State Net

CA’s Potentially Standard-Setting AI Bill & Brazil’s Shutdown of Social Network X

Alyzza Austriaco — Wed, 04 Sep 2024 17:20:00 GMT

CA Lawmakers Approve Potentially Standard-Setting AI Bill

The California Legislature passed a bill (SB 1047) that could become the national standard for regulating artificial intelligence. The measure would require AI companies that spend more than $100 million on training an AI model or over $10 million on modifying one to test whether those models could cause mass casualties or major property damage before releasing them to the public. It would also allow the state’s attorney general to sue AI developers for serious harms caused by their systems. But Gov. Gavin Newsom (D) hasn’t indicated whether or not he supports the legislation, and the tech industry has been strongly pressuring him to veto it. (NEW YORK TIMES, CALMATTERS, LEXISNEXIS STATE NET)

Brazil Blocks Access to X Nationwide

Brazil blocked access to Elon Musk’s social network X nationwide after Musk and X defied requests from the country’s Federal Supreme Court to take down accounts or posts it said violated Brazilian laws against misinformation and hate speech online. Brazilian authorities have blocked access to online services, including the messaging app Telegram, for ignoring court orders before. Such blocks have typically lasted only a few days before the targeted company complied. (CNBC, NEW YORK TIMES)

—By SNCJ Managing Editor KOREY CLARK

As we’ve previously reported, most states have either introduced or enacted legislation related to AI in the past twelve months. AI continues to be a pressing issue for state lawmakers this year, potentially introducing a host of challenges for businesses. And we don’t foresee that changing any time soon. That is why LexisNexis® State Net® would like to offer you 30 days of AI legislative and regulatory alerts for free.*

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Passage of PBM Bill in CA, States’ Tussle with Drug Makers Over Discounted Drugs

Alyzza Austriaco — Wed, 04 Sep 2024 16:51:00 GMT

CA Lawmakers Pass PBM Legislation

California joined a nationwide movement to tighten restrictions on pharmacy benefit managers with the approval of SB 966 days before adjourning its legislative session on Aug. 31. If signed by Gov. Gavin Newsom (D) the measure will establish licensing requirements for PBMs and require them to report to the state’s Department of Insurance the fees they charge pharmacies and the rebates they receive from drug manufacturers. The bill would also require PBMs to pass along 100% of those rebates to health plans or insurers. (PLURIBUS NEWS, LEXISNEXIS STATE NET)

States Forcing Drugmakers to Keep Selling Drugs at Discount

In 2021, Arkansas became the first state to pass a law requiring pharmaceutical manufacturers that participate in Medicaid to sell drugs to contract pharmacies at a discount under the federal 340B program. Louisiana followed suit in 2023. This year, Kansas (SB 28), Maryland (HB 1056), Mississippi (HB 728), Missouri (SB 751) and West Virginia (SB 325) enacted similar legislation. And other states, including New York (AB 7789), considered similar measures.

The recent legislative actions are pushback against the restriction of 340B drug sales by pharmaceutical companies, which contend the 340B program has expanded beyond its original intent. As of September 2023, 25 drugmakers had done so. (STATELINE)

—Compiled by SNCJ Managing Editor KOREY CLARK

Legislation Regulating Brain-Wave Monitoring May Become Trend

Mary Anne Peck — Wed, 04 Sep 2024 00:57:00 GMT

Data privacy, long a focus of state lawmakers across the country, is poised to enter a new space: your brain.

Elon Musk has been making headlines for years now with his company Neuralink, which seeks to someday combine human consciousness with artificial intelligence but in the meantime is looking into implanting computer chips into human brains to treat neurological disorders like Parkinson’s.

This technology, invasive by nature, is protected under strict privacy provisions within the Health Insurance Portability and Accountability Act or HIPPA.

But brain-wave monitoring isn’t limited to just implanted devices anymore.

An April 2024 study by The NeuroRights Foundation, a nonprofit organization dedicated to protecting people from the misuse of consumer neurotechnology devices, found that there are at least 30 products capable of recording or altering your nervous system currently available to consumers, and many of those devices are wearable.

The NRF also found that “29 of the 30 companies (96.67%)” that make these neurotechnology devices “appear to have access to the consumer’s neural data and provide no meaningful limitations to this access.”

In other words, you can now purchase a Fitbit-like device that could give someone access to your biological and neural data, allowing them to literally read your mind.

In August, CNBC predicted “A wave of biological privacy laws may be coming” to protect this new form of personal data.

Colorado First State to Pass Bill Protecting Neural Data

Colorado may have started that trend this year by passing a first-of-its-kind bill expanding the Colorado Privacy Act to include biological and neural data.

HB 1058, sponsored by two pairs of Republicans and Democrats, Reps. Cathy Kipp (D) and Matt Soper (R) and Sens. Mark Baisley (R) and Kevin Priola (D), was signed by Colorado’s Democratic governor, Jared Polis, in mid-April.

