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.

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 

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 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

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!

Lanton Law Quoted in Law360 Article Titled "High Court PBM Case Could Be Turning Point In 20-Year Fight"

Lanton Law was again quoted in Law360’s article titled “High Court PBM Case Could Be Turning Point in 20-Year Fight.” The article can be found here. For those having trouble finding the article written by Emily Brill we have provided it below:

Law360 (October 13, 2020, 8:47 PM EDT) -- Last week's U.S. Supreme Court arguments over Arkansas' attempt to regulate how much middlemen called pharmacy benefit managers reimburse pharmacies for drugs on insurers' behalf could mark a turning point in a broader legal fight that's been playing out for 20 years.

Here, Law360 brings you up to speed on what led to the pending high court showdown between the Pharmaceutical Care Management Association and the Natural State.

The Laws Come Down

Pharmacy benefit managers have assumed an increasingly large role in the health care landscape since the first PBM arose in 1968.

These companies started as third-party administrators, processing patients' prescription drug claims on behalf of health insurance plans. Over the years, though, PBMs have launched drug formularies, pharmacy networks and their own mail-order pharmacies as the industry has grown, and the largest PBMs have integrated with insurers in multibillion-dollar deals.

"They've always been a partner to the insurer, but now they're a crucial extension of the insurer," said Ron Lanton, an attorney and lobbyist who specializes in health care law. "The PBM has grown to this huge marketplace player — determining who's the provider in their networks, setting the prices for insurance reimbursement."

Today, PBMs have a hand in most aspects of prescription drug dispensing, from how much consumers pay and how much pharmacies are reimbursed to where patients get their drugs and whether they receive name-brand or generic versions.

PBMs have drawn praise for saving consumers and plan sponsors money, but they've also met criticism, particularly from pharmacists, who say PBMs routinely reimburse their own mail-order pharmacies at much higher rates and thus drive local pharmacies out of business.

"PBMs are not only managing benefits for their clients — they're actively competing in the networks they manage," said Linda Clark, a partner at Barclay Damon LLP. "That's the fundamental optical conflict of interest that's in play. And as a result, many states have attempted to even the playing field."

States have been attempting to regulate PBMs since at least 2003, passing laws that primarily target the industry's pricing and reimbursement practices. Today, all but three states have some legislation on the books impacting PBMs, according to the National Community Pharmacists Association.

Much of that legislation has arrived recently. An influential model bill released in December 2018 by the National Council of Insurance Legislators inspired the introduction of between 250 and 300 pieces of PBM reform legislation around the country in 2019, according to the NCPA.

Another model bill from a different insurance regulators group is in the works, with the National Association of Insurance Commissioners releasing a first draft in July after working on the policy for a year. The model bill proposes requiring PBMs to get licensed and banning practices such as self-dealing and retroactive payment reductions to pharmacies.

The Suits Flood In

PBMs have not sat idly by as states have tried to regulate them. They've met lawmakers' bills with aggressive lobbying and sued a half-dozen states that adopted PBM reform legislation.

"A lot of times when there are regulations in states proposed to provide some kind of oversight, the PBM lobby tends to get very aggressive," Lanton said. "I've directly lobbied on a lot of these issues, so I've come face to face with what they've been saying to legislators."

The PBM industry's lobbying group, the Pharmaceutical Care Management Association, began suing states over their PBM laws in the early 2000s. The first suit arose in Maine, a challenge to a law that required PBMs to disclose their payments from pharmaceutical companies and forbade them from switching patients to more expensive drugs.

That law survived the PCMA's challenge, with both a Maine federal judge and the First Circuit handing wins to the state and then the U.S. Supreme Court declining to take up the case in 2006. But other jurisdictions have not fared as well in the years since.

Since Maine's win, Washington, D.C., Iowa and North Dakota have been forced to walk back PBM regulations after the PCMA convinced the D.C. Circuit and Eighth Circuit that the laws tread on territory that could only be regulated by the federal Employee Retirement Income Security Act.

Oklahoma could be next, with a court battle playing out in the Tenth Circuit to determine the viability of a PBM law there. An Oklahoma federal judge blocked part of the law in July, ruling some of its language was likely preempted by Medicare Part D.

High Court Joins the Fray

As the Tenth Circuit weighs the legitimacy of Oklahoma's law, the U.S. Supreme Court is considering whether to strike down an Arkansas law in a case with huge implications for the legal fight between states and PBMs.

