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

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

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

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

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

The interview can be seen by clicking here.

Ron Lanton 12/15/21 Ron Lanton 12/15/21

Senator Wyden Requests FTC To Investigate Retail Pharmacy Market Consolidation

In a recent press release Senator Wyden (D-OR) has sent a letter to the Federal Trade Commission (FTC) to according to “investigate recent consolidations in Oregon’s retail pharmacy market to assess whether large national pharmacy chains and health plans have acted to make this market less competitive.”

“Wyden’s letter highlights ongoing industry dynamics that pose significant challenges to small, independent pharmacies. One particular practice known as direct and indirect remuneration, a form of retrospective fees imposed on pharmacies by pharmaceutical benefit managers (PBMs) has been cited as a particular challenge for these pharmacies to maintain healthy finances. According to a report by the Centers for Medicare and Medicaid Services (CMS), PBMs increased pharmacy DIR fees under Medicare Part D by 91,500 percent from 2010 to 2019.”

DIR fees have been something that the Senator has been monitoring. His press release states “In October, Wyden also urged the federal Centers for Medicare and Medicaid Services (CMS) to review pharmacy closures nationwide in the last five years with a focus on how fees imposed by Medicare Part D plans and middlemen known as pharmacy benefit managers are driving those closures.”

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

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

Ron Lanton 12/14/21 Ron Lanton 12/14/21

House Committee on Oversight and and Reform Releases Report on Drug Pricing

Last week Representative Maloney (D-NY) who is the Chairwoman of the Committee on Oversight and Reform released the final staff report, resulting from a multi-year investigation into drug pricing. The Committee investigation was originally started by the late Representative Cummings.

Here are a few findings from the report.

Drug companies aggressively raise prices to meet revenue targets, and executive compensation structures create incentives to raise prices. The companies in the Committee’s investigation collectively raised prices more than 250 times on the 12 drugs examined. The drugs in the Committee’s investigation are now priced at a median of almost 500% higher than when they were brought to market. The Committee ’s investigation revealed evidence that company executives made aggressive price increases to meet ever-increasing revenue targets and earnings goals. All ten companies have compensation structures that tie incentive payments to revenue and other financial targets, and several companies directly tied incentive compensation to drug-specific revenue targets.
Drug companies target the U.S. market for higher prices and use the Medicare program to boost revenue. Internal strategy documents show that drug companies targeted the U.S. market for price increases—while maintaining or lowering prices in the rest of the world—in part because Medicare cannot negotiate directly for lower prices. The Committee’s analysis found that taxpayers could have saved more than $25 billion over a five-year period for just seven of the drugs investigated—Humira, Imbruvica, Sensipar, Enbrel, Lantus, NovoLog, and Lyrica—if private Medicare Part D plans had obtained the same discounts as other federal health programs that are empowered to negotiate.
Drug companies abuse the patent system and FDA market exclusivities to suppress competition. Collectively, the companies in the Committee’s investigation have obtained more than 600 patents on the 12 drugs examined, which could potentially extend their monopoly periods to a combined total of nearly 300 years.
Drug companies use strategies to suppress competition and maintain monopoly pricing. Every company in the Committee’s investigation engaged in one or more strategies to suppress competition from generics or biosimilars. These strategies include what are often described as “life-cycle management” or “loss of exclusivity” strategies: (1) shifting patients to new products or formulations of a drug just before facing generic competition for the old formula (known as “product hopping” or “evergreening”); (2) pursuing contracts with PBMs and insurers that condition rebates and discounts on excluding competitor products; and (3) aggressively marketing directly to patients and physicians to drive sales, especially as drugs faced generic competition. The Committee’s investigation also uncovered new evidence of “shadow pricing,” a practice in which would-be competitor companies follow each other’s price increases.
Drug companies use patient assistance programs as a public relations tool to boost sales. The Committee’s investigation uncovered new evidence that companies emphasized the significant returns on investment from these programs in the form of increased sales, particularly for drugs approaching loss of exclusivity. Internal documents show that companies view these programs as an important public relations tool, but that companies’ spending on patient assistance programs is minimal compared to the enormous amount of revenue brought in by these drugs. These programs often do not provide sustainable support for patients and do not address the burden that the company’s pricing practices have placed on the U.S. health care system.
Research and manufacturing costs do not justify price increases. The Committee’s investigation found that companies’ investments in R&D are far outpaced by revenue gains. The investigation also found that even if the pharmaceutical industry collected less revenue due to pricing reforms, drug companies could maintain or even exceed their current R&D expenditures if they reduced spending on stock buybacks and dividends. From 2016 to 2020, the 14 leading drug companies spent $577 billion on stock buybacks and dividends—$56 billion more than they spent on R&D over the same period. In addition, companies dedicated a significant portion of their R&D expenditures to research intended to extend market monopolies, support the companies’ marketing strategies, and suppress competition.

