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.

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.

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 

House Passes the MORE Act

The House of Representatives passed the Marijuana Opportunity Reinvestment and Expengement Act of 2020 otherwise known as the MORE Act of 2020 or H.R. 3884. The party line vote was 228 to 164. The bill proposes to remove cannabis from the Controlled Substance Act and seeks to mirror the changing policy around this subject as medical cannabis is legal in ⅔ of the states while approximately 15 states have passed laws permitting recreational usage. The bill heads to the Senate where it is not expected to pass this session.

Lanton Law believes that the cannabis market will continue to evolve and expand. Notwithstanding this market potential is the fact that medical and adult-use cannabis operations are confronted with a complex patchwork of state and federal laws and regulations that we assist a variety of businesses with. 

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

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!

New Congressional Bill Aimed at Tech ISPs

The Platform Accountability and Consumer Transparency Act has been introduced by Sens. Brian Schatz (D-Hawaii) and John Thune (R-South Dakota), which targets Internet Service Providers and attempts to limit their protections under 47 U.S. Code § 230 of the Communications Decency Act (CDA), also called Title V of the Telecommunications Act of 1996. 

The proposed Act points out two critical facts: 

• “Online consumers are not adequately protected in the United States because, with the exception of Federal criminal statutes, providers of interactive computer services are immune from the enforcement of most Federal statutes and regulations.

• The bill among a list of proposed policies also seeks to preserve the internet and other interactive computer services as forums for diversity of political discourse, unique opportunities for cultural development, and myriad avenues for intellectual and commercial activity.”

Specifically, the interactive computer service provider shall provide the following elements:

• reasonably inform users about the types of content that are allowed on the interactive computer service;

• explain the steps the provider takes to

• ensure content complies with the acceptable use policy;

• explain the means by which users can notify the provider of potentially policy-violating content, illegal content, or illegal activity

• include publication of a quarterly transparency report outlining actions taken to enforce the policy

While there are some First Amendment concerns with this legislation, this demonstrates how 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.

Lanton Law Newsletter is Out

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.

Big Tech Company Executives Pressed On Capitol Hill On Their Market Influence

On July 29th four of the biggest tech companies CEOs testified in front of Congress. Jeff Bezos of Amazon, Tim Cook of Apple, Mark Zuckerberg of Facebook, and Sundar Pichai of Google all took questions from the U.S House Judiciary Subcommittee on Antitrust, Commercial, and Administrative Law. The hearing which can be viewed here was titled “Online Platforms and Market power, Part 6: Examining the Dominance of Amazon, Apple, Facebook, and Google.”  

Sadly, there was a lot of political posturing on both sides of the political aisle and not a lot of policy. The main takeaway is that there is still no clear bipartisan antitrust agenda. 

Democrats presented evidence regarding antitrust concerns. It seemed they had pointed questions regarding certain deals such as Amazon's purchase of Ring to control that sector of the market and Facebook's alleged threats against Instagram before its purchase of the company.  

Republicans focused on perceived anti-conservative bias in tech instead of addressing company size and market power. Their questions focused on whether the tech companies will participate in "electioneering" for Joe Biden and grilled Facebook about Twitter's shutdown of Trump Jr.'s account. 

This has been a year-long investigation by this Subcommittee with this testimony capping the investigation. Subcommittee members are still in the process of sending follow-up questions to the CEOs and finalizing their conclusions over the next few weeks. Once they are done the Subcommittee will file a report of its findings. 

This process has been highly politicized, and many tech stakeholders are wondering whether any significant policymaking will get done by the end of the year. While there is reason to be skeptical, there is a highly charged election about to take place, meaning it wouldn’t surprise us if a small step towards technology regulation was accomplished. The bigger question is what happens to tech policy at the start of 2021? 

We continue to see an increase in federal and state policymaking when it comes to technology companies. The threat of looming technology legislation will undoubtedly lead to increased regulation. It’s better to be prepared now by knowing the landscape and preparing your strategic options in order to navigate the increased scrutiny. 