On Oct. 6, the high court heard oral arguments in the PCMA's challenge to a 2015 Arkansas law requiring PBMs to reimburse local pharmacies at the same rates as their affiliated pharmacies.

If the high court rules that the law flouts ERISA, other state laws could fall on similar grounds, attorneys say.

"There are implications for other state laws based on what happens in this case," said Ben Conley, a partner at Seyfarth Shaw LLP.

Many states have placed their PBM reform plans on hold while waiting on the outcome of the case, Barclay Damon's Clark said. Other states aren't enforcing their PBM laws but would likely start if the Supreme Court rules in Arkansas' favor, she said.

She said her pharmacist clients also have their eyes trained on the high court, waiting on a decision that could have a huge effect on them.

"The decision in this case is really going to define the scope of permissible state regulation of pharmacy benefit manager practices. It's going to define the contours of what states can and can't do," Clark said. "And there could be a lot of nuances in the decision that could affect the impact on state legislation. That's why everybody's watching it so carefully."

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

Amazon Launches U.S. Pharmacy Business

Many supply chain stakeholders have been fearing whether Amazon would ever open a retail pharmacy business. There have been traces of this occurring for years from its sporadic applications of pharmacy licenses in various states, to its June 2018 $753 million acquisition of PillPak. However; no coherent plan had come into focus until now. 

Today (November 17) Amazon has launched Amazon Pharmacy. According to the press release: 

“ Amazon.com, Inc. (NASDAQ: AMZN) today announced two new pharmacy offerings to help customers conveniently purchase their prescription medications. Amazon Pharmacy, a new store on Amazon, allows customers to complete an entire pharmacy transaction on their desktop or mobile device through the Amazon App. Using a secure pharmacy profile, customers can add their insurance information, manage prescriptions, and choose payment options before checking out. Prime members receive unlimited, free two-day delivery on orders from Amazon Pharmacy included with their membership. 

Also new today, Prime members can access savings on medications at Amazon Pharmacy when paying without insurance, as well as at over 50,000 other participating pharmacies nationwide. The Amazon Prime prescription savings benefit saves members up to 80% off generic and 40% off brand name medications when paying without insurance. Prime members will have access to their prescription savings at checkout on Amazon Pharmacy, or can learn more at amazon.com/primerx.

Together the Amazon Prime prescription savings benefit and Amazon Pharmacymake it simple for customers to compare prices and purchase medications for home delivery, all in one place. Now, filling prescriptions is as convenient as any other purchase on Amazon’s online store:

• Research Medications and Order Confidently: The same browsing experience customers are familiar with from Amazon makes it easy to discover what medications – including branded and generic versions, and different forms or dosages – are available through Amazon Pharmacy. Before checking out customers can compare their insurance co-pay, the price without insurance, or the available savings with the new Prime prescription savings benefit to choose their lowest price option.

• Seamless Transactions: Customers can add insurance information and ask their prescriber to send new or existing prescriptions directly to Amazon Pharmacy for fulfilment. Purchase is as simple as confirming the request on the Amazon App or website.

• Access Fully Digital, Personalized Quality Care: Customers have online self-service help options combined with phone access to customer care at any time. Friendly and knowledgeable pharmacists are available 24/7 to answer questions about medications.”

Notwithstanding today’s market moving news, we fully expect that our healthcare supply chain will continue to evolve. New players are moving into the sector and are looking for ways to either disrupt the model or have significant influence on reimbursement. To succeed you need to be in the know and planning ahead. 

Lanton Law is a national boutique law and government affairs firm that closely monitors legislative, regulatory and legal developments in the LTC, CBD/hemp, specialty and retail pharmacy space, as well as manufacturers and suppliers. If you are an industry stakeholder with questions about strategy or simply need advice, contact us today.    

Psychedelic mushrooms take a policy step forward

In what has surprised many cannabis stakeholders it seems as though the November 2020 elections is bringing a new therapeutic item into the mainstream healthcare policy conversation: psychedelic mushrooms via ballot box initiatives. 

On November 3rd, Oregon voted to legalize psychedelic mushrooms for therapeutic usage with the passage of Measure 109. This is a first for the U.S.The ballot measure calls for a two year period to create a regulatory scheme to oversee this issue as well as what qualifications are required for overseeing therapists. The issue with psychedelic mushrooms turns on the use of psilocybin, who some therapists believe helps those battling depression, addiction and anxiety. Currently psilocybin is still classified as a Schedule I drug. 

Oregon also became the first in the nation via Measure 110 to decriminalize the possession of small amounts of drugs including heroin, cocaine, methamphetamine, ecstasy, LSD, psilocybin, methadone and oxycodone.     