Lanton Law is a national boutique law and lobbying firm that focuses on healthcare/life sciences and technology. Our healthcare and life science practice has been helping entities nationwide with operational issues, mergers and acquisitions, regulatory inquiries, audits, licensure, employment issues and contracting. Our lobbying efforts help stakeholders nationwide achieve improved business climates through carefully crafted legislation.

Ron Lanton 12/6/21 Ron Lanton 12/6/21

New Congressional CBD Bill Introduced to Give Policy Clarity for CBD Products

Congress has introduced the CBD Product Safety and Standardization Act “that will establish federal standards for CBD food and beverage products to protect consumers and provide marketplace stability for farmers, producers, and retailers.”

Congress has introduced the bi-partisan CBD Product Safety and Standardization Act “that will establish federal standards for CBD food and beverage products to protect consumers and provide marketplace stability for farmers, producers, and retailers.” The bill is sponsored by U.S. Representatives Rice (NY-04), Griffith (VA-09), Craig (MN-02), and Crenshaw (TX-02).

According to the bill’s press release:

“While the 2018 Farm Bill removed hemp-derived cannabidiol (CBD) from the Controlled Substances Act, it did not make changes to existing Food and Drug Administration (FDA) law or regulatory policies governing its use in FDA-regulated products. Since then, the market for CBD products has exploded, and CBD is ubiquitously available to consumers in oils, cosmetics, supplements, and foods, and it is even marketed in products for pets. The discrepancy between the Controlled Substances Act and FDA law has created a regulatory gray area in which CBD is widely available but unregulated – and considered illegal – by FDA.

The bipartisan CBD Product Safety and Standardization Act would allow FDA to regulate CBD as it would any other food ingredient and subject these products to enforceable safeguards to ensure accountability. It also charges the agency with establishing CBD content limits and packaging and labeling requirements and determining in which categories of food CBD is appropriate for use. This bill will help distinguish responsible players from bad actors that ignore federal requirements for quality, manufacturing, labeling, and claims, and it will bring safety and clarity to the market.”

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.

Ron Lanton 12/3/21 Ron Lanton 12/3/21

Congressional Cannabis Caucus Advocates for Medical Marijuana Access to Veterans

On December 1, 2021 the Congressional Cannabis Caucus composed a letter to the Secretary of Veterans Affairs regarding the Caucus’ advocacy for medical marijuana access for veterans.

The letter stated “As bipartisan Co-Chairs of the Congressional Cannabis Caucus, we are pleased to learn the Department of Veterans Affairs (VA) is considering a change in policy to allow for access to medical cannabis for VA patients. We implore your agency to act swiftly and implement this change as soon as possible.”

On December 1, 2021 the Congressional Cannabis Caucus composed a letter to the Secretary of Veterans Affairs regarding the Caucus’ advocacy for medical marijuana access for veterans.

The letter provides useful statistics and suggests benefits against certain disease states with the utilization of cannabis.

As time goes on we are seeing more opportunities for policy cooperation where cannabis is concerned, which means more marketplace opportunities for interested stakeholders.

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.

Ron Lanton 12/2/21 Ron Lanton 12/2/21

New Congressional Pharmacy Benefit Manager Bill Aimed at Spread Pricing Reintroduced

According to a December 1, 2021 press release, Representatives Carter (R-GA) and Gonzalez (D-TX) have reintroduced the Drug Price Transparency in Medicaid Act. The legislation “would limit the power of pharmacy benefit managers (PBMs) to artificially spike Medicaid drug prices. The Drug Price Transparency in Medicaid Act bans the use of spread pricing by middlemen (PBMs) in Medicaid managed care. PBMs drive up prescription drug costs without adding any value to the consumer.”

This legislation would help stop the under reimbursement that pharmacies are experiencing, while also helping to create much needed drug price transparency where Medicaid programs nationwide are concerned.

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

Pharmacy Celebrates Another Win Over PBMs in the 8th Circuit

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

The PCMA v. Wehbi case can be found here.