“It is a very forward-looking bill,” lawyer Zoe Argento, a shareholder and co-chair of Littler Mendelson’s Privacy and Data Security Practice Group, told Law Week Colorado. “Though I think we’ll see more along these lines, Colorado is being very cutting-edge here in passing this legislation.”

California lawmakers also passed a pair of bills that would include neural data under the California Consumer Privacy Act’s definition of "sensitive personal information," sending the bills on to Gov. Gavin Newsom (D) for consideration. The measures are AB 1008, introduced in 2023 by Rebecca Bauer-Kahan (D), and SB 1223, introduced by Sen. Josh Becker (D) this year.

“The neurotechnology industry has exploded globally over the last several years, and regulations need to continue to keep pace so that consumers have necessary protections that prevent the misuse of their sensitive personal information,” Becker said in a May press release about his bill.

Start of ‘Neural Data’ Privacy Legislative Trend?

Two states have introduced legislation this year that would expand their consumer data privacy laws to cover “neural data,” which they define as information generated by measuring the activity of someone’s central or peripheral nervous system. One of those states, Colorado, enacted its measure (HB 1058). The other state, California, has passed a pair of measures (AB 1008 and SB 1223), sending them to Gov. Gavin Newsom (D) for consideration.

More Neural Data Bills Could Come as Neurotechnology Grows

The Colorado and California bills are the only ones referring to “neural data” currently in State Net’s legislative tracking database. But a trio of lawyers writing for the New York Law Journal in May predicted that more proposals would be on the way.

The attorneys, Frances Green, Paul DeMuro and Eleanor Chung, of the national law firm Epstein Becker Green specifically predicted that new legislation would be introduced in Minnesota, where a bill (HB 1904) that would have protected brain data was introduced last year but which failed.

“Minnesota, which could have been a trailblazer in 2023, will undoubtedly revisit the topic in the future,” the attorneys wrote. “While such protections are novel in the United States, Chile amended its constitution in 2021, declaring that the law shall ‘especially protect brain activity, as well as the information from it.’ According to the Future of Privacy Forum, Mexico seeks to follow Chile’s lead, and Brazil may not be far behind.”

With other countries taking notice of this burgeoning technology and seeing a need to regulate it, you can bet state lawmakers here will come to a similar conclusion as well.

Famed filmmaker Werner Herzog released a documentary in 2022 called Theatre of Thought in which he explored the ethical implications of neurotechnology with neurobiologist Rafael Yuste.

In a September 2022 review of the film in The Hollywood Reporter, critic Sheri Linden wrote that Theatre of Thought reveals that “When computers can extract information directly from the brain or feed commands straight into it, privacy, autonomy and the very sense of self are at stake.”

When you put it that way, CNBC’s prediction of a wave of legislation regulating this technology seems inevitable.

—By SNCJ Correspondent BRIAN JOSEPH

CA’s Journalism Funding Deal with Google, WY’s Digital Dollar & More

Alyzza Austriaco — Tue, 27 Aug 2024 18:42:00 GMT

Google Agrees to Help Fund Journalism in CA

California lawmakers reached a deal with Google that will provide about $250 million in public and private funding for newsrooms across the state over the next five years. Although Google has committed to spending $105 million on the effort, critics say that’s roughly the amount of money the company makes in half an hour. (PLURIBUS NEWS)

WY to Introduce Own Digital Currency

Although the Federal Reserve has been reluctant to create a central bank digital currency, Wyoming is developing its own U.S. dollar-backed stablecoin, which it is planning to launch next year. The state’s intent is to give individuals a faster, cheaper way to transact with local businesses. The state also plans to invest the reserves that back its stablecoin in treasuries and reverse repos, and use the interest generated from those investments to help fund public education.

This isn’t Wyoming’s first foray into crypto. Since 2018 the state has passed over 30 pieces of legislation aimed at creating a favorable regulatory environment for the industry. (CNBC)

Porn Website Age Verification Bill Dies in CA

A bipartisan measure (AB 3080) that would have required pornographic websites to verify that users are of legal age died ahead of the state’s Aug. 31 legislative adjournment date. The fact that such legislation has been passed mostly in red states didn’t stop the deep blue state’s Assembly from passing AB 3080 unanimously in May or its Senate Judiciary Committee from approving it unanimously in July. But the measure was held up in the Senate Appropriations Committee over First Amendment and other concerns. (CALMATTERS, LEXISNEXIS STATE NET)

—Compiled by SNCJ Managing Editor Korey Clark

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MA’s New Maternal Health Care Access Law, NJ’s Elimination of $100M in Medical Debt & More

Alyzza Austriaco — Tue, 27 Aug 2024 18:38:00 GMT

MA Expands Access to Maternal Health Care

Massachusetts Gov. Maura Healy (D) signed legislation (HB 4999) expanding access to maternal health services in the state. Among other things, the measure provides for the licensing of midwives—reducing the number of states without licensed midwives to 11—as well as mandates coverage of midwives and doulas under Medicaid. (MASSLIVE)

