2018 Advocacy Summit Proposal Appendix

2018 SESSION

INTRODUCED

18102670D INTRODUCED 1 SENATE BILL NO. 732 2 Offered January 10, 2018 3 Prefiled January 10, 2018 4 A BILL to amend and reenact §§ 18.2-308.09, 18.2-308.2:1, 18.2-308.2:2, 18.2-308.2:3, and 19.2-386.28 5 of the Code of Virginia and to amend the Code of Virginia by adding a section numbered 6 18.2-308.1:6, relating to purchase, possession, and transport of firearms following certain 7 convictions; permit to restore rights; penalties. 8 ±±±±±±±±±± Patron±±Favola 9 ±±±±±±±±±± 10 Referred to Committee for Courts of Justice 11 ±±±±±±±±±± 12 Be it enacted by the General Assembly of Virginia: 13 1. That §§ 18.2-308.09, 18.2-308.2:1, 18.2-308.2:2, 18.2-308.2:3, and 19.2-386.28 of the Code of 14 Virginia are amended and reenacted and that the Code of Virginia is amended by adding a section 15 numbered 18.2-308.1:6 as follows: 16 § 18.2-308.09. Disqualifications for a concealed handgun permit. 17 The following persons shall be deemed disqualified from obtaining a permit: 18 1. An individual who is ineligible to possess a firearm pursuant to § 18.2-308.1:1, 18.2-308.1:2, or 19 18.2-308.1:3, or 18.2-308.1:6 or the substantially similar law of any other state or of the United States. 20 2. An individual who was ineligible to possess a firearm pursuant to § 18.2-308.1:1 and who was 21 discharged from the custody of the Commissioner pursuant to § 19.2-182.7 less than five years before

22 the date of his application for a concealed handgun permit. SB732 23 3. An individual who was ineligible to possess a firearm pursuant to § 18.2-308.1:2 and whose 24 competency or capacity was restored pursuant to § 64.2-2012 less than five years before the date of his 25 application for a concealed handgun permit. 26 4. An individual who was ineligible to possess a firearm under § 18.2-308.1:3 and who was released 27 from commitment less than five years before the date of this application for a concealed handgun 28 permit. 29 5. An individual who is subject to a restraining order, or to a protective order and prohibited by 30 § 18.2-308.1:4 from purchasing, possessing, or transporting a firearm. 31 6. An individual who is prohibited by § 18.2-308.2 from possessing or transporting a firearm, except 32 that a permit may be obtained in accordance with subsection C of that section. 33 7. An individual who has been convicted of two or more misdemeanors within the five-year period 34 immediately preceding the application, if one of the misdemeanors was a Class 1 misdemeanor, but the 35 judge shall have the discretion to deny a permit for two or more misdemeanors that are not Class 1.

9:57 36 Traffic infractions and misdemeanors set forth in Title 46.2 shall not be considered for purposes of this 37 disqualification. 38 8. An individual who is addicted to, or is an unlawful user or distributor of, marijuana, synthetic

1/17/18 39 cannabinoids, or any controlled substance. 40 9. An individual who has been convicted of a violation of § 18.2-266 or a substantially similar local 41 ordinance, or of public drunkenness, or of a substantially similar offense under the laws of any other 42 state, the District of Columbia, the United States, or its territories within the three-year period 43 immediately preceding the application, or who is a habitual drunkard as determined pursuant to 44 § 4.1-333. 45 10. An alien other than an alien lawfully admitted for permanent residence in the United States. 46 11. An individual who has been discharged from the armed forces of the United States under 47 dishonorable conditions. 48 12. An individual who is a fugitive from justice. 49 13. An individual who the court finds, by a preponderance of the evidence, based on specific acts by 50 the applicant, is likely to use a weapon unlawfully or negligently to endanger others. The sheriff, chief 51 of police, or attorney for the Commonwealth may submit to the court a sworn, written statement 52 indicating that, in the opinion of such sheriff, chief of police, or attorney for the Commonwealth, based 53 upon a disqualifying conviction or upon the specific acts set forth in the statement, the applicant is 54 likely to use a weapon unlawfully or negligently to endanger others. The statement of the sheriff, chief 55 of police, or the attorney for the Commonwealth shall be based upon personal knowledge of such 56 individual or of a deputy sheriff, police officer, or assistant attorney for the Commonwealth of the 57 specific acts, or upon a written statement made under oath before a notary public of a competent person 58 having personal knowledge of the specific acts. SB732 2 of 7

59 14. An individual who has been convicted of any assault, assault and battery, sexual battery, 60 discharging of a firearm in violation of § 18.2-280 or 18.2-286.1 or brandishing of a firearm in 61 violation of § 18.2-282 within the three-year period immediately preceding the application. 62 15. An individual who has been convicted of stalking. 63 16. An individual whose previous convictions or adjudications of delinquency were based on an 64 offense that would have been at the time of conviction a felony if committed by an adult under the laws 65 of any state, the District of Columbia, the United States or its territories. For purposes of this 66 disqualifier, only convictions occurring within 16 years following the later of the date of (i) the 67 conviction or adjudication or (ii) release from any incarceration imposed upon such conviction or 68 adjudication shall be deemed to be "previous convictions." Disqualification under this subdivision shall 69 not apply to an individual with previous adjudications of delinquency who has completed a term of 70 service of no less than two years in the Armed Forces of the United States and, if such person has been 71 discharged from the Armed Forces of the United States, received an honorable discharge. 72 17. An individual who has a felony charge pending or a charge pending for an offense listed in 73 subdivision 14 or 15. 74 18. An individual who has received mental health treatment or substance abuse treatment in a 75 residential setting within five years prior to the date of his application for a concealed handgun permit. 76 19. An individual not otherwise ineligible pursuant to this article, who, within the three-year period 77 immediately preceding the application for the permit, was found guilty of any criminal offense set forth 78 in Article 1 (§ 18.2-247 et seq.) or former § 18.2-248.1:1 or of a criminal offense of illegal possession 79 or distribution of marijuana, synthetic cannabinoids, or any controlled substance, under the laws of any 80 state, the District of Columbia, or the United States or its territories. 81 20. An individual, not otherwise ineligible pursuant to this article, with respect to whom, within the 82 three-year period immediately preceding the application, upon a charge of any criminal offense set forth 83 in Article 1 (§ 18.2-247 et seq.) or former § 18.2-248.1:1 or upon a charge of illegal possession or 84 distribution of marijuana, synthetic cannabinoids, or any controlled substance under the laws of any 85 state, the District of Columbia, or the United States or its territories, the trial court found that the facts 86 of the case were sufficient for a finding of guilt and disposed of the case pursuant to § 18.2-251 or the 87 substantially similar law of any other state, the District of Columbia, or the United States or its 88 territories. 89 § 18.2-308.1:6. Purchase, possession, or transportation of firearms following certain criminal 90 convictions; process to restore rights; penalty. 91 A. 1. Any person who knowingly and intentionally purchases, possesses, or transports any firearm 92 following a misdemeanor conviction for an offense that occurred on or after July 1, 2018, for the 93 offense of (i) stalking in violation of § 18.2-60.3, (ii) sexual battery in violation of § 18.2-67.4, (iii) 94 assault and battery of a family or household member, (iv) brandishing a firearm in violation of 95 § 18.2-282, or (v) any offense substantially similar to clause (i), (ii), (iii), or (iv) in the laws of any 96 other state or of the United States is guilty of a Class 1 misdemeanor. 97 2. Any person who knowingly and intentionally purchases, possesses, or transports any firearm 98 following two or more misdemeanor convictions for offenses that occurred on or after July 1, 2018, for 99 the offense of (i) assault and battery in violation of § 18.2-57 or (ii) any offense substantially similar to 100 clause (i) in the laws of any other state or of the United States is guilty of a Class 1 misdemeanor. 101 B. Any person prohibited from purchasing, possessing, or transporting a firearm described under this 102 section may, no earlier than two years from the date of conviction, petition the circuit court of the 103 jurisdiction in which he resides, or the circuit court of the county or city where he was last convicted of 104 an offense listed in subsection A, for a permit to possess or carry a firearm. A copy of the petition shall 105 be mailed or delivered to the attorney for the Commonwealth for the jurisdiction where the petition was 106 filed, who shall be entitled to respond and represent the interests of the Commonwealth. The court shall 107 conduct a hearing if requested by either party. The court may, in its discretion and for good cause 108 shown, grant such petition and issue a permit. The prohibitions of subsection A shall not apply to any 109 person who has been granted a permit pursuant to this subsection. The clerk of court shall certify and 110 forward forthwith to the Central Criminal Records Exchange, on a form provided by the Exchange, a 111 copy of any such order. 112 C. For the purposes of this section, "family or household member" has the same meaning as in 113 § 16.1-228. 114 § 18.2-308.2:1. Prohibiting the selling, etc., of firearms to certain persons. 115 Any person who sells, barters, gives or furnishes, or has in his possession or under his control with 116 the intent of selling, bartering, giving or furnishing, any firearm to any person he knows is prohibited 117 from possessing or transporting a firearm pursuant to § 18.2-308.1:1, 18.2-308.1:2, 18.2-308.1:3, 118 18.2-308.1:6, 18.2-308.2, subsection B of § 18.2-308.2:01, or § 18.2-308.7 shall be is guilty of a Class 119 4 felony. However, this prohibition shall not be applicable when the person convicted of the felony or 120 misdemeanor, adjudicated delinquent or acquitted by reason of insanity has (i) been issued a permit 3 of 7

121 pursuant to subsection C of § 18.2-308.2 or subsection B of § 18.2-308.1:6 or been granted relief

122 pursuant to subsection B of § 18.2-308.1:1, or § 18.2-308.1:2 or 18.2-308.1:3; (ii) been pardoned or had INTRODUCED 123 his political disabilities removed in accordance with subsection B of § 18.2-308.2; or (iii) obtained a 124 permit to ship, transport, possess or receive firearms pursuant to the laws of the United States. 125 § 18.2-308.2:2. Criminal history record information check required for the transfer of certain 126 firearms. 127 A. Any person purchasing from a dealer a firearm as herein defined shall consent in writing, on a 128 form to be provided by the Department of State Police, to have the dealer obtain criminal history record 129 information. Such form shall include only the written consent; the name, birth date, gender, race, 130 citizenship, and social security number and/or any other identification number; the number of firearms 131 by category intended to be sold, rented, traded, or transferred; and answers by the applicant to the 132 following questions: (i) has the applicant been convicted of a felony offense or a misdemeanor listed in 133 § 18.2-308.1:6 or found guilty or adjudicated delinquent as a juvenile 14 years of age or older at the 134 time of the offense of a delinquent act that if committed by an adult would be a felony if committed by 135 an adult or is a misdemeanor listed in § 18.2-308.1:6; (ii) is the applicant subject to a court order 136 restraining the applicant from harassing, stalking, or threatening the applicant©s child or intimate partner, 137 or a child of such partner, or is the applicant subject to a protective order; and (iii) has the applicant 138 ever been acquitted by reason of insanity and prohibited from purchasing, possessing or transporting a 139 firearm pursuant to § 18.2-308.1:1 or any substantially similar law of any other jurisdiction, been 140 adjudicated legally incompetent, mentally incapacitated or adjudicated an incapacitated person and 141 prohibited from purchasing a firearm pursuant to § 18.2-308.1:2 or any substantially similar law of any 142 other jurisdiction, or been involuntarily admitted to an inpatient facility or involuntarily ordered to 143 outpatient mental health treatment and prohibited from purchasing a firearm pursuant to § 18.2-308.1:3 144 or any substantially similar law of any other jurisdiction.

145 B. 1. No dealer shall sell, rent, trade or transfer from his inventory any such firearm to any other SB732 146 person who is a resident of Virginia until he has (i) obtained written consent and the other information 147 on the consent form specified in subsection A, and provided the Department of State Police with the 148 name, birth date, gender, race, citizenship, and social security and/or any other identification number and 149 the number of firearms by category intended to be sold, rented, traded or transferred and (ii) requested 150 criminal history record information by a telephone call to or other communication authorized by the 151 State Police and is authorized by subdivision 2 to complete the sale or other such transfer. To establish 152 personal identification and residence in Virginia for purposes of this section, a dealer must require any 153 prospective purchaser to present one photo-identification form issued by a governmental agency of the 154 Commonwealth or by the United States Department of Defense that demonstrates that the prospective 155 purchaser resides in Virginia. For the purposes of this section and establishment of residency for firearm 156 purchase, residency of a member of the armed forces shall include both the state in which the member©s 157 permanent duty post is located and any nearby state in which the member resides and from which he 158 commutes to the permanent duty post. A member of the armed forces whose photo identification issued 159 by the Department of Defense does not have a Virginia address may establish his Virginia residency 160 with such photo identification and either permanent orders assigning the purchaser to a duty post, 161 including the Pentagon, in Virginia or the purchaser©s Leave and Earnings Statement. When the photo 162 identification presented to a dealer by the prospective purchaser is a driver©s license or other photo 163 identification issued by the Department of Motor Vehicles, and such identification form contains a date 164 of issue, the dealer shall not, except for a renewed driver©s license or other photo identification issued by 165 the Department of Motor Vehicles, sell or otherwise transfer a firearm to the prospective purchaser until 166 30 days after the date of issue of an original or duplicate driver©s license unless the prospective 167 purchaser also presents a copy of his Virginia Department of Motor Vehicles driver©s record showing 168 that the original date of issue of the driver©s license was more than 30 days prior to the attempted 169 purchase. 170 In addition, no dealer shall sell, rent, trade, or transfer from his inventory any assault firearm to any 171 person who is not a citizen of the United States or who is not a person lawfully admitted for permanent 172 residence. 173 Upon receipt of the request for a criminal history record information check, the State Police shall (a) 174 review its criminal history record information to determine if the buyer or transferee is prohibited from 175 possessing or transporting a firearm by state or federal law, (b) inform the dealer if its record indicates 176 that the buyer or transferee is so prohibited, and (c) provide the dealer with a unique reference number 177 for that inquiry. 178 2. The State Police shall provide its response to the requesting dealer during the dealer©s request, or 179 by return call without delay. If the criminal history record information check indicates the prospective 180 purchaser or transferee has a disqualifying criminal record or has been acquitted by reason of insanity 181 and committed to the custody of the Commissioner of Behavioral Health and Developmental Services, SB732 4 of 7

182 the State Police shall have until the end of the dealer©s next business day to advise the dealer if its 183 records indicate the buyer or transferee is prohibited from possessing or transporting a firearm by state 184 or federal law. If not so advised by the end of the dealer©s next business day, a dealer who has fulfilled 185 the requirements of subdivision 1 may immediately complete the sale or transfer and shall not be 186 deemed in violation of this section with respect to such sale or transfer. In case of electronic failure or 187 other circumstances beyond the control of the State Police, the dealer shall be advised immediately of 188 the reason for such delay and be given an estimate of the length of such delay. After such notification, 189 the State Police shall, as soon as possible but in no event later than the end of the dealer©s next business 190 day, inform the requesting dealer if its records indicate the buyer or transferee is prohibited from 191 possessing or transporting a firearm by state or federal law. A dealer who fulfills the requirements of 192 subdivision 1 and is told by the State Police that a response will not be available by the end of the 193 dealer©s next business day may immediately complete the sale or transfer and shall not be deemed in 194 violation of this section with respect to such sale or transfer. 195 3. Except as required by subsection D of § 9.1-132, the State Police shall not maintain records longer 196 than 30 days, except for multiple handgun transactions for which records shall be maintained for 12 197 months, from any dealer©s request for a criminal history record information check pertaining to a buyer 198 or transferee who is not found to be prohibited from possessing and transporting a firearm under state or 199 federal law. However, the log on requests made may be maintained for a period of 12 months, and such 200 log shall consist of the name of the purchaser, the dealer identification number, the unique approval 201 number and the transaction date. 202 4. On the last day of the week following the sale or transfer of any firearm, the dealer shall mail or 203 deliver the written consent form required by subsection A to the Department of State Police. The State 204 Police shall immediately initiate a search of all available criminal history record information to 205 determine if the purchaser is prohibited from possessing or transporting a firearm under state or federal 206 law. If the search discloses information indicating that the buyer or transferee is so prohibited from 207 possessing or transporting a firearm, the State Police shall inform the chief law-enforcement officer in 208 the jurisdiction where the sale or transfer occurred and the dealer without delay. 209 5. Notwithstanding any other provisions of this section, rifles and shotguns may be purchased by 210 persons who are citizens of the United States or persons lawfully admitted for permanent residence but 211 residents of other states under the terms of subsections A and B upon furnishing the dealer with one 212 photo-identification form issued by a governmental agency of the person©s state of residence and one 213 other form of identification determined to be acceptable by the Department of Criminal Justice Services. 214 6. For the purposes of this subsection, the phrase "dealer©s next business day" shall not include 215 December 25. 216 C. No dealer shall sell, rent, trade or transfer from his inventory any firearm, except when the 217 transaction involves a rifle or a shotgun and can be accomplished pursuant to the provisions of 218 subdivision B 5 to any person who is not a resident of Virginia unless he has first obtained from the 219 Department of State Police a report indicating that a search of all available criminal history record 220 information has not disclosed that the person is prohibited from possessing or transporting a firearm 221 under state or federal law. The dealer shall obtain the required report by mailing or delivering the 222 written consent form required under subsection A to the State Police within 24 hours of its execution. If 223 the dealer has complied with the provisions of this subsection and has not received the required report 224 from the State Police within 10 days from the date the written consent form was mailed to the 225 Department of State Police, he shall not be deemed in violation of this section for thereafter completing 226 the sale or transfer. 227 D. Nothing herein shall prevent a resident of the Commonwealth, at his option, from buying, renting 228 or receiving a firearm from a dealer in Virginia by obtaining a criminal history record information check 229 through the dealer as provided in subsection C. 230 E. If any buyer or transferee is denied the right to purchase a firearm under this section, he may 231 exercise his right of access to and review and correction of criminal history record information under 232 § 9.1-132 or institute a civil action as provided in § 9.1-135, provided any such action is initiated within 233 30 days of such denial. 234 F. Any dealer who willfully and intentionally requests, obtains, or seeks to obtain criminal history 235 record information under false pretenses, or who willfully and intentionally disseminates or seeks to 236 disseminate criminal history record information except as authorized in this section shall be guilty of a 237 Class 2 misdemeanor. 238 G. For purposes of this section: 239 "Actual buyer" means a person who executes the consent form required in subsection B or C, or 240 other such firearm transaction records as may be required by federal law. 241 "Antique firearm" means: 242 1. Any firearm (including any firearm with a matchlock, flintlock, percussion cap, or similar type of 243 ignition system) manufactured in or before 1898; 5 of 7