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. 

Long Term Care Pharmacy (LTC) Legislation Introduced Aimed at Defining LTC Pharmacy

The Long-Term Care Pharmacy Definition Act of 2020 has been introduced by U.S. Senator Scott (R-SC) and co-sponsored by Senator Warner (D-VA). The bill has been introduced in the U.S. House of Representatives by Congressman Mullin (R-OK) and Congressman Schrader (D-OR). The bill seeks to establish a clear statutory definition of long term care pharmacy.

Lanton Law is a national boutique law and government affairs firm that closely monitors 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.    

This Week in Washington D.C.

It is widely anticipated this week that negotiation on another stimulus bill will begin on Capitol Hill. The backdrop of these negotiations are that we are starting to see an alarming increase in the number of COVID-19 infections nationwide, along with the fact that enhanced unemployment benefits that were approved in March 2020 will expire this week for many states without Congressional action to extend these benefits. The question is will we see another COVID-19 relief package that is similar to the CARES Act?

The House has been discussing $3 trillion in possible aid while the Senate is positioning for a possible $1 trillion in economic aid. At this point it is unclear where the Administration is on this issue. Major issues within this discussion are whether to include more finding for COVID-19 testing, contact tracing, etc.

The House late this spring passed a $3 trillion Heroes Act but since then the bill has been stalled in the Senate. The Senate is looking to create its own bill where the plan is the Senate version would be the blueprint to negotiate any possible further aid. It looks as though this may be the last possible economic relief bill before the election, however; this situation remains fluid. 

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.

Pharmacy Times Interviews Lanton Law On How COVID-19 May Lead to the Expansion of Practice Laws for Pharmacists Across the Country

Alana Hippensteele; Editor, MA of Pharmacy Times interviewed Ron Lanton to discuss how COVID-19 may lead to expansion of practice laws for pharmacists across the country. Click here to access the interview.

Below Is a summary of the interview from Pharmacy Times:

Pharmacy Times spoke with Ron Lanton III, Esq, a regulatory and government affairs professional, about how the coronavirus disease 2019 (COVID-19) could lead to more expanded practice laws for pharmacists across the country.

Lanton noted that actions such as clinical laboratory improvement amendment (CLIA) waivers and additional steps by the Centers for Medicare and Medicaid Services (CMS) and Department of Health and Human Services (HHS) have been encouraging and have allowed pharmacists to be more involved in the pandemic response while beginning to get paid for these services.

“I think that was one of those tools that just wasn’t there before because of where we are, and now it’s there,” Lanton said. “It’s been very encouraging to have HHS and CMS there trying to make sure that this happens for pharmacy.”

Lanton added that although pharmacists have been discussing their value for a long time, the pandemic has pushed that knowledge into the forefront of patients’ and other health care professionals’ minds.

He encouraged pharmacists to follow news from CMS closely, because new policies and announcements are coming out almost daily. The ongoing stimulus packages passed by Congress may also offer a chance for pharmacists to push the field forward, by lobbying for provider status, personal protective equipment, and direct and indirect remuneration fee relief as part of the packages.

Online Political Advertising Legislation to be Introduced

U.S. Congressman Cicilline (D-RI) has announced  his intent to introduce legislation “that tightly restricts the use of personal, online consumer data that is often used to ‘microtarget’ voters with misleading ads.” According to his release, the legislation will be titled the “Protecting Democracy from Disinformation Act” and has the following elements: 

• Restricts Microtargeting: Only allows advertisers and online platforms to use age, gender, and location when targeting political ads. 

• Improves Transparency: Requires disclosure and reporting on who paid for an ad, how much it cost, whom an ad is aimed at, and who saw the ad.

• Holds Online Platforms Accountable: Provides enforcement through the Federal Election Commission’s existing authority, a private right of action, and criminal penalties for online platforms and ad intermediaries that knowingly and willfully violate the Act.

Expect issues such as microtargeting and others to come to the forefront as we enter in the election season of 2020. 