NJ Erasing $100M of Residents’ Medical Debt

New Jersey Gov. Phil Murphy (D) said the state, in partnership with the charitable organization Undue Medical Debt, was using leftover federal pandemic relief money to eliminate $100 million in medical debt for an estimated 50,000 residents. Those residents included 17,905 individuals who owed $61.6 million to Prime Healthcare hospitals and 31,748 individuals who owed over $38.4 million to other providers and debt collectors. (NJ ADVANCE MEDIA)

MS Weighing Future PBM Legislation

The Mississippi House Prescription Drug Policy Taskforce held its second hearing on pharmacy benefit managers. The committee plans to hold several more hearings later this year before recommending a course of action for the legislature. A bill aimed at regulating PBMs died this year over concerns from the banking industry that it would raise business costs. (CLARION-LEDGER)

—Compiled by SNCJ Managing Editor KOREY CLARK

Legal Status of Fantasy Sports in Limbo in Many States

Mary Anne Peck — Tue, 27 Aug 2024 07:57:00 GMT

When the U.S. Supreme Court struck down the federal law prohibiting state-authorized sports betting in May 2018, it wasn’t just state legislatures that sprang into action.

The fantasy sports behemoths DraftKings and FanDuel also mobilized to become sportsbooks.

Indeed, DraftKings and FanDuel have become so synonymous with sports betting at this point that you’d be forgiven if you had forgotten they started out as something else entirely.

In fact, both still operate as, and derive revenue from, their original service: fantasy sports.

Fantasy sports are not sports betting. Sports betting involves wagering on the specific outcome of an athletic event, like the winner of the Super Bowl.

Fantasy sports players, on the other hand, pick real athletes for a pretend team and earn points based on those athletes’ performances in real life, which in turn can win them money.

The federal Unlawful Internet Gambling Enforcement Act has declared that fantasy sports are games of skill, not luck, unlike sports betting.

While sports betting has been generating headlines for years as more and more states legalize it in the wake of the Supreme Court’s ruling, fantasy sports is a powerful sector unto itself.

Fantasy sports are expected to generate $10.3 billion in revenue in the United States this year.

But fantasy sports have a problem, and it’s not just living in the shadow of sports betting.

While sports betting is explicitly legal in 38 states, fantasy sports are only regulated in 27 states. Fantasy sports are unregulated, but generally allowed, in 19 more states and not allowed in five.

This uncertainty about the legality of fantasy sports in at least some jurisdictions poses a problem for the billion-dollar sector. The Fantasy Sports and Gaming Association or FSGA, an industry organization, is actively pushing for state-level legislation clarifying the legal status of fantasy sports.

But curiously, almost all of the bills seeking to clarify fantasy sports’ status introduced in state legislatures this year failed.

What’s going on here?

Not Much Luck for Fantasy Sports Bills in 2024

At least 16 measures dealing specifically with fantasy sports were introduced in eight states this year, according to LexisNexis State Net’s legislative tracking system. Twelve of those measures failed, including five in Florida. The other four measures remain pending in two states, Illinois and New York.

New Forms of Fantasy Sports Complicate Legal Status Clarification Efforts

According to State Net data, 16 measures dealing specifically with fantasy sports were introduced in eight states in 2024. Twelve of those measures failed, five in Florida, two in Iowa and in Louisiana, and one each in Georgia, Hawaii and West Virginia.

Only four bills remain pending: companion measures in Illinois (HB 5648/SB 3710) and New York (AB 10040/SB 9044).

Peter Schoenke, president of the fantasy website RotoWire and former FSGA chairman (as well as the current head of that organization’s Government Affairs Committee), said the stalled legislation this year boils down to fantasy sports’ common association with sports betting and the development of new fantasy sports products.

“Fantasy sports has kind of been on the backburner to sports betting,” Schoenke said. “It’s kind of gotten swept up in it.”

Schoenke said the association of fantasy sports with sports betting in the minds of many has made fantasy sports legislation a target of entrenched stakeholders in some states, like Florida and Hawaii. That’s what he attributed to the failing of some of this year’s bills.

In fact, a number of bills addressing fantasy sports along with other forms of gaming, including sports wagering, have also been considered this year. And most of those measures have failed as well.

The other issue complicating efforts to clarify the legal status of fantasy sports is the increasing variety of fantasy sports products. In addition to traditional fantasy sports, where players draft athletes to their fantasy teams and watch their points accrue over a season, there’s also daily fantasy, where players build a team for just a day (or a week) and single-player fantasy, in which a player builds a parlay-style lineup around athletes’ performances, a newer form of fantasy sports popularized by the site PrizePicks.

Schoenke said as these new variations on fantasy sports are developed, some states question whether they’re still games of skill, leading to clarifying legislation being introduced. That, in turn, can trigger the confusion of fantasy sports with sports betting again.

But Schoenke said the fantasy sports sector continues to work hard to distinguish itself from its 10-time bigger cousin. He said the lobbying work FSGA has done over the past decade or so has positioned fantasy sports to grow, even as sports betting gets most of the attention.

“Generally speaking,” he said, “fantasy sports is doing well and we’re not under attack.”

