77R12706 MCK-D                           
         By Gray, Brown of Brazos, Eiland, et al.               H.B. No. 915
         Substitute the following for H.B. No. 915:
         By Gray                                            C.S.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:
1-13                 (1)  one officer or employee from each of the following
1-14     agencies, appointed by the administrative head of that agency:
1-15                       (A)  the Texas Department of Health;
1-16                       (B)  the Texas Department of Mental Health and
1-17     Mental Retardation;
1-18                       (C)  the Texas Department of Criminal Justice;
1-19                       (D)  the Employees Retirement System of Texas;
1-20     and
1-21                       (E)  the Teacher Retirement System of Texas; and
1-22                 (2)  an officer from any other agency that purchases
1-23     pharmaceuticals, appointed by the commissioner of health and human
1-24     services.
 2-1           Sec. 110.003.  PRESIDING OFFICER. The position of presiding
 2-2     officer rotates among the members of the council according to the
 2-3     procedures adopted by the council. A term as presiding officer is
 2-4     two years and expires on February 1 of each odd-numbered year.
 2-5           Sec. 110.004.  COMPENSATION. Service on the council is an
 2-6     additional duty of a member's office or employment.  A member of
 2-7     the council is not entitled to compensation, but is entitled to
 2-8     reimbursement of travel expenses incurred by the member while
 2-9     conducting the business of the council, as provided in the General
2-10     Appropriations Act.
2-11           Sec. 110.005.  SUPPORT STAFF. The council's member agencies
2-12     shall provide the staff for the council.
2-13           Sec. 110.006.  COUNCIL POWERS AND DUTIES. (a)  The council
2-14     shall develop procedures that member agencies must follow in
2-15     purchasing pharmaceuticals.  A member agency may elect not to
2-16     follow the council's procedures if the agency can purchase the
2-17     pharmaceuticals for a lower price than through the council.  An
2-18     agency that does not follow the council's procedures shall report
2-19     to the council:
2-20                 (1)  the purchase price for the pharmaceuticals; and
2-21                 (2)  the name of the wholesaler or retailer selling the
2-22     pharmaceuticals.
2-23           (b)  The council shall designate one member agency to be the
2-24     central purchasing agency for purchasing pharmaceuticals.
2-25           (c)  The council shall use existing distribution networks,
2-26     including wholesale and retail distributors, to distribute the
2-27     pharmaceuticals.
 3-1           (d)  The council shall:
 3-2                 (1)  investigate any and all options for better
 3-3     purchasing power, including expanding Medicaid purchasing,
 3-4     qualifying for participation in purchasing programs under 42 U.S.C.
 3-5     Section 256b, hospital disproportionate share purchasing, and
 3-6     health department and federally qualified health center purchasing;
 3-7     and
 3-8                 (2)  study and make recommendations regarding drug
 3-9     utilization review, prior authorization, the use of restrictive
3-10     formularies, the use of mail order programs, copayment structure,
3-11     and limits on the number of prescriptions for non-life sustaining
3-12     drugs.
3-13           SECTION 2.  Subchapter E, Chapter 431, Health and Safety
3-14     Code, is amended by adding Section 431.116 to read as follows:
3-15           Sec. 431.116.  AVERAGE MANUFACTURER PRICE. (a)  In this
3-16     section, "average manufacturer price" has the meaning assigned by
3-17     42 U.S.C. Section 1396r-8(k), as amended.
3-18           (b)  A person who manufactures a drug that is sold in this
3-19     state shall file with the department:
3-20                 (1)  the average manufacturer price for the drug; and
3-21                 (2)  the price that each wholesaler in this state pays
3-22     the manufacturer to purchase the drug.
3-23           (c)  The information required under Subsection (b) must be
3-24     filed annually or more frequently as determined by the department.
3-25           (d)  The department and the attorney general may investigate
3-26     the manufacturer to determine the accuracy of the information
3-27     provided under Subsection (b).
 4-1           SECTION 3.  Subchapter I, Chapter 431, Health and Safety
 4-2     Code, is amended by adding Section 431.208 to read as follows:
 4-3           Sec.  431.208.  REPORTING OF PURCHASE PRICE. (a)  A person
 4-4     who engages in the wholesale distribution of drugs in this state
 4-5     shall file with the department information showing the purchase
 4-6     price the distributor pays for each drug the distributor sells in
 4-7     this state.
 4-8           (b)  The information required under Subsection (a) must be
 4-9     filed annually or more frequently as determined by the department.
4-10           (c)  The department and the attorney general may investigate
4-11     the distributor to determine the accuracy of the information
4-12     provided under Subsection (a).
4-13           SECTION 4.  This Act takes effect September 1, 2001.