244 2. Any replica of any firearm described in subdivision 1 of this definition if such replica (i) is not

245 designed or redesigned for using rimfire or conventional centerfire fixed ammunition or (ii) uses rimfire INTRODUCED 246 or conventional centerfire fixed ammunition that is no longer manufactured in the United States and that 247 is not readily available in the ordinary channels of commercial trade; 248 3. Any muzzle-loading rifle, muzzle-loading shotgun, or muzzle-loading pistol that is designed to use 249 black powder, or a black powder substitute, and that cannot use fixed ammunition. For purposes of this 250 subdivision, the term "antique firearm" shall not include any weapon that incorporates a firearm frame 251 or receiver, any firearm that is converted into a muzzle-loading weapon, or any muzzle-loading weapon 252 that can be readily converted to fire fixed ammunition by replacing the barrel, bolt, breech-block, or any 253 combination thereof; or 254 4. Any curio or relic as defined in this subsection. 255 "Assault firearm" means any semi-automatic center-fire rifle or pistol which expels single or multiple 256 projectiles by action of an explosion of a combustible material and is equipped at the time of the 257 offense with a magazine which will hold more than 20 rounds of ammunition or designed by the 258 manufacturer to accommodate a silencer or equipped with a folding stock. 259 "Curios or relics" means firearms that are of special interest to collectors by reason of some quality 260 other than is associated with firearms intended for sporting use or as offensive or defensive weapons. To 261 be recognized as curios or relics, firearms must fall within one of the following categories: 262 1. Firearms that were manufactured at least 50 years prior to the current date, which use rimfire or 263 conventional centerfire fixed ammunition that is no longer manufactured in the United States and that is 264 not readily available in the ordinary channels of commercial trade, but not including replicas thereof; 265 2. Firearms that are certified by the curator of a municipal, state, or federal museum that exhibits 266 firearms to be curios or relics of museum interest; and 267 3. Any other firearms that derive a substantial part of their monetary value from the fact that they

268 are novel, rare, bizarre, or because of their association with some historical figure, period, or event. SB732 269 Proof of qualification of a particular firearm under this category may be established by evidence of 270 present value and evidence that like firearms are not available except as collectors© items, or that the 271 value of like firearms available in ordinary commercial channels is substantially less. 272 "Dealer" means any person licensed as a dealer pursuant to 18 U.S.C. § 921 et seq. 273 "Firearm" means any handgun, shotgun, or rifle that will or is designed to or may readily be 274 converted to expel single or multiple projectiles by action of an explosion of a combustible material. 275 "Handgun" means any pistol or revolver or other firearm originally designed, made and intended to 276 fire single or multiple projectiles by means of an explosion of a combustible material from one or more 277 barrels when held in one hand. 278 "Lawfully admitted for permanent residence" means the status of having been lawfully accorded the 279 privilege of residing permanently in the United States as an immigrant in accordance with the 280 immigration laws, such status not having changed. 281 H. The Department of Criminal Justice Services shall promulgate regulations to ensure the identity, 282 confidentiality and security of all records and data provided by the Department of State Police pursuant 283 to this section. 284 I. The provisions of this section shall not apply to (i) transactions between persons who are licensed 285 as firearms importers or collectors, manufacturers or dealers pursuant to 18 U.S.C. § 921 et seq.; (ii) 286 purchases by or sales to any law-enforcement officer or agent of the United States, the Commonwealth 287 or any local government, or any campus police officer appointed under Article 3 (§ 23.1-809 et seq.) of 288 Chapter 8 of Title 23.1; or (iii) antique firearms, curios or relics. 289 J. The provisions of this section shall not apply to restrict purchase, trade or transfer of firearms by a 290 resident of Virginia when the resident of Virginia makes such purchase, trade or transfer in another 291 state, in which case the laws and regulations of that state and the United States governing the purchase, 292 trade or transfer of firearms shall apply. A National Instant Criminal Background Check System (NICS) 293 check shall be performed prior to such purchase, trade or transfer of firearms. 294 J1. All licensed firearms dealers shall collect a fee of $2 for every transaction for which a criminal 295 history record information check is required pursuant to this section, except that a fee of $5 shall be 296 collected for every transaction involving an out-of-state resident. Such fee shall be transmitted to the 297 Department of State Police by the last day of the month following the sale for deposit in a special fund 298 for use by the State Police to offset the cost of conducting criminal history record information checks 299 under the provisions of this section. 300 K. Any person willfully and intentionally making a materially false statement on the consent form 301 required in subsection B or C or on such firearm transaction records as may be required by federal law, 302 shall be guilty of a Class 5 felony. 303 L. Except as provided in § 18.2-308.2:1, any dealer who willfully and intentionally sells, rents, trades 304 or transfers a firearm in violation of this section shall be guilty of a Class 6 felony. SB732 6 of 7

305 L1. Any person who attempts to solicit, persuade, encourage, or entice any dealer to transfer or 306 otherwise convey a firearm other than to the actual buyer, as well as any other person who willfully and 307 intentionally aids or abets such person, shall be guilty of a Class 6 felony. This subsection shall not 308 apply to a federal law-enforcement officer or a law-enforcement officer as defined in § 9.1-101, in the 309 performance of his official duties, or other person under his direct supervision. 310 M. Any person who purchases a firearm with the intent to (i) resell or otherwise provide such 311 firearm to any person who he knows or has reason to believe is ineligible to purchase or otherwise 312 receive from a dealer a firearm for whatever reason or (ii) transport such firearm out of the 313 Commonwealth to be resold or otherwise provided to another person who the transferor knows is 314 ineligible to purchase or otherwise receive a firearm, shall be guilty of a Class 4 felony and sentenced to 315 a mandatory minimum term of imprisonment of one year. However, if the violation of this subsection 316 involves such a transfer of more than one firearm, the person shall be sentenced to a mandatory 317 minimum term of imprisonment of five years. The prohibitions of this subsection shall not apply to the 318 purchase of a firearm by a person for the lawful use, possession, or transport thereof, pursuant to 319 § 18.2-308.7, by his child, grandchild, or individual for whom he is the legal guardian if such child, 320 grandchild, or individual is ineligible, solely because of his age, to purchase a firearm. 321 N. Any person who is ineligible to purchase or otherwise receive or possess a firearm in the 322 Commonwealth who solicits, employs or assists any person in violating subsection M shall be guilty of 323 a Class 4 felony and shall be sentenced to a mandatory minimum term of imprisonment of five years. 324 O. Any mandatory minimum sentence imposed under this section shall be served consecutively with 325 any other sentence. 326 P. All driver©s licenses issued on or after July 1, 1994, shall carry a letter designation indicating 327 whether the driver©s license is an original, duplicate or renewed driver©s license. 328 Q. Prior to selling, renting, trading, or transferring any firearm owned by the dealer but not in his 329 inventory to any other person, a dealer may require such other person to consent to have the dealer 330 obtain criminal history record information to determine if such other person is prohibited from 331 possessing or transporting a firearm by state or federal law. The Department of State Police shall 332 establish policies and procedures in accordance with 28 C.F.R. § 25.6 to permit such determinations to 333 be made by the Department of State Police, and the processes established for making such 334 determinations shall conform to the provisions of this section. 335 § 18.2-308.2:3. Criminal background check required for employees of a gun dealer to transfer 336 firearms; exemptions; penalties. 337 A. No person, corporation, or proprietorship licensed as a firearms dealer pursuant to 18 U.S.C. 338 § 921 et seq. shall employ any person to act as a seller, whether full-time or part-time, permanent, 339 temporary, paid or unpaid, for the transfer of firearms under § 18.2-308.2:2, if such employee would be 340 prohibited from possessing a firearm under § 18.2-308.1:1, 18.2-308.1:2, or 18.2-308.1:3, subsection B 341 of § 18.2-308.1:4, or § 18.2-308.1:6, 18.2-308.2, or 18.2-308.2:01, or is an illegal alien, or is prohibited 342 from purchasing or transporting a firearm pursuant to subsection A of § 18.2-308.1:4 or § 18.2-308.1:5. 343 B. Prior to permitting an applicant to begin employment, the dealer shall obtain a written statement 344 or affirmation from the applicant that he is not disqualified from possessing a firearm and shall submit 345 the applicant©s fingerprints and personal descriptive information to the Central Criminal Records 346 Exchange to be forwarded to the Federal Bureau of Investigation (FBI) for the purpose of obtaining 347 national criminal history record information regarding the applicant. 348 C. Prior to August 1, 2000, the dealer shall obtain written statements or affirmations from persons 349 employed before July 1, 2000, to act as a seller under § 18.2-308.2:2 that they are not disqualified from 350 possessing a firearm. Within five working days of the employee©s next birthday, after August 1, 2000, 351 the dealer shall submit the employee©s fingerprints and personal descriptive information to the Central 352 Criminal Records Exchange to be forwarded to the Federal Bureau of Investigation (FBI) for the 353 purpose of obtaining national criminal history record information regarding the request. 354 C1. In lieu of submitting fingerprints pursuant to this section, any dealer holding a valid federal 355 firearms license (FFL) issued by the Bureau of Alcohol, Tobacco and Firearms (ATF) may submit a 356 sworn and notarized affidavit to the Department of State Police on a form provided by the Department, 357 stating that the dealer has been subjected to a record check prior to the issuance and that the FFL was 358 issued by the ATF. The affidavit may also contain the names of any employees that have been subjected 359 to a record check and approved by the ATF. This exemption shall apply regardless of whether the FFL 360 was issued in the name of the dealer or in the name of the business. The affidavit shall contain the valid 361 FFL number, state the name of each person requesting the exemption, together with each person©s 362 identifying information, including their social security number and the following statement: "I hereby 363 swear, under the penalty of perjury, that as a condition of obtaining a federal firearms license, each 364 person requesting an exemption in this affidavit has been subjected to a fingerprint identification check 365 by the Bureau of Alcohol, Tobacco and Firearms and the Bureau of Alcohol, Tobacco and Firearms 366 subsequently determined that each person satisfied the requirements of 18 U.S.C. § 921 et seq. I 7 of 7

367 understand that any person convicted of making a false statement in this affidavit is guilty of a Class 5

368 felony and that in addition to any other penalties imposed by law, a conviction under this section shall INTRODUCED 369 result in the forfeiture of my federal firearms license." 370 D. The Department of State Police, upon receipt of an individual©s record or notification that no 371 record exists, shall submit an eligibility report to the requesting dealer within 30 days of the applicant 372 beginning his duties for new employees or within 30 days of the applicant©s birthday for a person 373 employed prior to July 1, 2000. 374 E. If any applicant is denied employment because of information appearing on the criminal history 375 record and the applicant disputes the information upon which the denial was based, the Central Criminal 376 Records Exchange shall, upon written request, furnish to the applicant the procedures for obtaining a 377 copy of the criminal history record from the Federal Bureau of Investigation. The information provided 378 to the dealer shall not be disseminated except as provided in this section. 379 F. The applicant shall bear the cost of obtaining the criminal history record unless the dealer, at his 380 option, decides to pay such cost. 381 G. Upon receipt of the request for a criminal history record information check, the State Police shall 382 establish a unique number for that firearm seller. Beginning September 1, 2001, the firearm seller©s 383 signature, firearm seller©s number and the dealer©s identification number shall be on all firearm 384 transaction forms. The State Police shall void the firearm seller©s number when a disqualifying record is 385 discovered. The State Police may suspend a firearm seller©s identification number upon the arrest of the 386 firearm seller for a potentially disqualifying crime. 387 H. This section shall not restrict the transfer of a firearm at any place other than at a dealership or at 388 any event required to be registered as a gun show. 389 I. Any person who willfully and intentionally requests, obtains, or seeks to obtain criminal history 390 record information under false pretenses, or who willfully and intentionally disseminates or seeks to

391 disseminate criminal history record information except as authorized by this section and § 18.2-308.2:2, SB732 392 shall be guilty of a Class 2 misdemeanor. 393 J. Any person willfully and intentionally making a materially false statement on the personal 394 descriptive information required in this section shall be guilty of a Class 5 felony. Any person who 395 offers for transfer any firearm in violation of this section shall be guilty of a Class 1 misdemeanor. Any 396 dealer who willfully and knowingly employs or permits a person to act as a firearm seller in violation of 397 this section shall be guilty of a Class 1 misdemeanor. 398 K. There is no civil liability for any seller for the actions of any purchaser or subsequent transferee 399 of a firearm lawfully transferred pursuant to this section. 400 L. The provisions of this section requiring a seller©s background check shall not apply to a licensed 401 dealer. 402 M. Any person who willfully and intentionally makes a false statement in the affidavit as set out in 403 subdivision C 1 shall be guilty of a Class 5 felony. 404 N. For purposes of this section: 405 "Dealer" means any person, corporation or proprietorship licensed as a dealer pursuant to 18 U.S.C. 406 § 921 et seq. 407 "Firearm" means any handgun, shotgun, or rifle that will or is designed to or may readily be 408 converted to expel single or multiple projectiles by action of an explosion of a combustible material. 409 "Place of business" means any place or premises where a dealer may lawfully transfer firearms. 410 "Seller" means for the purpose of any single sale of a firearm any person who is a dealer or an agent 411 of a dealer, who may lawfully transfer firearms and who actually performs the criminal background 412 check in accordance with the provisions of § 18.2-308.2:2. 413 "Transfer" means any act performed with intent to sell, rent, barter, trade or otherwise transfer 414 ownership or permanent possession of a firearm at the place of business of a dealer. 415 § 19.2-386.28. Forfeiture of weapons that are concealed, possessed, transported or carried in 416 violation of law. 417 Any firearm, any stun weapon as defined by § 18.2-308.1, or any weapon concealed, possessed, 418 transported, or carried in violation of § 18.2-283.1, 18.2-287.01, 18.2-287.4, 18.2-308.1:2, 18.2-308.1:3, 419 18.2-308.1:4, 18.2-308.1:6, 18.2-308.2, 18.2-308.2:01, 18.2-308.2:1, 18.2-308.4, 18.2-308.5, 18.2-308.7, 420 or 18.2-308.8 shall be forfeited to the Commonwealth and disposed of as provided in § 19.2-386.29. 421 2. That the provisions of this act may result in a net increase in periods of imprisonment or 422 commitment. Pursuant to § 30-19.1:4, the estimated amount of the necessary appropriation cannot 423 be determined for periods of imprisonment in state adult correctional facilities; therefore, Chapter 424 836 of the Acts of Assembly of 2017 requires the Virginia Criminal Sentencing Commission to 425 assign a minimum fiscal impact of $50,000. Pursuant to § 30-19.1:4, the estimated amount of the 426 necessary appropriation cannot be determined for periods of commitment to the custody of the 427 Department of Juvenile Justice. (Bench Opinion) OCTOBER TERM, 2007 1

Syllabus

NOTE: Where it is feasible, a syllabus (headnote) will be released, as is being done in connection with this case, at the time the opinion is issued. The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader. See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337. SUPREME COURT OF THE UNITED STATES

