Express Scripts 2014 Annual Report Download - page 20

Express Scripts 2014 Annual Report
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additiontoregistrationlaws,somestateshaveadoptedlegislationmandatingdisclosureofvariousaspectsofourfinancial
practices,includingthoseconcerningpharmaceuticalcompanyrevenue,aswellasprescribingprocessesforprescription
switchingprogramsandclientandproviderauditterms.Otherstatesareconsideringsimilarlegislation,andasmorestates
considerthesebillsitwillbedifficulttomanagethedistinctrequirementsofeach.
FDA Regulations. TheHealthReformLawsallowaregulatoryapprovalpathwayforbiosimilars(alternatively
knownasgenerics)forbiologicalproductsandprovideaninnovatorbiologicalproductwillbegranted12yearsofexclusivity.
Atthistime,weareunabletofullyevaluatetheimpactofthechangestobiosimilarstoourbusiness.
Ourclinicalresearchactivitiesarealsosubjecttoanumberofcomplexandstringentregulationsaffectingthe
biotechnologyandpharmaceuticalindustries.Weofferservicesrelatingtoconductofclinicaltrialsandthepreparationof
marketingapplicationsandarerequiredtocomplywithapplicableregulatoryrequirementsgoverning,amongotherthings,the
design,conduct,performance,monitoring,auditing,recording,analysisandreportingofthesetrials.IntheUnitedStates,the
FoodandDrugAdministration(“FDA”)governstheseactivitiespursuanttotheagency’sGoodClinicalPracticeregulations.
HIPAA and Other Data Privacy and Security Legislation. Manyofouractivitiesinvolvethereceiptoruseof
confidentialhealthandotherpersonalinformation.Inaddition,weuseaggregatedandanonymizeddataforourownresearch
andanalysispurposesand,insomecases,provideaccesstosuchdatatopharmaceuticalmanufacturersandthird-partydata
aggregators.Variousfederalandstatelaws,includingtheHealthInsurancePortabilityandAccountabilityActof1996
(“HIPAA”),regulateandrestricttheuse,disclosureandsecurityofcertainpersonalinformation,includinghealthinformation,
andnewlegislationisproposedfromtimetotimeinvariousstates.
Wearerequiredtocomplywithcertainaspectsoftheprivacy,securityandtransactionstandardregulationsunder
HIPAA.TheprivacyregulationsincludedaspartofHIPAAimposerestrictionsontheuseanddisclosureofindividually
identifiablehealthinformationbycertainentities.TheHIPAAsecurityregulationsrelateaccesstoanddisclosureofprotected
healthinformationwhenitismaintainedortransmittedelectronically.OtherHIPAArequirementsrelatetoelectronic
transactionstandardsandcodesetsforprocessingofpharmacyclaims.AspartoftheAmericanRecoveryandReinvestment
ActsignedintolawinFebruary2009,CongressadoptedtheHealthInformationTechnologyforEconomicandClinicalHealth
Act(“HITECH”).InJanuary2013,HHSannouncedanewruletostrengthentheprivacyandsecurityprotectionsestablished
underHIPAA,thefinalOmnibusRule(the“OmnibusRule”).TheOmnibusRuleenhancespatients’privacyprotections,
providespatientsnewrightswithrespecttotheirhealthinformationandstrengthensthegovernment’sabilitytoenforcethe
law.Thechangesexpandmanyoftheprivacyandsecurityrequirementstobusinessassociates,suchascontractorsand
subcontractors.Businessassociatesmayalsobeliableforincreasedpenaltiesfornoncompliance.TheOmnibusRule
significantlychangesthebreachnotificationrequirementsprovidedbyHITECH.Furthermore,theOmnibusRulesetsnew
limitsonhowinformationisusedanddisclosedformarketingandfundraisingpurposes,andprohibitsthesaleofapatient’s
healthinformationwithouthisorherpermission.AswithmanyothercompaniessubjecttoHIPAA,theOmnibusRulemay
havesignificantoperationalandlegalconsequencesforourbusiness.
WebelieveweareincomplianceinallmaterialrespectswithHIPAAandotherstateprivacylaws.Todate,no
patientprivacylawshavebeenadoptedthatmateriallyimpactourabilitytoprovidePBMandpharmacyservices,buttherecan
benoassurancefederalorstategovernmentswillnotenactlegislation,imposerestrictionsoradoptinterpretationsofexisting
lawsthatcouldhaveamaterialadverseeffectonourbusinessandfinancialresults.
Other Business Operations Services.ManyofthelawsandregulationscitedabovewithrespecttoourPBM
activitiesalsoapplywithrespecttoourvariousOtherBusinessOperationsservices.Ofparticularrelevancearethefederaland
stateanti-kickbacklaws,statepharmacyregulationsandHIPAA,whicharedescribedabove.Inaddition,asaconditionto
conductingourwholesalebusiness,wemustmaintainvariouspermitsandlicenseswiththeappropriatestateandfederal
agenciesandwearesubjecttovariouswholesaledistributorlawsthatregulatetheconductofwholesaledistributors,including,
butnotlimitedto,maintainingpedigreepapersincertaininstances.
Service Marks and Trademarks
We,andoursubsidiaries,haveregisteredcertainservicemarksincluding“EXPRESSSCRIPTS®,”“MEDCO®,”
“ACCREDO®,”“CONSUMEROLOGY®,”“UBC®,”“MYRXCHOICES®,”“RATIONALMED®,”“SCREENRX®,”
“EXPRESSALLIANCE®,”“EXPRESSSCRIPTSMEDICARE®,”“EXPRESSADVANTAGENETWORK®,”“HEALTH
DECISIONSCIENCE®”and“THERAPEUTICRESOURCECENTER®”withtheUnitedStatesPatentandTrademarkOffice.
Ourrightstothesemarkswillcontinuesolongaswecomplywiththeusage,renewalfilingsandotherlegalrequirements
relatingtotheusageandrenewalofservicemarks.
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