New Congressional Cannabis/Marijuana Bill Introduced

Senators Dianne Feinstein (D-Calif.), Chuck Grassley (R-Iowa) and Brian Schatz (D-Hawaii) have introduced the Cannabidiol and Marijuana Research Expansion Act. This proposed legislation seeks to improve the process for conducting valid medical research on marihuana, and to streamline the development of safe and effective FDA-approved medicines. The bill is cosponsored by Senators Dick Durbin (D-Ill.), Amy Klobuchar (D-Minn.), Thom Tillis (R-N.C.), Tim Kaine (D-Va.), Joni Ernst (R-Iowa), Jon Tester (D-Mont.) and Lisa Murkowski (R- Alaska). A one page summary of the proposal can be found here.  

Lanton Law is a national boutique law and lobbying firm that focuses on healthcare/life sciences and technology. Specifically our cannabis practice helps all supply chain entities from growers, financiers, suppliers, dispensers to ancillary services.

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 Psychedelic ETF About To Hit the Market

There is a new March 5, 2021 U.S. Securities Exchange Commission (SEC) filing that will allow investors to gain exposure to the psychedelic and cannabis industries. According to the fling, the Defiance Next Gen Altered Experience ETF is: 

The Index is a rules-based index that tracks the performance of a portfolio of life sciences companies conducting federally legal medical activities in the psychedelics, medical cannabis, hemp, and cannabidiol (“CBD”) industries whose common stock or depositary receipts are listed on a U.S. or Canadian exchange. Psychedelic drugs, also known as hallucinogens, are a group of substances, including psilocybin, that are used to change and enhance sensory perceptions, thought processes, and energy levels. Medical cannabis, also known as medical marijuana, refers to the use of parts of the marijuana plant, such as hemp and the plant’s chemicals, for the treatment of a variety of diseases or medical conditions. Hemp is a type of cannabis plant whose stalks and seeds are used for a variety of commercial products.

While Lanton Law is not making any statements about whether people should invest in this or not, we are simply monitoring the industry to let interested stakeholders know about the developments within the cannabis market. 

Lanton Law is a national boutique law and lobbying firm that focuses on healthcare/life sciences and technology. Specifically our cannabis practice helps all supply chain entities from growers, financiers, suppliers, dispensers to ancillary services.

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.

Virginia Votes to Legalize the Sales & Recreational Use of Marijuana

Virginia has taken one step closer to becoming the first southern state to legalize marijuana. If enacted Virginia would follow Washington D.C. along with fifteen other states to do so. The proposed legislation would allow the possession of up to one ounce of marijuanato become legal starting January 1, 2024. This would be at the same time as sales and a regulatory scheme overseeing the new marijuana marketplace would take off. The bill is awaiting Governor Northam’s signature who is expected to sign the measure into law.

Lanton Law is a national boutique law and lobbying firm that focuses on healthcare/life sciences and technology. Specifically our cannabis practice helps all supply chain entities from growers, financiers, suppliers, dispensers to ancillary services.

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.

PBM Lobby Has 8th Circuit Win Vacated & Remanded

The U.S. Supreme Court ruled in a February 22, 2021 decision against the Pharmaceutical Care Management Association (PCMA); the Washington D.C. based trade group that represents pharmacy benefit managers (PBMs). 

The Court described the merits of Dirk Wilke, Interim State Health Officer of North Dakota, et al., Petitioners v. Pharmaceutical Care Management Association below:

In Rutledge v. Pharmaceutical Care Management Association, No. 18-540 (U.S.), this Court granted a writ of certiorari to decide whether the Employee Re- tirement Income Security Act of 1974 preempts an Arkansas law that regulates the rates that pharmacy benefit managers (PBMs) reimburse pharmacies for dispensing generic drugs. In that case, the Eighth Circuit had held that Arkansas’s law made a prohib- ited “reference to” ERISA plans and had a forbidden “connection with” such plans.

In this case, Respondent sought to enjoin two North Dakota laws that regulate, among other things, certain fees that PBMs charge pharmacies, which drugs pharmacists are allowed to dispense, and what pharmacists are allowed to say to their pa- tients. These laws apply the same standards regard- less of whether PBMs are providing services to an ERISA or non-ERISA plan.