Syllabus

DISTRICT OF COLUMBIA ET AL. v. HELLER

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT

No. 07–290. Argued March 18, 2008—Decided June 26, 2008 District of Columbia law bans handgun possession by making it a crime to carry an unregistered firearm and prohibiting the registration of handguns; provides separately that no person may carry an unlicensed handgun, but authorizes the police chief to issue 1-year licenses; and requires residents to keep lawfully owned firearms unloaded and dissembled or bound by a trigger lock or similar device. Respondent Heller, a D. C. special policeman, applied to register a handgun he wished to keep at home, but the District refused. He filed this suit seeking, on Second Amendment grounds, to enjoin the city from enforcing the bar on handgun registration, the licensing requirement insofar as it prohibits carrying an unlicensed firearm in the home, and the trigger-lock requirement insofar as it prohibits the use of functional firearms in the home. The District Court dismissed the suit, but the D. C. Circuit reversed, holding that the Second Amendment protects an individual’s right to possess firearms and that the city’s total ban on handguns, as well as its requirement that firearms in the home be kept nonfunctional even when necessary for self-defense, violated that right. Held: 1. The Second Amendment protects an individual right to possess a firearm unconnected with service in a militia, and to use that arm for traditionally lawful purposes, such as self-defense within the home. Pp. 2–53. (a) The Amendment’s prefatory clause announces a purpose, but does not limit or expand the scope of the second part, the operative clause. The operative clause’s text and history demonstrate that it connotes an individual right to keep and bear arms. Pp. 2–22. (b) The prefatory clause comports with the Court’s interpretation 2 DISTRICT OF COLUMBIA v. HELLER

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of the operative clause. The “militia” comprised all males physically capable of acting in concert for the common defense. The Antifederal- ists feared that the Federal Government would disarm the people in order to disable this citizens’ militia, enabling a politicized standing army or a select militia to rule. The response was to deny Congress power to abridge the ancient right of individuals to keep and bear arms, so that the ideal of a citizens’ militia would be preserved. Pp. 22–28. (c) The Court’s interpretation is confirmed by analogous arms- bearing rights in state constitutions that preceded and immediately followed the Second Amendment. Pp. 28–30. (d) The Second Amendment’s drafting history, while of dubious interpretive worth, reveals three state Second Amendment proposals that unequivocally referred to an individual right to bear arms. Pp. 30–32. (e) Interpretation of the Second Amendment by scholars, courts and legislators, from immediately after its ratification through the late 19th century also supports the Court’s conclusion. Pp. 32–47. (f) None of the Court’s precedents forecloses the Court’s interpretation. Neither United States v. Cruikshank, 92 U. S. 542, 553, nor Presser v. Illinois, 116 U. S. 252, 264–265, refutes the individual- rights interpretation. United States v. Miller, 307 U. S. 174, does not limit the right to keep and bear arms to militia purposes, but rather limits the type of weapon to which the right applies to those used by the militia, i.e., those in common use for lawful purposes. Pp. 47–54. 2. Like most rights, the Second Amendment right is not unlimited. It is not a right to keep and carry any weapon whatsoever in any manner whatsoever and for whatever purpose: For example, concealed weapons prohibitions have been upheld under the Amendment or state analogues. The Court’s opinion should not be taken to cast doubt on longstanding prohibitions on the possession of firearms by felons and the mentally ill, or laws forbidding the carrying of firearms in sensitive places such as schools and government buildings, or laws imposing conditions and qualifications on the commercial sale of arms. Miller’s holding that the sorts of weapons protected are those “in common use at the time” finds support in the historical tradition of prohibiting the carrying of dangerous and unusual weapons. Pp. 54–56. 3. The handgun ban and the trigger-lock requirement (as applied to self-defense) violate the Second Amendment. The District’s total ban on handgun possession in the home amounts to a prohibition on an entire class of “arms” that Americans overwhelmingly choose for the lawful purpose of self-defense. Under any of the standards of scrutiny the Court has applied to enumerated constitutional rights, this

Cite as: 554 U. S. ____ (2008) 3

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prohibition—in the place where the importance of the lawful defense of self, family, and property is most acute—would fail constitutional muster. Similarly, the requirement that any lawful firearm in the home be disassembled or bound by a trigger lock makes it impossible for citizens to use arms for the core lawful purpose of self-defense and is hence unconstitutional. Because Heller conceded at oral argument that the D. C. licensing law is permissible if it is not enforced arbi- trarily and capriciously, the Court assumes that a license will satisfy his prayer for relief and does not address the licensing requirement. Assuming he is not disqualified from exercising Second Amendment rights, the District must permit Heller to register his handgun and must issue him a license to carry it in the home. Pp. 56–64. 478 F. 3d 370, affirmed.

SCALIA, J., delivered the opinion of the Court, in which ROBERTS, C. J., and KENNEDY, THOMAS, and ALITO, JJ., joined. STEVENS, J., filed a dissenting opinion, in which SOUTER, GINSBURG, and BREYER, JJ., joined. BREYER, J., filed a dissenting opinion, in which STEVENS, SOUTER, and GINSBURG, JJ., joined. Stricken language would be deleted from and underlined language would be added to present law. Act 1 of the Second Extraordinary Session

1 State of Arkansas Call Item 5 2 91st General Assembly A Bill 3 Second Extraordinary Session, 2018 HOUSE BILL 1010 4 5 By: Representatives M. Gray, Wardlaw, Murdock, Gazaway, F. Allen, Baltz, Barker, Bentley, Blake, 6 Boyd, Bragg, Brown, Capp, Cavenaugh, Coleman, Cozart, Dalby, Davis, Deffenbaugh, C. Douglas, D. 7 Douglas, Drown, Eaves, Farrer, D. Ferguson, K. Ferguson, Fielding, C. Fite, L. Fite, V. Flowers, Fortner, 8 Gates, Gillam, M.J. Gray, Hammer, Henderson, K. Hendren, Hillman, G. Hodges, M. Hodges, Holcomb, 9 Hollowell, Jean, Jett, Leding, Lemons, Lowery, Lundstrum, Lynch, Maddox, Magie, A. Mayberry, 10 McElroy, McNair, D. Meeks, S. Meeks, Miller, Nicks, Payton, Penzo, Petty, Pilkington, Richey, 11 Richmond, Rushing, Rye, Sabin, B. Smith, Sorvillo, Speaks, Sturch, Sullivan, Tosh, Tucker, Vaught, 12 Walker, Warren, Watson, D. Whitaker, Wing 13 By: Senators Caldwell, Rapert, Bledsoe, Bond, E. Cheatham, L. Chesterfield, A. Clark, Collins-Smith, J. 14 Cooper, L. Eads, Elliott, J. English, Flippo, T. Garner, J. Hendren, Hickey, J. Hutchinson, K. Ingram, 15 Irvin, B. Johnson, B. King, U. Lindsey, Maloch, Rice, B. Sample, D. Sanders, G. Stubblefield, Teague, D. 16 Wallace 17 18 For An Act To Be Entitled 19 AN ACT TO CREATE THE ARKANSAS PHARMACY BENEFITS 20 MANAGER LICENSURE ACT; TO REGULATE AND LICENSE 21 PHARMACY BENEFITS MANAGERS; TO AUTHORIZE PENALTIES 22 AND FINES REGARDING THE REGULATION AND LICENSURE OF 23 PHARMACY BENEFITS MANAGERS; TO DECLARE AN EMERGENCY; 24 AND FOR OTHER PURPOSES. 25 26 27 Subtitle 28 TO CREATE THE ARKANSAS PHARMACY BENEFITS 29 MANAGER LICENSURE ACT; AND TO DECLARE AN 30 EMERGENCY. 31 32 33 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 34 35 SECTION 1. Arkansas Code Title 23, Chapter 92, is amended to add an 36 additional subchapter to read as follows:

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1 Subchapter 5 — Arkansas Pharmacy Benefits Manager Licensure Act 2 3 23-92-501. Title. 4 This subchapter shall be known and may be cited as the "Arkansas 5 Pharmacy Benefits Manager Licensure Act". 6 7 23-92-502. Purpose. 8 (a) This subchapter establishes the standards and criteria for the 9 regulation and licensure of pharmacy benefits managers providing claims 10 processing services or other prescription drug or device services for health 11 benefit plans. 12 (b) The purpose of this subchapter is to: 13 (1) Promote, preserve, and protect the public health, safety, 14 and welfare through effective regulation and licensure of pharmacy benefits 15 managers; 16 (2) Provide for powers and duties of the Insurance Commissioner, 17 the State Insurance Department, and other state agencies and officers; and 18 (3) Prescribe penalties and fines for violations of this 19 subchapter. 20 21 23-92-503. Definitions. 22 As used in this subchapter: 23 (1) "Claims processing services" means the administrative 24 services performed in connection with the processing and adjudicating of 25 claims relating to pharmacist services that include: 26 (A) Receiving payments for pharmacist services; 27 (B) Making payments to pharmacists or pharmacies for 28 pharmacist services; or 29 (C) Both subdivisions (1)(A) and (B) of this section; 30 (2)(A) "Health benefit plan" means any individual, blanket, or 31 group plan, policy, or contract for healthcare services issued or delivered 32 by a healthcare insurer in this state. 33 (B) “Health benefit plan” does not include: 34 (i) Accidental-only plans; 35 (ii) Specified disease plans; 36 (iii) Disability income plans;

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1 (iv) Plans that provide only for indemnity for 2 hospital confinement; 3 (v) Long-term care only plans that do not include 4 pharmacy benefits; 5 (vi) Other limited-benefit health insurance policies 6 or plans; or 7 (vii) Health benefit plans provided under Arkansas 8 Constitution, Article 5, § 32, the Workers' Compensation Law, § 11-9-101 et 9 seq., and the Public Employee Workers' Compensation Act, § 21-5-601 et seq.; 10 (3) "Healthcare insurer" means an insurance company, a health 11 maintenance organization, or a hospital and medical service corporation; 12 (4) "Other prescription drug or device services" means services 13 other than claims processing services, provided directly or indirectly, 14 whether in connection with or separate from claims processing services, 15 including without limitation: 16 (A) Negotiating rebates, discounts, or other financial 17 incentives and arrangements with drug companies; 18 (B) Disbursing or distributing rebates; 19 (C) Managing or participating in incentive programs or 20 arrangements for pharmacist services; 21 (D) Negotiating or entering into contractual arrangements 22 with pharmacists or pharmacies, or both; 23 (E) Developing formularies; 24 (F) Designing prescription benefit programs; or 25 (G) Advertising or promoting services; 26 (5) "Pharmacist" means an individual licensed as a pharmacist by 27 the Arkansas State Board of Pharmacy; 28 (6) "Pharmacist services" means products, goods, and services, 29 or any combination of products, goods, and services, provided as a part of 30 the practice of pharmacy as defined in § 17-92-101; 31 (7) "Pharmacy" means the same as defined in § 17-92-101; 32 (8)(A) "Pharmacy benefits manager" means a person, business, or 33 entity, including a wholly or partially owned or controlled subsidiary of a 34 pharmacy benefits manager, that provides claims processing services or other 35 prescription drug or device services, or both, for health benefit plans. 36 (B) "Pharmacy benefits manager" does not include any:

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1 (i) Healthcare facility licensed in Arkansas; 2 (ii) Healthcare professional licensed in Arkansas; 3 (iii) Consultant who only provides advice as to the 4 selection or performance of a pharmacy benefits manager; or 5 (iv) Entity that provides claims processing services 6 or other prescription drug or device services for the fee-for-service 7 Arkansas Medicaid Program only in that capacity; 8 (9) "Pharmacy benefits manager affiliate" means a pharmacy or 9 pharmacist that directly or indirectly, through one (1) or more 10 intermediaries, owns or controls, is owned or controlled by, or is under 11 common ownership or control with a pharmacy benefits manager; 12 (10) “Pharmacy benefits manager network” means a network of 13 pharmacists or pharmacies that are offered by an agreement or insurance 14 contract to provide pharmacist services for health benefit plans; 15 (11) "Pharmacy benefits plan or program" means a plan or program 16 that pays for, reimburses, covers the cost of, or otherwise provides for 17 pharmacist services under a health benefit plan; 18 (12) "Pharmacy services administrative organization" means an 19 organization that helps community pharmacies and pharmacy benefits managers 20 or third party payers achieve administrative efficiencies, including 21 contracting and payment efficiencies; 22 (13)(A) "Rebate" means a discount or other price concession 23 based on utilization of a prescription drug that is paid by a manufacturer or 24 third party, directly or indirectly, to a pharmacy benefits manager, pharmacy 25 services administrative organization, or pharmacy after a claim has been 26 processed and paid at a pharmacy. 27 (B) "Rebate" includes without limitation incentives, 28 disbursements, and reasonable estimates of a volume-based discount; and 29 (14) "Third party" means a person, business, or entity other 30 than a pharmacy benefits manager that is not an enrollee or insured in a 31 health benefit plan. 32 33 23-92-504. License to do business — Annual statement — Assessment. 34 (a)(1) A person or organization shall not establish or operate as a 35 pharmacy benefits manager in Arkansas for health benefit plans without 36 obtaining a license from the Insurance Commissioner under this subchapter.

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1 (2) The commissioner shall prescribe the application for a 2 license to operate in Arkansas as a pharmacy benefits manager and may charge 3 application fees and renewal fees as established by rule. 4 (b)(1) The commissioner shall issue rules establishing the licensing, 5 fees, application, financial standards, and reporting requirements of 6 pharmacy benefits managers under this subchapter. 7 (2)(A) When adopting the initial rules to implement this 8 subchapter, the final rule shall be filed with the Secretary of State for 9 adoption under § 25-15-204(f): 10 (i) On or before September 1, 2018; or 11 (ii) If approval under § 10-3-309 has not occurred 12 by September 1, 2018, as soon as practicable after approval under § 10-3-309. 13 (B) The State Insurance Department shall file the proposed 14 rule with the Legislative Council under § 10-3-309(c) sufficiently in advance 15 of September 1, 2018, so that the Legislative Council may consider the rule 16 for approval before September 1, 2018. 17 18 23-92-505. Pharmacy benefits manager network adequacy. 19 A pharmacy benefits manager shall provide: 20 (1)(A) A reasonably adequate and accessible pharmacy benefits 21 manager network for the provision of prescription drugs for a health benefit 22 plan that shall provide for convenient patient access to pharmacies within a 23 reasonable distance from a patient's residence. 24 (B) A mail-order pharmacy shall not be included in the 25 calculations determining pharmacy benefits manager network adequacy; and 26 (2) A pharmacy benefits manager network adequacy report 27 describing the pharmacy benefits manager network and the pharmacy benefits 28 manager network's accessibility in this state in the time and manner required 29 by rule issued by the State Insurance Department. 30 31 23-92-506. Compensation — Prohibited practices. 32 (a)(1) The Insurance Commissioner may review and approve the 33 compensation program of a pharmacy benefits manager with a health benefit 34 plan to ensure that the reimbursement for pharmacist services paid to a 35 pharmacist or pharmacy is fair and reasonable to provide an adequate pharmacy 36 benefits manager network for a health benefit plan under the standards issued

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1 by rule of the State Insurance Department. 2 (2) All information and data acquired during the review under 3 subdivision (a)(1) of this section is: 4 (A) Considered proprietary and confidential under § 23-61- 5 107(a)(4) and § 23-61-207; and 6 (B) Not subject to the Freedom of Information Act of 1967, 7 § 25-19-101 et seq. 8 (b) A pharmacy benefits manager or representative of a pharmacy 9 benefits manager shall not: 10 (1) Cause or knowingly permit the use of any advertisement, 11 promotion, solicitation, representation, proposal, or offer that is untrue, 12 deceptive, or misleading; 13 (2) Unless reviewed and approved by the commissioner, charge a 14 pharmacist or pharmacy a fee related to the adjudication of a claim, 15 including without limitation a fee for: 16 (A) The receipt and processing of a pharmacy claim; 17 (B) The development or management of claims processing 18 services in a pharmacy benefits manager network; or 19 (C) Participation in a pharmacy benefits manager network; 20 (3) Unless reviewed and approved by the commissioner in 21 coordination with the Arkansas State Board of Pharmacy, require pharmacy 22 accreditation standards or certification requirements inconsistent with, more 23 stringent than, or in addition to requirements of the board; 24 (4)(A) Reimburse a pharmacy or pharmacist in the state an amount 25 less than the amount that the pharmacy benefits manager reimburses a pharmacy 26 benefits manager affiliate for providing the same pharmacist services. 27 (B) The amount shall be calculated on a per-unit basis 28 using the same generic product identifier or generic code number; or 29 (5) Do any combination of the actions listed in subdivisions 30 (b)(1)-(4) of this section. 31 (c) A claim for pharmacist services shall not be retroactively denied 32 or reduced after adjudication of the claim, unless: 33 (1) The original claim was submitted fraudulently; 34 (2) The original claim payment was incorrect because the 35 pharmacy or pharmacist had already been paid for the pharmacist services; or 36 (3) The pharmacist services were not properly rendered by the

