1-1                                   AN ACT
 1-2     relating to allowing the donation of certain unused prescription
 1-3     drugs to charitable medical clinics.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Chapter 431, Health and Safety Code, is amended
 1-6     by adding Subchapter M to read as follows:
 1-7                    SUBCHAPTER M.  DRUG DONATION PROGRAM
 1-8           Sec. 431.321.  DEFINITIONS. (a)  "Charitable medical clinic"
 1-9     means a clinic that provides medical care without charge or for a
1-10     substantially reduced charge, complies with the insurance
1-11     requirements of Chapter 84, Civil Practice and Remedies Code, and
1-12     is exempt from federal income tax under Section 501(a) of the
1-13     Internal Revenue Code of 1986 by being listed as an exempt
1-14     organization in Section 501(c)(3) or 501(c)(4) of the code and is
1-15     operated exclusively for the promotion of social welfare by being
1-16     primarily engaged in promoting the common good and general welfare
1-17     of the people in a community.
1-18           (b)  "Seller" means a person, other than a charitable drug
1-19     donor, as defined in Chapter 82, Civil Practice and Remedies Code.
1-20           (c)  "Manufacturer" means a person, other than a charitable
1-21     drug donor, as defined in Chapter 82, Civil Practice and Remedies
1-22     Code.
1-23           (d)  "Charitable drug donor" means a licensed convalescent or
1-24     nursing home or related institution, licensed hospice, hospital,
 2-1     physician, pharmacy, or a pharmaceutical seller or manufacturer
 2-2     that donates drugs pursuant to a qualified patient assistance
 2-3     program, that donates drugs to a charitable medical clinic.
 2-4           (e)  In this subchapter, "patient assistance program" means a
 2-5     qualified program offered by a pharmaceutical manufacturer under
 2-6     which the manufacturer provides drugs to financially disadvantaged
 2-7     persons at no charge or at a substantially reduced cost.  The term
 2-8     does not include the provision of a drug as part of a clinical
 2-9     trial.
2-10           Sec. 431.322.  DONATION OF UNUSED DRUGS TO CHARITABLE MEDICAL
2-11     CLINIC.  (a)  A charitable drug donor may donate certain unused
2-12     prescription drugs to a charitable medical clinic, and a charitable
2-13     clinic may accept, dispense, or administer the donated drugs in
2-14     accordance with this subchapter.
2-15           (b)  A seller or manufacturer of a drug may not donate drugs
2-16     to a charitable medical clinic except pursuant to a qualified
2-17     patient assistance program.  A seller or manufacturer of a drug
2-18     that donates drugs through a qualified patient assistance program
2-19     shall be considered a charitable drug donor.
2-20           (c)  The charitable drug donor shall use appropriate
2-21     safeguards established by the board to ensure that the drugs are
2-22     not compromised or illegally diverted while being stored or
2-23     transported to the charitable medical clinic.
2-24           (d)  The charitable medical clinic may not accept the donated
2-25     drugs unless:
2-26                 (1)  the charitable drug donor certifies that the drugs
2-27     have been properly stored while in the possession of the donor or
 3-1     of the person for whom the drugs were originally dispensed;
 3-2                 (2)  the charitable drug donor provides the clinic with
 3-3     a verifiable address and telephone number; and
 3-4                 (3)  the person transferring possession of the drugs
 3-5     presents the charitable medical clinic with photographic
 3-6     identification.
 3-7           Sec. 431.323.  CIRCUMSTANCES UNDER WHICH DONATED DRUGS MAY BE
 3-8     ACCEPTED AND DISPENSED.  (a)  A charitable medical clinic may
 3-9     accept and dispense or administer donated drugs only in accordance
3-10     with this subchapter.
3-11           (b)  The donated drugs must be drugs that require a
3-12     prescription.  A donated drug may not be a controlled substance
3-13     under Chapter 481.