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

Ron Lanton 10/20/21 Ron Lanton 10/20/21

FDA Approves First Interchangeable Biosimilar for Humira

According to the FDA’s press release, “The U.S. Food and Drug Administration approved the first interchangeable biosimilar product to treat certain inflammatory diseases.”

According to the FDA’s press release, “The U.S. Food and Drug Administration approved the first interchangeable biosimilar product to treat certain inflammatory diseases. Cyltezo (adalimumab-adbm), originally approved in August 2017, is both biosimilar to, and interchangeable with (may be substituted for), its reference product Humira (adalimumab) for Cyltezo’s approved uses. Cyltezo is the second interchangeable biosimilar product approved by the agency and the first interchangeable monoclonal antibody. Once on the market, approved biosimilar and interchangeable biosimilar products can play a role in facilitating access to treatments for many serious health conditions.”

Furthermore, “The FDA granted approval of Cyltezo to Boehringer Ingelheim on October 15, 2021. To date, the FDA has approved 31 biosimilar products, including two interchangeable products, for a variety of health conditions.”

The FDA’s announcement can be viewed here.

This is an exciting announcement by the FDA, as competitors to the originator now have a viable path forward to make market inroads.

Lanton Law is a national healthcare and life science boutique law and government affairs firm that closely monitors legislative, regulatory and legal developments for our clients. Our life sciences practice can help stakeholders understand what’s at issue so that we can help our valued clients reach their goals. Contact us to learn about how either our legal or lobbying services can help you attain your goals.

Ron Lanton 10/8/21 Ron Lanton 10/8/21

California Enacts Genetic Privacy Legislation

On October 6th, California Governor Newsom (D-CA) signed SB 41 titled Privacy: genetic testing companies.

On October 6th, California Governor Newsom (D-CA) signed SB 41 titled Privacy: genetic testing companies. The bill can be viewed here. Below are the highlights of the bill:

This bill would establish the Genetic Information Privacy Act, which would require a direct-to-consumer genetic testing company, as defined, to provide a consumer with certain information regarding the company’s policies and procedures for the collection, use, maintenance, and disclosure, as applicable, of genetic data, and to obtain a consumer’s express consent for collection, use, or disclosure of the consumer’s genetic data, as specified.

This bill would require a direct-to-consumer genetic testing company to honor a consumer’s revocation of consent in accordance with certain procedures, and to destroy a consumer’s biological sample within 30 days of revocation of consent. The bill would further require a direct-to-consumer genetic testing company to implement and maintain reasonable security procedures and practices to protect a consumer’s genetic data against unauthorized access, destruction, use, modification, or disclosure, and develop procedures and practices to enable a consumer to access their genetic data, and to delete their account and genetic data, as specified. The bill would exclude from its provisions the California Newborn Screening Program, specific tests, and certain information, providers, entities, and activities subject to specified state and federal laws.

This bill would provide that the act does not reduce a direct-to-consumer genetic testing company’s duties, obligations, requirements, or standards under any applicable state and federal law for the protection of privacy and security and would further provide, if a conflict exists between the act and any other law, that the provisions of the law that afford the greatest protection for the right of privacy for consumers shall control.

This bill would impose civil penalties for a violation of those provisions, as specified. The bill would require actions for relief pursuant to these provisions to be prosecuted exclusively by the Attorney General, a district attorney, county counsel, city attorney, or city prosecutor, as specified, in the name of the people of the State of California upon their own complaint or upon the complaint of a board, officer, person, corporation, or association or upon a complaint by a person who has suffered injury in fact and has lost money or property as a result of the violation of the act. Because the bill would require local officials to perform additional duties, the bill would impose a state-mandated local program.

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

Ron Lanton 10/5/21 Ron Lanton 10/5/21

Biden Administration Issues Interim Final Rule on Surprise Medical Billing

The Centers for Medicare and Medicaid Services (CMS) in conjunction with the Departments of Health and Human Services (HHS), Labor (DOL), Treasury (collectively, the Departments), and the Office of Personnel Management (OPM) has issued an interim final rule with a comment period that seeks to implement the No Surprises Act aimed at surprise medical billing.

According to the CMS announcement “This rule details a process that will take patients out of the middle of payment disputes, provides a transparent process to settle out-of-network (OON) rates between providers and payers, and outlines requirements for health care cost estimates for uninsured (or self-pay) individuals. Other consumer protections in the rule include a payment dispute resolution process for uninsured or self-pay individuals. It also adds protections in the external review process so that individuals with job-based or individual health plans can dispute denied payment for certain claims.”