—By SNCJ Correspondent BRIAN JOSEPH

AI Doomsday Bill in CA, Possible Wave of Biological Privacy Laws & More

Alyzza Austriaco — Wed, 21 Aug 2024 16:26:00 GMT

AI Doomsday Bill Moves Closer to Passage in CA

The California Assembly’s Appropriations Committee advanced a first-of-its kind bill (SB 1047) aimed at preventing mass human casualties or property damage caused by artificial intelligence. The Senate passed the measure in May, but it was amended in the Assembly to address tech industry objections. The changes included forgoing the creation of a new agency for AI safety and limiting companies’ liability for violations of the law only to cases in which their AI systems actually cause harm or imminent danger to the public.

Even if the Legislature ultimately passes the measure, however, it may still not become law, as Gov. Gavin Newsom (D) has been leery of AI regulations, with so many of the world’s top AI companies based in the Golden State. (PLURIBUS NEWS, NEW YORK TIMES, LEXISNEXIS STATE NET).

Wave of Biological Privacy Laws Ahead?

In April Colorado passed a bill (HB 1058) expanding the definition of “sensitive data” covered by the Colorado Consumer Protection Act of 2021 to include “biological data,” defined as “data generated by the technological processing, measurement, or analysis of an individual’s biological, genetic, biochemical, physiological, or neural properties, compositions, or activities or of an individual’s body or bodily functions,” and “neural data,” defined as “information that is generated by the measurement of the activity of an individual’s central or peripheral nervous systems.”

More legislation of this kind may be coming in the future. There are medical devices that are implanted in the body and linked to the brain, such as Elon Musk’s Neuralink, which are covered by HIPPA’s strict privacy protections. But dozens of companies are also making wearable devices that capture brain data, which are not covered by existing laws. (CNBC, LEXISNEXIS STATE NET)

AI Legislation May Be Coming Next Year in SD

State lawmakers and organizational leaders in South Dakota are meeting during the Legislature’s summer break to discuss how to regulate artificial intelligence and minors’ access to the internet. Those issues may be addressed in the state’s next legislative session. (SOUTH DAKOTA PUBLIC BROADCASTING)

—Compiled by SNCJ Managing Editor KOREY CLARK

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PBM Bill Nearing Passage in CA

Alyzza Austriaco — Wed, 21 Aug 2024 16:23:00 GMT

Bill Regulating PBMs Nearing Passage in CA

California lawmakers are on track to pass a bill (SB 966) in the coming weeks regulating pharmacy benefit managers. The measure would prohibit PBM practices as steering patients to PBM-affiliated pharmacies and “spread pricing,” charging insurers or drug plans more than the cost of reimbursing pharmacies. It would also require PBMs to regularly disclose information about their business practices to the state’s Department of Insurance.

The bill was passed nearly unanimously by the Senate in May and advanced unanimously by a series of House committees. A vote of the full House is likely to come before the Legislature adjourns on Aug. 31. (PLURIBUS NEWS, LEXISNEXIS STATE NET)

—Compiled by SNCJ Managing Editor KOREY CLARK

As Temperatures Rise, Lawmakers Eye More Heat Protections for Workers

Mary Anne Peck — Wed, 21 Aug 2024 12:19:00 GMT

Cities across the country have been setting heat records all summer long.

Indeed, the three hottest days on record for the entire Earth were all set in July, according to the United Nations.

“Earth is becoming hotter and more dangerous for everyone, everywhere,” said U.N. Secretary-General Antonio Guterres, attributing the problem to climate change.

Hundreds of workers have died from heat exposure over the last several years and tens of thousands have needed time away from work to recover from heat-related injuries, according to the Bureau of Labor Statistics.

But despite the scale of the problem, the federal government—so far, at least—has not established a nationwide policy, although the Occupational Safety and Health Administration has begun the long process of working on a heat workplace standard, which could take years until its completed (if ever).

In the interim, protecting workers from the rising temperatures of climate change is being left to states and local jurisdictions.

And, as with many policy issues, the way Blue states and Red states are responding differs tremendously.

California Leads Way on Worker Heat Standards

In 2005, California became the first state to implement an outdoor heat standard in the wake of the deaths of four farmworkers. When temperatures reach 80 degrees, employers must provide shade and water to workers; when temperatures rise to 95, the standard requires more breaks and monitoring.

Since then, Colorado, Minnesota, Oregon and Washington have implemented their own workplace heat standards, although each is a little different. Colorado’s applies to agricultural workers only. Minnesota’s is a heat standard for indoor workers, while Washington’s only applies to outdoor workers. Oregon’s applies to both indoor and outdoor settings.

This July, California enacted a second heat standard, which specifically applies to indoor workers. Under this new regulation, which applies to most indoor workplaces, including restaurants and warehouses, when temperatures reach 82 degrees, employers must provide workers with water, rest and cool-down areas, among other things. The new standard also mandates that employers provide their workers training on the standard and develop an indoor and outdoor heat illness prevention plan (which can be part of a broader Injury and Illness Prevention Plan (IIPP)).

