The regulatory environment surrounding patient data privacy has become an increasingly complex labyrinth for healthcare and pharmaceutical organizations, especially those that manage sensitive information through patient support programs. The central challenge arises from a fragmented and rapidly evolving landscape of privacy laws at the state level, which is creating a compliance maze that is exceptionally difficult to navigate. As these new regulations emerge, organizations find themselves struggling to reconcile a patchwork of requirements that extends far beyond the familiar territory of federal law. This shift is compelling a complete re-evaluation of established compliance strategies, forcing a move from a centralized, one-size-fits-all approach to a more dynamic and jurisdiction-specific framework to mitigate significant legal and financial risks. The days of relying on a single federal standard are over, replaced by an era of multifaceted and demanding state-by-state vigilance.
Navigating the Gaps in Federal Oversight
The Misunderstood Scope of HIPAA
A fundamental challenge in the current privacy landscape begins with a widespread and persistent misunderstanding of the Health Insurance Portability and Accountability Act (HIPAA), long considered the cornerstone of healthcare privacy in the United States. A common misconception, according to privacy experts, is that HIPAA governs all health-related data. In reality, its jurisdiction is surprisingly narrow, applying only to “covered entities”—such as healthcare providers and hospitals—and their designated “business associates.” A crucial point often overlooked is that HIPAA does not directly regulate pharmaceutical companies. This creates a major regulatory gap, as sensitive data that is legally classified as Protected Health Information (PHI) when held by a physician or hospital loses that specific legal status once it is received by a pharmaceutical company operating a patient support program. This distinction fundamentally complicates compliance efforts, as organizations must manage highly sensitive data that falls outside the well-known federal framework, leaving them to navigate a less defined and more perilous legal territory.
The practical implications of this regulatory gap are profound for organizations running patient support programs, which often handle a vast amount of sensitive health data to assist patients with medication access and adherence. When this information is transferred from a HIPAA-covered entity to a pharmaceutical manufacturer, it enters a legal gray area. While the data is no longer technically PHI under federal law, it remains intensely personal and subject to a growing array of other regulations. This transition requires a significant shift in compliance thinking. Companies can no longer rely solely on their HIPAA compliance programs. Instead, they must develop a multi-layered strategy that accounts for state privacy laws, contractual obligations, and consumer expectations. Failure to do so exposes these organizations to significant risks, including legal action, reputational damage, and a loss of patient trust, all of which can have devastating consequences for programs designed to help the most vulnerable patients.
A War of Words: The Challenge of Inconsistent Terminology
Adding another layer of complexity is the profound lack of standardized terminology across the expanding body of privacy regulations. Corey Dennis, chief privacy officer at Legend Biotech, emphasized that terms like “Protected Health Information,” “health information,” and “personal information” carry vastly different legal definitions depending on the specific law being applied. While the term “PHI” is often used colloquially in the pharmaceutical sector to describe any patient-related data, it is not technically accurate in that context and its misuse can lead to flawed compliance strategies. This inconsistency is not merely semantic; it has deep practical implications for compliance and risk management. Organizations must exercise extreme precision in their legal language, ensuring that their contracts, internal policies, procedures, and consent forms correctly reflect the definitions set forth by each applicable regulation. A failure to distinguish between these terms can result in the misapplication of rules, leading to significant compliance failures and legal vulnerabilities.
The operational challenges stemming from this inconsistent terminology are immense and impact the very foundation of an organization’s privacy program. Legal and compliance teams must dedicate substantial resources to analyzing each state law to understand its unique definitions and requirements. This painstaking work is essential for drafting accurate and effective legal documents. For example, a data processing agreement that works under one state’s definition of “personal information” may be inadequate under another’s. Similarly, patient consent forms must be carefully worded to align with the specific type of data being collected and the legal framework that governs it. This requires a level of granularity and adaptability that many existing compliance systems are not designed to handle, forcing organizations to invest in new technologies and processes to manage this complex linguistic and legal maze effectively and avoid the severe penalties associated with non-compliance.
The New Frontline: State-Level Regulations
The Domino Effect of State Privacy Legislation
An overarching trend reshaping the data privacy landscape is the proliferation of new, comprehensive state-level privacy laws designed to fill the gaps left by HIPAA. Dennis noted that this movement mirrors the “domino effect” seen in the 2000s and 2010s, when states began enacting their own data breach notification laws. That process, which started with a single state, eventually resulted in 50 different state laws, creating a complex compliance web for businesses. A similar pattern is now emerging with general data privacy, with 20 states having already enacted comprehensive laws. This trend strongly suggests the United States is heading toward an intricate patchwork of state-specific privacy requirements rather than a unified federal standard. This legislative fragmentation forces companies that operate nationally to move away from a single compliance model and instead adopt a more flexible and regionally-focused approach to data governance, dramatically increasing the complexity and cost of doing business across state lines.
