HBA-TBM, EDN C.S.H.B. 915 77(R)BILL ANALYSIS


Office of House Bill AnalysisC.S.H.B. 915
By: Gray
Public Health
4/17/2001
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

Currently, several different Texas state agencies purchase prescription
drugs for the individuals they serve. The Medicaid Vendor Drug Program at
the Texas Department of Health pays for prescription drugs for those
enrolled in the state Medicaid program.  The Texas Department of Mental
Health and Mental Retardation and the Texas Department of Criminal Justice
purchase prescription drugs for the populations they serve.  Both the
Employees Retirement System of Texas and the Teacher Retirement System of
Texas administer prescription drug benefit programs for the individuals
they insure.  Finally, many state higher education institutions operate
hospitals or clinics which purchase drugs for their patients.  All of these
agencies use different methods to purchase these drugs.  By coordinating
the purchasing efforts of the agencies Texas can negotiate lower prices on
drugs by purchasing in bulk.  C.S.H.B. 915 creates the Interagency Council
on Pharmaceuticals Bulk Purchasing (council) to provide pharmaceutical
purchasing procedures and options for Texas state agencies and requires
manufactures and wholesale distributers of pharmaceuticals in Texas to
report purchase prices of drugs to the council.   

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

C.S.H.B. 915 amends the Health and Safety Code to create the Interagency
Council on Pharmaceuticals Bulk Purchasing (council) to facilitate the bulk
purchasing of prescription drugs by certain state agencies. The bill
requires the council to develop procedures that member agencies must follow
in purchasing pharmaceuticals.  The council is also required to designate
one member agency to be the central purchasing agency for purchasing
pharmaceuticals and to use existing distribution networks to distribute the
pharmaceuticals.   

The bill provides for the council's composition, administration, and
operation.   

The bill requires the council to develop procedures that member agencies
must follow in purchasing pharmaceuticals.  The bill authorizes an agency
to elect not to follow the council's procedures if the agency can purchase
the pharmaceuticals for a lower price than through the council, in which
case the agency is required to report to the council the purchase price and
the name of the wholesaler or retailer selling the pharmaceuticals.  The
bill requires the council to use existing distribution networks to
distribute the pharmaceuticals.  The bill requires the council to
investigate options for better purchasing power and study and make
recommendations concerning prescription drug procedures.   

The bill requires the manufacturer of a drug that is sold in this state and
a wholesale distributer of drugs in Texas to file with the Texas Department
of Health (TDH) annually or more frequently as decided by TDH the average
manufacturer price for the drug and the price that each wholesaler in Texas
pays the manufacturer to purchase the drug.   TDH and the attorney general
are authorized to investigate the manufacturer or distributor to determine
that the information filed is accurate.   
 
EFFECTIVE DATE

September 1, 2001. 

COMPARISON OF ORIGINAL TO SUBSTITUTE

C.S.H.B. 915 differs from the original by providing that an officer on the
Interagency Council on Pharmaceuticals Bulk Purchasing from any agency not
named by the bill that purchases pharmaceuticals is appointed by the
commissioner of health and human services.  The substitute adds provisions
authorizing a member agency under certain circumstances to not follow
procedures for purchasing pharmaceuticals developed by the Interagency
Council on Pharmaceuticals Bulk Purchasing (council).  The substitute
removes provisions regarding a memorandum of understanding and a report
filed by the council with the Legislative Budget Board.  The substitute
adds provisions requiring the council to investigate, study, and make
recommendations regarding purchasing and procedures.  The substitute
requires drug manufacturers and wholesalers to report prices to the Texas
Department of Health.