1-1     By:  Gray, Homer, et al. (Senate Sponsor-Moncrief)    H.B. No. 2729
 1-2           (In the Senate - Received from the House May 7, 2001;
 1-3     May 7, 2001, read first time and referred to Committee on Health
 1-4     and Human Services; May 11, 2001, reported adversely, with
 1-5     favorable Committee Substitute by the following vote:  Yeas 7, Nays
 1-6     0; May 11, 2001, sent to printer.)
 1-7     COMMITTEE SUBSTITUTE FOR H.B. No. 2729                By:  Moncrief
 1-8                            A BILL TO BE ENTITLED
 1-9                                   AN ACT
1-10     relating to allowing the donation of certain unused prescription
1-11     drugs to charitable medical clinics.
1-12           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13           SECTION 1.  Chapter 431, Health and Safety Code, is amended
1-14     by adding Subchapter M to read as follows:
1-15                    SUBCHAPTER M.  DRUG DONATION PROGRAM
1-16           Sec. 431.321.  DEFINITION.  (a)  "Charitable medical clinic"
1-17     means a clinic that provides medical care without charge or for a
1-18     substantially reduced charge, complies with the insurance
1-19     requirements of Chapter 84, Civil Practice and Remedies Code, and
1-20     is exempt from federal income tax under Section 501(a) of the
1-21     Internal Revenue Code of 1986 by being listed as an exempt
1-22     organization in Section 501(c)(3) or 501(c)(4) of the code and is
1-23     operated exclusively for the promotion of social welfare by being
1-24     primarily engaged in promoting the common good and general welfare
1-25     of the people in a community.
1-26           (b)  "Seller" means a person, other than a charitable drug
1-27     donor, as defined in Chapter 82, Civil Practice and Remedies Code.
1-28           (c)  "Manufacturer" means a person, other than a charitable
1-29     drug donor, as defined in Chapter 82, Civil Practice and Remedies
1-30     Code.
1-31           (d)  "Charitable drug donor" means a licensed convalescent or
1-32     nursing home or related institution, licensed hospice, hospital,
1-33     physician, pharmacy, or a pharmaceutical seller or manufacturer
1-34     that donates drugs pursuant to a qualified patient assistance
1-35     program, that donates drugs to a charitable medical clinic.
1-36           (e)  In this subchapter, "patient assistance program" means a
1-37     qualified program offered by a pharmaceutical manufacturer under
1-38     which the manufacturer provides drugs to financially disadvantaged
1-39     persons at no charge or at a substantially reduced cost.  The term
1-40     does not include the provision of a drug as part of a clinical
1-41     trial.
1-42           Sec. 431.322.  DONATION OF UNUSED DRUGS TO CHARITABLE MEDICAL
1-43     CLINIC.  (a)  A charitable drug donor may donate certain unused
1-44     prescription drugs to a charitable medical clinic, and a charitable
1-45     clinic may accept, dispense, or administer the donated drugs in
1-46     accordance with this subchapter.
1-47           (b)  A seller or manufacturer of a drug may not donate drugs
1-48     to a charitable medical clinic except pursuant to a qualified
1-49     patient assistance program.  A seller or manufacturer of a drug
1-50     that donates drugs through a qualified patient assistance program
1-51     shall be considered a charitable drug donor.
1-52           (c)  The charitable drug donor shall use appropriate
1-53     safeguards established by the board to ensure that the drugs are
1-54     not compromised or illegally diverted while being stored or
1-55     transported to the charitable medical clinic.
1-56           (d)  The charitable medical clinic may not accept the donated
1-57     drugs unless:
1-58                 (1)  the charitable drug donor certifies that the drugs
1-59     have been properly stored while in the possession of the donor or
1-60     of the person for whom the drugs were originally dispensed;
1-61                 (2)  the charitable drug donor provides the clinic with
1-62     a verifiable address and telephone number; and
1-63                 (3)  the person transferring possession of the drugs
1-64     presents the charitable medical clinic with photographic
 2-1     identification.
 2-2           Sec. 431.323.  CIRCUMSTANCES UNDER WHICH DONATED DRUGS MAY BE
 2-3     ACCEPTED AND DISPENSED.  (a)  A charitable medical clinic may
 2-4     accept and dispense or administer donated drugs only in accordance
 2-5     with this subchapter.