3-14           (c)  The donated drugs must be approved by the federal Food
3-15     and Drug Administration and:
3-16                 (1)  be sealed in the manufacturer's unopened original
3-17     tamper-evident packaging and either:
3-18                       (A)  individually packaged; or
3-19                       (B)  packaged in unit-dose packaging;
3-20                 (2)  be oral or parenteral medication in sealed
3-21     single-dose containers approved by the federal Food and Drug
3-22     Administration;
3-23                 (3)  be topical or inhalant drugs in sealed
3-24     units-of-use containers approved by the federal Food and Drug
3-25     Administration; or
3-26                 (4)  be parenteral medication in sealed multiple-dose
3-27     containers approved by the federal Food and Drug Administration
 4-1     from which no doses have been withdrawn; and
 4-2                 (5)  must not be the subject of a mandatory recall by a
 4-3     state or federal agency or a voluntary recall by a drug seller or
 4-4     manufacturer.
 4-5           (d)  The charitable medical clinic may dispense or administer
 4-6     the donated drugs only:
 4-7                 (1)  before the expiration date or within the
 4-8     recommended shelf life of the donated drugs, as applicable; and
 4-9                 (2)  after a licensed pharmacist has determined that
4-10     the drugs are of an acceptable integrity.
4-11           (e)  The donated drugs may be accepted and dispensed or
4-12     administered by the charitable medical clinic only in accordance
4-13     with rules adopted by the department.
4-14           Sec. 431.324.  RULES.  The department shall adopt rules to
4-15     implement this subchapter that are designed to protect the public
4-16     health and safety.
4-17           Sec. 431.325.  LIMITATION ON LIABILITY.  (a)  Charitable drug
4-18     donors, charitable medical clinics, and their employees are not
4-19     liable for harm caused by the accepting, dispensing, or
4-20     administering of drugs donated in strict compliance with this
4-21     subchapter unless the harm is caused by:
4-22                 (i)  willful or wanton acts of negligence;
4-23                 (ii)  conscious indifference or reckless disregard for
4-24     the safety of others; or
4-25                 (iii)  intentional conduct.
4-26           (b)  This section does not limit, or in any way affect or
4-27     diminish, the liability of a drug seller or manufacturer pursuant
 5-1     to Chapter 82, Civil Practice and Remedies Code.
 5-2           (c)  This section shall not apply where harm results from the
 5-3     failure to fully and completely comply with the requirements of
 5-4     this subchapter.
 5-5           (d)  This section shall not apply to a charitable medical
 5-6     clinic that fails to comply with the insurance provisions of
 5-7     Chapter 84, Civil Practice and Remedies Code.
 5-8           SECTION 2.  Section 431.021, Health and Safety Code, is
 5-9     amended to read as follows:
5-10           Sec. 431.021.  PROHIBITED ACTS. The following acts and the
5-11     causing of the following acts within this state are unlawful and
5-12     prohibited:
5-13           (a)  the introduction or delivery for introduction into
5-14     commerce of any food, drug, device, or cosmetic that is adulterated
5-15     or misbranded;
5-16           (b)  the adulteration or misbranding of any food, drug,
5-17     device, or cosmetic in commerce;
5-18           (c)  the receipt in commerce of any food, drug, device, or
5-19     cosmetic that is adulterated or misbranded, and the delivery or
5-20     proffered delivery thereof for pay or otherwise;
5-21           (d)  the distribution in commerce of a consumer commodity, if
5-22     such commodity is contained in a package, or if there is affixed to
5-23     that commodity a label that does not conform to the provisions of
5-24     this chapter and of rules adopted under the authority of this
5-25     chapter; provided, however, that this prohibition shall not apply
5-26     to persons engaged in business as wholesale or retail distributors
5-27     of consumer commodities except to the extent that such persons:
 6-1                 (1)  are engaged in the packaging or labeling of such
 6-2     commodities; or
 6-3                 (2)  prescribe or specify by any means the manner in
 6-4     which such commodities are packaged or labeled;
 6-5           (e)  the introduction or delivery for introduction into
 6-6     commerce of any article in violation of Section 431.084, 431.114,
 6-7     or 431.115;
 6-8           (f)  the dissemination of any false advertisement;
 6-9           (g)  the refusal to permit entry or inspection, or to permit
6-10     the taking of a sample or to permit access to or copying of any
6-11     record as authorized by Sections 431.042-431.044; or the failure to
6-12     establish or maintain any record or make any report required under