In ruling in Respondent’s favor, the Eighth Cir- cuit applied its decision in Rutledge to do two things. First, it held that, under Rutledge’s logic, North Da- kota’s laws make an impermissible “reference to” ERISA plans because they apply to PBMs serving plans that “include[]” ERISA plans. Second, the court held that a finding of preemption under ERISA nullifies a State law “in its entirety”—even as ap- plied to non-ERISA plans. Because of the first hold- ing, the Eighth Circuit elected not to decide whether North Dakota’s laws also had a forbidden “connection with” ERISA plans. And because of the second hold- ing, the Eighth Circuit stated that it did not reach Respondent’s separate claims of preemption under Medicare Part D.

The questions in this case are: 1) Whether, contrary to decisions of this Court and every other court of appeals that has addressed the issue, ERISA preempts a State law simply be- cause it is broad enough to “include[ ]” ERISA plans among those affected by the law; 2) Whether, contrary to the text of ERISA and deci- sions of this Court and every other court of ap- peals to consider the issue, ERISA preempts a State law “in its entirety”—even as that law ap- plies to non-ERISA plans.

The Court granted the petition then vacated the prior Court’s decision and remanded the case for further consideration in light of Rutledge v. Pharmaceutical Care Management Assn. Rutledge was a December 2020 unanimous decision that ruled ERISA did not preempt Arkansas’ law on reimbursing pharmacies below acquisition costs, ruling that ERISA does not preempt rate regulations.  

Lanton Law was quoted by Law360’s article describing the Court’s Rutledge decision. 

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

New York Privacy Act Introduced into the New York State Legislature

A680 titled the New York Privacy Act has been introduced into the New York State Assembly. The bill is sponsored by Assemblywoman Rosenthal (D-District 67). 

The proposed bill seeks to enact the NY privacy act to require companies to disclose their methods of de-identifying personal information, to place special safeguards around data sharing and to allow consumers to obtain the names of all entities with whom their information is shared. Furthermore the proposed bill creates a special account to fund a new office of privacy and data protection.  

While the bill has echoes of Europe’s General Data Protection Regulation consent requirements, this bill takes a hard line approach on the subject which requires consent for all   processing activities and third-party disclosures, with no exceptions, the proposed bill as currently written raises significant concerns with how businesses would realistically be able to comply with the proposal’s requirements. 

Penalties are very strong under this proposal as seen below:

The attorney general may bring an action in the name of the state,or as parens patriae on behalf of persons  residing  in  the  state,  to enforce this article.

In addition to any right of action granted to any governmental body pursuant to this section, any person who has been injured by reason of a violation  of this article may bring an action in his or her own name to enjoin such unlawful act, or to recover his or her  actual  damages,  or both  such  actions. The court may award reasonable attorney's fees to a prevailing plaintiff.

Any controller or processor who violates this article is subject to an injunction and liable for damages and a civil penalty. When calculating damages and civil penalties, the court shall consider the number  of affected  individuals,  the  severity of the violation, and the size and revenues of the covered entity. Each individual  whose  information  was unlawfully  processed  counts as a separate violation. Each provision of this article that was violated counts as a separate violation.

Privacy is a hotly trending topic that is showing now signs of slowing down. Bills like this one will require significant work as it makes its way through the legislature in order for New York to achieve consumer protection while enacting a workable law that businesses will be able to comply with. 

We at Lanton Law can help. Our legal and lobbying tools can help offer your organization a clear path forward to navigate what will be changing policies for healthcare, technology and clean energy stakeholders. We are a D.C. based firm with no state boundaries as we are active nationwide. Contact us today to discuss your options.  

New York Governor Cuomo Announces 30-Day Amendments to Legislation Establishing Comprehensive Adult-Use Cannabis Program in New York

New York Governor Andrew Cuomo has announced in a press release detailing “30-day amendments to the Governor's proposal to establish a comprehensive adult-use cannabis program in New York. Specifically, these amendments will detail how the $100 Million in Social Equity funding will be allocated, enable the use of delivery services, and refine which criminal charges will be enforced as it relates to the improper sale of cannabis to further reduce the impact on communities hit hardest by the war on drugs.” 

New York has been a policy leader along with other innovative states on cannabis. Lanton Law is a national boutique law and lobbying 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.

