SRC-MKV C.S.H.B. 915 77(R)BILL ANALYSIS
Senate Research CenterC.S.H.B. 915
77R15748 EBy: Gray (Moncrief)
Health & Human Services
5/8/2001
Committee Report (Substituted)
DIGEST 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
This bill does not expressly grant any additional rulemaking authority to a
state officer, institution, or agency.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Title 2E, Health and Safety Code, by adding Chapter 110,
as follows:
CHAPTER 110. INTERAGENCY COUNCIL ON
PHARMACEUTICALS BULK PURCHASING
Sec. 110.001. DEFINITION. Provides that in this chapter, "council" means
the Interagency Council on Pharmaceuticals Bulk Purchasing.
Sec. 110.002. BULK PURCHASING COUNCIL. Provides that the Interagency
Council on Pharmaceuticals Bulk Purchasing (council) is composed of an
officer or employee from certain agencies, appointed by the administrative
head of that agency.
Sec. 110.003. PRESIDING OFFICER. Provides that the position of presiding
officer rotates among the members of the council according to the
procedures adopted by the council. Provides that a term as presiding
officer is two years and expires on February 1 of each odd-numbered year.
Sec. 110.004. COMPENSATION. Provides that service on the council is an
additional duty of a member's office or employment. Provides that a member
of the council is not entitled to compensation, but is entitled to
reimbursement of travel expenses incurred by the member while conducting
the business of the council, as provided in the General Appropriations Act.
Sec. 110.005. SUPPORT STAFF. Requires the council's member agencies to
provide the staff for the council.
Sec. 110.006. COUNCIL POWERS AND DUTIES. (a) Requires the council to
develop procedures that member agencies must follow in purchasing
pharmaceuticals other than medical assistance under the vendor drug
program. Authorizes a member 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. Requires an agency that does not follow the
council's procedures to report to the council certain information.
(b) Requires the council to designate one member agency to be the central
purchasing agency for purchasing pharmaceuticals.
(c) Requires the council to use existing distribution networks, including
wholesale and retail distributors, to distribute the pharmaceuticals.
(d) Requires the council to carry out certain duties.
(e) Requires the council, in conducting the study under
Subsection (d), to monitor the progress of the demonstration project for
certain medications and related services established by Section 32.053,
Human Resources Code, as added by S.B. 1156, 77th Regular Session, and make
no recommendations inconsistent with a prescribed medical regime for those
medications.
(f) Authorizes the council to enter into agreements with a local
governmental entity to purchase pharmaceuticals for the local governmental
entity.
(g) Requires the council to develop procedures under which the council is
authorized to disclose information relating to the prices that
manufacturers or wholesalers charge for pharmaceuticals by category of
pharmaceutical. Prohibits the council from disclosing information that
identifies a specific manufacturer or wholesaler or the prices charged by a
specific manufacturer or wholesaler for a specific pharmaceutical.
SECTION 2. Amends Chapter 431E, Health and Safety Code, by adding Section
431.116, as follows:
Sec. 431.116. AVERAGE MANUFACTURER PRICE. (a) Provides that in this
section, "average manufacturer price" has the meaning assigned by 42 U.S.C.
Section 1396r-8(k), as amended.
(b) Requires a person who manufactures a drug, including a person who
manufactures a generic drug, that is sold in this state to file with the
Texas Department of Health (department) certain information.
(c) Requires the information required under Subsection (b) to be filed
annually or more frequently as determined by the department.
(d) Authorizes the department and the attorney general to investigate the
manufacturer to determine the accuracy of the information provided under
Subsection (b). Authorizes the attorney general to take action to enforce
this section.
(e) Requires the department to report the information collected under
Subsection (b) to the council.
SECTION 3. Effective date: September 1, 2001.