By Madden                                             H.B. No. 2695
         77R1513 JRD-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the return to the dispensing pharmacy of unused
 1-3     prescription drugs for which the state paid all or part of the cost
 1-4     by a convalescent or nursing home.
 1-5           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-6           SECTION 1. Subchapter N, Chapter 242, Health and Safety Code,
 1-7     is amended by adding Sections 242.6035, 242.6036, and 242.6037 to
 1-8     read as follows:
 1-9           Sec. 242.6035.  RETURNING CERTAIN UNUSED MEDICATION. (a)  An
1-10     institution shall, in accordance with this section, return to the
1-11     dispensing pharmacy certain medication that requires a prescription
1-12     and that will not be used by the resident for whom the medication
1-13     was dispensed if the state paid all or part of the cost of the
1-14     medication under the state Medicaid program or any other program.
1-15           (b)  The dispensing pharmacy to which the medication is
1-16     returned may, in accordance with this section, redispense the
1-17     medication.
1-18           (c)  An institution may return medication that requires a
1-19     prescription to the dispensing pharmacy under this section and the
1-20     dispensing pharmacy may redispense the medication under this
1-21     section only if the medication:
1-22                 (1)  is not a controlled substance under Chapter 481;
1-23                 (2)  is sealed in the manufacturer's unopened original
1-24     tamper-evident packaging; and
 2-1                 (3)  is returned to the dispensing pharmacy in time for
 2-2     the medication to be redispensed by the pharmacy either before the
 2-3     expiration date or within the recommended shelf life of the
 2-4     medication, as applicable.
 2-5           (d)  An institution that returns medication under this
 2-6     section shall use appropriate safeguards to ensure that the
 2-7     medication is not compromised or illegally diverted during its
 2-8     return.
 2-9           Sec. 242.6036.  REIMBURSEMENT FOR RETURNED UNUSED MEDICATION.
2-10     (a)  This section applies only in relation to unused medication
2-11     returned under Section 242.6035.
2-12           (b)  A person who was paid by the state for the medication
2-13     shall pay or credit the state, on the return of the medication to
2-14     the dispensing pharmacy, for the full amount that the state paid
2-15     for the medication.
2-16           (c)  If the state paid the returning institution for the
2-17     medication, the institution may deduct from the amount it pays or
2-18     credits the state under this section a reasonable amount not to
2-19     exceed the  actual cost incurred by the institution in returning
2-20     the medication to the dispensing pharmacy.  If the state paid the
2-21     dispensing pharmacy for the medication, the dispensing pharmacy may
2-22     deduct from the amount it pays or credits the state under this
2-23     section a reasonable amount not to exceed the actual cost incurred
2-24     by the dispensing pharmacy in originally sending the medication to
2-25     the institution.
2-26           (d)  To the extent possible, the department and the Health
2-27     and Human Services Commission shall ensure that the state's claims
 3-1     for reimbursement under this section are adjudicated and paid or
 3-2     credited electronically, especially when the state paid for the
 3-3     medication electronically.
 3-4           Sec. 242.6037.  RULES; PROCEDURES; RECORDKEEPING. (a)  This
 3-5     section applies only in relation to unused medication returned
 3-6     under Section 242.6035 and in relation to reimbursement under
 3-7     Section 242.6036.
 3-8           (b)  An institution or dispensing pharmacy affected by
 3-9     Sections 242.6035 and 242.6036 shall establish procedures necessary
3-10     to allow the institution or dispensing pharmacy to effectively and
3-11     efficiently comply with those laws and with applicable rules
3-12     adopted by a state agency under this section.
3-13           (c)  An institution or dispensing pharmacy affected by
3-14     Sections 242.6035 and 242.6036 shall keep accurate records relating
3-15     to returned medications in the manner and for the period prescribed
3-16     by rule of the Texas State Board of Pharmacy, including records
3-17     regarding amounts charged, paid, or received in connection with the
3-18     returned medication.