Virginia on Track to Become Second Second State to Pass Data Privacy Laws

Lanton Law’s privacy practice has been closely monitoring the various state conversations around data privacy. We previously wrote a blog post titled California’s Consumer Privacy Act Could Be Coming to a State Near You, where we traced how California took the first step to create a consumer privacy law in the wake of Europe’s General Data Protection Regulation.    

So what’s going on with Virginia? Earlier this month the Virginia Senate passed 

 Senate Bill 1392, titled the Consumer Data Protection Act. The Virginia House of Delegates approved a companion (identical) House Bill H.B. 2307 by an 89-9 vote. Each bill likely will be heard in committee next week by the opposite chamber, which provides additional opportunities to make amendments. The state General Assembly will adjourn on March 1, it is expected that Governor Northam will sign the legislation. 

What does the bill do? The proposed legislation seeks the following:

“Establishes a framework for controlling and processing personal data in the Commonwealth. The bill applies to all persons that conduct business in the Commonwealth and either (i) control or process personal data of at least 100,000 consumers or (ii) derive over 50 percent of gross revenue from the sale of personal data and control or process personal data of at least 25,000 consumers. The bill outlines responsibilities and privacy protection standards for data controllers and processors. The bill does not apply to state or local governmental entities and contains exceptions for certain types of data and information governed by federal law. The bill grants consumer rights to access, correct, delete, obtain a copy of personal data, and to opt out of the processing of personal data for the purposes of targeted advertising. The bill provides that the Attorney General has exclusive authority to enforce violations of the law, and the Consumer Privacy Fund is created to support this effort. The bill has a delayed effective date of January 1, 2023.”

As with major policy issues that have yet to have a federal solution, states like California, Virginia and others are creating piecemeal policies, which will create compliance issues for entities that operate in several jurisdictions. New York, Oklahoma, Washington State, Minnesota, and North Dakota are jurisdictions that we continue to monitor with brewing policies on point.  

As we become more reliant on technology which crosses several sectors now, businesses are finding that they have to increase their awareness of state and federal policy in order to remain compliant. We at Lanton Law can help. Our legal and lobbying tools can help offer your organization a clear path forward to navigate what will be changing policies for healthcare, technology and clean energy stakeholders. We are a D.C. based firm with no state boundaries as we are active nationwide. Contact us today to discuss your options. 

Senator Klobuchar Introduces Sweeping Omnibus Antitrust Reform Legislation

U.S. Senator Amy Klobuchar (D-MN), the lead Democrat on the Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights, recently introduced sweeping proposed legislation targeting antitrust reform. 

According to her office’s release, the Competition and Antitrust Law Enforcement Reform Act  will strengthen regulator oversight tools, reform enforcement and strengthen prohibitions on anticompetitive mergers and conduct. 

Specifically the bill seeks to accomplish the following:

• Increase enforcement resources

• Strengthen prohibitions against anti competitive mergers

• Prevent harmful dominant firm conduct

• Establishes a new, independent FTC division to conduct market studies and merger retrospectives 

• Implement additional reforms to enhance antitrust enforcement

Interestingly, the  The bill also clarifies that the law applies not only to monopoly power, but also to monopsony power, a company's power as a buyer or employer in the market.

There have been several mergers and acquisitions over the years that have raised questions about the long term effects of specific sectors, but the fears of a more aggressive regulator has not been of concern until now. 

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

Cannabis Reform Legislation Anticipated in 117th Congress

We at Lanton Law have been closely monitoring cannabis policy developments as we fully anticipate federal action on this issue in 2021. How much activity remains to be seen. 

We were encouraged by the joint statement issued by Senators Booker (D-NJ), Wyden (D-OR) and Schumer (D-NY) on comprehensive cannabis reform legislation in the 117th Congress. The statement in full reads: 

“The War on Drugs has been a war on people—particularly people of color. Ending the federal marijuana prohibition is necessary to right the wrongs of this failed war and end decades of harm inflicted on communities of color across the country. But that alone is not enough. As states continue to legalize marijuana, we must also enact measures that will lift up people who were unfairly targeted in the War on Drugs. 

“We are committed to working together to put forward and advance comprehensive cannabis reform legislation that will not only turn the page on this sad chapter in American history, but also undo the devastating consequences of these discriminatory policies. The Senate will make consideration of these reforms a priority. 