6-13     Section 512(j), (l), or (m) of the federal Act, or the refusal to
6-14     permit access to or verification or copying of any such required
6-15     record;
6-16           (h)  the manufacture within this state of any food, drug,
6-17     device, or cosmetic that is adulterated or misbranded;
6-18           (i)  the giving of a guaranty or undertaking referred to in
6-19     Section 431.059, which guaranty or undertaking is false, except by
6-20     a person who relied on a guaranty or undertaking to the same effect
6-21     signed by, and containing the name and address of the person
6-22     residing in this state from whom the person received in good faith
6-23     the food, drug, device, or cosmetic; or the giving of a guaranty or
6-24     undertaking referred to in Section 431.059, which guaranty or
6-25     undertaking is false;
6-26           (j)  the use, removal, or disposal of a detained or embargoed
6-27     article in violation of Section 431.048;
 7-1           (k)  the alteration, mutilation, destruction, obliteration,
 7-2     or removal of the whole or any part of the labeling of, or the
 7-3     doing of any other act with respect to a food, drug, device, or
 7-4     cosmetic, if such act is done while such article is held for sale
 7-5     after shipment in commerce and results in such article being
 7-6     adulterated or misbranded;
 7-7           (l)(1)  forging, counterfeiting, simulating, or falsely
 7-8     representing, or without proper authority using any mark, stamp,
 7-9     tag, label, or other identification device authorized or required
7-10     by rules adopted under this chapter or the regulations promulgated
7-11     under the provisions of the federal Act;
7-12                 (2)  making, selling, disposing of, or keeping in
7-13     possession, control, or custody, or concealing any punch, die,
7-14     plate, stone, or other thing designed to print, imprint, or
7-15     reproduce the trademark, trade name, or other identifying mark,
7-16     imprint, or device of another or any likeness of any of the
7-17     foregoing on any drug or container or labeling thereof so as to
7-18     render such drug a counterfeit drug;
7-19                 (3)  the doing of any act that causes a drug to be a
7-20     counterfeit drug, or the sale or dispensing, or the holding for
7-21     sale or dispensing, of a counterfeit drug;
7-22           (m)  the using by any person to the person's own advantage,
7-23     or revealing, other than to the commissioner, an authorized agent,
7-24     a health authority or to the courts when relevant in any judicial
7-25     proceeding under this chapter, of any information acquired under
7-26     the authority of this chapter concerning any method or process that
7-27     as a trade secret is entitled to protection;
 8-1           (n)  the using, on the labeling of any drug or device or in
 8-2     any advertising relating to such drug or device, of any
 8-3     representation or suggestion that approval of an application with
 8-4     respect to such drug or device is in effect under Section 431.114
 8-5     or Section 505, 515, or 520(g) of the federal Act, as the case may
 8-6     be, or that such drug or device complies with the provisions of
 8-7     such sections;
 8-8           (o)  the using, in labeling, advertising or other sales
 8-9     promotion of any reference to any report or analysis furnished in
8-10     compliance with Sections 431.042-431.044 or Section 704 of the
8-11     federal Act;
8-12           (p)  in the case of a prescription drug distributed or
8-13     offered for sale in this state, the failure of the manufacturer,
8-14     packer, or distributor of the drug to maintain for transmittal, or
8-15     to transmit, to any practitioner licensed by applicable law to
8-16     administer such drug who makes written request for information as
8-17     to such drug, true and correct copies of all printed matter that is
8-18     required to be included in any package in which that drug is
8-19     distributed or sold, or such other printed matter as is approved
8-20     under the federal Act.  Nothing in this subsection shall be
8-21     construed to exempt any person from any labeling requirement
8-22     imposed by or under other provisions of this chapter;
8-23           (q)(1)  placing or causing to be placed on any drug or device
8-24     or container of any drug or device, with intent to defraud, the
8-25     trade name or other identifying mark, or imprint of another or any
8-26     likeness of any of the foregoing;
8-27                 (2)  selling, dispensing, disposing of or causing to be
 9-1     sold, dispensed, or disposed of, or concealing or keeping in
 9-2     possession, control, or custody, with intent to sell, dispense, or
 9-3     dispose of, any drug, device, or any container of any drug or
 9-4     device, with knowledge that the trade name or other identifying
