1-1 By: Gray, et al. (Senate Sponsor - Moncrief) H.B. No. 915 1-2 (In the Senate - Received from the House May 1, 2001; 1-3 May 2, 2001, read first time and referred to Committee on Health 1-4 and Human Services; May 8, 2001, reported adversely, with favorable 1-5 Committee Substitute by the following vote: Yeas 8, Nays 0; 1-6 May 8, 2001, sent to printer.) 1-7 COMMITTEE SUBSTITUTE FOR H.B. No. 915 By: Moncrief 1-8 A BILL TO BE ENTITLED 1-9 AN ACT 1-10 relating to bulk purchasing of prescription drugs by certain state 1-11 agencies. 1-12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-13 SECTION 1. Subtitle E, Title 2, Health and Safety Code, is 1-14 amended by adding Chapter 110 to read as follows: 1-15 CHAPTER 110. INTERAGENCY COUNCIL ON 1-16 PHARMACEUTICALS BULK PURCHASING 1-17 Sec. 110.001. DEFINITION. In this chapter, "council" means 1-18 the Interagency Council on Pharmaceuticals Bulk Purchasing. 1-19 Sec. 110.002. BULK PURCHASING COUNCIL. The Interagency 1-20 Council on Pharmaceuticals Bulk Purchasing is composed of an 1-21 officer or employee from each of the following agencies, appointed 1-22 by the administrative head of that agency: 1-23 (1) the Texas Department of Health; 1-24 (2) the Texas Department of Mental Health and Mental 1-25 Retardation; 1-26 (3) the Correctional Managed Health Care Committee; 1-27 (4) the Employees Retirement System of Texas; 1-28 (5) the Teacher Retirement System of Texas; and 1-29 (6) any other agency that purchases pharmaceuticals 1-30 designated by the commissioner of health and human services. 1-31 Sec. 110.003. PRESIDING OFFICER. The position of presiding 1-32 officer rotates among the members of the council according to the 1-33 procedures adopted by the council. A term as presiding officer is 1-34 two years and expires on February 1 of each odd-numbered year. 1-35 Sec. 110.004. COMPENSATION. Service on the council is an 1-36 additional duty of a member's office or employment. A member of 1-37 the council is not entitled to compensation, but is entitled to 1-38 reimbursement of travel expenses incurred by the member while 1-39 conducting the business of the council, as provided in the General 1-40 Appropriations Act. 1-41 Sec. 110.005. SUPPORT STAFF. The council's member agencies 1-42 shall provide the staff for the council. 1-43 Sec. 110.006. COUNCIL POWERS AND DUTIES. (a) The council 1-44 shall develop procedures that member agencies must follow in 1-45 purchasing pharmaceuticals other than medical assistance under the 1-46 vendor drug program. A member agency may elect not to follow the 1-47 council's procedures if the agency can purchase the pharmaceuticals 1-48 for a lower price than through the council. An agency that does 1-49 not follow the council's procedures shall report to the council: 1-50 (1) the purchase price for the pharmaceuticals; and 1-51 (2) the name of the wholesaler, retailer, or 1-52 manufacturer selling the pharmaceuticals. 1-53 (b) The council shall designate one member agency to be the 1-54 central purchasing agency for purchasing pharmaceuticals. 1-55 (c) The council shall use existing distribution networks, 1-56 including wholesale and retail distributors, to distribute the 1-57 pharmaceuticals. 1-58 (d) The council shall: 1-59 (1) investigate any and all options for better 1-60 purchasing power, including expanding Medicaid purchasing, 1-61 qualifying for participation in purchasing programs under 42 U.S.C. 1-62 Section 256b, and using rebate programs, hospital disproportionate 1-63 share purchasing, and health department and federally qualified 1-64 health center purchasing; and 2-1 (2) make recommendations regarding drug utilization 2-2 review, prior authorization, the use of restrictive formularies, 2-3 the use of mail order programs, and copayment structures to member 2-4 agencies. 2-5 (e) In conducting the study under Subsection (d), the 2-6 council shall monitor the progress of the demonstration project for 2-7 certain medications and related services established by Section 2-8 32.053, Human Resources Code, as added by S.B. 1156, 77th Regular 2-9 Session, and make no recommendations inconsistent with a prescribed 2-10 medical regime for those medications. 2-11 (f) The council may enter into agreements with a local 2-12 governmental entity to purchase pharmaceuticals for the local 2-13 governmental entity. 2-14 (g) The council shall develop procedures under which the 2-15 council may disclose information relating to the prices that 2-16 manufacturers or wholesalers charge for pharmaceuticals by category 2-17 of pharmaceutical. The council may not disclose information that 2-18 identifies a specific manufacturer or wholesaler or the prices 2-19 charged by a specific manufacturer or wholesaler for a specific 2-20 pharmaceutical. 2-21 SECTION 2. Subchapter E, Chapter 431, Health and Safety 2-22 Code, is amended by adding Section 431.116 to read as follows: 2-23 Sec. 431.116. AVERAGE MANUFACTURER PRICE. (a) In this 2-24 section, "average manufacturer price" has the meaning assigned by 2-25 42 U.S.C. Section 1396r-8(k), as amended. 2-26 (b) A person who manufactures a drug, including a person who 2-27 manufactures a generic drug, that is sold in this state shall file 2-28 with the department: 2-29 (1) the average manufacturer price for the drug; and 2-30 (2) the price that each wholesaler in this state pays 2-31 the manufacturer to purchase the drug. 2-32 (c) The information required under Subsection (b) must be 2-33 filed annually or more frequently as determined by the department. 2-34 (d) The department and the attorney general may investigate 2-35 the manufacturer to determine the accuracy of the information 2-36 provided under Subsection (b). The attorney general may take 2-37 action to enforce this section. 2-38 (e) The department shall report the information collected 2-39 under Subsection (b) to the Interagency Council on Pharmaceuticals 2-40 Bulk Purchasing. 2-41 SECTION 3. This Act takes effect September 1, 2001. 2-42 * * * * *