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.