Lawyer Elias Kahn, senior product manager for labor and employment, tax, employee benefits and executive compensation, and federal government, on the Practical Guidance team for LexisNexis®, said the Golden State’s new indoor heat standard reflects understandable growing concerns about workers’ health due to climate change.

“Obviously, it’s becoming hotter and hotter,” he said. “People are feeling it.”

Texas and Florida Block Local Heat Standards

Kahn also noted that Red states are taking a different approach on this issue—and some of them are located in the South, where temperatures are the hottest.

As we reported last year, Texas’s Gov. Greg Abbott (R) signed legislation preempting local rules requiring water breaks for construction workers, effectively banning them. The statewide legislation, known as the “Death Star” bill, knocked out local workplace heat ordinances that Austin, Dallas and San Antonio passed to protect construction workers.

After the bill was passed, several cities filed a lawsuit to stop its implementation. In August 2023, the Texas District Court for Travis County ruled that the bill was unconstitutional, but the Texas attorney general’s office filed an appeal, which stayed the court’s ruling. No date has been set for oral arguments.

The Florida Legislature took a similar tack this year when workers in Miami-Dade County began agitating for a local workplace heat standard. In March, the Republican-dominated Legislature passed a bill preempting local heat standards, which was signed into law by Gov. Ron DeSantis (R) in April. The Legislature also rejected legislation aimed at protecting workers from heat illness (HB 945 and SB 762). (See this survey for more detail on Florida’s, Texas’s, and all other states’ labor and employment preemption laws.)

Only One Local Workplace Heat Standard

Kahn said the only major local jurisdiction he’s aware of that has successfully passed its own workplace heat standard is the city of Phoenix, which in March enacted a mandate—applicable only to city contractors and subcontractors—to provide shade, rest, water and air conditioning for outdoor workers.

This workplace heat standard, passed by the Phoenix City Council, applies only to the city; it is not a state mandate. In fact, the only three bills introduced in the Arizona State Legislature this year dealing with workplace heat protections failed, according to LexisNexis® State Net® data.

More State Workplace Heat Mandates Could Be on Horizon

Five other bills looking to set heat-related standards—two in New Jersey, two in New York and one in Rhode Island—are still pending, according to State Net data. Kahn said he could “definitely see other states following suit” on heat protections, especially given the dramatic temperatures we’ve seen during this summer’s unprecedented heat wave.

But he also noted the partisan divide is likely to continue, with Blue states far more likely to pursue heat standards for workers, even though Red states occupy some of the nation’s

Some States Look to Protect Workers from Heat Illness

At least seven states have considered legislation in the current legislative biennium that would establish standards for preventing heat illness in the workplace. One of those states, Florida, enacted legislation preempting worker heat standards established by local governments.

Proposed Federal OSHA Workplace Heat Standard

Kahn also said OSHA recently set out a proposed indoor and outdoor workplace heat standard that would apply to employers across the country. If enacted, the OSHA standard would be triggered when the temperature reaches 80 degrees. Once the temperature hits this point, employers would have to “allow and encourage employees to take paid rest breaks” as “needed to prevent overheating”, and provide cool drinking water, shaded break areas, and increased air movement. If the temperature reaches 90 degrees, employers would have to provide paid 15-minute rest breaks every two hours, a hazard alert, and employee monitoring through a buddy system where coworkers observe each other, or a heat safety coordinator or supervisor observes the employee. Like California, the proposed federal OSHA heat standard would require training for employees and a written heat injury and illness prevention plan.

Kahn explained that this OSHA workplace heat regulation would likely not go into effect until 2026 (at the earliest), and if Donald Trump becomes president, it is likely his administration would quash the regulation. Furthermore, employers and business organizations will almost certainly challenge the OSHA heat standard in court. So, Kahn said “it still might be up to the states to help workers beat the heat.”

—By SNCJ Correspondent BRIAN JOSEPH

AI at NCSL Summit, AI Enactments in IL & More

Alyzza Austriaco — Wed, 14 Aug 2024 16:42:00 GMT

AI Big Issue at NCSL Summit

Artificial intelligence was a major focus of the National Conference of State Legislatures’ 2024 Summit in Louisville last week, with 10 sessions devoted to various aspects of the issue. And while 2024 seemed like the year of AI in state legislatures, particularly with the passage of first-in-the-nation comprehensive AI legislation in Colorado (SB 205), it may just be a preview of what’s to come in 2025.

Pluribus News Staff Writer Austin Jenkins, who attended the summit, said he thinks some version of Colorado’s groundbreaking AI legislation may be “in the works” in “a dozen more states in 2025.” He said lawmakers are talking with each other in red states and blue states, formally and informally, and they’re trying to avoid repeating the mistakes of the data privacy wars by being more coordinated.