 2-6           (b)  The donated drugs must be drugs that require a
 2-7     prescription.  A donated drug may not be a controlled substance
 2-8     under Chapter 481.
 2-9           (c)  The donated drugs must be approved by the federal Food
2-10     and Drug Administration and:
2-11                 (1)  be sealed in the manufacturer's unopened original
2-12     tamper-evident packaging and either:
2-13                       (A)  individually packaged; or
2-14                       (B)  packaged in unit-dose packaging;
2-15                 (2)  be oral or parenteral medication in sealed
2-16     single-dose containers approved by the federal Food and Drug
2-17     Administration;
2-18                 (3)  be topical or inhalant drugs in sealed
2-19     units-of-use containers approved by the federal Food and Drug
2-20     Administration; or
2-21                 (4)  be parenteral medication in sealed multiple-dose
2-22     containers approved by the federal Food and Drug Administration
2-23     from which no doses have been withdrawn, and
2-24                 (5)  must not be the subject of a mandatory recall by a
2-25     state or federal agency or a voluntary recall by a drug seller or
2-26     manufacturer.
2-27           (d)  The charitable medical clinic may dispense or administer
2-28     the donated drugs only:
2-29                 (1)  before the expiration date or within the
2-30     recommended shelf life of the donated drugs, as applicable; and
2-31                 (2)  after a licensed pharmacist has determined that
2-32     the drugs are of an acceptable integrity.
2-33           (e)  The donated drugs may be accepted and dispensed or
2-34     administered by the charitable medical clinic only in accordance
2-35     with rules adopted by the department.
2-36           Sec. 431.324.  RULES.  The department shall adopt rules to
2-37     implement this subchapter that are designed to protect the public
2-38     health and safety.
2-39           Sec. 431.325.  LIMITATION ON LIABILITY.  (a)  Charitable drug
2-40     donors, charitable medical clinics, and their employees are not
2-41     liable for harm caused by the accepting, dispensing, or
2-42     administering of drugs donated in strict compliance with this
2-43     subchapter unless the harm is caused by:
2-44                 (i)  willful or wanton acts of negligence;
2-45                 (ii)  conscious indifference or reckless disregard for
2-46     the safety of others; or
2-47                 (iii)  intentional conduct.
2-48           (b)  This section does not limit, or in any way affect or
2-49     diminish, the liability of a drug seller or manufacturer pursuant
2-50     to Chapter 82, Civil Practices and Remedies Code.
2-51           (c)  This section shall not apply where harm results from the
2-52     failure to fully and completely comply with the requirements of
2-53     this subchapter.
2-54           (d)  This section shall not apply to a charitable medical
2-55     clinic that fails to comply with the insurance provisions of
2-56     Chapter 84, Civil Practice and Remedies Code.
2-57           SECTION 2.  Section 431.021, Health and Safety Code, is
2-58     amended to read as follows:
2-59           Sec. 431.021.  PROHIBITED ACTS.  The following acts and the
2-60     causing of the following acts within this state are unlawful and
2-61     prohibited:
2-62           (a)  the introduction or delivery for introduction into
2-63     commerce of any food, drug, device, or cosmetic that is adulterated
2-64     or misbranded;
2-65           (b)  the adulteration or misbranding of any food, drug,
2-66     device, or cosmetic in commerce;
2-67           (c)  the receipt in commerce of any food, drug, device, or
2-68     cosmetic that is adulterated or misbranded, and the delivery or
2-69     proffered delivery thereof for pay or otherwise;
 3-1           (d)  the distribution in commerce of a consumer commodity, if
 3-2     such commodity is contained in a package, or if there is affixed to
 3-3     that commodity a label that does not conform to the provisions of
 3-4     this chapter and of rules adopted under the authority of this
 3-5     chapter; provided, however, that this prohibition shall not apply
 3-6     to persons engaged in business as wholesale or retail distributors
 3-7     of consumer commodities except to the extent that such persons:
 3-8                 (1)  are engaged in the packaging or labeling of such
 3-9     commodities; or
3-10                 (2)  prescribe or specify by any means the manner in
3-11     which such commodities are packaged or labeled;
3-12           (e)  the introduction or delivery for introduction into