The interim final rule can be viewed here.

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

Ron Lanton 9/27/21 Ron Lanton 9/27/21

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

Lanton Law PLLC was honored to speak with Medical World News’ Second Opinion on emerging COVID-19 vaccine mandates. It was great sharing this program with Ned Milenkovich of Much Shelist, P.C.

Episode 2 can be viewed here.

Lanton Law PLLC was honored to speak with Medical World News’ Second Opinion on emerging COVID-19 vaccine mandates. It was great sharing this program with Ned Milenkovich of Much Shelist, P.C.

Episode 2 can be viewed here.

Ron Lanton 9/24/21 Ron Lanton 9/24/21

SAFE Banking Act Passes House in Defense Legislation

The House of Representatives has passed by voice vote an amendment to the National Defense Authorization Act (NDAA) by adding the Secure and Fair Enforcement (SAFE) Banking Act to the legislation.

The House of Representatives has passed by voice vote an amendment to the National Defense Authorization Act (NDAA) by adding the Secure and Fair Enforcement (SAFE) Banking Act to the legislation. The bill would give safe harbors to financial institutions servicing cannabis industry stakeholders. The text of the SAFE Banking Act can be found here.

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.

Ron Lanton 8/27/21 Ron Lanton 8/27/21

Lanton Law Speaks with Medical World News Second Opinion Regarding Mandated COVID-19 Vaccines

Lanton Law was honored to speak with Medical World News’ Second Opinion on emerging COVID-19 vaccine mandates. It was great sharing this program with Ned Milenkovich of Much Shelist, P.C.

The full episode can be viewed at: here.

Lanton Law PLLC was honored to speak with Medical World News’ Second Opinion on emerging COVID-19 vaccine mandates. It was great sharing this program with Ned Milenkovich of Much Shelist, P.C.

Episode 1 can be viewed here.

Ron Lanton 8/27/21 Ron Lanton 8/27/21

Home Infusion Stakeholders to be Helped by Newly Introduced Congressional Legislation

According to a press release by Senator Warner (D-VA), a newly introduced “bipartisan bill in the U.S. Senate proposes to ensure Medicare patients maintain access to home infusion therapies that require the use of an infusion pump. The Preserving Patient Access to Home Infusion Act — introduced by Sen. Mark Warner (D-VA) and Sen. Tim Scott (R-SC) — would ensure patients with serious viral and fungal infections, heart failure, immune diseases, cancer, and other conditions can receive the intravenous (IV) medications they need while at home.”

The Preserving Patient Access to Home Infusion Act can be viewed here.

How did this legislation come to be?

“Congress included provisions in the 21st Century Cures Act and the Bipartisan Budget Act of 2018 to create a professional services benefit for Medicare Part B home infusion drugs. The intent in establishing this benefit was to maintain patient access to home infusion by covering professional services including assessments, education on administration and access device care, monitoring and remote monitoring, coordination with the patient, caregivers and other health care providers, and nursing visits.

Despite Congress’ intent — as detailed in multiple letters to the agency — the Centers for Medicare and Medicaid Services (CMS) improperly implemented the benefit by requiring a nurse to be physically present in the patient’s home in order for providers to be reimbursed. As a practical matter, the current home infusion therapy benefit only acknowledges face-to-face visits from a nurse and fails to account for the extensive clinical and administrative services that are provided remotely by home infusion clinicians. As a result, provider participation in Medicare’s home infusion benefit has dropped sharply and beneficiaries have experienced reduced access to home infusion over the last several years.

The Preserving Patient Access to Home Infusion Act provides technical clarifications that will remove the physical presence requirement, ensuring payment regardless of whether a health care professional is present in the patient’s home. The legislation also acknowledges the full scope of professional services provided in home infusion — including essential pharmacist services — into the reimbursement structure.”

Lanton Law is a national boutique law and lobbying firm that focuses on healthcare/life sciences and technology. We have lobbied for and consult home infusion stakeholders.

If you are either thinking about getting into or are a current home infusion stakeholder and are unsure how your business model fares, contact Lanton Law so that we can go over your business model, assess potential risks and help you plan for both pending legislative and regulatory actions.