Meanwhile in the District of Columbia, voters approved Ballot Initiative 81 that would decriminalize the use of magic mushrooms and other psychedelic substances.  The measure ensures that the prosecution of those who use and sell these substances would be “among the Metropolitan Police Department’s lowest law enforcement priorities.”   

There is definitely a policy change on the local and state levels. 

Lanton Law’s Cannabis practice is more than prepared to assist cannabis stakeholders. Whether you are a public or private cultivator, processor, distributor, dispensary, or an ancillary service related to the medical and/or adult-use cannabis business, we can help. 

Lanton Law assists our cannabis clients with the following services:  

• Offer strategic advice on the federal and state outlook

• Contract and lease drafting

• Corporate formation & governance

• Shareholder agreements

• Administrative representation

• Trademarks and copyrights

• FDA, USDA and FTC regulatory compliance 

• Banking and finance

• Licensing

• State and local permits

• Lobbying 

• Investor & early stage company issues

• Mergers and acquisitions

• Non-Compete and Non-Disclosure agreements

• Labor and employment

• General counsel services

To put your plans forward contact us today. 

Lanton Law & Private Equity

With increasing mergers and acquisitions in both the technology and healthcare sectors, investment opportunities abound for funds and interested stakeholders. In order for these stakeholders to be successful it is essential to know the limits and opportunities within a complex regulatory landscape. 

At Lanton Law not only do we understand the issues, but we provide you with timely solutions to help you make informed decisions about either an acquisition target or ways to maximize value. 

We counsel clients by performing corporate due diligence, provide strategic advice for growth and business strategies as well as structuring and executing M&A transactions.

If you are a financial stakeholder including a private equity firm, hedge fund, bank, etc. we have a suite of strategic services that can help. Contact us today to learn more.

Lanton Law Opens Cannabis Practice

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. 

Whether you are a public or private cultivator, processor, distributor, dispensary, or an ancillary service related to the medical and/or adult-use cannabis business, we can help. 

Lanton Law assists our cannabis clients with the following services:  

• Offer strategic advice on the federal and state outlook

• Contract and lease drafting

• Corporate formation & governance

• Shareholder agreements

• Administrative representation

• Trademarks and copyrights

• FDA, USDA and FTC regulatory compliance 

• Banking and finance

• Licensing

• State and local permits

• Lobbying 

• Investor & early stage company issues

• Mergers and acquisitions

• Non-Compete and Non-Disclosure agreements

• Labor and employment

• General counsel services

Lanton Law Follow Up Interview with Law360

Lanton Law had a follow up interview with Law360 regarding the Rutledge v. PCMA Supreme Court oral arguments on October 6, 2020. Below is a link to the story titled “Justices Eye Arkansas PBM Law’s Impact on Workers.” The story can be viewed here.

If you have trouble accessing the story we have included Emily Brill’s article below.

Justices Eye Arkansas PBM Law's Impact On Workers

By Emily Brill

Law360 (October 6, 2020, 1:50 PM EDT) -- The U.S. Supreme Court on Tuesday focused on whether an Arkansas law's potential costliness to employee benefit plans is enough to place it in conflict with the Employee Retirement Income Security Act, with two conservative justices questioning whether the statute regulating pharmacy benefit managers would end up hurting workers.

Counsel for the Pharmaceutical Care Management Association, the PBM lobby that challenged Arkansas' Act 900, argued that increased plan costs could cause employers to squeeze benefits. Therefore, laws like Act 900 — which could increase plans' costs by increasing PBMs' costs in the form of compliance burdens — pose enough of a threat to workers' benefits that they should be preempted by ERISA, argued Seth Waxman, a partner at WilmerHale.

"Those additional costs, both in terms of reimbursement obligations and plan administration, would manifestly affect how munificent the pharmacy benefits a plan could offer would be," Waxman said.

Arkansas' solicitor general bucked this argument, claiming PCMA's approach to ERISA preemption would spell the end for far more laws than Congress intended to strike down when it stated that ERISA should be the only law regulating employee benefit plans.

"If you accept their position that anytime a regulation imposes cost, that can lead to preemption because it might affect the benefits calculation, that really has no limiting principle," Arkansas Solicitor General Nicholas Bronni said. "It would, frankly, preempt things like state minimum wage laws that have exactly that same effect."

Justice Brett Kavanaugh questioned why increased costs shouldn't be considered an ERISA preemption issue.

