy Times about U.S. Supreme Court Case Rutledge v. PCMA & Its Implication on Pharmacy Policy

Lanton Law was interviewed by Pharmacy Times on the implications of the October 6, 2020 U.S. Supreme Court case of Rutledge v. PCMA.

Lanton Law was interviewed by Pharmacy Times on the implications of the October 6, 2020 U.S. Supreme Court case of Rutledge v. PCMA. This case has major consequences for future PBM policies. Click here to access the interview.

Ron Lanton 7/27/20 Ron Lanton 7/27/20

New Executive Order Aimed at Pharmacy Benefit Managers (PBMs)

The White House has released an Executive Order titled “Executive Order on Lowering Prices for Patients by Eliminating Kickbacks to Middlemen.”

“One of the reasons pharmaceutical drug prices in the United States are so high is because of the complex mix of payers and negotiators that often separates the consumer from the manufacturer in the drug-purchasing process. The result is that the prices patients see at the point-of-sale do not reflect the prices that the patient’s insurance companies, and middlemen hired by the insurance companies, actually pay for drugs. Instead, these middlemen — health plan sponsors and pharmacy benefit managers (PBMs) — negotiate significant discounts off of the list prices, sometimes up to 50 percent of the cost of the drug.”

This Executive Order advocates for HHS to complete its prior January 2019 proposed rule aimed at “revising the discount safe harbor to explicitly exclude from the definition of a discount eligible for safe harbor protection certain reductions in price or other remuneration from a manufacturer of prescription pharmaceutical products to plan sponsors under Medicare Part D, Medicaid managed care organizations as defined under section 1903(m) of the Act (Medicaid MCOs), or pharmacy benefit managers (PBMs) under contract with them.”

Not only does this Executive Order state that discounts offered on prescription drugs should be passed on to patients, but that HHS must confirm publicly prior to finalizing its proposed rule that “that the action is not projected to increase Federal spending, Medicare beneficiary premiums, or patients’ total out-of-pocket costs.”

Lanton Law is a national boutique law and government affairs firm that focuses on healthcare/life sciences, technology and finance. 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 7/16/20 Ron Lanton 7/16/20

Update on Closely the Watched U.S. Supreme Court Case of Rutledge v. PCMA

We have been providing occasion updates through our blog on the U.S. Supreme Court case of Rutledge v. PCMA, whose outcome could have wide ranging policy and legal ramifications on pharmacy and pharmacy benefit managers.

We have been providing occasional updates through our blog on the U.S. Supreme Court case of Rutledge v. PCMA, whose outcome could have wide ranging policy and legal ramifications on pharmacy and pharmacy benefit managers.

This issue in this case according to the Court is “Whether the U.S. Court of Appeals for the 8th Circuit erred in holding that Arkansas’ statute regulating pharmacy benefit managers’ drug-reimbursement rates, which is similar to laws enacted by a substantial majority of states, is preempted by the Employee Retirement Income Security Act of 1974, in contravention of the Supreme Court’s precedent that ERISA does not preempt rate regulation.”

The case will now be heard on October 6, 2020 in front of the U.S. Supreme Court. Additional information on this case can be found here.

Ron Lanton 11/25/19 Ron Lanton 11/25/19

What's Next for DIR Policy?

We have a new article in the American College of Apothecaries (ACA) titled “What’s Next for DIR Policy?”

We have a new article in the American College of Apothecaries (ACA) titled “What’s Next for DIR Policy?” We will be having a new white paper on the subject coming out soon. In the meantime, this link will take you to the article in the ACA Fall Magazine 2019. https://acainfo.org/wp-content/uploads/flipbook/22/mobile/index.html#p=9

Ron Lanton 11/24/19 Ron Lanton 11/24/19

The Specialty Pharmacist's Role in Educating Patients about Biosimilars and Biologics

Ron Lanton III, Esq. of Lanton Law discusses with Specialty Pharmacy Times the specialty pharmacist's role in educating patients about biosimilars and biologics

Ron Lanton III, Esq. of Lanton Law discusses with Specialty Pharmacy Times the specialty pharmacist's role in educating patients about biosimilars and biologics. https://www.pharmacytimes.com/news/the-specialty-pharmacists-role-in-educating-patients-about-biosimilars-and-biologics

Specialty pharmacies really can help the patient in getting the education out about biologics and biosimilar products in a number of different ways. First of all, the specialty pharmacy is very educated about what products are out on the market, and they’re in close communication with the physician. It’s also going to depend on the formulary and whether or not the pharmacy benefit manager or the carrier is actually going to carry the drug on the particular formulary. So I think if it does, I mean, obviously they don’t know everything about the patient’s formulary but they can find out that information and then see whether or not that’s good for the patient to take, as far as cost and outcomes-wise. So I think that with the specialty pharmacist being positioned in the center of everything, it’s a great position to be in for them to say, ‘Look, this is coming down. This is something I think that can help you, and let’s try and see if we can lower your costs and improve your outcome.’

