Legislative Developments

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California’s new law, SB 1120, set to take effect on January 1, 2025, regulates how health care service plans (HCSPs) and disability insurers use automated decision-making tools, such as artificial intelligence, to analyze medical necessity in utilization reviews affecting California enrollees. Compared to federal guidelines, this law is more prescriptive, requiring HCSPs and disability…

In the two years since the Dobbs v. Jackson Women’s Health decision from the Supreme Court, state legislatures and courts have attempted to define the new post-Roe landscape in health care. That effort includes actions by states to enact health data privacy laws or to amend existing privacy laws to protect consumer health data…

Not a question that we thought we would be asking more than a year after the large omnibus package was signed into law by President Biden. But here we are, with a federal judge in Texas ruling on Feb. 27 that the House’s passage of the Consolidated Appropriations Act, 2023 (P.L. 117-328) (CAA, 2023) violated the “quorum clause” of Article I, Section 5 of the U.S. Constitution.

The court’s ruling puts in jeopardy a number of substantive health policy provisions if it is allowed to stand. Many of the provisions of the act that could be overturned were designed to sunset at the end of 2024 and some have since been reauthorized. But some, like the FDA’s new cosmetic regulatory regime that was included in the Modernization of Cosmetics Regulation Act of 2022 (MoCRA) are more permanent and are now under threat.

The court’s decision limited its impact to only one aspect of the law and enjoined that provision only as applied to public employees in Texas, but the court’s analysis of the way that the law was passed calls into question the entire appropriations act. The Department of Justice (DOJ) has 60 days from the court’s decision to appeal to the U.S. Court of Appeals for the Fifth Circuit. The agency has filed a notice of compliance with the court indicating that neither the DOJ or Equal Employment Opportunity Commission will enforce the law against the state or its agencies.Continue Reading Was the Consolidated Appropriations Act, 2023 Legitimately Passed by the House?

On Nov. 8, 2023, the Senate Finance Committee voted 26-0 to approve the Better Mental Health, Lower Cost Drugs, and Extenders Act. Among its other provisions, the bill, for which final legislative text has not yet been released, would, for the first time, mandate minimum prices that Medicare Part D plans, and the pharmacy…

New minimum wage requirements have been signed into law by Governor Gavin Newsom, establishing five comprehensive minimum wage schedules for “covered health care employees,” which includes both contracted and subcontracted employees. Effective June 1, 2024, “covered health care facilities” will be required to implement the applicable minimum wage schedule, as set forth by the law.…

UPDATE: Late in the evening of September 28, the House defeated H.R. 4368 by a vote of 191-237, with 27 Republicans voting against the bill. It was the only one of the four appropriations bills to fail.

Editor’s Note: This post was originally published at 11:15 PM EST on September 27, 2023 while the House of Representatives was still voting on amendments to other appropriations bills.

A group of conservative Republicans in the House of Representatives’ proposed Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2024 (H.R. 4368) would rescind the Food and Drug Administration (FDA)’s January 2023 change to the Risk Evaluation and Mitigation Strategy (REMS) program to allow certified retail pharmacies to dispense mifepristone as part of a medication abortion regimen. The proposal would effectively limit retail pharmacy dispensing of the only medication that is labeled for medication abortion.Continue Reading GOP House Bill Proposes Repeal of Retail Pharmacy Dispensing of Mifepristone

On April 27, 2023, Washington Governor Jay Inslee signed into law House Bill 1155, otherwise known as the My Health My Data Act.  Certain “geofencing” portions of the law became effective July 23, 2023.  Other provisions will become effective for “small businesses” on June 30, 2024, and for all other regulated entities on March 31, 2024. Below is a brief summary of the law’s following core components: (1) covered individuals and entities, (2) covered data, and (3) data collection and sharing requirements.Continue Reading Implementation Underway for Washington’s New Wide-Reaching Consumer Health Data Law

Shortly after Connecticut’s 2023 legislative session kicked off, Governor Ned Lamont announced a series of policy initiatives aimed at reducing health care costs and undertaken in collaboration with the Connecticut Hospital Association. “An Act Protecting Patients and Prohibiting Unnecessary Health Care Costs” (“the Act”), which was passed by the Connecticut Legislature in early June and signed into law by Governor Lamont in late June, implements some of those initiatives. Among other things, the Act targets pharmaceutical marketing practices and imposes extensive reporting requirements. These provisions apply to “pharmaceutical manufacturers” and come into effect on October 1, 2023.