"In the early part of this year, we will release a unified discussion draft on comprehensive reform to ensure restorative justice, protect public health and implement responsible taxes and regulations. Getting input from stakeholder groups will be an important part of developing this critical legislation.”

The promise of possible Congressional action on this issue is stronger this session than it has even been.

Lanton Law is a national boutique law and lobbying 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 York Proposing Its Own Biometric Law

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

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

The New York proposal seeks to do the following: 

Establishes the biometric privacy act; requires private entities in possession of biometric identifiers or biometric information to develop a written policy establishing a retention schedule and guidelines for permanently destroying biometric identifiers and biometric information when the initial purpose for collecting or obtaining such identifiers or information has been satisfied or within three years of the individual's last interaction with the private entity, whichever occurs first. 

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

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

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

Surprise Medical Billing Law Takes Effect January 1, 2022

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

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

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

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

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

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

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

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

So what does this proposal outline?

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

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

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

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

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

If you are an industry stakeholder with questions about the current landscape or if you would like to discuss how your organization’s strategic initiatives might be impacted by either Congress, regulatory agencies or legal decisions, contact us today!

Jazz Pharmaceuticals Purchases GW Pharmaceuticals for $7.2 billion

Jazz Pharmaceuticals has announced that it will “acquire GW for $220.00 per American Depositary Share (ADS), in the form of $200.00 in cash and $20.00 in Jazz ordinary shares, for a total consideration of $7.2 billion, or $6.7 billion net of GW cash. The transaction, which has been unanimously approved by the Boards of Directors of both companies, is expected to close in the second quarter of 2021.” 

“GW is a global leader in discovering, developing, manufacturing and commercializing novel, regulatory approved therapeutics from its proprietary cannabinoid product platform to address a broad range of diseases. The company's lead product, Epidiolex® (cannabidiol) oral solution, is approved in patients one-year and older for the treatment of seizures associated with Lennox-Gastaut Syndrome (LGS), Dravet Syndrome and Tuberous Sclerosis Complex (TSC), all of which are rare diseases characterized by severe early-onset epilepsy. Epidiolex was the first plant-derived cannabinoid medicine ever approved by the U.S. Food and Drug Administration (FDA).”

Interestingly, Epidiolex brought in approximately $510 million in annual sales within two years of its launch. 

The cannabis market is definitely an emerging one with high growth potential for interested stakeholders. We foresee that there will be additional deals in the near term as more companies embrace this sector. However; the cannabis industry has several federal and state regulatory hurdles to overcome.

Lanton Law is a national boutique law and lobbying 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!

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 

FDA Releases Artificial Intelligence/Machine Learning Action Plan

Earlier this month, the FDA released its first Artificial Intelligence/Machine Learning (AI/ML)-Based Software as a Medical Device (SaMD) Action Plan. 

As part of its breakthrough, the FDA pointed out some interesting aspects of its new policy area.

“Consistent with FDA’s longstanding commitment to develop and apply innovative approaches to the regulation of medical device software and other digital health technologies, in April of 2019, FDA published the “Proposed Regulatory Framework for Modifications to Artificial Intelligence/Machine Learning (AI/ML)-Based Software as a Medical Device (SaMD) - Discussion Paper and Request for Feedback.” This paper described the FDA’s foundation for a potential approach to premarket review for artificial intelligence and machine learning-driven software modifications. The ideas delineated in the discussion paper leveraged practices from our current premarket programs and relied on the International Medical Device Regulators Forum’s risk categorization principles, the FDA’s benefit-risk framework, risk management principles described in the software modifications guidance, and the organization-based total product lifecycle approach also envisioned in the Digital Health Software Precertification (Pre-Cert) Pilot Program.

As part of this proposed framework, FDA described a “Predetermined Change Control Plan” in premarket submissions. This plan would include the types of anticipated modifications—referred to as the “SaMD Pre-Specifications”—and the associated methodology being used to implement those changes in a controlled manner that manages risks to patients —referred to as the “Algorithm Change Protocol.” In this approach, FDA expressed an expectation for transparency and real-world performance monitoring by manufacturers that could enable FDA and manufacturers to evaluate and monitor a software product from its premarket development through postmarket performance. This framework would enable FDA to provide a reasonable assurance of safety and effectiveness while embracing the iterative improvement power of artificial intelligence and machine learning-based software as a medical device.”