Ron Lanton 11/8/19 Ron Lanton 11/8/19

New PBM Legislation Advances in Congress

Congresswoman Amy Spanberger (D-VA) has sponsored H.R. 2115 titled “Public Disclosure of Drug Discounts and Real-Time Beneficiary Drug Cost Act.” This is important for healthcare stakeholders, as this proposed legislation requires greater transparency for discounts provided by manufacturers. This bill also proposes to include real-time benefit information as part of a prescription drug plan’s electronic prescription program under Medicare.

Below are a few of the bill’s highlights:

“In order to allow the comparison of PBMs’ ability to negotiate rebates, discounts, direct and indirect remuneration fees, administrative fees, and price concessions and the amount of such rebates, discounts, direct and indirect remuneration fees, administrative fees, and price concessions that are passed through to plan sponsors, beginning January 1, 2020, the Secretary shall make available on the Internet website of the Department of Health and Human Services the information with respect to the second preceding calendar year provided to the Secretary on generic dispensing rates (as described in paragraph (1) of subsection (b)) and information provided to the Secretary under paragraphs (2) and (3) of such subsection that, as determined by the Secretary, is with respect to each PBM.”

Not later than January 1, 2021, the program shall implement real-time benefit tools that are capable of integrating with a prescribing health care professional’s electronic prescribing or electronic health record system for the transmission of formulary and benefit information in real time to prescribing health care professionals. With respect to a covered part D drug, such tools shall be capable of transmitting such information specific to an individual enrolled in a prescription drug plan. Such information shall include the following:

(I) A list of any clinically-appropriate alternatives to such drug included in the formulary of such plan.

(II) Cost-sharing information for such drug and such alternatives, including a description of any variance in cost sharing based on the pharmacy dispensing such drug or such alternatives.

(III) Information relating to whether such drug is included in the formulary of such plan and any prior authorization or other utilization management requirements applicable to such drug and such alternatives so included.

Conclusion:

Efforts to advocate for stronger PBM transparency has picked up in the last few years but this legislation which was voted 403-0 is telling. Usually this time of the year has Congress winding down its legislative agenda in preparation for the upcoming election. While I don’t expect to see too much legislation that is politically charged passing by year end, I do foresee either something on drug pricing or PBM transparency; if not both passing before we head into 2020. This Act is currently in the U.S. Senate.

If you have additional questions about lobbying or need strategic advice on developing state or federal policies, contact Lanton Strategies or our sister company Lanton Law for regulatory compliance and legal issues.

Ron Lanton 10/18/19 Ron Lanton 10/18/19

Is the Insulin Price Reduction Act the Right Answer to High Insulin Prices?

I have a new article in The Centers for Biosimilars titled Is the Insulin Price Reduction Act the Right Answer to High Insulin Prices? You can find the article by clicking on the following link: https://www.centerforbiosimilars.com/contributor/ron-lanton-III-esq/2019/10/is-the-insulin-price-reduction-act-the-right-answer-to-high-insulin-prices

If you cannot access the link above, I have put the text of the article below.

At this point in the legislative calendar, it is time to take a look at what may have a likely shot at passing Congress before the 2020 election season gets underway. With the contentious debate on drug pricing that has occurred during the last several months, insulin pricing is still garnering plenty of attention.

This summer saw the unveiling of bipartisan legislation aimed to deliver a policy solution to rising insulin prices. Titled the Insulin Price Reduction Act, otherwise known as S.2199, the proposed legislation sponsored by Senators Tom Carper, D-Delaware; Jeanne Shaheen, D-New Hampshire; Susan Collins, R-Maine; and Kevin Cramer, R-North Dakota, seeks to hold payers, manufacturers, and pharmacy benefit managers accountable for insulin price increases.

According to Senator Carper’s press release, the bill would create a new insulin pricing model “where the use of rebates would be restricted for any insulin product for which the manufacturer reduces the list price back to a level no higher than the price of the product in 2006. For the most popular insulins, this would result in more than a [75%] decrease in prices compared to what we can expect to see in 2020. These rebate restrictions would apply in Medicare Part D and the private insurance market. Private insurance plans would also be required to waive the deductible for insulin products that met the list price reduction criteria. To keep these rebate exemptions and deductible waivers in future years, the manufacturer would have to limit any list price increase to no more than medical inflation.”

The bill does have support from industry stakeholders. This bill has been endorsed by the JDRF, the American Diabetes Association (ADA) and the Congressional Diabetes Caucus, and the need for insulin access is there. According to the ADA, “Between 2002 and 2013, the average price of insulin nearly tripled. For more than 7.4 million Americans, including all individuals with type 1 diabetes, insulin is a life-sustaining medication for which there is no substitute.”

While having stakeholder support is important, it is not the only factor that determines whether this bill advances. There are several bills in Congress proposing similar solutions to insulin pricing, on top of FDA’s interest in lowering insulin prices via the development of biosimilar and interchangeable insulin products. Not to mention the fact that the US Department of the Treasury has implemented guidance aimed at making chronic medication access easier for beneficiaries with High Deductible Health Plans that include Health Savings Accounts.

While the bill is bipartisan, it would help if more senators from both sides signed on to show broadening support. However, with the looming election season, it remains questionable whether both sides can agree on if the Insulin Price Reduction Act is the right vehicle to lower insulin prices.