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.