By Gray, Brown of Brazos, Eiland, Naishtat, H.B. No. 915
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to bulk purchasing of prescription drugs by certain state
1-3 agencies.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Subtitle E, Title 2, Health and Safety Code, is
1-6 amended by adding Chapter 110 to read as follows:
1-7 CHAPTER 110. INTERAGENCY COUNCIL ON
1-8 PHARMACEUTICALS BULK PURCHASING
1-9 Sec. 110.001. DEFINITION. In this chapter, "council" means
1-10 the Interagency Council on Pharmaceuticals Bulk Purchasing.
1-11 Sec. 110.002. BULK PURCHASING COUNCIL. The Interagency
1-12 Council on Pharmaceuticals Bulk Purchasing is composed of an
1-13 officer or employee from each of the following agencies, appointed
1-14 by the administrative head of that agency:
1-15 (1) the Texas Department of Health;
1-16 (2) the Texas Department of Mental Health and Mental
1-17 Retardation;
1-18 (3) the Correctional Managed Health Care Committee;
1-19 (4) the Employees Retirement System of Texas;
1-20 (5) the Teacher Retirement System of Texas; and
1-21 (6) any other agency that purchases pharmaceuticals
1-22 designated by the commissioner of health and human services.
1-23 Sec. 110.003. PRESIDING OFFICER. The position of presiding
1-24 officer rotates among the members of the council according to the
1-25 procedures adopted by the council. A term as presiding officer is
2-1 two years and expires on February 1 of each odd-numbered year.
2-2 Sec. 110.004. COMPENSATION. Service on the council is an
2-3 additional duty of a member's office or employment. A member of
2-4 the council is not entitled to compensation, but is entitled to
2-5 reimbursement of travel expenses incurred by the member while
2-6 conducting the business of the council, as provided in the General
2-7 Appropriations Act.
2-8 Sec. 110.005. SUPPORT STAFF. The council's member agencies
2-9 shall provide the staff for the council.
2-10 Sec. 110.006. COUNCIL POWERS AND DUTIES. (a) The council
2-11 shall develop procedures that member agencies must follow in
2-12 purchasing pharmaceuticals. A member agency may elect not to
2-13 follow the council's procedures if the agency can purchase the
2-14 pharmaceuticals for a lower price than through the council. An
2-15 agency that does not follow the council's procedures shall report
2-16 to the council:
2-17 (1) the purchase price for the pharmaceuticals; and
2-18 (2) the name of the wholesaler, retailer, or
2-19 manufacturer selling the pharmaceuticals.
2-20 (b) The council shall designate one member agency to be the
2-21 central purchasing agency for purchasing pharmaceuticals.
2-22 (c) The council shall use existing distribution networks,
2-23 including wholesale and retail distributors, to distribute the
2-24 pharmaceuticals.
2-25 (d) The council shall:
2-26 (1) investigate any and all options for better
2-27 purchasing power, including expanding Medicaid purchasing,
3-1 qualifying for participation in purchasing programs under 42 U.S.C.
3-2 Section 256b, and using rebate programs, hospital disproportionate
3-3 share purchasing, and health department and federally qualified
3-4 health center purchasing; and
3-5 (2) make recommendations regarding drug utilization
3-6 review, prior authorization, the use of restrictive formularies,
3-7 the use of mail order programs, and copayment structures to member
3-8 agencies.
3-9 (e) The council may enter into agreements with a local
3-10 governmental entity to purchase pharmaceuticals for the local
3-11 governmental entity.
3-12 (f) The council shall develop procedures under which the
3-13 council may disclose information relating to the prices that
3-14 manufacturers or wholesalers charge for pharmaceuticals by category
3-15 of pharmaceutical. The council may not disclose information that
3-16 identifies a specific manufacturer or wholesaler or the prices
3-17 charged by a specific manufacturer or wholesaler for a specific
3-18 pharmaceutical.
3-19 SECTION 2. Subchapter E, Chapter 431, Health and Safety
3-20 Code, is amended by adding Section 431.116 to read as follows:
3-21 Sec. 431.116. AVERAGE MANUFACTURER PRICE. (a) In this
3-22 section, "average manufacturer price" has the meaning assigned by
3-23 42 U.S.C. Section 1396r-8(k), as amended.
3-24 (b) A person who manufactures a drug, including a person who
3-25 manufactures a generic drug, that is sold in this state shall file
3-26 with the department:
3-27 (1) the average manufacturer price for the drug; and
4-1 (2) the price that each wholesaler in this state pays
4-2 the manufacturer to purchase the drug.
4-3 (c) The information required under Subsection (b) must be
4-4 filed annually or more frequently as determined by the department.
4-5 (d) The department and the attorney general may investigate
4-6 the manufacturer to determine the accuracy of the information
4-7 provided under Subsection (b). The attorney general may take
4-8 action to enforce this section.
4-9 (e) The department shall report the information collected
4-10 under Subsection (b) to the Interagency Council on Pharmaceuticals
4-11 Bulk Purchasing.
4-12 SECTION 3. Subchapter I, Chapter 431, Health and Safety
4-13 Code, is amended by adding Section 431.208 to read as follows:
4-14 Sec. 431.208. REPORTING OF PURCHASE PRICE. (a) A person
4-15 who engages in the wholesale distribution of drugs in this state
4-16 shall file with the department information showing the actual price
4-17 at which the wholesale distributor sells each drug to a retail
4-18 pharmacy.
4-19 (b) The department shall adopt rules to implement this
4-20 section, including rules relating to how often a wholesale
4-21 distributor is required to provide the information.
4-22 (c) The department and the attorney general may investigate
4-23 the distributor to determine the accuracy of the information
4-24 provided under Subsection (a). The attorney general may take
4-25 action to enforce this section.
4-26 (d) The department shall report the information collected
4-27 under Subsection (a) to the Interagency Council on Pharmaceuticals
5-1 Bulk Purchasing.
5-2 SECTION 4. This Act takes effect September 1, 2001.