3-19           (d)  The Texas State Board Of Pharmacy shall adopt rules to
3-20     implement this section and Sections 242.6035 and 242.6036 that are
3-21     necessary to protect the public health, safety, and welfare. The
3-22     rules must address:
3-23                 (1)  records that an institution or dispensing pharmacy
3-24     must keep under Subsection (c), including records that will allow
3-25     the appropriate authorities to determine whether returned
3-26     medication is redispensed safely and by legal and appropriate
3-27     means; and
 4-1                 (2)  in appropriate detail, situations in which it is
 4-2     normally presumed to be safe and allowed and situations in which it
 4-3     is presumed to be unsafe and not allowed for a pharmacy to
 4-4     redispense medications returned under Section 242.6035, including
 4-5     situations in which medications may not be redispensed because
 4-6     there is reason to believe the medication could be subpotent or
 4-7     could have been compromised or illegally diverted.
 4-8           (e)  The department shall adopt rules to ensure that each
 4-9     institution establishes appropriate procedures necessary to allow
4-10     the institution to effectively and efficiently comply with this
4-11     section, Sections 242.6035 and 242.6036, and applicable rules
4-12     adopted by a state agency under this section.  The rules must
4-13     address procedures by which an institution may effectively identify
4-14     medication for which the state paid all or part of the cost and
4-15     which the institution has a duty to return under Section 242.6035.
4-16           (f)  The Health and Human Services Commission, or the
4-17     department at the direction of the commission, shall adopt rules to
4-18     ensure that the state is promptly and efficiently paid or credited
4-19     the correct amount for returned medications for which the state
4-20     paid all or part of the cost.
4-21           SECTION 2. Section 431.021, Health and Safety Code, is
4-22     amended to read as follows:
4-23           Sec. 431.021.  PROHIBITED ACTS. The following acts and the
4-24     causing of the following acts within this state are unlawful and
4-25     prohibited:
4-26                 (a)  the introduction or delivery for introduction into
4-27     commerce of any food, drug, device, or cosmetic that is adulterated
 5-1     or misbranded;
 5-2                 (b)  the adulteration or misbranding of any food, drug,
 5-3     device, or cosmetic in commerce;
 5-4                 (c)  the receipt in commerce of any food, drug, device,
 5-5     or cosmetic that is adulterated or misbranded, and the delivery or
 5-6     proffered delivery thereof for pay or otherwise;
 5-7                 (d)  the distribution in commerce of a consumer
 5-8     commodity, if such commodity is contained in a package, or if there
 5-9     is affixed to that commodity a label that does not conform to the
5-10     provisions of this chapter and of rules adopted under the authority
5-11     of this chapter; provided, however, that this prohibition shall not
5-12     apply to persons engaged in business as wholesale or retail
5-13     distributors of consumer commodities except to the extent that such
5-14     persons:
5-15                       (1)  are engaged in the packaging or labeling of
5-16     such commodities; or
5-17                       (2)  prescribe or specify by any means the manner
5-18     in which such commodities are packaged or labeled;
5-19                 (e)  the introduction or delivery for introduction into
5-20     commerce of any article in violation of Section 431.084, 431.114,
5-21     or 431.115;
5-22                 (f)  the dissemination of any false advertisement;
5-23                 (g)  the refusal to permit entry or inspection, or to
5-24     permit the taking of a sample or to permit access to or copying of
5-25     any record as authorized by Sections 431.042-431.044; or the
5-26     failure to establish or maintain any record or make any report
5-27     required under Section 512(j), (l), or (m)  of the federal Act, or
 6-1     the refusal to permit access to or verification or copying of any
 6-2     such required record;
 6-3                 (h)  the manufacture within this state of any food,
 6-4     drug, device, or cosmetic that is adulterated or misbranded;
 6-5                 (i)  the giving of a guaranty or undertaking referred