He also said, “California may still very well go its own way, and then you may have a bunch of other states doing something else, so I’m not sure it’s going to look that different in the end.” But he added: “the thing that I think is so interesting is that legislators are communicating across state lines and across party lines about this. They may not write the same bills but they’re saying let’s be smart about this because if you are doing a patchwork of laws, it probably makes sense to have some agreement about like just what is the definition of AI.” (PLURIBUS NEWS, NATIONAL CONFERENCE OF STATE LEGISLATURES, LEXISNEXIS STATE NET)

IL Gov Signs Multiple AI Bills

Illinois Gov. J.B. Pritzker (D) signed multiple bills dealing with artificial intelligence. They include a measure protecting employees from AI-related discrimination in the workplace and requiring transparency about the use of AI in employment-related decision-making (HB 3773) and a measure protecting performers from the wrongful use of digital replicas of their voices (HB 4762). (CENTER SQUARE)

More Kid’s Data Privacy Legislation Coming in 2025

Minnesota Rep. Kristin Bahner (D) said she will sponsor children’s online safety legislation again next year and lawmakers in a half-dozen other states may do the same. Legislation inspired by the Age-Appropriate Design Code law passed in California in 2022 came up short last year in Minnesota, as well as Hawaii, Illinois, New Mexico and South Carolina. But a version of the law was enacted this year in Maryland (HB 603). (PLURIBUS NEWS, LEXISNEXIS STATE NET)

—Compiled by SNCJ Managing Editor KOREY CLARK

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Moratorium on Some Homeowners’ Insurance Policy Cancellations in CA, LA Tackling High Insurance Rates & More

Alyzza Austriaco — Wed, 14 Aug 2024 13:46:00 GMT

CA Insurance Commissioner Orders Moratorium on Cancellations for Fire-Impacted Homeowners

California Insurance Commissioner Ricardo Lara issued a one-year moratorium on the cancellation or non-renewal of residential insurance coverage for more than 185,000 policyholders impacted by recent major fires in the state. The moratorium shields homeowners within the perimeters or adjoining ZIP codes of the fires for one year regardless of whether they suffered a loss. (INSURANCE JOURNAL)

LA Addressing High Insurance Rates

Five Louisiana legislative committees with oversight of insurance met last week to discuss the causes of and potential solutions for the state’s high insurance rates. The state’s Legislature is expected to meet in a special session on insurance issues in 2025. (LOUISIANA ILLUMINATOR)

Anti-DEI Investor Resolutions on Rise

As the backlash against diversity, equity and inclusion, or DEI, investing has intensified in the United States, the number of resolutions companies have been receiving from investors urging them to abandon their support of DEI programs has also been rising, with 42 such anti-DEI resolutions having been filed this year, up from just one three years ago. But for now, pro-DEI resolutions still outnumber anti-DEI resolutions. (INSURANCE JOURNAL)

—Compiled by SNCJ Managing Editor KOREY CLARK

State Lawmakers Turn Attention to Pharmacy Benefit Managers

Mary Anne Peck — Tue, 13 Aug 2024 09:15:00 GMT

A recent analysis by the website GoodRx found that the cost of prescription drugs in the United States has risen 37 percent over the past decade, outstripping inflation.

Drug companies, insurers and the government often take the blame for these skyrocketing prices. But a recent New York Times investigation points to another culprit: pharmacy benefit managers, intermediaries between drug companies and insurers, which the newspaper found drive up the cost of prescriptions.

Pharmacy benefit managers, otherwise known as PBMs, contract with health insurers and employers to manage the prescription drug benefits of millions of Americans.

They handle a variety of tasks, from maintaining formularies to processing claims—and they’ve been a target of state legislators for years. According to the National Academy for State Health Policy, by late 2023, all 50 states had passed at least some legislation regulating PBMs.

But that seems to have been just the beginning. Since the start of 2024, more than 100 bills dealing substantively with PBMs have been introduced in 20 states, according to the LexisNexis® State Net® legislative tracking system. A number of those bills have failed, but 13 were signed into law, and others are pending.

PBMs might “often escape attention” as the New York Times put it, but they’re squarely in the sights of state legislators.

Recently Enacted Bills Regulating Basic PBM Practices

The bills that have been enacted generally regulate the behavior of PBMs. They include:

Louisiana SB 444 and West Virginia SB 453, both of which govern reimbursements by PBMs, and Oregon HB 4113, which mandates that PBMs count payments made by or on behalf of an enrollee for prescription drugs when determining the enrollee’s contribution to out-of-pocket deductibles and maximums.

Idaho HB 596, which limits charges for PBMs, and Iowa HB 2099, which requires PBMs to operate in good faith and prohibits them from retaliating against pharmacies.

New Hampshire SB 557, which prohibits discrimination by PBMs, and Kentucky SB 188, which ensures that PBMS establish reasonably accessible pharmacy networks.

While these bills may seem to be basic in nature, they reflect the still-emerging landscape of PBM regulation. As the U.S. Government Accountability Office noted in a March 2024 study, “researchers and stakeholders have questioned certain PBM practices,” leading to a recent deluge of legislation.

GAO researchers found that some state-level regulators “stressed the need for robust enforcement of PBM laws and effective penalties to enforce them,” suggesting that there are still wide swaths of this burgeoning policy area that need oversight.