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1 pharmacy or pharmacist. 2 (d) Termination of a pharmacy or pharmacist from a pharmacy benefits 3 manager network shall not release the pharmacy benefits manager from the 4 obligation to make any payment due to the pharmacy or pharmacist for 5 pharmacist services properly rendered. 6 (e) The commissioner may issue a rule establishing prohibited 7 practices of pharmacy benefits managers providing claims processing services 8 or other prescription drug or device services for health benefit plans. 9 10 23-92-507. Gag clauses prohibited. 11 (a) The prohibitions under § 23-99-407 apply to participation 12 contracts between pharmacy benefits managers and pharmacists or pharmacies 13 providing prescription drug coverage for health benefit plans. 14 (b) A pharmacy or pharmacist may provide to an insured information 15 regarding the insured's total cost for pharmacist services for a prescription 16 drug. 17 (c) A pharmacy or pharmacist shall not be proscribed by a pharmacy 18 benefits manager from discussing information regarding the total cost for 19 pharmacist services for a prescription drug or from selling a more affordable 20 alternative to the insured if a more affordable alternative is available. 21 (d) A pharmacy benefits manager contract with a participating 22 pharmacist or pharmacy shall not prohibit, restrict, or limit disclosure of 23 information to the Insurance Commissioner, law enforcement, or state and 24 federal governmental officials investigating or examining a complaint or 25 conducting a review of a pharmacy benefits manager's compliance with the 26 requirements under this subchapter. 27 28 23-92-508. Enforcement. 29 (a) The Insurance Commissioner shall enforce this subchapter. 30 (b)(1) The commissioner may examine or audit the books and records of 31 a pharmacy benefits manager providing claims processing services or other 32 prescription drug or device services for a health benefit plan to determine 33 if the pharmacy benefits manager is in compliance with this subchapter. 34 (2) The information or data acquired during an examination under 35 subdivision (b)(1) of this section is: 36 (A) Considered proprietary and confidential under § 23-61-

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1 107(a)(4) and § 23-61-207; and 2 (B) Not subject to the Freedom of Information Act of 1967, 3 § 25-19-101 et seq. 4 5 23-92-509. Rules. 6 (a)(1) The Insurance Commissioner may adopt rules regulating pharmacy 7 benefits managers that are not inconsistent with this subchapter. 8 (2) Rules that the commissioner may adopt under this subchapter 9 include without limitation rules relating to: 10 (A) Licensing; 11 (B) Application fees; 12 (C) Financial solvency requirements; 13 (D) Pharmacy benefits manager network adequacy; 14 (E) Prohibited market conduct practices; 15 (F) Data reporting requirements under § 4-88-803; 16 (G) Compliance and enforcement requirements under § 17-92- 17 507 concerning Maximum Allowable Cost Lists; 18 (H) Rebates; 19 (I) Compensation; and 20 (J) Lists of health benefit plans administered by a 21 pharmacy benefits manager in this state. 22 (b) Rules adopted under this subchapter shall set penalties or fines, 23 including without limitation monetary fines, suspension of licensure, and 24 revocation of licensure for violations of this subchapter and rules adopted 25 under this subchapter. 26 (c)(1) In addition to the filing requirements under the Arkansas 27 Administrative Procedure Act, § 25-15-201 et seq., and under § 10-3-309, the 28 State Insurance Department shall file a proposed rule or a proposed amendment 29 to an existing rule under this subchapter with the Senate Committee on 30 Insurance and Commerce and the House Committee on Insurance and Commerce at 31 least thirty (30) days before the expiration of the period for public comment 32 under the Arkansas Administrative Procedure Act, § 25-15-201 et seq. 33 (2) The Senate Committee on Insurance and Commerce and the House 34 Committee on Insurance and Commerce shall review the proposed rule or 35 proposed amendment to an existing rule within forty-five (45) days of the 36 date the proposed rule or proposed amendment to an existing rule is filed

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1 with the Senate Committee on Insurance and Commerce and the House Committee 2 on Insurance and Commerce. 3 (3)(A) If the department adopts an emergency rule under this 4 subchapter, in addition to the filing requirements under the Arkansas 5 Administrative Procedure Act, § 25-15-201 et seq., and under § 10-3-309, the 6 department shall notify the following individuals of the emergency rule and 7 provide each individual with a copy of the rule within five (5) business days 8 of adopting the rule: 9 (i) The Speaker of the House of Representatives; 10 (ii) The President Pro Tempore of the Senate; 11 (iii) The Chair of the Senate Committee on Insurance 12 and Commerce; and 13 (iv) The Chair of the House Committee on Insurance 14 and Commerce. 15 (B) The Senate Committee on Insurance and Commerce and the 16 House Committee on Insurance and Commerce shall review the emergency rule 17 within forty-five (45) days of the date that the emergency rule is provided 18 to the Chair of the Senate Committee on Insurance and Commerce and the Chair 19 of the House Committee on Insurance and Commerce. 20 21 23-92-510. Applicability. 22 (a) This subchapter is applicable to a contract or health benefit plan 23 issued, renewed, recredentialed, amended, or extended on and after September 24 1, 2018. 25 (b) A contract existing on the date of licensure of the pharmacy 26 benefits manager shall comply with the requirements of this subchapter as a 27 condition of licensure for the pharmacy benefits manager. 28 29 SECTION 2. Arkansas Code § 4-88-803, concerning required practices 30 under the Fair Disclosure of State Funded Payments for Pharmacists' Services 31 Act, is amended to add a new subsection to read as follows: 32 (d)(1) Unless otherwise required more frequently by the Insurance 33 Commissioner, a pharmacy benefits manager shall file an annual report with 34 the commissioner providing the information required under subsection (a) of 35 this section pursuant to the timing, format, and requirements issued by rule 36 of the State Insurance Department.

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1 (2) The annual report is: 2 (A) Considered proprietary and confidential under § 23-61- 3 107(a)(4) and § 23-61-207; and 4 (B) Not subject to the Freedom of Information Act of 1967, 5 § 25-19-101 et seq. 6 (3) This section is not subject to § 4-88-113(f)(1)(B). 7 8 SECTION 3. Arkansas Code § 17-92-507(g), concerning the Maximum 9 Allowable Cost Lists, is amended to read as follows: 10 (g)(1) A violation of this section is a deceptive and unconscionable 11 trade practice under the Deceptive Trade Practices Act, § 4-88-101 et seq., 12 and a prohibited practice under the Arkansas Pharmacy Benefits Manager 13 Licensure Act, § 23-92-501 et seq., and the Trade Practices Act, § 23-66-201 14 et seq. 15 (2) This section is not subject to § 4-88-113(f)(1)(B). 16 17 SECTION 4. Effective on and after September 1, 2018, Arkansas Code § 18 23-92-201 is amended to read as follows: 19 23-92-201. Definitions Definition. 20 As used in this subchapter:, "third-party administrator": 21 (1) “Pharmacy benefits manager” means an entity that administers 22 or manages a pharmacy benefits plan or program; 23 (2) “Pharmacy benefits plan or program” means a plan or program 24 that pays for, reimburses, covers the cost of, or otherwise provides 25 pharmacist services to individuals who reside in or are employed in this 26 state; and 27 (3)(A)(1) “Third-party administrator” means Means a person, 28 firm, or partnership that collects or charges premiums from or adjusts or 29 settles claims on residents of this state in connection with life or accident 30 and health coverage provided by a self-insured plan or a multiple employer 31 trust or multiple employer welfare arrangement.; 32 (B)(2) “Third-party administrator” includes: Includes 33 (i) An an administrative-services-only contract 34 offered by insurers and health maintenance organizations; and 35 (ii) A pharmacy benefits manager that administers or 36 manages a pharmacy benefits plan or program that furnishes, covers the cost

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1 of, or otherwise provides for the practice of pharmacy as defined in § 17-92- 2 101 under any life and accident and health coverage provided in this state by 3 a self-insured plan, a multiple-employer trust, or a multiple-employer- 4 welfare arrangement. 5 (C)(3) “Third-party administrator” does Does not include: 6 (i)(A) An employer, for its employees or for the 7 employees of a subsidiary or affiliated corporation of the employer; 8 (ii)(B) A union, for its members; 9 (iii)(C) An insurer or health maintenance 10 organization licensed to do business in this state; 11 (iv)(D) A creditor, for its debtors, regarding 12 insurance covering a debt between the creditor and its debtors; 13 (v)(E) A credit-card-issuing company that advances 14 for, or collects premiums or charges from, its credit card holders, as long 15 as that company does not adjust or settle claims; 16 (vi)(F) An individual who adjusts or settles claims 17 in the normal course of his or her practice or employment and who does not 18 collect charges or premiums in connection with life or accident and health 19 coverage; or 20 (vii)(G) An agency licensed by the Insurance 21 Commissioner and performing duties pursuant to an agency contract with an 22 insurer authorized to do business in this state. 23 24 SECTION 5. DO NOT CODIFY. SEVERABILITY CLAUSE. If any provision of 25 this act or the application of this act to any person or circumstance is held 26 invalid, the invalidity shall not affect other provisions or applications of 27 this act which can be given effect without the invalid provision or 28 application, and to this end, the provisions of this act are declared 29 severable. 30 31 SECTION 6. EFFECTIVE DATE CLAUSE. 32 SECTION 4 of this act is effective on and after September 1, 2018. 33 34 SECTION 7. EMERGENCY CLAUSE. It is found and determined by the 35 General Assembly of the State of Arkansas that the unregulated behavior of 36 pharmacy benefits managers is threatening the sustainability of pharmacies in

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1 Arkansas; that regulation of pharmacy benefits managers by the State 2 Insurance Department will stabilize the pharmacy industry in this state; and 3 that Section 1, 2, 3, and 5 of this act are immediately necessary to ensure 4 that Arkansas residents have continued access to pharmacy services across the 5 state. Therefore, an emergency is declared to exist, and Sections 1, 2, 3, 6 and 5 of this act, being immediately necessary for the preservation of the 7 public peace, health, and safety, shall become effective on: 8 (1) The date of the act's approval by the Governor; 9 (2) If the bill is neither approved nor vetoed by the Governor, 10 the expiration of the period of time during which the Governor may veto the 11 bill; or 12 (3) If the bill is vetoed by the Governor and the veto is 13 overridden, the date the last house overrides the veto. 14 15 16 APPROVED: 3/15/18 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36

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Drug Plans Are Fighting States to Keep Prices in the Dark

By Jared S Hopkins September 13, 2017, 12:50 AM EDT

➞ California bill, Nevada law aimed at pharmacy-beneﬁt managers

➞ Firms say more oversight threatens savings on medicine costs

California is the biggest state so far to seek to pull back the curtain on pharmacy-beneﬁts managers, as the industry aggressively tries to thwart a wider push for transparency.

Lawmakers in the General Assembly advanced a bill that would require more disclosures of discounts negotiated between the companies and drugmakers, but the measure is on hold after Governor Jerry Brown’s administration last week asked for changes. Beneﬁts managers have stymied several attempts at the state and federal levels to pry open their workings.

“There’s been huge push-back,” said the legislation’s sponsor, Jim Wood, a Democratic assemblyman from Northern California and dentist. “It really makes me more suspicious that there’s simply things they don’t want us to know.”

Politicians, pharmacies and patients say they understand little about how the $280 billion industry uses its clout to inﬂuence costs. The three largest pharmacy-beneﬁt managers -- Express Scripts Holding Co., UnitedHealth Group Inc.’s OptumRx, and CVS Health Corp. -- process roughly 70 percent of U.S. prescriptions.

Trump vs. Big Pharma: Can He Bring Drug Prices Down? This Bloomberg QuickTake looks at how President Trump is looking to lower prescription drug prices. (Source: Bloomberg)

The ﬁght is just one battle in a nationwide struggle between lawmakers who want more light on drug plans’ practices and the companies, who say that increased regulation will disrupt their ability to seek lower drug costs. In addition to state eﬀorts, the U.S. Congress is also considering legislation.

“Those bills aren’t going anywhere,” said Mark Merritt, chief executive oﬃcer of the Pharmaceutical Care Management Association, the industry’s lobbying arm. “Every industry has numerous bills introduced by this or that member of Congress, whether you’re selling shoelaces or health care, that they don’t like. That’s just a normal cost of doing business.”

Poor Visibility

A Nevada measure signed in June by Republican Governor Brian Sandoval requires pharmacy-beneﬁt managers to reveal rebates they receive from insulin makers, how much of those rebates are passed on to insurers, and what they keep for themselves.

Diabetes affects 12 percent of Nevada’s population; another 38 percent are estimated to be at risk of the disease. At the same time, the price of insulin, a century-old treatment, has surged. Eli Lilly & Co.’s Humalog cost $21 a vial when it hit the market in 1996. Today, it has a list price of $275. Annual insulin sales worldwide exceed $20 billion. Pharmacy-benefit managers say such rules deprive them of bargaining power they need to contain costs. The PCMA has blocked state efforts to regulate reimbursements, curb their ownership of mail-order pharmacies, and make them disclose financial conflicts.

In a six-page letter to Sandoval, the industry said the law would raise drug costs and likely be struck down by the courts for violating federal laws. Sandoval, a former state attorney general and federal judge, said when he signed the bill that it was unlikely to lose in court.

On Sept. 1, the Biotechnology Innovation Organization and the Pharmaceutical Research and Manufacturers of America, two drug-industry lobbying groups, sued Nevada, hoping to keep the state from implementing the law, which they say violates patent rights and jeopardizes trade secrets.

Resistant to Regulation

Nevada isn’t alone. In July, Connecticut became the latest to ensure that pharmacists can tell patients the cheapest way to get their prescription drugs. Oklahoma has a law aimed at increasing clarity on pricing and giving pharmacists ways to dispute reimbursements.

But most states haven’t been able to make their eﬀorts stick.

An Iowa PBM law was found by the U.S. Court of Appeals for the Eighth Circuit to run afoul of federal law preventing states from regulating employer-sponsored health plans. An Arkansas law was partially set aside on similar grounds. Laws in Maine and Washington, D.C., tagged pharmacy-beneﬁts managers with a ﬁduciary duty to clients, but Maine’s law was eventually repealed, while Washington’s was struck down by courts. “I still believe there’s a lot to be gained by cracking the PBMs’ practices,” said Kate Gainer, executive director of the Iowa Pharmacy Association, which represents more than 1,000 pharmacists and technicians. “I just don’t know how to get there.”

The California bill is expected to be reintroduced early next year. The governor’s oﬃce declined to comment.

The Federal Front

Transparency with drug-price negotiations is a “double-edged sword,” as some research has found revealing details could result in higher costs, Stephen Ubl, the chief executive oﬃcer of PhRMA, said in an interview. “So much of the transparency discussion that we see primarily at the state level is little more than veiled attempts at price controls.”

U.S. Representative Doug Collins, a Republican from Georgia, has a bill that would make companies that contract with the U.S. government detail how they reimburse pharmacies for drugs. A bill from Senator Ron Wyden, the Oregon Democrat, would force disclosure of discounts.

Merritt, the PCMA chief, said that his industry works to educate lawmakers on how proposed regulations will increase health-care and drug costs.

“We do it all the time, usually successfully,” he said. “The single most compelling thing we do, and do regularly, is show policy makers the real cost impact of the anti-PBM policies.”

Merritt said the better way to lower drug costs is for the U.S. Food and Drug Administration to increase approvals of generic and branded treatments -- a strategy that the agency’s new leadership has embraced. Merritt said that companies don’t have to hire pharmacy-beneﬁt managers, but do because of the savings they receive for their employees.

From: Financing and Distribution of Pharmaceuticals in the United States

JAMA. 2017;318(1):21-22. doi:10.1001/jama.2017.5607

Figure Legend: Flow of Pharmaceutical Funds, Products, and ServicesAdapted from a figure by the Congressional Budget Office. Services represent contractual relationships between entities. Rebates are payments from manufacturers to pharmaceutical benefit managers. Chargebacks are payments from manufacturers to distributors. Retailers include pharmacies, hospitals, group purchasing organizations, and mail-order programs. AMP indicates average manufacturer price; WAC, wholesale acquisition cost. Copyright 2017 American Medical Association. Date of download: 4/6/2018 All Rights Reserved. Bob Herman Mar 15

Inside a drug pricing contract

Express Scripts manages drug beneﬁts for employers. Photo: Whitney Curtis / Bloomberg via Getty Images

A contract template used by Express Scripts, the largest pharmacy benefit manager in the U.S., provides a window into how pharmacy benefit managers — middlemen that manage drug coverage for businesses throughout the country — steer negotiations with drug companies to benefit their own financial interests.

Why it matters: These benefit managers have a lot of power over the prescription drug coverage people get through their employers, and they're supposed to negotiate discounts so coverage is cheaper for insurers and employers. If they're not making it cheaper, there's less chance people will get relief from high drug prices. The details: Axios obtained a 36-page Express Scripts contract template from a source who works in the health care industry. Express Scripts and employers use the document as a starting point to determine how medications are paid for and how pharmacy networks work, but the contract usually is not in the public's view. Since it's a template, there are no hard numbers or terms of any specific agreements.

The big takeaway: There's nothing illegal about these contracts. But the language is clearly written with the PBM's financial interests in mind, and critics say those kinds of provisions can result in lost savings for everyone, especially for small companies and their employees.

"This whole contract is about the undisclosed spreads that they take."

— Susan Hayes, pharmacy beneﬁt consultant

Even some of the largest companies think they are protected because they have in-house and outside attorneys vetting contracts, yet that's not necessarily the case.

"That's a little bit like going to Las Vegas and consistently thinking you can beat the house at their own game," said one source who has worked in the industry for many years. "These PBMs have entire departments of lawyers where this is their game."