Lanton Strategies; a segment of Lanton Law works to help advance our clients interests before both legislative and regulatory bodies on the state and federal levels. We use sources from the Hill, state houses, agencies, markets and trade associations, to inform our clients and achieve proactive results. Let us know how either our government affairs services or legal services can help you achieve your priorities. 

New Rule: Transition to BLA Pathway Is Complete

We have a new article with the Center for Biosimilars titled “New Rule: Transition to BLA Pathway is Complete.”

Click here for the article

For those having difficulty accessing the article, we have provided the text from the article below.

As of today, March 23, 2020, the life sciences industry completes “the transition.” New categories of biologics will now be licensed via the biologics approval pathway under the Biologics Price Competition and Innovation Act (BPCIA). 

This transition occurs 10 years after the 2009 enactment of the BPCIA. During that interim, manufacturers of certain biologics approved and under review for approval were in limbo as to how their products and rights of exclusivity would be treated under the new policy.

Now, biologics previously approved under section 505 of the Federal Food, Drug, and Cosmetic Act (FDC) will automatically be “deemed” biologics licensed under section 351 of the Public Health Service Act (PHS). Ultimately, these drugs will be categorized as biologics, subject to biosimilar and not generic competition.

Unfortunately, the original BPCIA statute did not provide instructions to the FDA on how to implement this change. Therefore, the FDA has taken certain steps to enact the transition via several proposed rules and the implementation of its Biosimilars Action Plan (BAP). 

The BAP was released in July 2018. The plan is in 2 sections. The first defines key areas in which the FDA wants to focus its regulatory efforts: improving clarity and efficiency of the biosimilar approval process, enhancing understanding through better public communications, and addressing anticompetitive practices.  

The second section is made up of key actions. These are steps that the FDA is either taking or planning to take to improve review processes, create information resources, upgrade guidance, and encourage public feedback. Many of these actions have already been initiated.

On February 21, 2020, the FDA released a final rule that goes into effect today. It amends the FDA’s regulatory definition of a biological product so that it is aligned with the BPCIA. “Under the final rule, the term protein means any alpha amino acid polymer with a specific defined sequence that is greater than 40 amino acids in size.” This is one of the final steps in the 10-year transition process. It opens the door for insulins to be approved via the biologics license application (BLA) pathway.  

Over 100 products that had been approved via new drug applications under the FDC now must be reviewed as BLAs under section 351 of the PHS. Drugs that will be transitioned include naturally occurring proteins such as hyaluronidase, human growth hormones, and menotropins.

The FDA is focusing on insulins and has made waves with the release of draft guidance on insulin biosimilars. The FDA indicated that switching studies may not be needed for a designation of interchangeable insulins if analytical assessments suggest high similarity between biosimilars and reference products. This could speed the arrival to market of the first interchangeable biosimilars in the United States for insulin.

The FDA has also released 2 question-and-answer documents that discuss the transition for patients and healthcare providers. With the BAP and guidance, the FDA has signaled that they are moving forward with the transition as a means of introducing more affordable medicines into the healthcare system—specifically, by expanding the use of biosimilars.
 

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.

With the Debate Over Data Privacy Increasing, Senator Gillibrand Proposes Legislation to Create New Data Protection Agency

U.S. Senator Kirsten Gillibrand (D-NY) has announced the creation of new legislation titled the Data Protection Act. According to the Senator’s press release, the bill would create “the Data Protection Agency (DPA), an independent federal agency that would protect Americans’ data, safeguard their privacy, and ensure data practices are fair and transparent. 

The DPA will have the authority and resources to effectively enforce data protection rules—created either by itself or congress—and would be equipped with a broad range of enforcement tools, including civil penalties, injunctive relief, and equitable remedies. The DPA would promote data protection and privacy innovation across public and private sectors, developing and providing resources such as Privacy Enhancing Technologies (PETs) that minimize or even eliminate the collection of personal data. The U.S. is one of the only democracies, and the only member of the Organization for Economic Co-operation and Development (OECD), without a federal data protection agency.”