 6-6     to in Section 431.059, which guaranty or undertaking is false,
 6-7     except by a person who relied on a guaranty or undertaking to the
 6-8     same effect signed by, and containing the name and address of the
 6-9     person residing in this state from whom the person received in good
6-10     faith the food, drug, device, or cosmetic; or the giving of a
6-11     guaranty or undertaking referred to in Section 431.059, which
6-12     guaranty or undertaking is false;
6-13                 (j)  the use, removal, or disposal of a detained or
6-14     embargoed article in violation of Section 431.048;
6-15                 (k)  the alteration, mutilation, destruction,
6-16     obliteration, or removal of the whole or any part of the labeling
6-17     of, or the doing of any other act with respect to a food, drug,
6-18     device, or cosmetic, if such act is done while such article is held
6-19     for sale after shipment in commerce and results in such article
6-20     being adulterated or misbranded;
6-21                 (l)(1)  forging, counterfeiting, simulating, or falsely
6-22     representing, or without proper authority using any mark, stamp,
6-23     tag, label, or other identification device authorized or required
6-24     by rules adopted under this chapter or the regulations promulgated
6-25     under the provisions of the federal Act;
6-26                       (2)  making, selling, disposing of, or keeping in
6-27     possession, control, or custody, or concealing any punch, die,
 7-1     plate, stone, or other thing designed to print, imprint, or
 7-2     reproduce the trademark, trade name, or other identifying mark,
 7-3     imprint, or device of another or any likeness of any of the
 7-4     foregoing on any drug or container or labeling thereof so as to
 7-5     render such drug a counterfeit drug;
 7-6                       (3)  the doing of any act that causes a drug to
 7-7     be a counterfeit drug, or the sale or dispensing, or the holding
 7-8     for sale or dispensing, of a counterfeit drug;
 7-9                 (m)  the using by any person to the person's own
7-10     advantage, or revealing, other than to the commissioner, an
7-11     authorized agent, a health authority or to the courts when relevant
7-12     in any judicial proceeding under this chapter, of any information
7-13     acquired under the authority of this chapter concerning any method
7-14     or process that as a trade secret is entitled to protection;
7-15                 (n)  the using, on the labeling of any drug or device
7-16     or in any advertising relating to such drug or device, of any
7-17     representation or suggestion that approval of an application with
7-18     respect to such drug or device is in effect under Section 431.114
7-19     or Section 505, 515, or 520(g) of the federal Act, as the case may
7-20     be, or that such drug or device complies with the provisions of
7-21     such sections;
7-22                 (o)  the using, in labeling, advertising or other sales
7-23     promotion of any reference to any report or analysis furnished in
7-24     compliance with Sections 431.042-431.044 or Section 704 of the
7-25     federal Act;
7-26                 (p)  in the case of a prescription drug distributed or
7-27     offered for sale in this state, the failure of the manufacturer,
 8-1     packer, or distributor of the drug to maintain for transmittal, or
 8-2     to transmit, to any practitioner licensed by applicable law to
 8-3     administer such drug who makes written request for information as
 8-4     to such drug, true and correct copies of all printed matter that is
 8-5     required to be included in any package in which that drug is
 8-6     distributed or sold, or such other printed matter as is approved
 8-7     under the federal Act.  Nothing in this subsection shall be
 8-8     construed to exempt any person from any labeling requirement
 8-9     imposed by or under other provisions of this chapter;
8-10                 (q)(1)  placing or causing to be placed on any drug or
8-11     device or container of any drug or device, with intent to defraud,
8-12     the trade name or other identifying mark, or imprint of another or
8-13     any likeness of any of the foregoing;
8-14                       (2)  selling, dispensing, disposing of or causing
8-15     to be sold, dispensed, or disposed of, or concealing or keeping in
8-16     possession, control, or custody, with intent to sell, dispense, or