The other side: Express Scripts, which is in the process of being acquired by Cigna in a $67 billion deal, didn't dispute the contract template was its own. But spokeswoman Jennifer Luddy said in an email the document was "several years old," although some sources said it appeared to be current.

Luddy added that employers are "savvy purchasers of pharmacy benefits" and that these contracts are common: "It is industry standard terminology used by all PBMs, and is well- understood by clients and consultants."

In a follow-up email, Luddy said: "It is clear to us that there are several vocal PBM critics who are eager to provide their biased interpretations of this template contract to serve their own agenda." The details: These are some of the major provisions. The contract was explained in interviews with several people who work in or are familiar with the pharmacy benefit industry, most of whom asked not to be named given the sensitivity of the issue and to speak candidly.

Rebates

A primary function of a PBM is to negotiate rebates from drug companies. Most of those rebate dollars flow back to employers (not workers).

But Express Scripts collects other rebate-like fees from drug companies that it doesn't have to pass along to employers.

The Express Scripts contract explicitly says "rebates do not include things" like "administration fees" from drug manufacturers, "inflation payments" and numerous types of "other pharma revenue."

"There are so many carve-outs of what they consider a rebate that it’s very murky of what’s being kept and what’s being passed through (to clients)," an industry source said.

The contract also says Express Scripts negotiates rebates "on its own behalf and for its own benefit, and not on behalf of sponsor."

The brand/generic algorithm

Multiple people said the "proprietary" algorithm is one of the most important definitions, as it gives Express Scripts full authority to determine whether a drug is brand or generic without being transparent.

The algorithm allows Express Scripts to pocket the difference between a brand-drug discount and a generic-drug discount — a major tactic to maximize profits.

"This is why they don't miss earnings," said one person familiar with the industry.

Payment schedules

The "MAC list" and "maximum reimbursement amount" also permit Express Scripts to pay for drugs in a way that is "most advantageous to them," according to a source.

For example, using these different lists of drug costs, Express Scripts can charge its employer clients $15 for a particular medication but pay the pharmacy just $1 for the same medication — and keep the extra money for itself.

Financial disclosures and auditing

The last two pages rehash some of the initial definitions, but also reiterate how Express Scripts can collect almost any type of revenue it wants and "may realize positive margin" — code for reaping big profits and not having to share with employers.

Employers can choose to have their agreements audited, but they have to get Express Scripts' approval on what auditor is used.

And sometimes they don't get it. Hayes, a pharmacy benefit consultant who agreed to review the document and speak on the record, said Express Scripts has not allowed her firm to conduct audits.

Go deeper: The first target on drug prices: Pharmacy benefit managers

Update: DocumentCloud removed the contract after receiving a Digital Millennium Copyright Act complaint from Express Scripts.

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HEALTH CARE

Bob Herman Mar 12

The ﬁrst target on drug prices: pharmacy beneﬁt managers Illustration: Caresse Haaser, Rebecca Zisser / Axios

After months of circular finger-pointing over high drug prices, lawmakers, administration officials and parts of the health care industry seem to have settled on an initial target: pharmacy benefit managers, the middlemen that health insurers and employers hire to negotiate with drug companies.

Yes, but: There are savings to be wrung out of the highly concentrated PBM industry. That's why insurers are so eager to operate their own PBMs. But analysts say squeezing PBMs won't solve some of the fundamental problems that drive high drug spending.

What Washington is doing: Health and Human Services Secretary Alex Azar and FDA Commissioner Scott Gottlieb both had strong words for PBMs and insurers last week. Gottlieb said they misuse the rebates PBMs negotiate on drugs, and rely on a "short-term profit goose" rather than bringing down consumers' drug costs.

Azar and Gottlieb want PBMs and health plans to pass on more of those savings to consumers when they pick up their prescriptions at the pharmacy.

UnitedHealthcare said last week it would start doing so, in a limited fashion.

Several members of Congress also have called out PBMs over the past year.

What pharma is doing: The pharmaceutical industry, meanwhile, has consistently cast PBMs as the villains in its year-long lobbying campaign to prevent the government from cracking down on prices.

"It's clear the knives are out for (PBMs) politically as a way for pharma to save their own pricing practices," said Andrea Harris, a health care analyst at Height Capital Markets. What insurers are doing: Merging with PBMs.

Cigna's pending $52 billion acquisition of Express Scripts followed the proposed merger of CVS Health and Aetna. And these deals come roughly three years after UnitedHealth Group's OptumRx bought Catamaran.

If those deals clear antitrust review, the three largest PBMs in the country — Express Scripts, CVS and OptumRx — would all be tied to the hip of health insurance conglomerates.

Combining insurers and PBMs under one roof was the status quo a decade ago, and it makes some sense. It leaves one fewer mouth that needs to be fed profit, and offering medical and prescription drug benefits together is less disjointed.

But these deals are about gaining an upper hand in negotiations with drug companies and could spur pharmaceutical makers to pursue their own round of mega-mergers. No company enjoys losing negotiating leverage.

The intrigue: PBMs have helped bring down net spending on some drugs, according to data from industry reports. But they also have profited from secretive rebates and raised concerns about whether they have exploited their market power. Changing PBM structures could help people who are struggling to pay for their medicine.

The catch: Squeezing the middleman can only go so far.

PBMs negotiate rebates off a drug's list price. That process begins with high list prices, and drug companies are still free to jack up those numbers at will.

There's no guarantee higher rebate amounts will actually go back to patients, and insurers can easily raise their premiums to offset any rebates they have to dish out at the pharmacy.

"If there is increased clout, leading to lower drug prices from pharmaceutical companies, will they pass those savings on to consumers? We don’t know that," said Ben Gomes-Casseres, a professor at the Brandeis International Business School who studies mergers.

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HEALTH CARE It's time to eliminate the secret Pharmacy Beneit Manager pri practices

BY ALAN G. ROSENBLOOM, OPINION CONTRIBUTOR — 09/29/17 05:20 PM EDT THE VIEWS EXPRESSED BY CONTRIBUTORS ARE THEIR OWN AND NOT THE VIEW OF THE HILL Just In... 232 SHARES SHARE TWEET PLU Pruitt rallies auto industry on emissions plan ENERGY & ENVIRONMENT — 8M 2S AGO

The infuriating invisibility of Facebook COO Sheryl Sandberg OPINION — 11M 43S AGO

Fox's Bartiromo: Trump needs 'to be careful about calling out individual companies' like Amazon MEDIA — 14M 26S AGO

Most Facebook users © Thinkstock don't trust site with their data: POLL With federal lawmakers introducing a variety of bipartisan, bicameral TECHNOLOGY — 15M 44S AGO legislation throughout 2017 aimed at eliminating opaque and secretive Pharmacy Beneit Manager (PBM) pricing practices, the increasingly There are better ways to controversial middlemen in the national drug pricing chain now ind spend $1.5 trillion than themselves the target of new state laws passed to end so-called on corporations “clawbacks,” which retroactively extract dollars from consumers months OPINION — 26M 43S AGO after a transaction.

US granting fewer A new state law signed by Connecticut Governor Dan Malloy (D) would visitor visas: report close a drug price loophole taking aim at PBM clawbacks — referred to INTERNATIONAL — 28M 59S AGO technically as Direct and Indirect Remuneration (DIR) fees.

Trump continues The law protects consumers by eliminating retroactive fees PBMs impose Amazon attacks, says it on patients, a variety of pharmacy groups — including long term care costs USPS 'massive (LTC) pharmacies — and the Medicare program itself. amounts'

TECHNOLOGY — 30M 30S AGO Connecticut, Louisiana, Georgia, North Dakota and Maine are among more than a dozen states nationally, which have either passed legislation aimed 10 Florida mayors sue at stopping clawbacks — or seek to do so — amid growing concern about for right to implement high prescription costs and the escalating national debate over drug their own gun laws prices. BLOG BRIEFING ROOM — 55M 11S AGO VIEW ALL Meanwhile, ABC News aired a recent report on the landslide of PBM lawsuits, detailing how the middlemen beneit at consumers’ expense View Latest Opinions >> from secretive, undisclosed pricing agreements.

Clawbacks levied retroactively on LTC pharmacies serving vulnerable seniors are both abusive and contribute to pharmaceutical pricing volatility. We thank Congressman Doug Collins (R-GA) for championing the cause of eliminating PBM clawbacks, and articulately detailing the need to eliminate a variety of anti-free market PBM abuses.

This fall, advancing the bicameral Improving Transparency and Accuracy in Medicare Part D Drug Spending Act is an SCPC priority. Introduced by Related News by Sens. Shelley Moore Capito (R-W.Va.) and Jon Tester (D-Mont.) in the Senate, and Reps. Morgan Griith (R-Va.) and Peter Welch (D-Vt.) in the U.S. House (H.R. 1038), the bill will stop PBMs from extracting retroactive DIR fees in transactions with patients, LTC pharmacies and the Medicare program.

Trump's shifting Express Scripts, CVS Caremark and Optum Rx are, for all intent and between issues isn't… purpose, a PBM oligopoly, controlling more than 80 percent of prescription medications dispensed to patients in long-term care facilities.

In their current Capitol Hill advocacy eﬀorts they conveniently omit discussing a seminal January, 2017 Centers for Medicare & Medicaid Services (CMS) report inding that while drug companies and pharmacies Hypersonics in enemy hands are… are paying larger rebates to PBMs, these “beneit managers” simply keep the money rather than translating it into lower costs for government health care programs or beneiciaries.

CMS data inds that since 2010, the growth in rebates or concessions paid by drug companies or pharmacies to PBMs or managed care plans (in addition to the lump sum payment plans received from Medicare) after Comey's book tour is a the point of sale (DIR fees) has far outpaced the growth in Part D drug colossal mistake costs. CMS reports DIR fees increased from $31 billion in 2012 to $50 billion in 2015.

At a time when transparency in the marketplace, in government and within society at-large is a driving force for positive change beneitting every American, the PBM industry’s reliance upon hiding facts, and Trump, the lawyer you making secret deals behind closed doors, will and should be a target for want already defends… lawmaker, regulator and media scrutiny alike.

Alan G. Rosenbloom is President of the Senior Care Pharmacy Coalition (SCPC) in Washington, D.C. Representing a national membership serving more than 675,000 seniors daily, SCPC is the only federal advocacy organization devoted exclusively to the interests on the nation’s LTC pharmacies and the patients they serve.

TAGS SHELLEY MOORE CAPITO MORGAN GRIFFITH PETER WELCH JON TESTER PBM PHARMACY BENEFIT MANAGER

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Arkansas PBM Bill: A Step in the Right Direction

the-rheumatologist.org/article/arkansas-pbm-bill-step-right-direction

Kelly Tyrrell

During a three-day special legislative session in March, Arkansas Governor Asa Hutchinson (R) signed into law the first bill in the U.S. intended to address a lack of transparency among pharmacy benefit managers (PBMs) and their role in the high cost of prescription drugs.1

The bill, H.B. 1010: Arkansas Pharmacy Benefits Manager Licensure Act, will require PBMs be licensed under the Arkansas Insurance Department and to provide “a reasonable, adequate and accessible pharmacy benefits manager network … that shall provide for convenient patient access to pharmacies within a reasonable distance from a patient’s residence.”2

After the bill’s passage, the ACR was joined by allies in the Alliance for Transparent and Affordable Prescriptions (ATAP) in a meeting the ACR coordinated with Gov. Hutchinson to discuss how “patients are hurt by PBMs through high drug prices and out-of-pocket costs, and our concerns that PBMs may prevent biosimilars from lowering drug prices or preventing savings from getting to patients,” says Angus Worthing, MD, FACP, FACR, rheumatologist and chair of the ACR Government Affairs Committee. ACR will continue to work with the state on implementation.

“Drug pricing and, similarly, access to medication are probably top on the radar screen of most Americans, many members of Congress and the ACR,” he adds.

A Significant Leap Forward Advocates see the law as a significant leap forward with respect to transparency when it comes to PBM practices. It may also serve as a model for other states weighing similar legislation, says Joseph Cantrell, JD, the ACR’s senior manager of state affairs. The ACR and ATAP have established language available for other states to use.

“Now PBMs in Arkansas are going to have to provide the Insurance Commission with at least some explanation for the way they do things,” says rheumatologist Christopher Adams, MD, FACP, FACR, and chair of the ACR’s Affiliate Society Council. “The idea behind transparency is not only so patients and physicians can comprehend better what they’re paying for, but also so healthcare purchasers can make informed business decisions.”

How PBMs Work PBMs negotiate drug prices with manufacturers and process claims on behalf of the insurers they represent. When a patient pays a copay at the pharmacy, the PBM reimburses the pharmacy. Sometimes reimbursement is at a much lower rate than the price the pharmacy paid to acquire the drug. Also, in some cases, the co-pay the patient pays is higher than the off formulary cost of the drug.3

Gag clauses prevent pharmacists from disclosing that a drug is cheaper to buy at its cash 1/3 price, rather than with insurance. The Arkansas bill, like recent legislation in other states, will eliminate the gag clause. Also, three bills that would eliminate gag clauses at the federal level are currently circulating in Congress, says ACR Director of Regulatory Affairs Kayla Amodeo, PhD.

“Patients are affected by PBMs in multiple ways,” says Dr. Worthing. “The prescription that is best for them, which they and their rheumatologist have agreed upon, may not be covered because the drug didn’t garner enough rebate money for PBMs to place it on formulary. Or the co-payment a patient pays may be higher because it is based on the list price instead of the discounted price. When paying out of pocket is cheaper than obtaining a drug through insurance, patients often remain unaware, because pharmacists can’t inform them.”

Pharmacists Push Back In Arkansas, pharmacists argued that these practices have also resulted in hardships for smaller pharmacies, particularly in rural parts of the state where patients may already have fewer options.

“It was evident from discussions with the governor that part of his motivation in signing the bill was to better understand the role of PBMs in the healthcare market and their impact on local pharmacies,” says Mr. Cantrell.

The ACR would like to see other states or the federal government pass legislation to address PBM practices that affect patient access to care. The ACR is also working at the federal level to educate members of Congress on the broad implications of PBM practices, says Dr. Amodeo.

In February, the ACR visited Capitol Hill with ATAP to meet with legislators to assure them that regulation of PBM practices would not violate the Centers for Medicare & Medicaid Services’ non-interference clause, which prohibits the Secretary of Health and Human Services from establishing a single formulary and from interfering in the negotiations between plans and manufacturers. Even with PBM regulation, insurers could still engage with manufacturers in establishing prices.

“People across the country are starting to understand the complex problems of consolidation, opacity and perverse incentives in the PBM system,” says Dr. Worthing. “We’re optimistic that more and more bills will become law at all levels and that our patients will benefit from lower prices and easier access to the high-quality treatments they deserve.”

Kelly April Tyrrell writes about health, science and health policy. She lives in Madison, Wis.

References

1. Arkansas governor signs pharmacy manager bill into law. U.S. News & World Report. 2018 Mar 15. 2. Hardy B. Committee approves bill to regulate pharmacy benefit managers over objections of conservative group. Arkansas Nonprofit News Network. 2018 Mar 13. 2/3 3. Lupkin S. Patients overpay for prescriptions 23% of the time, analysis shows. Kaiser Health News. 2018 Mar 13. 4. Lopez L. A startling lawsuit against CVS could blow up what you thought you knew about drug prices. Business Insider. 2017 Aug 8.

3/3 I N T E L L I G E N C E N E W S

OPINION Who’s Stealing My Savings? BY PETER PITTS January 4, 2018

Payers have always hated copay cards because payers love restrictive formularies and hate patient choice. Witness UnitedHealthcare’s new program to discourage patients from using innovator company co-pay coupons.

These coupons have been a thorn in the side of payers because they lead to the use of more expensive drugs, higher utilization and an increase in payer costs. Alas, they’re a good deal for patients. But after all, aren’t payer proﬁts more important than either patient care or patient choice?

The writing’s been on the wall for those paying attention. There’s already a UnitedHealthcare program in place that calls for specialty pharmacies in its network to decline to redeem copay coupons for off-formulary products. The new arrangement expands on that pilot program by punishing patients who use copay cards — the majority of whom have high-deductible plans and those with coinsurance linked to out-of-pocket maximums.

Translation? If you went for a low-premium/high-deductible Obamacare plan you’re going to get it right in the neck. If you like your health insurance, you can keep it? The biggest lie in American health care has never been so topsy-turvy. In a health care ecosystem governed by the Affordable Care Act, what happens when you don’t like your health insurance and there isn’t another game in town? What happens when your insurance provider decides to change the rules of the game to disadvantage the health care consumer in order to pad their own bottom line? Is that in keeping with the spirit of the ACA legislation?

Previously, both copay and the amount covered by the coupon were applied to the patient’s deductible or out-of-pocket cap. UnitedHealthcare’s change will likely cause deductibles and out-of-pocket limits to be met more slowly, which will drive consumers towards those products preferred by the payer rather than by patients and their physicians.

