HBA-NRS H.B. 417 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 417 By: Maxey Public Health 2/7/2001 Introduced BACKGROUND AND PURPOSE Most third party drug programs, including state Medicaid outpatient drug programs, pay pharmacy providers based on an estimated cost of the drugs. The federal Omnibus Budget Reconciliation Act of 1990 created the Medicaid Drug Rebate Program for states to obtain post payment rebates from drug manufacturers for state overpayments because of inaccurate cost estimates. As part of the rebate program, drug manufacturers are required to provide the federal government with average manufacturer price (AMP) data for drugs sold by the manufacturer. States offering Medicaid, including Texas, currently do not receive this AMP data. Having access to the data would enhance accurate drug pricing at the state level for the purpose of estimating drug payments. House Bill 417 requires drug manufacturers to provide AMP data to the Texas Department of Health. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS House Bill 417 amends the Health and Safety Code to require a person who manufactures a drug that is sold in this state to annually file with the Texas Department of Health the average manufacturer price for the drug and the price that each wholesaler in this state pays the manufacturer to purchase the drug. The bill authorizes the Texas Department of Health and the attorney general to investigate the manufacturer to determine the accuracy of the "average manufacturer price" as defined by 42 U.S.C. Section 1396r8(k)(1). EFFECTIVE DATE September 1, 2001.