8-17     dispose of, any drug, device, or any container of any drug or
8-18     device, with knowledge that the trade name or other identifying
8-19     mark or imprint of another or any likeness of any of the foregoing
8-20     has been placed thereon in a manner prohibited by Subdivision (1)
8-21     of this subsection; or
8-22                       (3)  making, selling, disposing of, causing to be
8-23     made, sold, or disposed of, keeping in possession, control, or
8-24     custody, or concealing with intent to defraud any punch, die,
8-25     plate, stone, or other thing designed to print, imprint, or
8-26     reproduce the trademark, trade name, or other identifying mark,
8-27     imprint, or device of another or any likeness of any of the
 9-1     foregoing on any drug or container or labeling of any drug or
 9-2     container so as to render such drug a counterfeit drug;
 9-3                 (r)  dispensing or causing to be dispensed a different
 9-4     drug in place of the drug ordered or prescribed without the express
 9-5     permission in each case of the person ordering or prescribing;
 9-6                 (s)  the failure to register in accordance with Section
 9-7     510 of the federal Act, the failure to provide any information
 9-8     required by Section 510(j) or (k) of the federal Act, or the
 9-9     failure to provide a notice required by Section 510(j)(2) of the
9-10     federal Act;
9-11                 (t)(1)  the failure or refusal to:
9-12                             (A)  comply with any requirement prescribed
9-13     under Section 518 or 520(g) of the federal Act; or
9-14                             (B)  furnish any notification or other
9-15     material or information required by or under Section 519 or 520(g)
9-16     of the federal Act;
9-17                       (2)  with respect to any device, the submission
9-18     of any report that is required by or under this chapter that is
9-19     false or misleading in any material respect;
9-20                 (u)  the movement of a device in violation of an order
9-21     under Section 304(g) of the federal Act or the removal or
9-22     alteration of any mark or label required by the order to identify
9-23     the device as detained;
9-24                 (v)  the failure to provide the notice required by
9-25     Section 412(b) or 412(c), the failure to make the reports required
9-26     by Section 412(d)(1)(B), or the failure to meet the requirements
9-27     prescribed under Section 412(d)(2) of the federal Act;
 10-1                (w)  except as provided under Sections 242.6035,
 10-2    242.6036, and 242.6037, the acceptance by a person of an unused
 10-3    prescription or drug, in whole or in part, for the purpose of
 10-4    resale, after the prescription or drug has been originally
 10-5    dispensed, or sold;
 10-6                (x)  engaging in the wholesale distribution of drugs or
 10-7    operating as a distributor or manufacturer of devices in this state
 10-8    without filing a licensing statement with the commissioner as
 10-9    required by Section 431.202 or having a license as required by
10-10    Section 431.272, as applicable;
10-11                (y)  engaging in the manufacture of food in this state
10-12    without first registering with the department as required by
10-13    Section 431.222; or
10-14                (z)  unless approved by the United States Food and Drug
10-15    Administration pursuant to the federal Act, the sale, delivery,
10-16    holding, or offering for sale of a self-testing kit designed to
10-17    indicate whether a person has a human immunodeficiency virus
10-18    infection, acquired immune deficiency syndrome, or a related
10-19    disorder or condition.
10-20          SECTION 3. Sections 242.6035, 242.6036, and 242.6037, Health
10-21    and Safety Code, as added by this Act, and the change in law made
10-22    by this Act to Section 431.021, Health and Safety Code, take effect
10-23    January 1, 2002.  This Act takes effect September 1, 2001, for the
10-24    limited purpose of allowing the Texas State Board of Pharmacy, the
10-25    Texas Department of Human Services, and, if applicable, the Health
10-26    and Human Services Commission to timely adopt the rules required
10-27    under Section 242.6037, Health and Safety Code, as added by this
 11-1    Act.  Those agencies shall adopt the required rules in time for the
 11-2    rules to take effect on January 1, 2002.