UnitedHealthcare’s scheme isn’t going unnoticed. According to a letter sent out by the California Rheumatology Alliance,

“It has come to our attention that a new ‘Accumulator’ program has started to roll out that will directly affect a patient’s ability to use co-pay cards for biologic therapies dispensed through pharmacies. We need to brace and prepare for the reality that all four major national PBM’s will seek to exploit these ‘Accumulator’ programs starting January 1, 2018 … The program stops all payments from patient co-pay cards, which are used to pay for biologics and other specialty medications dispensed by pharmacies, from being applied towards deductibles and out-of-pocket maximums. Consequently, co-pay cards given to our patients will only pay out-of-pocket costs up to the card limit. Once the card funds have been exhausted, the patient will be hit with the shock of having to pay the deductible all over again.”

In essence, both the insurance companies and pharmacy beneﬁt managers are collecting the deductibles and out-of- pocket maximums twice with these “Accumulator” programs. According to best estimates, up to 20 percent of commercial medical insurance policies sold in 2018 will have these programs built in. The most alarming concern is that most employers who have purchased/are purchasing these plans are unaware these programs are present in the coverage. They have no idea how it will adversely affect their employees’ care.

And, per the CRA, “We fear that access to the essential medications needed to manage our patient’s conditions with be severely interrupted. This appears to serve only the purpose of increasing PBM proﬁts while providing a small discount to medical premiums.”

MC/HEALTH: SUBSCRIBE Get the latest news, data and insights on key trends affecting healthcare and health policy.

E-mail address SIGN UP It’s a sad story of PBM proﬁts over patients. In the United States, nearly $15 of every $100 spent on brand-name drugs goes to PBMs, which claim they lower drug costs. However, the share of annual drug price increases that PBMs pocket – as opposed to pass on to consumers – has soared from 5 percent in 2011 to 62 percent in 2016. Three large PBMs control 78 percent of the market and use this market power to control what medicines people can use, what they pay, and where they get their prescriptions ﬁlled.

PBMs use clawbacks of retail pharmacy revenue, spread pricing on generic medications subject to maximum allowable cost pricing and non-medical drug switching to increase revenue. Clawbacks in the form of direct and indirect remuneration fees PBMs extract from pharmacies that push many Medicare consumers into the program’s catastrophic coverage, driving up total spending.

While it may be true that copay assistance programs for some brand name drugs with generic competition provides an “end run” around legitimate PBM cost-reduction strategies, it is completely untrue for most specialty drugs. – The uniform elimination of copay assistance as a method of meeting “accumulator” requirements does not appropriately recognize this not-so-subtle difference.

Copay accumulator policies leave patients ﬁnancially exposed and prone to noncompliance. But it’s good for the PBM bottom line. Perhaps a better term for “copay accumulator” is “PBM bottom line enhancer.” Sometimes it’s worthwhile to call something by its proper name.

According to Susan Pilch, vice president of policy and regulatory affairs at the National Community Pharmacists Association: “PBMs are sitting in the cat bird seat in the pharmaceutical supply chain. They take advantage of the fact that they have unparalleled insight into everything that goes on upstream as well as downstream and have managed to build in revenue streams for that.”

And if PBMs are the cat … who’s the canary? As they like to say inside the Beltway, “If you’re not at the table, you’re on the ” menu.”

Peter J. Pitts, a former FDA associate commissioner, is president of the Center for Medicine in the Public Interest

Morning Consult welcomes op-ed submissions on policy, politics and business strategy in our coverage areas. Updated submission guidelines can be found here.

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© Morning Consult 2017, All Rights About All Subscribe Reserved Careers Brands Facebook Contact Energy Twitter Terms & Conditions Finance LinkedIn Privacy Health Tech Washington Opinion Commonwealth of Virginia Health Insurance Protection Act: Establishment of a Reinsurance Program

Whereas, the Health Insurance Reform Commission was created to monitor and respond to issues emanating from the Affordable Care Act.

Whereas, this commission shall be tasked with protecting and stabilization of the individual and small business marketplace premiums on the healthcare insurance exchange.

Whereas, this commission shall recoup the aggregate amount of the Health Insurance Provider Fee that otherwise would have been assessed under section 9010 of the Affordable Care Act that is attributable to state health risk for calendar year 2019 as a bridge to stability in the individual and small group market.

Whereas, in calendar year 2019, in addition to the amounts otherwise due under this subtitle, an entity subject to this section shall be subject to an assessment of 2.75% on all amounts used to calculate the entity’s Premium Tax Liability under this section or the amount of the entity’s Premium Tax Exemption Value for calendar year 2018.

Whereas, the assessment required under this section shall be distributed by this commission to the Virginia Health Benefit Exchange Fund.

Resolved that, this assessment, the Virginia Health Benefit Exchange Fund, is to be used for the implementation of a state-specific requirement for reinsurance and risk adjustment, designed to mitigate the impact of certain individuals on certain rates as they relate to the individual and small group insurance marketplace.

Respectfully submitted,

Bruce A. Silverman, MD 1340 Hounslow Drive Manakin Sabot, VA 23103 804-536-1469

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American Academy Prior Authorization and Utilization of Child and ManagementPrior Authorization Reform Principles and Utilization Adolescent Psychiatry PatientManagement-centered care has emerged Reform as a major commonPrinciples goal across the

American Academy health care industry. By empowering patients to play an active role in their of Dermatology care and assume a pivotal role in developing an individualized treatment plan to meet their health care needs, this care model can increase patients’ American Academy satisfaction with provided services and ultimately improve treatment quality of Family and outcomes. Physicians

American College of Yet despite these clear advantages to adopting patient-centered care, health Cardiology care providers and patients often face significant obstacles in putting this concept into practice. Utilization management programs, such as prior American College of authorization and step therapy, can create significant barriers for patients by Rheumatology delaying the start or continuation of necessary treatment and negatively affecting patient health outcomes. The very manual, time-consuming American Hospital processes used in these programs burden providers (physician practices, Association pharmacies and hospitals) and divert valuable resources away from direct American patient care. However, health plans and benefit managers contend that Pharmacists utilization management programs are employed to control costs and ensure Association appropriate treatment.

American Society of Recognizing the investment that the health insurance industry will continue to Clinical Oncology place in these programs, a multi-stakeholder group representing patients,

Arthritis Foundation physicians, hospitals and pharmacists (see organizations listed in left column) has developed the following principles on utilization management programs to Colorado Medical reduce the negative impact they have on patients, providers and the health Society care system. This group strongly urges health plans, benefit managers and any other party conducting utilization management (“utilization Medical Group review entities”), as well as accreditation organizations, to apply the Management Association following principles to utilization management programs for both medical and pharmacy benefits. We believe adherence to these principles Medical Society of will ensure that patients have timely access to treatment and reduce the State of New administrative costs to the health care system. York

Minnesota Medical

Association

North Carolina Medical Society

Ohio State Medical Association

Washington State Medical Association .

Clinical Validity

1. Health care providers want nothing more than to provide the most clinically appropriate care for each individual patient. Utilization management programs must therefore have a clinically accurate foundation for provider adherence to be feasible. Cost-containment provisions that do not have proper medical justification can put patient outcomes in jeopardy.

Principle #1: Any utilization management program applied to a service, device or drug should be based on accurate and up-to-date clinical criteria and never cost alone. The referenced clinical information should be readily available to the prescribing/ordering provider and the public.

2. The most appropriate course of treatment for a given medical condition depends on the patient’s unique clinical situation and the care plan developed by the provider in consultation with his/her patient. While a particular drug or therapy might generally be considered appropriate for a condition, the presence of comorbidities or patient intolerances, for example, may necessitate an alternative treatment. Failure to account for this can obstruct proper patient care.

Principle #2: Utilization management programs should allow for flexibility, including the timely overriding of step therapy requirements and appeal of prior authorization denials.

3. Adverse utilization management determinations can prevent access to care that a health care provider, in collaboration with his/her patient and the care team, has determined to be appropriate and medically necessary. As this essentially equates to the practice of medicine by the utilization review entity, it is imperative that these clinical decisions are made by providers who are at least as qualified as the prescribing/ordering provider.

Principle #3: Utilization review entities should offer an appeals system for their utilization management programs that allows a prescribing/ordering provider direct access, such as a toll-free number, to a provider of the same training and specialty/subspecialty for discussion of medical necessity issues.

Continuity of Care

4. Patients forced to interrupt ongoing treatment due to health plan utilization management coverage restrictions could experience a negative impact on their care and health. In the event that, at the time of plan enrollment, a patient’s condition is stabilized on a particular treatment that is subject to prior authorization or step therapy protocols, a utilization review entity should permit ongoing care to continue while any prior authorization approvals or

step-therapy overrides are obtained.

Principle #4: Utilization review entities should offer a minimum of a 60-day grace period for any step- therapy or prior authorization protocols for patients who are already stabilized on a particular treatment upon enrollment in the plan. During this period, any medical treatment or drug regimen should not be interrupted while the utilization management requirements (e.g., prior authorization, step therapy overrides, formulary exceptions, etc.) are addressed.

5. Many patients carefully review formularies and coverage restrictions prior to purchasing a health plan product in order to ensure they select coverage that best meets their medical and financial needs. Unanticipated changes to a formulary or coverage restriction throughout the plan year can negatively impact patients’ access to needed medical care and unfairly reduce the value patients receive for their paid premiums.

Principle #5: A drug or medical service that is removed from a plan’s formulary or is subject to new coverage restrictions after the beneficiary enrollment period has ended should be covered without restrictions for the duration of the benefit year.

6. Many conditions require ongoing treatment plans that benefit from strict adherence. Recurring prior authorizations requirements can lead to gaps in care delivery and threaten a patient’s health.

Principle #6: A prior authorization approval should be valid for the duration of the prescribed/ordered course of treatment.

7. Many utilization review entities employ step therapy protocols, under which patients are required to first try and fail certain therapies before qualifying for coverage of other treatments. These programs can be particularly problematic for patients—such as those purchasing coverage on the individual marketplace—who change health insurance on an annual basis. Patients who change health plans are often required to disrupt their current treatment to retry previously failed therapeutic regimens to meet step therapy requirements for the new plan. Forcing patients to abandon effective treatment and repeat therapy that has already been proven ineffective under other plans’ step therapy protocols delays care and may result in negative health outcomes.

Principle #7: No utilization review entity should require patients to repeat step therapy protocols or retry therapies failed under other benefit plans before qualifying for coverage of a current effective therapy.

Transparency and Fairness

8. Prior authorization requirements and drug formulary changes can have a direct impact on patient care by creating a delay or altering the course of treatment. In order to ensure that patients and health care providers are fully informed while purchasing a product and/or making care decisions, utilization review entities need to be transparent about all coverage and formulary restrictions and the supporting clinical documentation needed to meet utilization management requirements.

Principle #8: Utilization review entities should publically disclose, in a searchable electronic format, patient-specific utilization management requirements, including prior authorization, step therapy, and formulary restrictions with patient cost-sharing information, applied to individual drugs and medical services. Such information should be accurate and current and include an effective date in order to be relied upon by providers and patients, including prospective patients engaged in the enrollment process. Additionally, utilization review entities should clearly communicate to prescribing/ordering providers what supporting documentation is needed to complete every prior authorization and step therapy override request.

9. Incorporation of accurate formulary data and prior authorization and step therapy requirements into electronic health records (EHRs) is critical to ensure that providers have the requisite information at the point of care. When prescription claims are rejected at the pharmacy due to unmet prior authorization requirements, treatment may be delayed or completely abandoned, and additional administrative burdens are imposed on prescribing providers and pharmacies/pharmacists.

Principle #9: Utilization review entities should provide, and vendors should display, accurate, patient- specific, and up-to-date formularies that include prior authorization and step therapy requirements in electronic health record (EHR) systems for purposes that include e-prescribing.

10. Data are critical to evaluating the effectiveness, potential impact and costs of prior authorization processes on patients, providers, health insurers and the system as a whole; however, limited data are currently made publically available for research and analysis. Utilization review entities need to provide industry stakeholders with relevant data, which should be used to improve efficiency and timely access to clinically appropriate care.

Principle #10: Utilization review entities should make statistics regarding prior authorization approval and denial rates available on their website (or another publically available website) in a readily accessible format. The statistics shall include but are not limited to the following categories related to prior authorization requests:

i. Health care provider type/specialty; ii. Medication, diagnostic test or procedure; iii. Indication; iv. Total annual prior authorization requests, approvals and denials; v. Reasons for denial such as, but not limited to, medical necessity or incomplete prior authorization submission; and vi. Denials overturned upon appeal. These data should inform efforts to refine and improve utilization management programs.

11. A planned course of treatment is the result of careful consideration and collaboration between patient and physician. A utilization review entity’s denial of a drug or medical service requires deviation from this course. In order to promote provider (physician practice, hospital and pharmacy) and patient understanding and ensure appropriate clinical decision- making, it is important that utilization review entities provide specific justification for prior authorization and step therapy override denials, indicate any covered alternative treatment and detail any available appeal options.

Principle #11: Utilization review entities should provide detailed explanations for prior authorization or step therapy override denials, including an indication of any missing information. All utilization review denials should include the clinical rationale for the adverse determination (e.g., national medical specialty society guidelines, peer-reviewed clinical literature, etc.), provide the plan’s covered alternative treatment and detail the provider’s appeal rights.

Timely Access and Administrative Efficiency

12. The use of standardized electronic prior authorization transactions saves patients, providers and utilization review entities significant time and resources and can speed up the care delivery process. In order to ensure that prior authorization is conducted efficiently for all stakeholders, utilization review entities need to complete all steps of utilization management processes through NCPDP SCRIPT ePA transactions for pharmacy benefits and the ASC X12N 278 Health Care Service Review Request for Review and Response transactions for medical services benefits. Proprietary health plan web-based portals do not represent efficient automation or true administrative simplification, as they require health care

providers to manage unique logins/passwords for each plan and manually re-enter patient and clinical data into the portal.

Principle #12: A utilization review entity requiring health care providers to adhere to prior authorization protocols should accept and respond to prior authorization and step-therapy override requests exclusively through secure electronic transmissions using the standard electronic transactions for pharmacy and medical services benefits. Facsimile, proprietary payer web-based portals, telephone discussions and nonstandard electronic forms shall not be considered electronic transmissions.

13. Providers have encountered instances where utilization review entities deny payment for previously approved services or drugs based on criteria outside of the prior authorization review process (e.g., eligibility issues, medical policies, etc.). These unexpected payment denials create hardship for patients and additional administrative burdens for providers.

Principle #13: Eligibility and all other medical policy coverage determinations should be performed as part of the prior authorization process. Patients and physicians should be able to rely on an authorization as a commitment to coverage and payment of the corresponding claim.

14. Significant time and resources are devoted to completing prior authorization requirements to ensure that the patient will have the requisite coverage. If utilization review entities choose to use such programs, they need to honor their determinations to avoid misleading and further burdening patients and health care providers. Prior authorization must remain valid and coverage must be guaranteed for a sufficient period of time to allow patients to access the prescribed care. This is particularly important for medical procedures, which often must be scheduled and approved for coverage significantly in advance of the treatment date.

Principle #14: In order to allow sufficient time for care delivery, a utilization review entity should not revoke, limit, condition or restrict coverage for authorized care provided within 45 business days from the date authorization was received.

15. In order to ensure that patients have prompt access to care, utilization review entities need to make coverage determinations in a timely manner. Lengthy processing times for prior authorizations can delay necessary treatment, potentially creating pain and/or medical complications for patients.

Principle #15: If a utilization review entity requires prior authorization for non-urgent care, the entity should make a determination and notify the provider within 48 hours of obtaining all necessary information. For urgent care, the determination should be made within 24 hours of obtaining all necessary information.

16. When patients receive an adverse determination for care, the patient (or the physician on behalf of the patient) has the right to appeal the decision. The utilization review entity has a responsibility to ensure that the appeals process is fair and timely.

Principle #16: Should a provider determine the need for an expedited appeal, a decision on such an appeal should be communicated by the utilization review entity to the provider and patient within 24 hours. Providers and patients should be notified of decisions on all other appeals within 10 calendar days. All appeal decisions should be made by a provider who (a) is of the same specialty, and subspecialty, whenever possible, as the prescribing/ordering provider and (b) was not involved in the initial adverse determination.

17. Prior authorization requires administrative steps in advance of the provision of medical care in order to ensure coverage. In emergency situations, a delay in care to complete administrative tasks related to prior authorization could have drastic medical consequences for patients.

Principle #17: Prior authorization should never be required for emergency care.

18. There is considerable variation between utilization review entities’ prior authorization criteria and requirements and extensive use of proprietary forms. This lack of standardization is associated with significant administrative burdens for providers, who must identify and comply with each entity’s unique requirements. Furthermore, any clinically based utilization management criteria should be similar—if not identical—across utilization review entities.

Principle #18: Utilization review entities are encouraged to standardize criteria across the industry to promote uniformity and reduce administrative burdens.

Alternatives and Exemptions

19. Broadly applied prior authorization programs impose significant administrative burdens on all health care providers, and for those providers with a clear history of appropriate resource utilization and high prior authorization approval rates, these burdens become especially unjustified.

Principle #19: Health plans should restrict utilization management programs to “outlier” providers whose prescribing or ordering patterns differ significantly from their peers after adjusting for patient mix and other relevant factors.