The proposed bill will have three core missions:

• Give Americans control and protection over their own data by creating and enforcing data protection rules

• Maintain the most innovative, successful tech sector in the world by ensuring fair competition within the digital marketplace

• Prepare the American government for the digital age

Governmental oversight into data is showing no signs of slowing down. Gone are the days where you don’t have to worry about regulations in order to operate. If you are a healthcare, technology and financial services stakeholder, data privacy will be the most important issue to overcome within the next 10-20 years. Ensuring against breaches of personally identifiable information (PII), protected health information (PHI), personally identifiable financial information (PIFI), and other sensitive data will be key to compliance, trust and market competitiveness. Contact Lanton Law so that our experts can use their advocacy and legal services to help you prepare and succeed in a more interconnected world.   

Private Equity Presence Grows in Physician Practices As Well As Congressional Scrutiny

The Changing Market

As the consolidation of independent physician practices continues, one finds that there is a new player in the corporatization of medicine. While hospitals, health systems and insurers continue to make physician practice acquisitions, these entities suddenly find themselves competing against private equity firms.

Several physicians are finding themselves struggling in today’s reimbursement landscape. Whether you are in orthopedics, oncology, dermatology, urology, women’s health and gastroenterology for example, not only are reimbursement pressures much worse than in prior years, but transitioning to value based care has caused these and other physician practices to struggle with acquiring specialized personnel, new workflows and innovative technology.

What is Private Equity?

Private equity firms are backed by money from high net worth individuals, sovereign wealth funds, pensions funds, etc. that seek to invest in specialized sectors for an average return of 20% within 5-7 years. Once these firms take a majority stake in these practices and scale down costs to make the practice efficient, these same firms exit their positions after a short period while the remaining physician owners profit from the resale. The goal is to target a market, region or to create a multi-specialty practice. Besides the goal of financial returns, these firms can use their market clout to negotiate better rates and compete for more contracts with payers. 

To date, there are many questions surrounding private equity firms purchasing physician practices. Do they improve patient outcomes? Do all employees within these new scaled practices work for the private equity firm? What legal liabilities exist for the physicians? Are physicians considered owners or employees in these newly acquired entities? 

Private Equity Transactions Debated by Congress

Transactions such as the ones described above are now being debated by Congress. The House Ways and Means Committee is debating whether transparency is warranted by private equity firm ownership of physician practices. Should these firms have to file disclosures with the Internal Revenue Services (IRS) on Medicare payments, as well as provider rents and mortgages? Additionally, the question of whether an increase in patient surprise billing is the result of private equity ownership is also currently being examined.    

How Can Lanton Law Help?

Lanton Law’s advocacy and legal services  can help physician practices think about your options in this changing marketplace. If your position is not to sell your firm, we can help you with both legal and advocacy options that will assist with better reimbursement and network access. If you are thinking of selling your practice we can help walk you through your strategies. Once you sell, your practice will transition not only operationally, but also how you care for your patients. Not having complete managerial control will likely occur after the transaction so making sure that you sell to the right stakeholder is crucial. Contact us today for more information.  

Department of Justice Will Hold February 2020 Workshop on Section 230 Which Will Impact Tech Stakeholders

Earlier this month, we released a blog post titled Tech Companies and the Uncertain Future of §230. In it we focused on what Section 230 of the Communications Decency Act is and how the tech community would be impacted by changes currently being debated by both sides of the political aisle in Congress. 

Interestingly, the Department of Justice (DOJ) has announced that it will hold a public workshop in Washington, D.C. on Feb. 19, 2020, titled “Section 230 – Nurturing Innovation or Fostering Unaccountability?” According to the DOJ the workshop will discuss the law, its expansive interpretation by the courts, its impact on the American people and business community, and whether improvements to the law should be made. 

Additionally, the Department stated “Following the public workshop, the Justice Department will invite stakeholders with diverse perspectives for private listening sessions and roundtables to seek additional input and discuss the problems, benefits, and potential improvements to Section 230.  The department will publish readouts on the various perspectives and debate from those meetings.”