"Why shouldn't ERISA care about costs that are going to be increased and then passed on in the form of worse benefits to Arkansas workers?" Justice Kavanaugh asked the assistant to the U.S. solicitor general, Frederick Liu, who argued in support of Arkansas' position.

Liu responded that "increased costs actually don't affect the basic bargain between the plan and its beneficiaries," which was what Justice Kavanaugh had stated that ERISA was designed to protect.

"I totally agree that ERISA was enacted to protect that relationship, but increased costs don't affect the terms of that relationship," Liu argued.

Justice Samuel Alito Jr. questioned whether Act 900, which regulates how PBMs reimburse local pharmacies, would indeed increase costs for employee benefit plans and workers.

"You said that these laws affect the benefits that employees get, but do we know whether that is in fact true?" Justice Alito said. "Assuming they increase the costs for the PBMs, do we know how much of that increase in cost is passed on to plans and beneficiaries, and how much is absorbed by the PBMs?"

Waxman said he didn't "have specific data on this" but knew that "one way or another, in the very short term or the long term, this is going to cost plans more to administer," which would affect "the munificence of the pharmacy benefits that plans feel they can afford."

Arkansas Takes on PBMs

The case the justices heard Tuesday asks them to decide whether Arkansas was allowed to pass a law regulating the rates at which PBMs reimburse pharmacies for prescription drugs.

Critics of PBMs, which manage health insurance plans' relationships with pharmacies, say they're pushing local pharmacies out of business by regularly shortchanging them on prescription reimbursements, while paying PBM-owned pharmacies higher rates for the same drugs.

Those critics — which include pharmacy groups and a coalition of 46 attorneys general — say Arkansas was within its rights in 2015 to pass a law that purported to protect local pharmacies from unfair treatment by PBMs. Act 900, among other things, required PBMs to reimburse at rates at least equal to what pharmacies pay for drugs.

But supporters of PBMs, which include business and insurance trade groups, say Act 900 violated ERISA. They say Congress intended ERISA to be the only law that regulates matters impacting employee benefit plans, so Arkansas' law cannot stand.

In 2017, an Arkansas federal judge agreed with the law's challengers and struck down Act 900. The Eighth Circuit upheld the lower court's decision in June 2018, and Arkansas petitioned the Supreme Court for review in October 2018. The high court picked up the case in January.

Mulling Travelers

Much of Tuesday's debate on whether a law's costliness to benefit plans could trigger ERISA preemption centered on interpretation of the Supreme Court's 1995 decision in New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Insurance Co .

In the Travelers case, the high court upheld a New York law that required hospitals to impose a surcharge on patients with certain types of insurance, including employer-provided health insurance.

The justices ruled unanimously that the law wasn't preempted by ERISA because "it simply bears on the cost of benefits" without "bind[ing] plan administrators to any particular choice," as now-retired Justice David Souter wrote in the opinion.

Bronni argued Tuesday that the justices' logic in Travelers neatly applies to this case, saying that "for the same reason that New York's rate regulation wasn't preempted in Travelers, Arkansas' is not preempted here."

But Travelers left the door open for a law's costliness to trigger ERISA preemption if that statute produced "such acute, albeit indirect, economic effects as to force an ERISA plan to adopt a certain scheme of coverage," as Justice Souter put it in a footnote.

That's what PCMA is arguing could happen here, said Mark Casciari, a benefits attorney at Seyfarth Shaw LLP who watched Tuesday's oral arguments.

"A plan sponsor has to decide what they're going to cover, and this law could have the effect of forcing its hand on those decisions because of onerous administrative burdens," Casciari said. "By regulating costs, the state law is rearticulating the plan terms."

But PCMA's argument could be weakened by the fact it's choosing to pass on those costs to benefit plans, when it could just absorb those costs, said Ron Lanton, an attorney and lobbyist with 15 years of experience in health care law.

When Waxman referenced the footnote in the Travelers decision, Chief Justice John Roberts pointed out that increasing costs for PBMs doesn't necessarily increase costs for benefit plans; that only happens because PBMs set things up that way.

"If the state law produced economic effects as to force the ERISA plan to adopt a certain scheme of coverage, it would, indeed, be preempted," Waxman said.

"Well, it's not the state or the pharmacy's fault that the PBMs have such Byzantine procedures that affect drug prices," Justice Roberts said.

Lanton said he thinks Justice Roberts was "undermining PCMA's argument" with his comment.