3-13     commerce of any article in violation of Section 431.084, 431.114,
3-14     or 431.115;
3-15           (f)  the dissemination of any false advertisement;
3-16           (g)  the refusal to permit entry or inspection, or to permit
3-17     the taking of a sample or to permit access to or copying of any
3-18     record as authorized by Sections 431.042-431.044; or the failure to
3-19     establish or maintain any record or make any report required under
3-20     Section 512(j), (l), or (m) of the federal Act, or the refusal to
3-21     permit access to or verification or copying of any such required
3-22     record;
3-23           (h)  the manufacture within this state of any food, drug,
3-24     device, or cosmetic that is adulterated or misbranded;
3-25           (i)  the giving of a guaranty or undertaking referred to in
3-26     Section 431.059, which guaranty or undertaking is false, except by
3-27     a person who relied on a guaranty or undertaking to the same effect
3-28     signed by, and containing the name and address of the person
3-29     residing in this state from whom the person received in good faith
3-30     the food, drug, device, or cosmetic; or the giving of a guaranty or
3-31     undertaking referred to in Section 431.059, which guaranty or
3-32     undertaking is false;
3-33           (j)  the use, removal, or disposal of a detained or embargoed
3-34     article in violation of Section 431.048;
3-35           (k)  the alteration, mutilation, destruction, obliteration,
3-36     or removal of the whole or any part of the labeling of, or the
3-37     doing of any other act with respect to a food, drug, device, or
3-38     cosmetic, if such act is done while such article is held for sale
3-39     after shipment in commerce and results in such article being
3-40     adulterated or misbranded;
3-41           (l)(1)  forging, counterfeiting, simulating, or falsely
3-42     representing, or without proper authority using any mark, stamp,
3-43     tag, label, or other identification device authorized or required
3-44     by rules adopted under this chapter or the regulations promulgated
3-45     under the provisions of the federal Act;
3-46                 (2)  making, selling, disposing of, or keeping in
3-47     possession, control, or custody, or concealing any punch, die,
3-48     plate, stone, or other thing designed to print, imprint, or
3-49     reproduce the trademark, trade name, or other identifying mark,
3-50     imprint, or device of another or any likeness of any of the
3-51     foregoing on any drug or container or labeling thereof so as to
3-52     render such drug a counterfeit drug;
3-53                 (3)  the doing of any act that causes a drug to be a
3-54     counterfeit drug, or the sale or dispensing, or the holding for
3-55     sale or dispensing, of a counterfeit drug;
3-56           (m)  the using by any person to the person's own advantage,
3-57     or revealing, other than to the commissioner, an authorized agent,
3-58     a health authority or to the courts when relevant in any judicial
3-59     proceeding under this chapter, of any information acquired under
3-60     the authority of this chapter concerning any method or process that
3-61     as a trade secret is entitled to protection;
3-62           (n)  the using, on the labeling of any drug or device or in
3-63     any advertising relating to such drug or device, of any
3-64     representation or suggestion that approval of an application with
3-65     respect to such drug or device is in effect under Section 431.114
3-66     or Section 505, 515, or 520(g) of the federal Act, as the case may
3-67     be, or that such drug or device complies with the provisions of
3-68     such sections;
3-69           (o)  the using, in labeling, advertising or other sales
 4-1     promotion of any reference to any report or analysis furnished in
 4-2     compliance with Sections 431.042-431.044 or Section 704 of the
 4-3     federal Act;
 4-4           (p)  in the case of a prescription drug distributed or
 4-5     offered for sale in this state, the failure of the manufacturer,
 4-6     packer, or distributor of the drug to maintain for transmittal, or
 4-7     to transmit, to any practitioner licensed by applicable law to
 4-8     administer such drug who makes written request for information as
 4-9     to such drug, true and correct copies of all printed matter that is
4-10     required to be included in any package in which that drug is
4-11     distributed or sold, or such other printed matter as is approved
4-12     under the federal Act.  Nothing in this subsection shall be
4-13     construed to exempt any person from any labeling requirement
4-14     imposed by or under other provisions of this chapter;