 9-5     mark or imprint of another or any likeness of any of the foregoing
 9-6     has been placed thereon in a manner prohibited by Subdivision (1)
 9-7     of this subsection; or
 9-8                 (3)  making, selling, disposing of, causing to be made,
 9-9     sold, or disposed of, keeping in possession, control, or custody,
9-10     or concealing with intent to defraud any punch, die, plate, stone,
9-11     or other thing designed to print, imprint, or reproduce the
9-12     trademark, trade name, or other identifying mark, imprint, or
9-13     device of another or any likeness of any of the foregoing on any
9-14     drug or container or labeling of any drug or container so as to
9-15     render such drug a counterfeit drug;
9-16           (r)  dispensing or causing to be dispensed a different drug
9-17     in place of the drug ordered or prescribed without the express
9-18     permission in each case of the person ordering or prescribing;
9-19           (s)  the failure to register in accordance with Section 510
9-20     of the federal Act, the failure to provide any information required
9-21     by Section 510(j) or (k) of the federal Act, or the failure to
9-22     provide a notice required by Section 510(j)(2) of the federal Act;
9-23           (t)(1)  the failure or refusal to:
9-24                       (A)  comply with any requirement prescribed under
9-25     Section 518 or 520(g) of the federal Act; or
9-26                       (B)  furnish any notification or other material
9-27     or information required by or under Section 519 or 520(g) of the
 10-1    federal Act;
 10-2                (2)  with respect to any device, the submission of any
 10-3    report that is required by or under this chapter that is false or
 10-4    misleading in any material respect;
 10-5          (u)  the movement of a device in violation of an order under
 10-6    Section 304(g) of the federal Act or the removal or alteration of
 10-7    any mark or label required by the order to identify the device as
 10-8    detained;
 10-9          (v)  the failure to provide the notice required by Section
10-10    412(b) or 412(c), the failure to make the reports required by
10-11    Section 412(d)(1)(B), or the failure to meet the requirements
10-12    prescribed under Section 412(d)(2) of the federal Act;
10-13          (w)  except as provided under Subchapter M, the acceptance by
10-14    a person of an unused prescription or drug, in whole or in part,
10-15    for the purpose of resale, after the prescription or drug has been
10-16    originally dispensed, or sold;
10-17          (x)  engaging in the wholesale distribution of drugs or
10-18    operating as a distributor or manufacturer of devices in this state
10-19    without filing a licensing statement with the commissioner as
10-20    required by Section 431.202 or having a license as required by
10-21    Section 431.272, as applicable;
10-22          (y)  engaging in the manufacture of food in this state
10-23    without first registering with the department as required by
10-24    Section 431.222; or
10-25          (z)  unless approved by the United States Food and Drug
10-26    Administration pursuant to the federal Act, the sale, delivery,
10-27    holding, or offering for sale of a self-testing kit designed to
 11-1    indicate whether a person has a human immunodeficiency virus
 11-2    infection, acquired immune deficiency syndrome, or a related
 11-3    disorder or condition.
 11-4          SECTION 3.  Subchapter M, Chapter 431, Health and Safety
 11-5    Code, as added by this Act, and the change in law made by this Act
 11-6    to Section 431.021, Health and Safety Code, take effect January 1,
 11-7    2002.  This Act takes effect September 1, 2001, for the limited
 11-8    purpose of allowing the Texas Department of Health to adopt the
 11-9    rules required under Section 431.324, Health and Safety Code, as
11-10    added by this Act, in time for the rules to take effect on January
11-11    1, 2002.
         _______________________________     _______________________________
             President of the Senate              Speaker of the House
               I certify that H.B. No. 2729 was passed by the House on May
         5, 2001, by a non-record vote; and that the House concurred in
         Senate amendments to H.B. No. 2729 on May 25, 2001, by a non-record
         vote.
                                             _______________________________
                                                 Chief Clerk of the House
               I certify that H.B. No. 2729 was passed by the Senate, with
         amendments, on May 22, 2001, by a viva-voce vote.
                                             _______________________________
                                                 Secretary of the Senate
         APPROVED:  __________________________
                              Date
                    __________________________
                            Governor