As an example of just how much regulation still remains to be enacted around this issue, the New York Legislature recently passed SB 9040, which would bar PBMs from penalizing pharmacies for giving customers information about the costs of prescription medications—perhaps one of the most basic services a pharmacy provides, but one that is still imperiled under current practices.

SB 9040 awaits action by New York Gov. Kathy Hocul (D).

State Legislatures Focusing on PBMs

At least 26 states have considered bills dealing substantively with pharmacy benefit managers in the current legislative biennium, according to the LexisNexis State Net legislative tracking system. Half of those states have enacted such measures.

PBMs Could Continue to Draw Lawmakers’ Attention

According to State Net® data, a little more than 60 bills focusing on PBMs remain pending in eight states: California, Illinois, Massachusetts, New Hampshire, New York, Ohio, Pennsylvania and Rhode Island.

Like the bills mentioned above, these pending proposals would regulate a litany of PBM practices and behaviors, covering such issues as rebates, supply chain transparency and in-network drug costs.

In addition to solving practical problems, these bills also seem to be politically popular.

“Pennsylvanians are getting screwed by the high cost of prescription drugs and too many rural pharmacies have been forced to close their doors, while the few PBMs that dominate the market are raking in billions,” Pennsylvania Gov. Josh Shapiro (D) said in a press release after signing HB 1993 to address pharmacy benefit transparency. “My Administration is doing everything in our power to cut costs and put money back in their pockets so they can receive the medication they need to live healthy lives while supporting our communities.”

More legislation is likely on the horizon for 2025 and beyond, as PBMs are growing in influence and power. As the New York Times reported, due to recent mergers, the three largest PBMs, CVS Health’s Caremark, UnitedHealth’s Optum Rx and Cigna’s Express Scripts, “are becoming more dominant, collectively processing roughly 80 percent of prescriptions in the United States. In 2012, the figure was less than 50 percent.”

The Times noted that all three PBMs are owned by health care conglomerates, but if they were standalone companies, they “would each rank among the top 40 U.S. companies by revenue. The largest, Caremark, generates more revenue than Ford or Home Depot.”

According to the National Academy for State Health Policy, states only started regulating PBMs in 2017—just seven years ago. With the added attention from the Times and other media outlets, this could be a policy priority for lawmakers for years to come.

—By SNCJ Correspondent BRIAN JOSEPH

Gig-Driver Ballot Measure Upheld in CA & Call for FTC Investigation of Driver Data Collection

Alyzza Austriaco — Tue, 30 Jul 2024 14:51:00 GMT

CA High Court Upholds Gig-Economy Ballot Measure

California’s Supreme Court ruled that a ballot measure passed by the state’s voters in 2020, allowing Uber, Lyft and DoorDash to continue classifying their California drivers as independent contractors, did not limit the Legislature’s authority over worker protections. The gig-economy companies backed the measure, Proposition 22, to avoid having to reclassify those workers as employees, potentially costing them millions of dollars more to operate in one of their largest U.S. markets. (INSURANCE JOURNAL)

Federal Lawmakers Call for FTC Investigation of Driver Data Collection

U.S. Sens. Ron Wyden (D-OR) and Sen. Edward J. Markey (D-MA) sent a letter urging the Federal Trade Commission to investigate the collection and sharing of driver data by the auto industry. An investigation by Wyden’s office found that automakers have made relatively little from selling such data. Hyundai received $1 million, or just 61 cents per car, over six years from selling driver data to the analytics company Verisk, which sold the information to the insurance industry. Honda made only $25,920, or just 26 cents per car, over four years. (NEW YORK TIMES)

—Compiled by SNCJ Managing Editor KOREY CLARK

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MT Follows Nonprofit Hospital Oversight Trend & PBM Bill in MA

Alyzza Austriaco — Tue, 30 Jul 2024 14:49:00 GMT

MT Follows Trend of States Increasing Oversight of Nonprofit Hospitals

The Montana Department of Public Health has proposed rules regarding the collection of data on nonprofit hospitals’ charitable acts, including discounting prices and conducting free health screenings. If the rules are adopted in August as officials expect, Montana would become part of a national trend of states seeking to fill gaps in federal oversight, with 10 states having required nonprofit hospitals to create community benefit plans and 25 states having mandated that such facilities make their financial assistance policies public. (KFF HEALTH NEWS)

Bill Regulating PBM Practices Goes to Conference Committee in MA

The Massachusetts House passed a bill (SB 2520) last week that would ban or limit pharmacy benefit managers’ use of spread pricing, rebates and clawbacks. The Senate refused to concur with House amendments, however, so the measure was sent to a conference committee, with the state’s regular session set to end on July 31. (BOSTON HERALD, LEXISNEXIS STATE NET)

—Compiled by SNCJ Managing Editor KOREY CLARK

Ozempic’s Popularity Spurs Renewed Interest in Off-Label Prescriptions

Mary Anne Peck — Tue, 30 Jul 2024 07:11:00 GMT

In case you haven’t noticed, we’re in the midst of an Ozempic boom.

Exploding demand for the weight-loss drug has sent the value of its manufacturer, Novo Nordisk, to the moon and the buzz shows no signs of diminishing.