20. Prior authorization requirements are a burdensome way of confirming clinically appropriate care and managing utilization, adding administrative costs for all stakeholders across the health care system. Health plans should offer alternative, less costly options to serve the same functions.

Principle #20: Health plans should offer providers/practices at least one physician-driven, clinically based alternative to prior authorization, such as but not limited to “gold-card” or “preferred provider” programs or attestation of use of appropriate use criteria, clinical decision support systems or clinical pathways.

21. By sharing in the financial risk of resource allocation, providers engaged in new payment models are already incented to contain unnecessary costs, thus rendering prior authorization unnecessary.

Principle #21: A provider that contracts with a health plan to participate in a financial risk-sharing payment plan should be exempt from prior authorization and step-therapy requirements for services covered under the plan’s benefits.

http://www.richmond.com/opinion/their-opinion/guest-columnists/dr-mark-monahan-health-insurance-prior- authorizations-are-on-the/article_8e8f030f-1eb4-5e77-bb6f-30a05fdf7225.html HEALTH CARE Dr. Mark Monahan: Health insurance prior-authorizations are on the rise

By Mark Monahan, M.D. Feb 11, 2017 By Mark Monahan, M.D. From a physician’s perspective, the You’ve probably heard the old saying ascribed to Mark Twain, Benjamin Franklin, and others: “The only two certainties in life process remains are death and taxes.” Now you may want to add a third far too certainty about life in the 21st century: health insurance prior- burdensome. authorizations.

If you’ve recently gotten your new insurance card for 2017, you’re probably still decoding the fine print about the details of what it takes to visit your physician for one ailment or another. In that morass of detail, it’s also likely you may have to ask your physician to get your insurance company to say “yes” ahead of time for various treatments or drugs — otherwise known as “prior-authorizations.”

It probably will come as small comfort for you to hear from a doctor like me that we feel your pain — and we share it! About two years ago, I wrote here about some of the same problems that insurers’ “prior-auth dance” was causing for patients and doctors alike.

I wish I could say that much has changed over the past couple of years, but I can’t do that with a straight face. Doctors still face plenty of insurance-related problems. Consider “step therapy” — the process used by insurers to allegedly reduce costs by requiring patients to try lower-cost or generic medications before trying other drugs.

The problem is that all too often patients suffer serious relapses of symptoms when they’re forced to return to using medications they’ve already tried before — just because their new insurance coverage requires it! Adding insult to our patients’ injuries, insurance companies place heavy burdens on doctors and their staffs to help patients get prior authorization for these medications that we’d rather not “step” on again!

Despite changes in Virginia’s law last year, at my practice, Virginia Urology, our nurses still fill out more than 400 prior- authorizations a week. We currently have four full-time employees to oversee this paper-intensive process, which totals more than 20,000 approvals a year!

If you are a small business owner — as many physicians are — you can imagine how this adds to our operating costs, not to mention the interruptions it causes doctors who want to spend as much time as they can with their patients.

***

That’s (some of) the bad news. So let’s look for some good news. Working together, the state’s Medicaid agency, along with the Virginia Department of Health and the Medical Society of Virginia, recently announced that all Medicaid plans will no longer require prior-authorization for non-opioid pain relievers (a change that was approved to battle the ongoing public health crisis with opioid abuse).

And the 2015 General Assembly did provide some “prior-auth” pain relief. While that led to some improvements, there’s still plenty of room for continued reform. Insurers still drag their collective feet when we try to settle these matters in a timely way for you, our patients. Here’s one small example of the games insurers play: Under the 2015 law, insurers are required to process nonurgent requests within 48 hours of when they receive them from physicians. Sounds simple, right? Unfortunately, we’ve noticed several insurers seem to be “gaming the system” by calling or emailing our offices for additional information on our nonurgent requests late on Friday afternoon, when they know that we’re either closed or getting ready to close for the week.

Why would they do this? Because when Monday morning rolls around the required 48-hour period for processing a prior- authorization request has ended. At that point, our employees are told by insurers that the request for a particular drug or treatment has been “closed” over the weekend. So guess who gets to start the whole process all over? We do. And guess who waits longer for medications? You do!

Is this any way to run our health system? Of course not. Such bureaucracy is nonsense. After completing a successful pilot project in electronic prior-authorization, James Lange, a pharmacist with Blue Cross Blue Shield of Michigan, wrote in “Managed Healthcare Executive” last year that the “antiquated paper-phone-fax methods” for prior authorization “create a number of hassles for all stakeholders, which adversely affect care.”

The back-and-forth often takes 48 hours or more, and leads to delayed treatment and patients giving up on taking a needed drug. Such days, Lange wrote, ““in turn result in unnecessary doctor and emergency department visits, adverse reactions and even deaths — all of which affect everyone’s healthcare costs.” Besides the delays, other problems arise when insurers use “tiering” (dividing medications into different levels of cost), require step therapy, and charge high co-payments. Taken together, these practices lead to stress and financial hardships for far too many people.

***

As bad, annoying, and even potentially fatal as these insurers’ games can be, Virginia’s 2015 law didn’t even cover a large part of the health insurance sector many rely on: Medicare, Medicaid and Tricare (for the military and their families). Taken together, patients enrolled in those programs comprise nearly half of my practice, and those programs also suffer from the types of problems I’ve described.

All this is why — from a physician’s perspective — the process remains far too burdensome. Making matters worse, insurers continue to be picky with required documentation to justify drugs needed to help our patients. We are even seeing increased prior-authorization requests for generic drugs, which should be the least expensive alternative in the first place!

Insurers will argue that they are trying to hold down the cost of unnecessarily prescribed drugs or treatments. But frankly, this argument actually turns the truth on its head: by limiting their costs of covering your health needs, they are driving up health care costs by making us spend more time and money to wade through their paperwork. And so the cycle of cost inflation continues. A 2014 article in the “Journal of the American Board of Family Medicine” estimated that insurers’ prior-authorization practices currently costs the nation’s entire health-care system between $23 billion to $31 billion a year.

***

So what’s the answer? How can we work together with our friends in the insurance sector? Well, after spending 16 years of battling with the unseen people who reject my claims for my patients, I offer two proposals:

• Insurers need to be more open and transparent about their approval (and rejection) processes. After passage of the 2015 law, a work group was set up that required insurance companies to identify common evidence-based parameters for insurers’ approval of the 10 most frequently prescribed chronic disease management prescription drugs.

Yet, despite the hard work of the Medical Society of Virginia, the Virginia Association of Health Plans, and the Virginia Academy of Family Physicians, the insurance sector has yet to release this information as required by law. They claim that information — which patients and physicians alike rely on — is “proprietary.”

Virginians aren’t alone in this battle, by the way. The American Medical Association and 14 other health-care organizations recently banded together to aid in prior-authorization reform. Their goal “is to build a dialogue between providers, health plans and their third parties so we can cut out needless administrative waste from the system.” I strongly encourage insurers in Virginia to join in this effort. • The General Assembly should push insurance companies to keep upgrading the electronic approval of prescription requests. A pilot project in Michigan has found that such collaborative problem- solving between insurers and the medical community can bring cost savings within a few years of its implementation.

Such changes are long overdue — not only for doctors, but especially for you, our patients who deserve better.

Dr. Mark Monahan is a physician at Virginia Urology and vice president of the Richmond Academy of Medicine. He can be reached at [email protected].

4/15/2018 Making Cigarettes More Expensive Could Save 450 Million Years of Life | Fortune

Making Cigarettes More Expensive Could Save 450 Million Years of Life, Study Says

By JAMIE DUCHARME April 11, 2018

Tobacco currently kills more than 7 million people each year, making it one of the world’s most signicant threats to public health, according to the World Health Organization. But the best intervention, according to a study published Wednesday in the BMJ, may be rooted in economics.

Doubling cigarette taxes in 13 middle-income countries across the globe could save almost 450 million years of life and $157 billion in averted medical costs — all by prompting smokers to lay off the habit, and reaping the public health gains that follow, the study says.

To start, the researchers used existing price elasticity data to estimate how raising cigarette taxes could inuence the habits of the 490 million male smokers living in the 13 countries included in the study, such as China, India, Mexico, and Brazil. They determined that a 50% price increase would correspond to a 20% downturn in smoking, encouraging millions of men to quit. Those in the lowest economic brackets would be especially likely to quit in the face of price increases, the data says.

Since smokers tend to be concentrated in lower-income demographics, all that theoretical smoking cessation would come with major public health benets for these populations, explains study co-author Prabhat Jha, a professor of epidemiology at the University of Toronto Dalla Lana School of Public Health. “Over time, the rich have quit in much greater numbers, in proportion, than the poor,” Jha explains, “so the persistent smoking burdens” — such as heart disease and cancer — “are concentrated on the poor in many countries.”

http://fortune.com/2018/04/11/cigarette-tax-public-health/ 1/3 4/15/2018 Making Cigarettes More Expensive Could Save 450 Million Years of Life | Fortune All in all, Jha and his colleagues found that smoking cessation caused by higher prices would save an estimated 449 million years of life across the 13 countries, with the most signicant benets theoretically seen among younger, poorer smokers. Smoking cessation on that scale could also save $157 billion in medical costs associated with smoking-related conditions including lung diseases, cancer, heart disease and stroke. In addition, 15.5 million men in countries without universal health care could be saved from “catastrophic health expenditures,” and 8.8 million individuals — and their families — could be spared from resulting extreme poverty.

“The male is addicted to smoking, he’s the breadwinner of the family, he gets a disease and the family spends a fortune to keep him alive, and usually fails,” Jha says, illustrating a common situation in low- and middle-income countries. “The family’s broke and he’s dead. The male addiction is having enormous consequences on household poverty.”

If you extrapolate beyond the 13 countries included in the study, Jha estimates something like 20 million people could avoid extreme poverty — suggesting that tobacco taxation actually disproportionately benets low-income people, despite some economic arguments to the contrary. As an added bonus of cigarette taxes, the report says, the 13 countries included in the analysis would see their gross domestic products increase by between 0.1% and 1.1%.

“Tax is a really powerful instrument for addressing income poverty goals,” Jha says. “Because the poor are more price responsive [and are more likely to quit when prices go up], the richest income group ends up paying twice as much of the extra tax as the lowest income group.”

While the study’s ndings are all based on theoretical models, they’re compelling enough that Jha and his colleagues are working with Canada’s International Development Research Centre and the World Bank to discuss possible implementation strategies.

That said, Jha cautions against thinking of taxation as a one-size-ts-all solution to public health problems. Heavily taxing sugary beverages or alcohol — two commonly suggested strategies — could come with benets, Jha says, but each case is different. http://fortune.com/2018/04/11/cigarette-tax-public-health/ 2/3 4/15/2018 Making Cigarettes More Expensive Could Save 450 Million Years of Life | Fortune Cigarettes are unique, for example, in that there aren’t many alternatives on the market; taxing soda, on the other hand, could just push consumers to drink sweetened juices or other products.

“Thinking about taxation approaches to curb unhealthy consumption is a good idea, but tobacco [taxation] builds upon decades of careful research and understanding of what works,” Jha says. “You should be careful to just say, ‘Oh, we’re just going to take from one product and do it to another.'”

http://fortune.com/2018/04/11/cigarette-tax-public-health/ 3/3

4/8/2018 Higher education financial incentives for health professionals serving underserved areas | County Health Rankings & Roadmaps

Higher education financial incentives for health professionals serving underserved areas

Financial incentive programs offer scholarships and loans with service requirements, educational loans with a service option, and loan repayment or forgiveness programs to encourage health care providers to serve in regions that are rural, underserved, or Health Professional Shortage Areas (HPSA). Such incentives are available to various types of providers, including physicians, nurse practitioners, physician assistants, nurses, dentists, and mental health providers, but typically focus on primary care and family medicine practitioners (Geletko 2014 ).

Expected Beneficial Outcomes (Rated)

Increased availability of health professionals in underserved areas

Other Potential Beneficial Outcomes

Increased access to care

Evidence of Effectiveness

There is some evidence that nancial incentive programs increase the number of health care providers serving in underserved areas (Goodfellow 2016 , Cochrane-Grobler 2015, Wilson 2009, Sempowski 2004 , Opoku 2015, Daniels 2007). Additional evidence is needed to conrm effects and determine which incentives are most effective (Goodfellow 2016 , Misfeldt 2014).

Participants in nancial incentive programs are more likely to serve in underserved areas than non-participating peers (Cochrane-Grobler 2015, Barnighausen 2009b , Daniels 2007). On average, participants remain in underserved areas longer than non-participants (Cochrane-Grobler 2015, Barnighausen 2009b ). However, providers may not always stay in rural or remote communities following their commitment (Misfeldt 2014).

Scholarships, loan repayments (Misfeldt 2014), and loan forgiveness programs appear to support recruitment of health care providers to underserved areas (Daniels 2007). Loan repayment programs also appear to increase the duration providers practice in these locations (Goodfellow 2016 , Renner 2010, Opoku 2015). Financial incentives are more effective as part of multi-dimensional programs than incentives alone (Sempowski 2004 , Misfeldt 2014), and incentive programs offered at the end of training may be more successful than those offered earlier (Barnighausen 2009b ). Surveys suggest that competitive salaries, professional development, knowledgeable support staff, and professional support may increase the likelihood of provider retention in rural or underserved areas after the completion of service commitments (Scarbrough 2016).

Mid-level providers such as nurse practitioners (NPs), nurse midwives, and physician assistants are more likely to practice in rural areas than other health care professionals (Daniels 2007). Primary care NPs (Spetz 2016, DesRoches 2013) and family medicine NPs (Odell 2013) are also more likely to practice in rural or underserved areas than NPs with other specialties. Research suggests that providers who participate in nancial incentive programs may have elected to practice in underserved areas even without incentives (Renner 2010, Barnighausen 2009b ). In particular, rural background or origin is associated with the decision to practice and remain in rural communities (Cochrane-Grobler 2015, Crump 2015, Petrany 2013, Renner 2010, Wilson 2009, Daniels 2007).

Experts suggest that expanding nancial incentives with service requirements to include general surgeons (Tierney 2017, Collins 2016 ), OB/GYN physicians, nurse midwives (Smulian 2016 ), and telehealth providers offering mental health care (Collins 2016 ) may increase access in rural and underserved communities.

Impact on Disparities

Likely to decrease disparities

http://www.countyhealthrankings.org/take-action-to-improve-health/what-works-for-health/policies/higher-education-financial-incentives-for-health-professionals-servin Im4/8/2018plementation EHigherxam educationples financial incentives for health professionals serving underserved areas | County Health Rankings & Roadmaps

The National Health Service Corps (NHSC) provides up to $50,000 in loan repayment and scholarships for physicians, dentists, advance practice nurses (nurse practitioners, certied nurse midwives), physician assistants, dental hygienists, and mental health professionals who work for two years in a Tier 1 Health Professional Shortage Area (HPSA) (US DHHS-NHSC ). NHSC’s Students to Service Loan Repayment Program (S2S LRP) also provides up to $120,000 to fourth year medical students who commit to practice primary care in a HPSA for three years full-time or six years half-time (US DHHS-NHSC-S2S LRP ).

A number of other entities provide loan repayment programs. The Health Resources and Services Administration (HRSA), for example, offers a Nursing Education Loan Repayment Program that repays 60% of qualied loan balances for two years of work at a critical shortage facility; for an optional third year, it will pay 25% of the original balance (HRSA-NELRP ). The Indian Health Service’s Loan Repayment Program provides $20,000 per year for two years for a variety of providers and allied health professionals; the contract may be extended annually until the debt is paid (US DHHS-IHS ).

State funded loan repayment programs may complement the NHSC federal program (US DHHS-NHSC , Pathman 2012a). States can also include other specialties in their loan repayment programs, for example, in North Carolina general surgeons practicing in HPSAs are eligible (Collins 2016 ).

Implementation Resources

US DHHS-IHS - US Department of Health and Human Services (US DHHS). Indian Health Service (IHS). IHS Loan repayment program.

HRSA-NELRP - Health Resources and Services Administration (HRSA). Nursing education loan repayment program (NELRP). US Department of Health and Human Services (US DHHS).

US DHHS-NHSC - US Department of Health and Human Services (US DHHS). National Health Service Corps (NHSC). Growing the primary care workforce by serving communities.

RHIhub-Loan forgiveness 2014 - Rural Health Information Hub (RHIhub). Programs for loan repayment and forgiveness: A list for rural providers. The Rural Monitor. 2014.

RTT Collaborative - RTT Collaborative. Rural education & training: resources on rural residencies, training tracks, program locations, and nancial resources.

ASHA-Student loan repayment - American Speech-Language-Hearing Association (ASHA). The ASHA Leader. Student loan repayment looms for new clinicians. 2015.