The consequences of this legislative patchwork are far-reaching, imposing a significant compliance burden on organizations, particularly those with a national footprint. Instead of adhering to a single set of federal rules, companies must now track, interpret, and implement dozens of different, and sometimes conflicting, state requirements. This creates substantial operational inefficiencies and elevates legal risks. For example, a company’s data collection practices might be permissible in one state but require explicit, affirmative consent in another. Managing these variations demands sophisticated compliance management systems and dedicated legal expertise to monitor the ever-changing legislative environment. The lack of a federal privacy standard means this complexity is likely to grow, turning data privacy compliance into a state-by-state battle that requires constant vigilance and significant investment in resources to avoid costly enforcement actions and reputational harm.
Washington’s My Health, My Data Act: A Glimpse into the Future
The Washington My Health, My Data Act serves as a prominent and powerful example of this new wave of state regulation, offering a glimpse into the future of health data privacy. According to Joe Jones, senior commercial counsel at LivaNova, this law was specifically designed to regulate the vast amount of consumer health data generated outside the traditional healthcare system. This includes information collected by wearable devices like the Apple Watch and Fitbit, data from health and wellness apps, and even search engine queries related to health conditions—none of which are typically covered by HIPAA. The Act’s power lies in its exceptionally broad definition of “consumer health data,” which includes any information, derived or inferred, that can be reasonably linked to a consumer and identifies their past, present, or future physical or mental health status. This expansive scope captures a wide range of data that previously existed in a regulatory gray area, signaling a major shift toward greater consumer control over all forms of health-related information.
A key distinction of the Washington law that sets it apart from other state privacy acts is its stringent consent model. Unlike the California Consumer Privacy Act (CCPA), which largely operates on an “opt-out” basis where consumers must actively choose to stop their data from being sold or shared, the Washington law mandates “express consent.” This “opt-in” requirement means organizations must obtain explicit and affirmative permission from consumers before any consumer health data is collected or used. This represents a much higher compliance threshold and a fundamental reordering of the relationship between companies and consumers. It shifts the burden of action from the consumer to the corporation, demanding transparency and clear communication about data practices from the outset. This move toward an opt-in standard for health data is a significant development that is likely to influence future privacy legislation in other states, pushing the entire industry toward a more consumer-centric model of data governance.
The GDPR’s Lingering Influence on U.S. Law
Furthermore, this new generation of state laws reflects the significant and undeniable influence of the European Union’s General Data Protection Regulation (GDPR). Terminology and legal concepts that originated with GDPR, such as the formal distinction between a “data controller” and a “data processor,” are now becoming standard in the U.S. regulatory landscape. Similarly, the requirement for formal “data processing agreements” that clearly outline the responsibilities of each party when handling personal data is another concept imported directly from the European framework. This integration of international privacy principles into state law is compelling American companies to adopt new compliance frameworks and operational processes that align with global standards. It is no longer sufficient for U.S.-based organizations to focus solely on domestic regulations; they must now incorporate a global perspective into their privacy programs to remain compliant within their own borders.
The adoption of GDPR-like principles is more than just a matter of legal terminology; it represents a fundamental philosophical shift in how data privacy is approached in the United States. The emphasis on concepts like data minimization, purpose limitation, and privacy by design—all hallmarks of the GDPR—is forcing American companies to move beyond a reactive, compliance-focused mindset toward a more proactive and ethical approach to data governance. This cultural change requires organizations to embed privacy considerations into the entire lifecycle of their products and services, from initial design to data disposal. The long-term impact is a convergence of U.S. and international privacy norms, pushing domestic companies to meet a higher standard of accountability and transparency that consumers are increasingly coming to expect and that state lawmakers are now beginning to mandate through their new, more stringent legislation.
A Mandate for Proactive Compliance
The landscape of patient data privacy had definitively shifted away from a singular, federally-focused standard toward a fragmented and more stringent system dominated by state-level legislation. This evolution presented substantial and unprecedented compliance challenges for patient support programs and the broader healthcare industry. Organizations were forced to navigate a maze of varying legal definitions, consent requirements that ranged from opt-out to strict opt-in models, and entirely new regulatory frameworks. The tangible impact was a mandatory and comprehensive overhaul of compliance programs. This overhaul affected everything from contracts with vendors and internal policies and procedures to patient authorization forms and consent management systems, all of which had to become adaptable enough to meet the distinct and often conflicting requirements of multiple jurisdictions simultaneously. This new reality mandated a proactive, agile, and deeply informed approach to privacy that anticipated regulatory changes rather than merely reacting to them.