Ozempic’s active ingredient, semaglutide—also found in the equally popular drug Wegovy—is a glucagon-like peptide-1 or GLP-1 receptor agonist approved by the Federal Drug Administration for the treatment of chronic weight issues.

But the benefits of semaglutide may extend far beyond its headline-grabbing attributes. In March, the FDA approved semaglutide injections “to reduce the risk of cardiovascular death, heart attack and stroke in adults with cardiovascular disease and either obesity or overweight,” while new studies have found that the ingredient may also be used to treat dementia, pancreatitis, and polycystic ovary syndrome.

These potential additional benefits of the hottest drug of the moment have revived discussions of an often-debated subject in medicine: the off-label use of prescription drugs.

Off-Label Prescribing Common Practice

The FDA does not regulate the practice of medicine; it regulates medical devices and prescription drugs. So doctors are free to prescribe medications for health conditions or at doses not approved by the FDA, although the practice can sometimes open practitioners to liability claims.

Still, the off-label use of medicine is widely accepted as a beneficial practice. About 21 percent of all prescriptions are for off-label uses.

While pharmaceutical companies are barred from labelling and marketing their drugs for off-label use, they can obtain FDA approval for doing so. Most companies, however, don’t pursue that path because of the cost and time involved.

So off-label uses exist in something of a gray area, employed by doctors on their accord, typically after reviewing studies documenting their effectiveness in treating conditions other than those the FDA has approved.

In a May 2023 article in The Geneva Papers on Risk and Insurance–Issues and Practices, Andrea Parziale of the Netherlands’s Maastricht University explained how vital that practice was during the COVID-19 pandemic, as experimentation was essential to managing the public health emergency.

“(O)ff-label research is key to reducing uncertainties and protecting patients and is recommended by international ethics,” Parziale wrote.

Risk of Off-Label Prescribing

A recent U.S. Supreme Court case illustrates the somewhat tenuous nature of off-label prescribing practices. In March, the Supreme Court rejected a challenge of the FDA’s approval of mifepristone, an abortion drug. The challenge was caught up in the nation’s on-going culture wars over abortion. But had a ban against the drug been upheld, it would have impacted the medicine’s availability for other uses, such as treating miscarriages and Cushing’s Syndrome, as well as pregnancy complications like ectopic pregnancy and preeclampsia.

The threat of liability also looms. In 2006, Maryland psychiatrist Dr. Peter Gleason was charged for promoting the use of Xyrem, a narcolepsy drug, to treat anxiety and depression. Gleason pleaded to a federal misdemeanor, was fined $25 and sentenced to one-year probation in 2010.

But the ordeal left him destitute, and faced with state medical board disciplinary proceedings, he committed suicide. In a November 2021 article in the Journal of the American Academy of Psychiatry and the Law, Shariful Syed of Stony Brook University Medical Center and several coauthors write that his off-label use of Xyrem was “entirely lawful.”

State Lawmakers Aim to Protect Off-Label Prescribing

To protect doctors’ use of off-label prescriptions in their state, Alabama lawmakers recently passed and Gov. Kay Ivey (R) signed SB 72, preventing the Alabama Board of Medical Examiners and the Medical Licensure Commission of Alabama from taking action against a physician for prescribing off-label treatments.

“This bill just allowed a doctor to do what they’re already doing without any fear of reprisal from the State Medical Board,” SB 72’s sponsor, Sen. Arthur Orr (R), said in an interview with the Alabama Reflector.

At least a dozen other states have also considered legislation dealing substantively with “off-label” use of prescription drugs, according to LexisNexis® State Net® legislative tracking system.

In New Jersey, for example, AB 1236 would grant terminally ill patients access to “investigational and off-label treatments.” That bill is pending.

Bills dealing directly with off-label practices also failed this year in Louisiana (HB 813), Maryland (HB 1132), Mississippi (HB 1601), South Carolina (HB 4684) and South Dakota (HB 1168).

Off-Label Drug Use Bills Considered in Over Dozen States

At least 13 states have considered bills dealing substantively with off-label use of prescription drugs in the current legislative biennium, according to the LexisNexis® State Net® legislative tracking system. Two of those states have enacted such bills.

Potential Problems Ahead for GLP-1 Drugs

Dr. Chun-Su Yuan, the Cyrus Tang Professor of Anesthesia and Critical Care at the University of Chicago, said the off-label use of GLP-1 drugs could potentially expand much more due to America’s “national obsession” with weight loss.

Yuan said the drugs are effective at reducing weight, but are still being studied, leading to uncertainty about their use under certain conditions—such as obesity without other medical concerns—and their long-term impacts.

But America’s obsession with weight loss could cause a run on GLP-1 drugs, he said, endangering their supply. He also noted insurance companies might not pay for them, and the increased interest in the drug could lead to more counterfeits flooding the market, which could be dangerous for patients.

“Off-label use could be a big problem,” Yuan said. “I don’t know.”

—By SNCJ Correspondent BRIAN JOSEPH