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

Oral Arguments Scheduled for North Dakota PBM Case

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

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

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

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

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

Ron Lanton 8/20/21 Ron Lanton 8/20/21

Illumina Acquires Grail

According to the press release, Illumina announced that it has acquired GRAIL.

According to the press release, Illumina announced that it has “acquired GRAIL, a healthcare company focused on life-saving early detection of multiple cancers, but will hold GRAIL as a separate company during the European Commission's ongoing regulatory review.

Illumina, the global leader in DNA sequencing, first announced its intention to acquire GRAIL nearly a year ago, reuniting Illumina with GRAIL four years after it was spun off. GRAIL's Galleri blood test detects 50 different cancers before they are symptomatic. Illumina's acquisition of GRAIL will accelerate access and adoption of this life-saving test worldwide.”

This acquisition has been announced despite the fact that it faces a legal challenge from the FTC as well as European antitrust scrutiny.

Here are the reasons Illumnia gave for the deal according to the press release:

The deal will save lives. Cancer kills around 10 million people annually worldwide and 600,000 people in the US alone. Cancers responsible for nearly 71% of cancer deaths have no recommended early detection screening, and most cancers are detected when chances of survival are lower. Illumina feels there is a moral obligation to have the deal decided by a thoughtful and full review by the EU regulators and the US courts. This can only be done if Illumina acquires GRAIL now. Otherwise, the company is locked into a situation where the deal terms will expire before there is a chance for full review; the clock will just run out.
Right now, the Galleri test is available but costs $950 because it is not covered by insurance. Reuniting the two companies is the fastest way to make the test broadly available and affordable. Illumina's expertise in market development and access has resulted in coverage of genomic testing for over 1 billion people around the world already. This experience will help lead to coverage and reimbursement for the Galleri test.
GRAIL and Illumina have a long history. Illumina formed GRAIL and spun it out in 2016. GRAIL's first employees were part of Illumina, which still owns 12 percent of the company. GRAIL and Illumina are not competitors—this is a vertical acquisition.
Based on past experience, when Illumina enters a market, the market expands. When Illumina entered the non-invasive prenatal testing space, prices dropped, reimbursement expanded, the number of providers increased, and more expectant parents had access to testing.
Illumina's acquisition of GRAIL is driven by the belief that this test should be available to as many people as possible as quickly as possible. From fighting the COVID-19 pandemic to matching cancer patients to therapies, Illumina's mandate is to save lives and transform healthcare. The first COVID-19 viral sequence was on an Illumina machine and now genomic surveillance has emerged as a critical tool in the global fight against the pandemic, with over 70 countries now using Illumina platforms for COVID-19 variant tracking.

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

Ron Lanton 8/10/21 Ron Lanton 8/10/21

FDA Approves First Interchangeable Biosimilar

The U.S. Food and Drug Administration (FDA) has “approved the first interchangeable biosimilar insulin product, indicated to improve glycemic control in adults and pediatric patients with Type 1 diabetes mellitus and in adults with Type 2 diabetes mellitus. Semglee (insulin glargine-yfgn) is both biosimilar to, and interchangeable with (can be substituted for), its reference product Lantus (insulin glargine), a long-acting insulin analog. Semglee (insulin glargine-yfgn) is the first interchangeable biosimilar product approved in the U.S. for the treatment of diabetes. Approval of these insulin products can provide patients with additional safe, high-quality and potentially cost-effective options for treating diabetes.

Biological products include medications for treating many serious illnesses and chronic health conditions, including diabetes. A biosimilar is a biological product that is highly similar to, and has no clinically meaningful differences from, a biological product already approved by the FDA (also called the reference product). This means you can expect the same safety and effectiveness from the biosimilar as you would the reference product.

An interchangeable biosimilar product may be substituted for the reference product without the intervention of the prescriber. The substitution may occur at the pharmacy, a practice commonly called “pharmacy-level substitution”—much like how generic drugs are substituted for brand name drugs, subject to state pharmacy laws, which vary by state. Biosimilar and interchangeable biosimilar products have the potential to reduce health care costs, similar to how generic drugs have reduced costs. Biosimilars marketed in the U.S. typically have launched with initial list prices 15% to 35% lower than comparative list prices of the reference products.”

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

Ron Lanton 8/10/21 Ron Lanton 8/10/21

CMS Proposes Rescinding Most Favored Nation Interim Final Rule

The Centers for Medicare and Medicaid Services (CMS) has released a proposed rule that seeks to rescind the Most Favored Nation Model interim final rule with comment period that appeared in the November 27, 2020 Federal Register. CMS is seeking public comment by October 12, 2021.