Congressional officials have been increasing their desire to modify this law. Democrats have complained that the law allows tech companies to be lax in patrolling misinformation or violent extreme content while Republicans have advocated that the law prevents them from imposing actions against tech companies for removing conservative political content.  

As we continue to become an increasingly connected world, being able to digitally share content with each other is not likely to slow down anytime soon. However; the market and our intentions in sharing data have changed significantly since when section 230 was enacted in 1996. While major tech titans like Facebook, Twitter, Alphabet are at the center of this debate, we foresee that other tech stakeholders should take note of these developments and plan accordingly. We don’t believe that this debate will slow down at all so making adaption to section 230 is key. Contact Lanton Law for more details.      

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.

Texas v. United States (An ACA Ruling)

Lanton Law has been both monitoring and advising clients on a controversial case winding through the federal courts called Texas v. United States, which focused on the constitutionality of the Affordable Care Act (ACA). 

On December 18, 2019 the industry witnessed the U.S. Court of Appeals for the 5th Circuit issue its ruling, which found that while the individual mandate is unconstitutional, the federal district court must decide on whether the remaining portion of the ACA could remain intact. The previous federal district court ruled that the ACA’s individual mandate is no longer considered a tax, meaning that Congress does not have a constitutional authority to enforce the individual mandate. Ultimately the district court stated that since the mandate was not a severable provision from the rest of the ACA, the remainder of the ACA was thus unconstitutional.      

In contrast, the U.S. Court of Appeals for the 5th Circuit reasoned:     

“First, there is a live case or controversy because the intervenor-defendant states have standing to appeal and, even if they did not, there remains a live case or controversy between the plaintiffs and the federal defendants. Second, the plaintiffs have Article III standing to bring this challenge to the ACA; the individual mandate injures both the individual plaintiffs, by requiring them to buy insurance that they do not want, and the state plaintiffs, by increasing their costs of complying with the reporting requirements that accompany the individual mandate. Third, the individual mandate is unconstitutional because it can no longer be read as a tax, and there is no other constitutional provision that justifies this exercise of congressional power. Fourth, on the severability question, we remand to the district court to provide additional analysis of the provisions of the ACA as they currently exist.”

 So what happens next?

First the status quo remains for now as the individual mandate has been repealed by Congress. And while it is anticipated that the U.S. Supreme Court will have a say again on this issue in 2020, the defendants in this case comprised of a coalition of Democratic state attorneys general are considering asking the Supreme Court to examine the ACA for a third time since 2012. The question is whether the U.S. Supreme Court would issue any decision before the lower federal courts have completed their review of the case. Whether the Court grants an expedited review is currently unknown. 

If you have additional questions about this issue or you are trying to comprehend how this case will impact you as a stakeholder, contact us by clicking here. 

What Will Happen to Biosimilars in the USMCA Agreement in 2020?

Back in August I started an analysis of how biosimilars will be impacted in the new United States-Mexico-Canada Agreement (USMCA). To refresh, in a follow up on a 2016 campaign promise to renegotiate the North American Free Trade Agreement (NAFTA), the Administration has been engaging Mexico and Canada in an effort to create and ratify the USMCA. 

One of the major points of contention in the negotiation centered on the exclusivity period of biologics. Biosimilar manufacturers raised concerns about the fact that the USMCA would award biologic manufacturers 10 years of market exclusivity. 

Fast forward to December 19, 2019 when the U.S. House of Representatives approved the USMCA with a bipartisan vote of 385-41. When it comes to biologics, the status quo remains as the exclusivity period continues to be 12 years. A provision that would have guaranteed 10 years of market exclusivity for biologic drugs was stripped out of a deal between Congress and the Administration. 

Senate Majority Leader McConnell (R-KY) stated that the U.S. Senate would consider the measure in early 2020. The reason for the delay according to the Senator is due to the looming impeachment trial for President Trump. Stay tuned for developments.