4-15           (q)(1)  placing or causing to be placed on any drug or device
4-16     or container of any drug or device, with intent to defraud, the
4-17     trade name or other identifying mark, or imprint of another or any
4-18     likeness of any of the foregoing;
4-19                 (2)  selling, dispensing, disposing of or causing to be
4-20     sold, dispensed, or disposed of, or concealing or keeping in
4-21     possession, control, or custody, with intent to sell, dispense, or
4-22     dispose of, any drug, device, or any container of any drug or
4-23     device, with knowledge that the trade name or other identifying
4-24     mark or imprint of another or any likeness of any of the foregoing
4-25     has been placed thereon in a manner prohibited by Subdivision (1)
4-26     of this subsection; or
4-27                 (3)  making, selling, disposing of, causing to be made,
4-28     sold, or disposed of, keeping in possession, control, or custody,
4-29     or concealing with intent to defraud any punch, die, plate, stone,
4-30     or other thing designed to print, imprint, or reproduce the
4-31     trademark, trade name, or other identifying mark, imprint, or
4-32     device of another or any likeness of any of the foregoing on any
4-33     drug or container or labeling of any drug or container so as to
4-34     render such drug a counterfeit drug;
4-35           (r)  dispensing or causing to be dispensed a different drug
4-36     in place of the drug ordered or prescribed without the express
4-37     permission in each case of the person ordering or prescribing;
4-38           (s)  the failure to register in accordance with Section 510
4-39     of the federal Act, the failure to provide any information required
4-40     by Section 510(j) or (k) of the federal Act, or the failure to
4-41     provide a notice required by Section 510(j)(2) of the federal Act;
4-42           (t)(1)  the failure or refusal to:
4-43                       (A)  comply with any requirement prescribed under
4-44     Section 518 or 520(g) of the federal Act; or
4-45                       (B)  furnish any notification or other material
4-46     or information required by or under Section 519 or 520(g) of the
4-47     federal Act;
4-48                 (2)  with respect to any device, the submission of any
4-49     report that is required by or under this chapter that is false or
4-50     misleading in any material respect;
4-51           (u)  the movement of a device in violation of an order under
4-52     Section 304(g) of the federal Act or the removal or alteration of
4-53     any mark or label required by the order to identify the device as
4-54     detained;
4-55           (v)  the failure to provide the notice required by Section
4-56     412(b) or 412(c), the failure to make the reports required by
4-57     Section 412(d)(1)(B), or the failure to meet the requirements
4-58     prescribed under Section 412(d)(2) of the federal Act;
4-59           (w)  except as provided under Subchapter M, the acceptance by
4-60     a person of an unused prescription or drug, in whole or in part,
4-61     for the purpose of resale, after the prescription or drug has been
4-62     originally dispensed, or sold;
4-63           (x)  engaging in the wholesale distribution of drugs or
4-64     operating as a distributor or manufacturer of devices in this state
4-65     without filing a licensing statement with the commissioner as
4-66     required by Section 431.202 or having a license as required by
4-67     Section 431.272, as applicable;
4-68           (y)  engaging in the manufacture of food in this state
4-69     without first registering with the department as required by
 5-1     Section 431.222; or
 5-2           (z)  unless approved by the United States Food and Drug
 5-3     Administration pursuant to the federal Act, the sale, delivery,
 5-4     holding, or offering for sale of a self-testing kit designed to
 5-5     indicate whether a person has a human immunodeficiency virus
 5-6     infection, acquired immune deficiency syndrome, or a related
 5-7     disorder or condition.
 5-8           SECTION 3.  Subchapter M, Chapter 431, Health and Safety
 5-9     Code, as added by this Act, and the change in law made by this Act
5-10     to Section 431.021, Health and Safety Code, take effect January 1,
5-11     2002.  This Act takes effect September 1, 2001, for the limited
5-12     purpose of allowing the Texas Department of Health to adopt the
5-13     rules required under Section 431.324, Health and Safety Code, as
5-14     added by this Act, in time for the rules to take effect on January
5-15     1, 2002.
5-16                                  * * * * *