This rule has already had some interesting history. According to the proposal, “In December 2020, while the comment period was open, four lawsuits were filed related to CMS's waivers of proposed rulemaking and delay in effective date as well as other aspects of the MFN Model and the November 2020 interim final rule.

On January 8, 2021, the Solicitor General determined not to appeal the preliminary injunction issued in California Life Sciences. On January 19, 2021, at the parties' request, the U.S. Northern District of California stayed the case until at least April 23, 2021. Subsequently, on April 26, 2021, another stay was granted until July 26, 2021. On July 29, 2021, another stay was granted until September 27, 2021.

In Regeneron Pharmaceuticals, on February 2, 2021, the plaintiff filed a letter seeking leave to file a motion for summary judgment, and HHS filed a letter seeking leave to file a motion for a stay. On February 10, 2021, the U.S. District Court for the Southern District of New York granted HHS's request and stayed the case for 90 days (that is, through May 11, 2021). On May 10, 2021, the stay in this case was extended for an additional 90 days, until August 9, 2021, to give HHS time to consider how to proceed with the rule in light of the “unanimous” court decisions to date. In its order, the court noted that HHS should “not assume that another stay will be granted,” as the stays gave HHS “a half-year to reach a conclusion regarding how to proceed[.]”

As a result of the nationwide preliminary injunction, the MFN Model was not implemented on January 1, 2021, as contemplated in the November 2020 interim final rule. While the nationwide preliminary injunction has been in place, CMS considered how to proceed given stakeholders' concerns about potential impacts of the MFN Model.”

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

Ron Lanton 6/25/21 Ron Lanton 6/25/21

Connecticut Has Enacted New Law Legalizing Adult-Use Cannabis

According to Governor Ned Lamont’s press release, the Governor has enacted a new law that legalizes and regulates adult-use cannabis in Connecticut. “The legislation Governor Lamont signed today is Senate Bill 1201. A proposal to legalize adult-use cannabis was initially put forward by Governor Lamont to the General Assembly earlier this year as Senate Bill 888. He also proposed similar legislation in February 2020 as Senate Bill 16.”

Key components of the new law include:

Possession: Possession of cannabis among adults age 21 and over will be legal in Connecticut beginning July 1, 2021. Adults cannot have more than 1.5 ounces of cannabis on their person, and no more than 5 ounces in their homes or locked in their car, truck or glove box.

Retail sales: Retail sales of cannabis aim to begin in Connecticut by the end of 2022. The sale, manufacture, and cultivation of cannabis (aside from home grown) requires a license from the state. Products that contain delta-8-THC, delta-9-THC, or delta-10-THC are considered cannabis and may only be sold by licensed retailers. Individuals who are not licensed by the state may gift cannabis to others but may not sell it. Individuals may not gift cannabis to another individual who has “paid” or “donated” for another product.

Homegrown: Patients who are participating in Connecticut’s medical marijuana program will be permitted to cultivate up to six cannabis plants (three mature, three immature) indoors within their homes beginning October 1, 2021. All adults age 21 and over will be permitted to grow a similar number of plants indoors within their homes beginning July 1, 2023. The law includes requirements to keep the plants secure from anyone else. Home grown of up to six cannabis plants is defelonized beginning July 1, 2021, and instead will result in infractions.

Erases prior convictions: Certain cannabis-related convictions that occurred between January 1, 2000 and October 1, 2015 will be automatically erased. Those seeking to erase cannabis-related convictions outside of that period will require petitioning.

Equity and investments: To start the necessary work of repairing the damage caused by decades of failed cannabis criminalization policies, the law implements equitable marketplace requirements under which at least half of all initial licenses are reserved for social equity applicants, targeting those communities that have been most negatively impacted by the so-called war on drugs. The Social Equity Council, which is created by this legislation, will launch programs and support for social equity applicants in the cannabis market.

Tax structure: The law enacts a tax rate structure on the retail sale of cannabis that includes a new source of revenue for municipalities. This includes (1) a 3% municipal sales tax, which will be directed to the town or city where the retail sale occurred; (2) the 6.35% state sales tax; and (3) a tax based on the THC content of the product, which will be 2.75 cents per milligram of THC for cannabis edibles; 0.625 cents per milligram of THC for cannabis flower; and 0.9 cents per milligram of THC for all other product types. This means that Connecticut generally will have about a 4% lower tax rate than New York and about the same as Massachusetts.