Lanton Law is an innovative firm at the center of tomorrow’s legal, policy and market trends. We continue to monitor the developments of emerging sectors such as AI and give counsel to stakeholders accordingly. Contact Lanton Law to discuss your lobbying and legal strategies.    

National Community Pharmacists Association (NCPA) Files Lawsuit Against HHS Seeking to Eliminate Pharmacy DIR Fees

NCPA has sued the Department of Health and Human Services (HHS) over DIR fees. The lawsuit can be viewed here.  Specifically the crux of the case is found below:

This is an action for judicial review of a policy of the Department of Health and Human Services (“HHS”) that undermines Medicare beneficiaries’ access to negotiated prices for prescription drugs and otherwise alters Medicare payment for those drugs in a way that reduces their availability. 

Despite having been reopened time and time again over the last several years, the agency’s current definition of “negotiated prices” continues to enable Medicare Part D plans under the Medicare program (and the pharmacy benefit managers (“PBMs”) with which they contract) to downward-adjust reimbursement to pharmacies for prescription drugs months after a patient has paid cost-sharing for the prescription drugs based on an artificially inflated price. This dynamic results from an exception to the definition of “negotiated prices” for pharmacy price concessions that cannot “reasonably be determined” at the time of sale, an exception that HHS said would be narrow but never was. In reality, this exception swallows the rule and hereby threatens the solvency of independent community pharmacies and drives up the cost of prescription drugs for Medicare patients nationwide. Plaintiff asks this Court to set aside that invalid exception and the agency’s guidance on it.

Lanton Law applauds NCPA’s leadership in filing this much needed lawsuit. Lanton Law has been assisting pharmacies on the state level with issues such as DIR via lobbying. If you are a pharmacy that would like to discuss your advocacy options, contact Lanton Law to discuss your lobbying and legal strategies.

Biometric Policies Will Likely Be Debated Nationwide in 2021

New York has introduced Assembly Bill 27. According to the proposed bill, AB 27 seeks “to establish the biometric privacy act; requires private entities in possession of biometric identifiers or biometric information to develop a written policy establishing a retention schedule and guidelines for permanently destroying biometric identifiers and biometric information when the initial purpose for collecting or obtaining such identifiers or information has been satisfied or within three years of the individual's last interaction with the private entity, whichever occurs first.”  

Currently, the Illinois Biometric Information Privacy Act, commonly known as BIPA, is the only state with a biometric privacy statute that provides for a similar private right of action. We have been writing in previous posts about how state policies have been taking shape regarding this subject. 

We expect this and other technology questions to be debated in various state houses throughout 2021. It is imperative for interested stakeholders to be prepared for what new potential legislation requires. Contact Lanton Law to discuss your lobbying and legal strategies.   

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". 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.

Lanton Law quoted in Bloomberg Law Article

We were quoted in Bloomberg Law’s article titled “States Risk Losing Power to Regulate Pharmacy Drug Middlemen” by Lydia Wheeler. The article discusses the pros and cons of Rutledge v. PCMA, which is currently being debated at the Supreme Court.

For those that have trouble accessing the article we have provided it below.

States are going to have a hard time controlling the cost of prescription drugs if the Supreme Court broadens a federal law prohibiting states from regulating employee benefit plans.

A challenge to an Arkansas law meant to protect independent pharmacies from abusive reimbursement practices of rate-setting pharmacy middlemen is testing the bounds of the Employee Retirement Income Security Act. A decision striking down Arkansas’s law could cripple state efforts to control the cost of prescription drugs and other health-care services. That could lead to a flood of litigation challenging dozens of similar laws in other states, health policy experts say.

“This is really the tip of the iceberg because states are trying to control drug costs in all kinds of different ways,” said Katherine Gudiksen, a senior health policy researcher at the Source on Healthcare Price and Competition, a project of the University of California Hastings College of Law.

The case could be one of the first decided by the Supreme Court this term. Arguments were heard Oct. 6.

Drawing the Line 

Arkansas’s fighting to save its law, which regulates the rates at which pharmacy benefit managers reimburse pharmacies for drugs and gives pharmacies a right to appeal the rates they set.