"Where they're saying this affects the plan, I think Justice Roberts is saying, 'Yeah, I hear what you're saying, but we're only here because of the way you guys structured this business.'"

Arkansas Attorney General Leslie Rutledge is represented at oral arguments by Arkansas Solicitor General Nicholas Bronni.

The federal government is represented by Frederick Liu of the U.S. Office of the Solicitor General.

PCMA is represented by Seth Waxman 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 Orlando Lorenzo.

Update: This article has been updated with more details from the hearing and further comment.

Where Do Biden & Trump Stand On The Issues?

With election season underway many are wondering where the two Presidential candidates stand on the issues of importance to voters.

Reuters did a great summary found here that explains the major differences from the economy, trade, healthcare, etc.

The winner of this election will certainly have policies affecting your interests. Whether you are in technology, healthcare/lifesciences or finance, it is important to know what your organization’s priorities are and to have a plan for either candidate should they win.

Lanton Strategies; a division of Lanton Law is a is a full service federal and state lobbying and government affairs firm that has a menu of services to help you achieve your goals.

Contact us today to get started in understanding your range of options as the new legislative session approaches.

New York Comptroller finds $605 million in unnecessary costs to the Medicaid program

The New York Comptroller recently released the results of an audit titled “Medicaid Program-Cost of Pharmacy Services Under Managed Care.” The audit covered the period January 1, 2016 to December 31, 2019.

The following outline the key findings of the audit;

• The Department missed opportunities to minimize costs on pharmacy services delivered through Medicaid managed care because Department officials did not take steps to ensure the use of the lowest net cost drugs to the Medicaid program. As a result, for the period January 1, 2016 through December 31, 2019, we estimated $605 million in unnecessary costs to the Medicaid program.

• The Department does not require MCOs to use the most cost-effective drugs to the Medicaid program, nor does it provide MCOs with information or assistance to determine the most cost-effective drugs.

• Medicaid-participating MCOs are required to regularly provide their drug formulary information, as well as information on costs and supplemental rebates (which MCOs did not always provide as required) for all drugs delivered under managed care, but the Department does not review this information to determine if MCO formulary preferences result in the use of the most cost-effective drugs.

The audit gave the following recommendation:

• Conduct timely routine analyses to identify the most cost-effective drugs to the Medicaid program and ensure drug utilization is steered toward drugs with the lowest net cost when medically appropriate.

If you are a healthcare stakeholder with an interest in New York state or do business within New York’s insurance system then you should be aware of this type of scrutiny. The legislature has already enacted a bill that will carve pharmacy benefits out of the Medicaid managed care program beginning in April 2021.

Lanton Law is a national boutique law and government affairs firm that focuses on healthcare and technology. If you are an industry stakeholder with questions about the current landscape or if you would like to discuss how your organization’s strategic initiatives might be impacted by either Congress, regulatory agencies or legal decisions, contact us today!

New White House Drug Pricing Executive Order Released

On September 13, 2020, the Trump Administration released a new Executive Order (EO)  targeting drug pricing. The EO directs the Secretary of HHS to implement a “Most Favored Nation” drug pricing program for Medicare Parts B and D. This policy relies on international price competition and seeks to provide Americans with the same lower prices for prescriptions that we see in other countries.

Drug pricing has been a major point of contention as manufacturers and insurer/pharmacy benefit managers exchange blame over why drug prices are rising. Drug pricing has been a major issue that had been getting Congressional scrutiny until COVID-19. 

This issue will come back once a COVID-19 vaccine is available as there may be questions around the vaccine’s price. Additionally, once COVID-19 dies down, drug pricing for new therapies is expected to be front and center again.

Lanton Law is a national boutique law and government affairs firm that focuses on healthcare and technology. If you are an industry stakeholder with questions about the current landscape or if you would like to discuss how your organization’s strategic initiatives might be impacted by either Congress, regulatory agencies or legal decisions, contact us today!

Lanton Law to Attend 9/14-9/18 2020 NASP Annual Meeting & Expo Virtual Experience

Lanton Law is proud to be attending the 9/14-9/18 2020 NASP Annual Meeting & Expo Virtual Experience.

We will be giving a presentation on the role of “State & Federal Regulations in Payer Contracting” and Ron Lanton will be serving as Vice Chair of Law Day! Additionally, we will be hosting a panel titled “Interoperability of Health Records: Providing Post-Market Data and Other Valuable Information.”

We are very much looking forward to interacting with our specialty colleagues including Sheila Arquette! Register today at https://lnkd.in/eU2VXaB

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.    

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

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