Broadly, the provisions require “pharmaceutical manufacturers” that employ “pharmaceutical representatives” to register annually with the Department of Consumer Protection (“DCP”) as “pharmaceutical marketing firms” and provide annual reports to DCP containing various information about their employed “pharmaceutical representatives.” The provisions also require “pharmaceutical representatives” to disclose specific information to prescribing practitioners and pharmacists and provides DCP with the authority to impose penalties for non-compliance.

The nuance lives in the Act’s definitions, and several key questions remain open, including to what extent the Act applies to medical device and technology manufacturers.Continue Reading New Connecticut Law Targets Drug and Device Manufacturers who Employ Sales Representatives for Additional Scrutiny

On May 3, New York Governor Kathy Hochul signed into law provisions that will require health care entities to submit a notification to the state Department of Health (DOH) providing information about any material transaction involving that health care entity.

The law, passed as part of the state’s budget, was originally crafted to give the DOH authority to review and approve those transactions. Ultimately, following several iterations during the legislative process, that approval power was stripped out by the state general assembly and replaced with the current notice requirement.

The law will take effect on August 1, 2023 and states on its face that it will apply to all “material transactions” involving health care entities that close on or after that date. That said, the requirements for transactions that close between August 1 and August 31 are a somewhat open question, given the 30-day notice requirement in the law. The DOH is tasked by the law with creating regulations that may address this situation.Continue Reading New York Passes Health Care Transaction Notice Requirements

[Note, this is Part 3 in an ongoing series of posts exploring substantive aspects of the Consolidated Appropriations Act, 2023 (P.L. 117-328) (referred to hereafter as 2023 CAA). Earlier parts covered Medicare Payments and the PIE Act]

The Modernization of Cosmetics Regulation Act of 2022 (MoCRA) is Subtitle E of the Food and Drug Administration Title of the 2023 CAA. The subtitle itself is a major change for the cosmetics industry, bringing almost all manufacturers and distributors into a regulatory and reporting structure similar to that currently used by the FDA to govern drugs and medical devices.

The Senate and House committee markups for both versions of the FDA User Fee legislation included a version of this law. However, the final version of that legislation had almost all policy riders stripped from it. But, it reappeared in the 2023 CAA and is now law.

So, what is MoCRA and what does it do? As with the previous posts on the 2023 CAA, we will go a little deeper on this than a regular blog post. That approach is particularly warranted here since this is an entirely new regulatory structure.Continue Reading Health Provisions of the Consolidated Appropriations Act, 2023: Part 3 Cosmetics Regulation

In December 2022, the New York City Council introduced the Secure Jobs Act. The Act attempts to redefine the long-established system of at-will employment by requiring New York City employers to provide “just cause” before firing an employee. The Act builds on December 2020 legislation that imposed similar restrictions within the fast food industry…

[Note, this is Part 2 in an ongoing series of posts exploring substantive aspects of the Consolidated Appropriations Act, 2023 (P.L. 117-328) (referred to hereafter as 2023 CAA). Part 1, available here, covered changes in Medicare payment rates.]

Buried in the “Miscellaneous” chapter of Subtitle F (“Cross-Cutting Provisions”) of the Food and Drug Administration Title (Title III) of the 2023 CAA is Section 3630, a provision without a short title called “Facilitating exchange of product information prior to approval.”

This provision was originally proposed as the Pre-approval Information Exchange Act (or PIE Act) in March 2022 and was included in the House version of the Food and Drug Administration user fee legislation before being dropped from that legislation along with almost all other policy riders in a deal to get the FDA User Fee program approved before it expired.

But the same language was included in the 2023 CAA that was signed into law on Dec. 29, 2022. And again, while it was not directly entitled as such in the law, it is the PIE Act and that is how this post will refer to it. So, exactly what is the PIE Act and what does it do?  Before assuming there is “PIE” for everyone, read more for important content on the boundaries of this law, and remaining challenges for companies seeking to exchange information under this statutory authority.Continue Reading Health Provisions of the Consolidated Appropriations Act, 2023: Part 2 The PIE Act

The Consolidated Appropriations Act, 2023 (P.L. 117-328) (referred to hereafter as 2023 CAA) runs more than 1,600 pages long in the official PDF version, so you would be excused if you missed a few key substantive health provisions that were included in the law.

Many of the substantive provisions of the law had been proposed as parts of other packages throughout the year, including the Infrastructure law, the FDA User Fee legislation and the Inflation Reduction Act. However, for one reason or another, these provisions were eliminated from the final versions of the laws that were passed.

The 2023 CAA included, among other aspects, changes to the Medicare payment program and sequestration requirements, additions to the accelerated approval process for drugs, a regulatory regime for cosmetics, and changes related to pre-approval communication of health care economic information to payors, formularies and similar entities.