The U.S. Court of Appeals for the Eighth Circuit held the law was preempted by ERISA, which prohibits states from passing laws that reference an ERISA plan or have an impermissible connection to an ERISA plan. But Arkansas argues pharmacy reimbursement regulation is basic rate regulation, which the Supreme Court has ruled isn’t preempted by ERISA.

“It’s hard to see how a law that directly affects benefits claims processing isn’t central to ERISA plan administration,” said Stacey Cerrone, a principal in the New Orleans office of Jackson Lewis PC.

“The court is struggling on where to draw the line with preemption,” she said.

Patchwork of State Laws

A win for Pharmaceutical Care Management Association (PCMA)—the trade group for PBMs that’s aggressively fighting this law and others—would likely open the door for more legal challenges. Laws regulating PBMs have passed in 36 states.

“There’s no agency that oversees federally a pharmacy benefit manager,” said Ron Lanton, principal at Lanton Law, which helped lobby for some state PBM laws. “That’s the problem, so the states have had to come up with their own solution on how to regulate this problem.”

But PCMA argues Congress set out to create a uniform set of standards in administering ERISA plans, which include most private sector health plans. The trade group said employers will have to spend more money on administrative services and compliance, increasing the cost of care, if laws like the one in Arkansas remain.

“More than 266 million Americans rely on the prescription drug benefits PBMs administer, and now more than ever we’re committed to protecting accessible, affordable health care,” JC Scott, PCMA’s president and CEO, said in a statement after oral arguments in October.

In addition to Arkansas, PCMA has challenged laws in North Dakota, Oklahoma, and Iowa in recent years.

The trade group has been successful in winning challenges in the Eighth Circuit. The appeals court ruled Iowa’s law and two North Dakota lawsare preempted by ERISA. Iowa’s law regulates how PBMs establish generic drug pricing, and requires certain disclosures on their drug pricing methodology. North Dakota’s laws regulate the fees PBMs can charge pharmacies. North Dakota officials have appealed the court’s decision to the Supreme Court.

In July, a federal judge blocked part of Oklahoma’s law. PCMA filed an appeal to the U.S. Court of Appeals for the Tenth Circuit, which it later had dismissed. The case is still playing out in the district court.

Lanton, who represents independent pharmacies, said his clients hope the Supreme Court provides some uniformity to what’s become a patchwork of state laws. He’s also hoping for a clear definition of what a pharmacy benefit manager is and isn’t.

“It comes down to this split in the court of whether or not the court sees a pharmacy benefit manager as an insurer that provides benefits or as an administrator that simply regulates reimbursement and cost.”

Market Power 

The three largest PBM companies are OptumRx, a subsidiary of UnitedHealth Group; CVS Caremark, a subsidiary of CVS Health; and Express Scripts, a subsidiary of Cigna Corp. They control 85% of the market share for PBM services, according to the National Association of Specialty Pharmacy’s brief in support of Arkansas.

That market power gives health plans very little bargaining power, said Erin Fuse Brown, director of the Center for Law, Health and Society at Georgia State University College of Law.

PBMs say they use their size and power to negotiate discounts with the pharmaceutical manufacturers, but it’s not clear they’re passing along those savings to the health plans, she said.

The case is Rutledge v. Pharm. Care Mgmt. Ass’n, U.S., No. 18-540.

To contact the reporter on this story: Lydia Wheeler in Washington at lwheeler@bloomberglaw.com

To contact the editors responsible for this story: Fawn Johnson at fjohnson@bloombergindustry.com; Brent Bierman at bbierman@bloomberglaw.com

Secure and Fair Enforcement Banking Act of 2019 Still Pending in Congress

The Secure and Fair Enforcement Banking Act of 2019 (SAFE Banking Act) is still pending in Congress. Also known as H.R. 1595, the bill proposes to create protections for depository institutions that provide financial services to cannabis-related legitimate businesses and service providers for such businesses.

In May 2020 the SAFE Banking Act language was included in the U.S. House stimulus bill called the The Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act, which aimed to provide $3 trillion in economic relief in response to the COVID-19 economic effects on the U.S.

 The bill is currently in the U.S. Senate whose future during this session is uncertain. 

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!