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
2-1 procedures adopted by the council. A term as presiding officer is
2-2 two years and expires on February 1 of each odd-numbered year.
2-3 Sec. 110.004. COMPENSATION. Service on the council is an
2-4 additional duty of a member's office or employment. A member of
2-5 the council is not entitled to compensation, but is entitled to
2-6 reimbursement of travel expenses incurred by the member while
2-7 conducting the business of the council, as provided in the General
2-8 Appropriations Act.
2-9 Sec. 110.005. SUPPORT STAFF. The council's member agencies
2-10 shall provide the staff for the council.
2-11 Sec. 110.006. COUNCIL POWERS AND DUTIES. (a) The council
2-12 shall develop procedures that member agencies must follow in
2-13 purchasing pharmaceuticals. A member agency may elect not to
2-14 follow the council's procedures if the agency can purchase the
2-15 pharmaceuticals for a lower price than through the council. An
2-16 agency that does not follow the council's procedures shall report
2-17 to the council:
2-18 (1) the purchase price for the pharmaceuticals; and
2-19 (2) the name of the wholesaler, retailer, or
2-20 manufacturer selling the pharmaceuticals.
2-21 (b) The council shall designate one member agency to be the
2-22 central purchasing agency for purchasing pharmaceuticals.
2-23 (c) The council shall use existing distribution networks,
2-24 including wholesale and retail distributors, to distribute the
2-25 pharmaceuticals.
2-26 (d) The council shall:
2-27 (1) investigate any and all options for better
3-1 purchasing power, including expanding Medicaid purchasing,
3-2 qualifying for participation in purchasing programs under 42 U.S.C.
3-3 Section 256b, as amended, and using rebate programs, hospital
3-4 disproportionate share purchasing, and health department and
3-5 federally qualified health center purchasing; and
3-6 (2) make recommendations regarding drug utilization
3-7 review, prior authorization, the use of restrictive formularies,
3-8 the use of mail order programs, and copayment structures to member
3-9 agencies.
3-10 (e) In conducting the investigation under Subsection (d),
3-11 the council shall monitor the progress of the demonstration project
3-12 for certain medications and related services established by Section
3-13 32.053, Human Resources Code, as added by S.B. 1156, Acts of the
3-14 77th Legislature, Regular Session, 2001, and make no
3-15 recommendations inconsistent with a prescribed medical regime for
3-16 those medications.
3-17 (f) The council may enter into agreements with a local
3-18 governmental entity to purchase pharmaceuticals for the local
3-19 governmental entity.
3-20 (g) The council shall develop procedures under which the
3-21 council may disclose information relating to the prices that
3-22 manufacturers or wholesalers charge for pharmaceuticals by category
3-23 of pharmaceutical. The council may not disclose information that
3-24 identifies a specific manufacturer or wholesaler or the prices
3-25 charged by a specific manufacturer or wholesaler for a specific
3-26 pharmaceutical.
3-27 SECTION 2. Subchapter E, Chapter 431, Health and Safety
4-1 Code, is amended by adding Section 431.116 to read as follows:
4-2 Sec. 431.116. AVERAGE MANUFACTURER PRICE. (a) In this
4-3 section, "average manufacturer price" has the meaning assigned by
4-4 42 U.S.C. Section 1396r-8(k), as amended.
4-5 (b) A person who manufactures a drug, including a person who
4-6 manufactures a generic drug, that is sold in this state shall file
4-7 with the department:
4-8 (1) the average manufacturer price for the drug; and
4-9 (2) the price that each wholesaler in this state pays
4-10 the manufacturer to purchase the drug.
4-11 (c) The information required under Subsection (b) must be
4-12 filed annually or more frequently as determined by the department.
4-13 (d) The department and the attorney general may investigate
4-14 the manufacturer to determine the accuracy of the information
4-15 provided under Subsection (b). The attorney general may take
4-16 action to enforce this section.
4-17 (e) The department shall report the information collected
4-18 under Subsection (b) to the Interagency Council on Pharmaceuticals
4-19 Bulk Purchasing.
4-20 SECTION 3. Subchapter I, Chapter 431, Health and Safety
4-21 Code, is amended by adding Section 431.208 to read as follows:
4-22 Sec. 431.208. REPORTING OF PURCHASE PRICE. (a) On the
4-23 department's request, a person who engages in the wholesale
4-24 distribution of drugs in this state shall file with the department
4-25 information showing the actual price at which the wholesale
4-26 distributor sells a particular drug to a retail pharmacy.
4-27 (b) The department shall adopt rules to implement this
5-1 section.
5-2 (c) The department and the attorney general may investigate
5-3 the distributor to determine the accuracy of the information
5-4 provided under Subsection (a). The attorney general may take
5-5 action to enforce this section.
5-6 (d) The department shall report the information collected
5-7 under Subsection (a) to the Interagency Council on Pharmaceuticals
5-8 Bulk Purchasing.
5-9 SECTION 4. This Act takes effect September 1, 2001.
_______________________________ _______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 915 was passed by the House on April
30, 2001, by a non-record vote; that the House refused to concur in
Senate amendments to H.B. No. 915 on May 17, 2001, and requested
the appointment of a conference committee to consider the
differences between the two houses; and that the House adopted the
conference committee report on H.B. No. 915 on May 27, 2001, by a
non-record vote.
_______________________________
Chief Clerk of the House
I certify that H.B. No. 915 was passed by the Senate, with
amendments, on May 15, 2001, by a viva-voce vote; at the request of
the House, the Senate appointed a conference committee to consider
the differences between the two houses; and that the Senate adopted
the conference committee report on H.B. No. 915 on May 27, 2001, by
a viva-voce vote.
_______________________________
Secretary of the Senate
APPROVED: __________________________
Date
__________________________
Governor