Citations - Evidence +

Citations - Implementation Examples +

Date Last Updated Sep 26, 2017

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http://www.countyhealthrankings.org/take-action-to-improve-health/what-works-for-health/policies/higher-education-financial-incentives-for-health-professionals-servin 4/8/2018 Mexico's sugar tax leads to fall in consumption for second year running | Society | The Guardian

Mexico's sugar tax leads to fall in consumption for second year running Health experts are watching the progress of the tax to see if it will lower the rates of obesity- related diseases and type 2 diabetes

Sarah Boseley Health editor Wed 22 Feb 2017 16.00 EST

Mexico’s sugar tax appears to be having a signiﬁcant impact for the second year running in changing the habits of a nation famous for its love of Coca-Cola, and will encourage countries troubled by obesity and contemplating a tax of their own.

An analysis of sugary-drink purchases, carried out by academics in Mexico and the United States, has found that the 5.5% drop in the ﬁrst year after the tax was introduced was followed by a 9.7% decline in the second year, averaging 7.6% over the two-year period.

Mexico has high rates of obesity – more than 70% of the population is overweight or obese – and sugar consumption. More than 70% of the added sugar in the diet comes from sugar-sweetened drinks. Coca-Cola is particularly popular and holds a place in the national culture, while former president Vicente Fox was the regional head of the company. https://www.theguardian.com/society/2017/feb/22/mexico-sugar-tax-lower-consumption-second-year-running 1/4 4/8/2018 Mexico's sugar tax leads to fall in consumption for second year running | Society | The Guardian Health experts worldwide have been watching the progress of the Mexican tax closely because it could potentially lower the rates of obesity-related diseases and type 2 diabetes in a country with a population of more than 122 million.

The scientists cannot yet calculate the eﬀect on health. But they write in the journal Health Aﬀairs: “These reductions in consumption could have positive impacts on health outcomes and reductions in healthcare expenses in Mexico.”

The Mexican tax, if successful, may pave the way for taxes in other countries. “At the global level, ﬁndings on the sustained impact over two years of taxes on the beverages in Mexico may encourage other countries to use ﬁscal policies to reduce the consumption of unhealthy beverages ... to reduce the burden of chronic diseases,” they say.

Mexico is a nation famous for its love of Coca-Cola. Photograph: Alamy

The study has been carried out by the University of North Carolina at Chapel Hill’s Gillings School of Global Public Health and the Mexican Instituto Nacional de Salud Pública (National Institute of Public Health). They found that the tax, which is just 1 peso (4p) per litre of sugary drink, had its biggest impact on the poorest households, where the decline in purchases was 18.8ml per person per day in 2014 and 29.3ml in 2015.

Purchases of other untaxed drinks went up on average by 2% over the two years, although the second year showed a decline. There is evidence from other data, however, of an increase in the production of still bottled water two years after the tax began, which the authors say may suggest some consumers are turning to water instead.

“Overall the results from our study contradict industry reports of a decline in the eﬀect of the tax after the ﬁrst year of its implementation. We found a greater reduction in purchases of sugar- sweetened beverages in 2015 than in 2014. Moreover, both the absolute and relative reductions were highest among households at lower socioeconomic levels,” said the paper.

Barry Popkin, distinguished professor in the department of nutrition at Gillings and one of the authors, looked forward to collecting data on the health impact. “It will be important for us to continue to monitor this tax and see how this actually will aﬀect overall diets, diabetes prevalence and other biological markers of the many noncommunicable diseases linked with excessive sugary beverage consumption,” he said.

https://www.theguardian.com/society/2017/feb/22/mexico-sugar-tax-lower-consumption-second-year-running 2/4 4/8/2018 Mexico's sugar tax leads to fall in consumption for second year running | Society | The Guardian Adam Briggs, of the Nuﬃeld department of population health at Oxford University, said the results of the study were “really encouraging, particularly from a UK perspective where the sugar- sweetened beverages levy is due to be introduced in just 12 months’ time.

“These are very important data for policymakers considering implementing soft drink taxes and it will be fascinating to see how sales continue over time … measuring independent health outcomes of such isolated policies is really challenging but, as the authors say, these reductions in consumption would likely have important population-level health beneﬁts in terms of diabetes and obesity-related diseases.”

The UK planned levy is diﬀerent to the Mexican tax in its design and structure, he said. “However, the principle that price change leads to sustained behaviour change remains important.”

Gavin Partington, director general of the British Soft Drinks Association, said: “Given their fervent belief in the principle of taxing soft drinks we should at least be encouraged that the authors accept causality cannot be established in terms of the impact of the tax in Mexico and the claimed falls in consumption. Nevertheless, while it seems obvious that price can have an impact on sales levels, it is far from clear that the tax on soft drinks in Mexico has had any impact on levels on obesity.”

A new report from Euromonitor International said that 19 countries had so far introduced what it called “sin taxes” on food and drinks and more would do so in the near future, with the aim of reducing sugar consumption by 20% in line with guidance from the World Health Organisation.

Euromonitor suggested the Mexican tax may be too low to have the desired eﬀect and that the higher tax of 33 US cents per litre introduced in Berkeley, California, has been a bigger success. Berkeley “is said to have reduced SSB [sugar-sweetened beverage] consumption by 21% and increased water consumption by 63%. In comparison, other cities in the US reported a 4% increase in SSB consumption, and only 19% increase in water consumption in that time,” said the report.

It pointed to countries that might want to introduce “sin taxes” in the near future. “According to the NHS in the UK, consumers should not exceed more than 70g of fat and have no more than 90g of total sugar a day. Euromonitor’s Passport Nutrition data shows that 37 of the 54 (69%) researched countries exceed the fat intake recommendation, and 38 (70%) exceed the sugar recommendation. The top three sugar consumers are Chile, the Netherlands and Belgium, while the top three fat consumers are Germany, Sweden and Austria,” it said. Since you’re here … … we have a small favour to ask. More people are reading the Guardian than ever but advertising revenues across the media are falling fast. And unlike many news organisations, we haven’t put up a paywall – we want to keep our journalism as open as we can. So you can see why we need to ask for your help. The Guardian’s independent, investigative journalism takes a lot of time, money and hard work to produce. But we do it because we believe our perspective matters – because it might well be your perspective, too.

I appreciate there not being a paywall: it is more democratic for the media to be available for all and not a commodity to be purchased by a few. I’m happy to make a contribution so others with less means still have access to information. Thomasine, Sweden https://www.theguardian.com/society/2017/feb/22/mexico-sugar-tax-lower-consumption-second-year-running 3/4 4/8/2018 Mexico's sugar tax leads to fall in consumption for second year running | Society | The Guardian If everyone who reads our reporting, who likes it, helps fund it, our future would be much more secure. For as little as $1, you can support the Guardian – and it only takes a minute. Thank you.

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https://www.theguardian.com/society/2017/feb/22/mexico-sugar-tax-lower-consumption-second-year-running 4/4 4/8/2018 Obesity-related health care spending on the rise, study finds | Advisory Board Daily Briefing

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7:30 AM - February 21, 2018

The share of U.S. medical expenditures dedicated to treating obesity-related illnesses in adults rose by 29% from 2001 to 2015, but state spending levels varied, according to a study published in Clinical Chemistry.

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Study details

For the study, researchers analyzed Medical Expenditure Panel Survey data from 2001 to 2015 and estimated the share of health care costs associated with adult obesity in the United States. The researchers examined expenditures by payer types, including Medicare, Medicaid, and private health insurance. The researchers also reviewed literature on the economic eﬀects of obesity.

Findings

According to the study, the share of U.S. national medical expenditures dedicated to treating obesity-rated illness in the adults increased by 29% from 6.13% in 2001 to 7.91% in 2015. The authors wrote that ﬁndings show a "substantial and rising percentage of health care costs are associated with obesity" in the United States.

However, the researchers found "substantial diﬀerences" in state spending on obesity-related illnesses. For example, the researchers found Arizona, California, Florida, and New York dedicated 5% to 6% of state medical expenditures in 2015 to obesity, while North Carolina, Ohio, and Wisconsin dedicated more than 12% of state medical expenditures.

https://www.advisory.com/daily-briefing/2018/02/21/obesity-costs?wt.mc_id=email%7cdailybriefing+headline%7cdba%7cdb%7c2018feb21%7cfinaldb2018feb21%7c% 4/8/2018 Obesity-related health care spending on the rise, study finds | Advisory Board Daily Briefing The state-by-state spending disparities held when the researchers looked at obesity-related spending by payer. For instance, the researchers found Kentucky and Wisconsin dedicated more than 20% of their Medicaid expenditures to obesity-related illnesses. In comparison, New York dedicated 10.9% of its Medicaid expenditures to obesity-related illnesses.

When the researchers reviewed previous literature on the economic eﬀects of obesity, they found obesity:

Imposes negative external costs that might warrant government intervention; Lowers wages and the likelihood of employment; and Raises medical care costs.

Comments Understand the wellness John Cawley, one of the study's authors and a professor at Cornell spectrum University, in a release said, "We have, for the ﬁrst time, estimated the percentage of health care spending that is devoted to obesity, using microdata for each state." Cawley said the diﬀerence in medical expenditures dedicated to obesity across states is driven by several factors, including health care access, health care prices, obesity prevalence, and obesity treatment (MacDonald, FierceHealthcare, 2/9; HealthDay News/Endocrinology Advisory, 2/9; Lagasse, Healthcare Finance News, 2/12).

Key considerations for launching an outpatient diabetes program

As obesity and diabetes rates rise across the country, many hospitals have developed outpatient diabetes centers. Projections estimate that by 2050, one in three Americans will have diabetes. The most progressive hospitals have combined diabetes treatment, education, wound care, ophthalmology, and other services into comprehensive programs.

In this brieﬁng, we proﬁled six leading institutions have successfully integrated outpatient diabetes services into their primary care networks.

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Do Soda Taxes Really Work?

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By ALEXANDRA SIFFERLIN April 18, 2017

TIME For more, visit TIME Health. Health

In 2014, Berkeley, California became the rst city in the United States to pass a tax on sugar-sweetened beverages. The goal was to cut back on consumption—and eventually, to help chip away at rates of diseases like obesity and type 2 diabetes.

The tax, which tacks on one cent per uid ounce on beverages with added caloric sweeteners—like sodas, energy drinks and sweetened fruit drinks—was ofcially

http://time.com/4743286/berkeley-soda-tax/ 1/4 4/8/2018 Soda Tax in Berkeley: Does Taxing Sugar Really Work? | Time implemented in March 2015. And according to a new report published Tuesday in the journal PLOS Medicine, it appears to be working.

The researchers looked at whether the tax impacted the buying behaviors of Berkeley residents. They found that one year after the tax took effect, sales of sugar- sweetened drinks fell by close to 10%, and sales of water increased in Berkeley by about 16%. Sales of unsweetened teas, milk and fruit juices also went up, suggesting people were substituting their sugary drinks with healthier alternatives.

MORE: Soda Taxes Prompt High Fives from Health Advocates

“I was really quite surprised, to be honest,” says lead study author Barry Popkin of the University of North Carolina at Chapel Hill. “Berkeley already consumes [fewer sugary drinks] than the rest of America. They are highly educated and higher income. We wondered, if money is not a problem, would they stop?”

The ndings suggest that even in higher-income communities, a soda tax can impact sales. Popkin predicts that the drops would be even greater in cities and counties with lower-income communities. In Mexico, which passed a similar tax that took effect in 2014, there have been signicant declines in the consumption of sugary beverages. Among low-income residents, it dropped by 17% early on.

This strategy may be gaining traction in the U.S. During the 2016 election, four cities and one U.S. county—including San Francisco and Cook County, Illinois—voted in favor of raising the price of sugar-sweetened beverages. Philadelphia also passed a similar soda tax in June of 2016. “I expect larger effects in those cities,” says Popkin.

Another interesting nding in the study was that sales of sugar-sweetened beverages in neighboring cities rose nearly 7%—possibly because people may be buying their soda where it’s cheaper. Yet Popkin says he’s skeptical that the number of people in Berkeley would be great enough to increase the rates of other cities substantially, and believes that the higher rates could be partially unrelated. Other experts argue that taxes in surrounding areas would need to be passed to have a substantial effect.

http://time.com/4743286/berkeley-soda-tax/ 2/4 4/8/2018 Soda Tax in Berkeley: Does Taxing Sugar Really Work? | Time TIME Health Newsletter

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“What if surrounding cities, or the state of California, passed a tax? Would people go to another state to buy? Probably not,” says Dr. Robert Lustig, a sugar researcher and a pediatric endocrinologist at University of California, San Francisco. (Lustig was not involved in the study.)

It’s still too early to say whether soda taxes in communities translate to better health in residents. In the new report, Berkeley residents reported drinking fewer sugary beverages, but the amount of calories saved was too small to be statistically signicant. Popkin and Lustig both say it could take years before any effect on diabetes or obesity rates will be noticeable.

http://time.com/4743286/berkeley-soda-tax/ 3/4 4/8/2018 Soda Tax in Berkeley: Does Taxing Sugar Really Work? | Time Bloomberg Philanthropies, founded by former New York City Mayor Michael Bloomberg, provided some funding for the new study. Bloomberg is an advocate of soda taxes, and has donated funds to campaigns throughout the country.

Taxes on sugary beverages have big implications for the companies that sell them. The beverage industry has spent more than $20 million ghting soda taxes in places like California; in Philadelphia, the American Beverage Association (ABA), a trade group for beverage companies, has taken legal action against the city, arguing the taxes are unconstitutional. Pepsi recently announced it will cut up to 100 jobs in Philadelphia due to the tax. Philadelphia Mayor Jim Kenney’s ofce has urged residents to be skeptical of Pepsi’s claims, given the company brought in $62.8 billion in revenue in 2016. “They are literally holding hostage the jobs of hardworking people in their battle to overturn the tax,” city spokeswoman Lauren Hitt told the Associated Press.

The tax also doesn’t look the same in every city. While the money from Berkeley’s tax goes into the city’s general fund, Philadelphia uses the funds from the tax to expand the availability of pre-kindergarten in the city. “Ultimately I am for anything that reduces consumption,” Lustig says. “I think different cities and countries will nd different way to make it happen.”

http://time.com/4743286/berkeley-soda-tax/ 4/4 4/15/2018 Philadelphia Residents Drank Less Sugary Drinks After Soda Tax | Time

Does Taxing Soda Actually Stop People from Drinking It?

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By ALEXANDRA SIFFERLIN April 12, 2018

TIME For more, visit TIME Health. Health

A new study suggests that people may drink signicantly less soda when it costs more. The ndings support a public health strategy—the so-called “soda tax,” or a sugary drink tax that raises the price of sugar-sweetened beverages—that has grown more popular in recent years.

http://time.com/5236621/soda-sugary-drink-tax/ 1/3 4/15/2018 Philadelphia Residents Drank Less Sugary Drinks After Soda Tax | Time In the study, researchers analyzed the effects of Philadelphia’s sugary drink tax implemented in January 2017—one of the steepest in the U.S. at $0.015 per ounce, which was estimated to increase the cost of sugary drinks by as much as 20%. Researchers from Drexel University in Philadelphia looked at the short-term impact of the city’s beverage tax by studying residents’ consumption within the rst two months of the tax and comparing it to how much people reported drinking before the tax. Their ndings are published in the journal American Journal of Preventive Medicine.

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The researchers asked close to 900 men and women in Philadelphia about their sugar-sweetened beverage habits before and after the tax was launched; they also asked about 900 people living in three other cities (Trenton, New Jersey; Camden, New Jersey; and Wilmington, Delaware). Philadelphia residents were 40% less likely to report drinking sugary soda each day after the tax was passed, and 64% less likely to drink energy drinks. Instead, they seemed to drink more water; residents were 58% more likely to drink bottled water every day. The researchers did not see declines in sugary fruit drinks like lemonade or cranberry juice. There were declines in the consumption of diet beverages (which were also taxed) but they were not statistically signicant.

“There’s growing recognition that sugar-sweetened beverages are not an essential item, and consumers may be willing to accept other beverages if sugar-sweetened beverages are not as cheap as they have been,” says study co-author Amy Auchincloss, an associate professor at Drexel’s Dornsife School of Public Health.

MORE: Do Soda Taxes Actually Work? http://time.com/5236621/soda-sugary-drink-tax/ 2/3 4/15/2018 Philadelphia Residents Drank Less Sugary Drinks After Soda Tax | Time Some experts argue it’s still too early to know for certain whether beverage taxes actually have an impact on community health. In Philadelphia, the taxes weren’t passed solely for health reasons, but to increase revenue for the city to help fund things like an expansion of the city’s pre-kindergarten programming. Still, some initiatives are showing promising results. One year after Berkeley, California became the rst U.S. city in 2015 to pass a tax on sugar-sweetened beverages, research showed sales of sugar-sweetened drinks in Berkeley fell by close to 10%, and water sales increased by about 16%. Similar drops have been reported in Mexico; a year after the country implemented its tax in 2014, there was an average 6% decline in purchases of sugar-sweetened beverages and a 4% average increase in untaxed beverages compared to what would have been expected if the tax was not in place.

The current study only offers a glimpse into the impact of the tax immediately after it was implemented in Philadelphia. It’s unclear if people’s drinking habits continued after the two-month study period. However, the study authors point out that drops in soda consumption among residents of Mexico have continued for at least two years after passage of the law.

http://time.com/5236621/soda-sugary-drink-tax/ 3/3