Revenue to support economic opportunities in targeted communities: Portions of the revenue obtained from retail sales of cannabis will be directed to communities that have been most negatively impacted by the war on drugs through the creation of the Social Equity and Innovation Fund. Funding from this account will be appropriated for use by the Social Equity Council to provide business capital, technical assistance for business start-ups and operations, workforce education, and community investments. These investments will not be limited to the cannabis market.

Revenue to support substance misuse prevention and recovery services: Portions of the revenue obtained from retail sales of cannabis will be directed to support substance misuse prevention, treatment, and recovery services through the creation of the Prevention and Recovery Services Fund. Connecticut’s health agencies, including the Department of Public Health, Department of Mental Health and Addiction Services, and Department of Children and Families will launch new programs and initiatives regarding prevention, treatment, and recovery in regard to cannabis.

Preventing underage use: This legislation adapts the state’s strong framework regarding preventing access to alcohol by minors in the context of cannabis. For example, it will be a Class A misdemeanor to sell or provide cannabis to a person under 21 years old. In addition, an individual allowing someone under 21 years old to loiter at a cannabis store will receive a $1,000 fine on the first offense with subsequent offenses as a Class B misdemeanor. It will be a Class D misdemeanor for a person under the age of 21 to lie about their age or use a fake ID in an attempt to buy cannabis. Delivery services will be required to use online ID and age verification.

Enforcement of safe driving: This law significantly strengthens Connecticut’s impaired driving statutes by requiring police to be trained in Advanced Roadside Impaired Driving Enforcement (ARIDE) and allows for Drug Recognition Expert (DRE) evaluations to result in license suspensions. This means that drivers who are impaired on any substance, whether cannabis or otherwise, will be more quickly taken off the roads.

Advertising: This law implements strong standards for advertising that exceed those for the tobacco and alcohol industries. All cannabis-related advertising will be banned on television, radio, internet, print, and billboards unless the advertiser has reliable evidence that more than 90% of the audience reached by the advertising is at least 21 years of age or older. Advertising of cannabis is restricted within 500 feet of a school. The advertising restrictions apply to all cannabis advertising, whether or not the advertiser is a state licensee.

Safe products: This legislation imposes strong requirements for product safety. Products will have to be lab tested and will have strict packaging and labeling standards. Edible cannabis products are limited to 5 milligrams of THC per serving, and most other products are subject to a potency cap. Products will be in child-safe packaging, and product types that appeal to children are banned.

Municipalities and zoning: Local officials will play an important role in the implementation of cannabis legalization. For example, local officials can control the number and locations of cannabis retailers through zoning. Municipalities can also determine where smoked or vaped cannabis can be consumed (e.g. in city parks or beaches, or on sidewalks or streets).

Employment: This legislation allows employers to continue to enforce drug-free workplaces, and respects the need for employers to maintain workplace safety and to remain in compliance with federal laws and contracts. As such, employers in certain industries, such as manufacturing and healthcare, are considered “exempt” from the employment provisions of this law. The law allows employers to take adverse actions against employees who are impaired at work. The law says that nonexempt employers may not prohibit the off-work use of cannabis or take adverse action against an employee or a potential employee for a positive THC test unless such employer has adopted employment policies stipulating as such. Generally, an employer may not take adverse action against an employee or potential employee for use of cannabis prior to applying for or working at such employer.

Medical marijuana program: The law protects Connecticut’s nation-leading medical marijuana program in many ways. For example, producers and dispensaries that currently operate in the medical marijuana program may expand or convert their licenses for adult-use cannabis, but they must prioritize serving the medical program. Medical marijuana users will soon be able to purchase medical marijuana from any dispensary rather than simply the one to which they are assigned.

State parks and beaches: Cannabis use is prohibited in state parks, state beaches, and on state waters.

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.

Ron Lanton 6/17/21 Ron Lanton 6/17/21

New Louisiana Law Bans White Bagging

The Governor has enacted Act No. 50 effective June 1, which seeks to ban “white bagging” in the state. White bagging is when a drug is delivered from an insurer’s preferred pharmacy to a physician’s office. This new law which is the first of its kind in the country provides that insurers cannot refuse to pay for physician-administered drugs to covered patients. Similar legislation has been seen in Massachusetts, New York and Texas.

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