This is the first in a series of posts exploring some of the more important policy aspects of the law. With part 1, we will explore the changes to Medicare payment rules.Continue Reading Health Provisions of the Consolidated Appropriations Act, 2023: Part 1 Medicare Payments

The Inflation Reduction Act included some very significant changes to the ways in which the Medicare program handles drug pricing.

Among the changes are a redesign of the Medicare Part D (prescription drug benefit) program, as well as requirements that certain drug prices be negotiated with the Centers for Medicare & Medicaid Services and a provision that drug manufacturers pay inflation rebates to on utilization of drugs covered by Medicare Part B and Part D in certain circumstances.

To address these changes to the law, Reed Smith has put together a series of alerts and webinars on the topics.Continue Reading Analysis of Medicare Prescription Drug Pricing Changes in Inflation Reduction Act

The House Energy and Commerce Committee seems poised to make substantial changes to the Food and Drug Administration’s (“FDA’s”) Accelerated Approval Program. The committee’s Democratic chairman, Frank Pallone, Jr. (D-NJ) and Republican ranking member, Cathy McMorris Rodgers (R-WA) have proposed competing bills that were featured prominently in the Health Subcommittee’s legislative hearing on March 17, 2022.

The Accelerated Approval Program was developed in 1982, largely in response to the HIV/AIDs epidemic, to expedite approval of novel drugs that treat serious conditions with unmet medical needs based on a surrogate endpoint.  Drugs that receive accelerated approval must undergo post-approval (Phase IV) studies to confirm the intended clinical benefit.  If the clinical testing does not demonstrate the intended clinical benefit, FDA has mechanisms to remove the drug from the market.

However, concerns have mounted regarding FDA’s ability to remove ineffective drugs from the market, and those concerns were punctuated during a February 3, 2022 Health Subcommittee hearing on the reauthorization of FDA User Fees. Dr. Patrizia Cavazzoni, the Director of the Center for Drug Evaluation and Research at the FDA testified that the program’s existing mechanism to withdraw accelerated approvals is cumbersome, resource intensive, and seldom used.Continue Reading Competing bills propose amendments to FDA’s accelerated approval program

On August 1, 2021, the Senate released the legislative text of the bipartisan infrastructure bill, the “Infrastructure Investment and Jobs Act,” H.R. 3684.  The Senate is expected to vote this week, before a month-long recess beginning on August 9, 2021.  The 2,702 page legislation contains several relevant health care-related provisions, including a delay of the implementation of the rule eliminating the Anti-Kickback Statute (“AKS”) safe harbor protection for Medicare Part D rebates.

Rebate for Discarded Amounts of Medicare Part B Single-Dose Container or Single-Use Package Drugs

First, the legislation requires manufacturers of single-dose container or single-use package drugs payable under Medicare Part B to provide a rebate to the government for any discarded portion of that drug.  The rebates will be charged each quarter, beginning with the first quarter of 2023, and must be paid in regular intervals, as determined appropriate by the Secretary of the U.S. Department of Health and Human Services (“HHS”).  The legislation provides that, in order to enforce this provision, HHS will conduct periodic audits of both drug manufacturers and providers who submit claims.  For violations of this provision, HHS will impose Civil Monetary Penalties in amounts equal to the sum of the amount that the manufacturer would have paid and twenty-five percent of such amount.Continue Reading Health Care Provisions in the Infrastructure Investment and Jobs Act

Over the last decade, members of the medical and public health communities around the world have widely studied and acknowledged the impact of social determinants of health (SDOH)—the conditions in the environments where people live, learn, work, play, and age—on a wide range of health, functioning, and quality-of-life-risks and outcomes.[1]  In the past year…

On April 19th, 2021 Governor Andrew Cuomo (D) signed the state’s Budget for Health and Mental Hygiene (A3007C/S2507C), which includes several significant changes impacting the state’s nursing home operators and investors. Most notably, the legislation’s principal provisions require reinvestment of revenue into each nursing home facility and a cap on the profit the facility can…

During a press conference on Monday, March 29, 2021, Florida Governor Ron DeSantis signed Senate Bill 72, which grants civil immunity to corporations, hospitals, nursing homes, government entities, schools, and churches from COVID-19-related lawsuits, except in cases of gross negligence or intentional misconduct.  Plaintiffs who file suit in Florida alleging coronavirus-related injuries will face…

The U.S. Senate recently voted unanimously to approve the Competitive Health Insurance Reform Act (Act), which the House of Representatives had already passed earlier in the fall. Currently, health insurers have federal antitrust immunity under the McCarran-Ferguson Act for state-regulated activity that constitutes the business of insurance. Should President Trump opt to sign CHIRA into…