By:  Armbrister                                        S.B. No. 561
       73R907 MLR-F
                                 A BILL TO BE ENTITLED
    1-1                                AN ACT
    1-2  relating to licensing exemptions for wholesale distribution of
    1-3  prescription drugs.
    1-4        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-5        SECTION 1.  Section 431.2021(a), Health and Safety Code, is
    1-6  amended to read as follows:
    1-7        (a)  A person who engages in wholesale distribution of drugs
    1-8  in this state for use in humans is exempt from this subchapter if
    1-9  the person is exempt under:
   1-10              (1)  the Prescription Drug Marketing Act of 1987, as
   1-11  amended (21 U.S.C.  Section 353(c)(3)(B));
   1-12              (2)  the regulations adopted by the secretary to
   1-13  administer and enforce that Act; or
   1-14              (3)  the interpretations of that Act set out in the
   1-15  compliance policy manual of the United States Food and Drug
   1-16  Administration <Persons who engage only in the following types of
   1-17  wholesale drug distribution are exempt from the licensing
   1-18  requirements of this subchapter:>
   1-19              <(1)  intracompany sales;>
   1-20              <(2)  the purchase or acquisition by a hospital or
   1-21  other health care entity that is a member of a group purchasing
   1-22  organization of a drug for its own use from the group purchasing
   1-23  organization or from other hospitals or health care entities that
   1-24  are members of such organizations;>
    2-1              <(3)  the sale, purchase, or trade of a drug or an
    2-2  offer to sell, purchase, or trade a drug by a charitable
    2-3  organization described in Section 501(c)(3) of the Internal Revenue
    2-4  Code of 1986 to a nonprofit affiliate of the organization to the
    2-5  extent otherwise permitted by law;>
    2-6              <(4)  the sale, purchase, or trade of a drug or an
    2-7  offer to sell, purchase, or trade a drug among hospitals or other
    2-8  health care entities that are under common control; for the purpose
    2-9  of this section, "common control" means the power to direct or
   2-10  cause the direction of the management and policies of a person or
   2-11  an organization, whether by ownership of stock, voting rights,
   2-12  contract, or otherwise;>
   2-13              <(5)  the sale, purchase, or trade of a drug or an
   2-14  offer to sell, purchase, or trade a drug for emergency medical
   2-15  reasons; for purposes of this section, "emergency medical reasons"
   2-16  includes transfers of prescription drugs by a retail pharmacy to
   2-17  another retail pharmacy to alleviate a temporary shortage;>
   2-18              <(6)  the sale, purchase, or trade of a drug, an offer
   2-19  to sell, purchase, or trade a drug, or the dispensing of a drug
   2-20  pursuant to a prescription;>
   2-21              <(7)  the distribution of drug samples by
   2-22  manufacturers' representatives or distributors' representatives; or>
   2-23              <(8)  the sale, purchase, or trade of blood and blood
   2-24  components intended for transfusion>.
   2-25        SECTION 2.  The importance of this legislation and the
   2-26  crowded condition of the calendars in both houses create an
   2-27  emergency and an imperative public necessity that the
    3-1  constitutional rule requiring bills to be read on three several
    3-2  days in each house be suspended, and this rule is hereby suspended,
    3-3  and that this Act take effect and be in force from and after its
    3-4  passage, and it is so enacted.