LSL C.S.H.B. 492 75(R)    BILL ANALYSIS

PUBLIC HEALTH
C.S.H.B. 492
By: Maxey
2-23-97
Committee Report (Substituted)

BACKGROUND 

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.
Clarifications are also needed to address new trends in the wholesale drug
distribution business by which pharmacists are contracting with
wholesalers and "repackagers" on 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. 

PURPOSE

C.S.H.B. 492 redefines "manufacture," and establishes new guidelines in
regard to the issuance of an emergency order. 

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any
additional rulemaking authority to a state officer, department, agency or
institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 431.002(23), Health & Safety Code, by
redefining the term "manufacture" to include specific activities applied
to food, drug or drug products, devices or cosmetic products, and replaces
the term "consumer" with "person."  Clarifies that the term does not
include the distribution process of alcoholic beverages, if the
distribution process does not include any of the other processes under
this subdivision. 

SECTION 2.  Amends Section 431.045(c), Health and Safety Code, to clarify
that a hearing on an emergency order shall be held under the contested
case provisions of Chapter 2001, Government Code and the board's formal
hearing rules rather than departmental rules. 

SECTION 3.  Effective date is September 1, 1997.

SECTION 4.  Emergency clause.

COMPARISON OF ORIGINAL TO SUBSTITUTE

SECTION 1 of the substitute removes the reference from the original bill
to "holding" of a product from the definition of "manufacture."  The
substitute clarifies that the term "manufacture" does not include the
distribution process of alcoholic beverages, if the distribution process
does not include any of the other processes under this subdivision. 

The language from SECTIONS 2 and 3 of the original bill are removed from
the substitute. 

SECTION 4 of the original bill becomes SECTION 2 of the substitute, except
that the amendment to Section 431.045(a), Health and Safety Code, in
SECTION 4 of the original bill is removed from the substitute.