If your organization intends to either start or increase your utilization of biologic/biosimilar products or you are interested in understanding how to invest in these emerging products, contact us today. 

CMS Star Ratings: Will Biosimilars Benefit?

This article is in Biosimilar Development: Click here to read the article

In case you can’t access the article, here is the text below.

The Centers for Medicare and Medicaid Services (CMS) star ratings system was created in 2007 for insurance plans operating under both the Medicare Advantage and Part D. This 1 to 5 system (with 5 being the highest rating) is a way for CMS to measure the value of a plan and determine whether to continue to allow it to be part of the program. However, it’s more than just the plan, since the plan’s providers play a key role in how CMS evaluates each plan.

Essentially, the system measures other items as well, such as clinical quality, beneficiary satisfaction, and regulatory compliance, in addition to included providers. Plans are incentivized with financial rewards for improving quality performance and achieving the highest rating. What has been interesting to watch over time is how the star ratings system has become the go to evaluator for anything healthcare. The question is whether this concept could be applied to reduce drug costs, specifically, where biosimilars are concerned. 

We received our answer with the introduction of the Star Ratings for Biosimilars Act, otherwise known as H.R. 4629. This bipartisan bill is sponsored by Congressmen Tonko (D-NY) and Gibbs (R-OH), but to date it hasn’t gotten much support. The bill has a U.S. Senate version sponsored by Senators Cassidy (R-LA) and Menendez (D-NJ). According to Senator Cassidy’s press release, “This bill would incentivize insurers to use lower cost versions of drugs by rating the plan based on usage of biosimilar medications. Using lower cost drugs will lead to positive health outcomes with lower out of pocket costs for patients.” We have also seen similar legislative language in S.2543, known as the Prescription Drug Pricing Reduction Act of 2019.

For years now, we have witnessed several debates on how biosimilars could potentially lower drug costs, and this proposed legislation is another example of the potential promise that biosimilars have in helping policymakers lower drug costs. But will this bill help? Specifically, the proposed legislation calls for determining whether a biosimilar is on the formulary, assesses whether and how utilization management tools are applied with respect to a biosimilar, and assesses the percentage of enrollees prescribed the biosimilar biological product when the reference biological product is also available.

While I applaud any idea that attempts to lower costs and promote patient access, the devil is always in the details. For example, will these proposed metrics of incentivizing plans to use biosimilars work? Will there be competing metrics that plans have that may be better measurements than CMS?

Industry stakeholders like physicians and pharmacists may not like having plans with too much autonomy because unfairness and bias in measuring provider compliance may come into play, as plans and their partner pharmacy benefit managers (PBMs) would likely favor their providers and pharmacies, which could result in different star ratings for some. Will hospitals be amenable to this system when they already have complaints against CMS’ star ratings programs due to hospitals not being able to predict quality improvement metrics for operational efficiency? Physician education on biosimilars will have to be increased as well, since their comfort level with biosimilars will help spawn more utilization by their patients. Lastly, what impact will star ratings on biosimilars have on insurer rebates? At this time, it is too early to tell, since without this clarity it is even hard to quantify if biosimilars are already experiencing formulary disadvantages due to innovators offering larger discounts. One thing is for certain, in order to force monumental change, it may be best to do it via mandate. Forced compliance, in my opinion, will bring out the potential bugs in a system fast.

Ultimately, the other big issue is whether there is enough time to get legislation like this through Congress, along with a presidential signature. It would also help if the bill had more support, through either Congressional members or a push from powerful interested stakeholders. To date, the bill doesn’t have a significant number of cosponsors. It could be that it is December or that lowering drug prices through biosimilars is an idea that is spread throughout too many current Congressional proposed bills.

Theoretically, this seems like a win-win for both parties, but, realistically, we are on the doorstep of campaign season. With the upcoming elections on the state and federal level expected to be explosive, will lawmakers find the will to agree on a bipartisan solution like this before the political rhetoric heats up? We can only hope.