SRC-CDH H.B. 492 75(R)   BILL ANALYSIS


Senate Research Center   H.B. 492
By: Maxey (Harris)
Health & Human Services
5-5-97
Engrossed


DIGEST 

Currently, the Texas Department of Health (TDH) regulates the wholesale
distribution of drugs and medical devices.  In recent years, the agency's
authority in this area has been challenged administratively and in the
courts due to ambiguities in provisions of the Texas Food, Drug & Cosmetic
Act.  Concern has been raised that clarifications are also needed to
address new trends in the wholesale drug distribution business by which
pharmacists are contracting with wholesalers and "repackagers" on a
consignment basis.  Although pharmacy practice is regulated by the Texas
Board of Pharmacy, such wholesale drug and medical device transactions may
be falling into a jurisdictional gray area without oversight by either the
Board of Pharmacy or TDH.  H.B. 492 redefines "manufacture" to include the
repacking or labeling of food; the process of preparing a drug or drug
product, with certain exceptions; the process of preparing a device; and
the making of any cosmetic product by certain procedures.  This
legislation also redefines "food wholesaler," to include an establishment
engaged solely in the distribution of alcoholic beverages in sealed
containers; and exempts alcohol distributors licensed under certain
chapters of the Alcoholic Beverage Code from the application of Chapter
431J, Health and Safety Code, regarding food manufacturers and
wholesalers.  In addition, this bill requires a hearing on an emergency
order to be held under the contested case provisions of Chapter 2001,
Government Code, and the Texas Board of Health's formal hearing rules.   

PURPOSE

As proposed, H.B. 492 sets forth activities covered by the Texas Food,
Drug, and Cosmetic Act. 

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 431.002(23), Health and Safety Code, to redefine
"manufacture" to include repackaging or labeling of any food; the process
of preparing, propagating, compounding, processing, packaging, holding,
repackaging, labeling, testing, or quality control of a drug or drug
product, with certain exceptions; the process of preparing, fabricating,
assembling, processing, packing, repacking, labeling, or relabeling a
device; or the making of any cosmetic product by certain procedures,
including manipulation, sampling, or testing applied to the product. 

SECTION 2. Amends Sections 431.221(3) and (4), Health and Safety Code, to
redefine "food wholesaler" to provide that the term includes an
establishment engaged solely in the distribution of alcoholic beverages.
Deletes the definition of "manufacture." 

SECTION 3. Amends Section 431.2211, Health and Safety Code, to provide
that this subchapter does not apply to a person engaged solely in the
distribution of alcoholic beverages in sealed containers by holders of
licenses or permits issued under Chapter 19-21, 64, or 65, Alcoholic
Beverage Code.   

SECTION 4. Amends Section 431.045(c), Health and Safety Code, to require a
hearing for an emergency order to be held under the contested case
provisions of Chapter 2001, Government Code, and the Texas Board of
Health's formal hearing rules.  Deletes existing text requiring the
hearing to  be held under Texas Department of Health rules. 

SECTION 5. Effective date:  September 1, 1997.

SECTION 6. Emergency clause.