By:  Duncan, et al.                                    S.B. No. 556
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to prices of prescription drugs provided to certain
 1-3     Medicare recipients by certain pharmacies participating in the
 1-4     Medicaid vendor drug program.
 1-5           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-6           SECTION 1.  Subchapter B, Chapter 32, Human Resources Code,
 1-7     is amended by adding Section 32.0462 to read as follows:
 1-8           Sec. 32.0462. SENIOR DRUG ASSISTANCE PROGRAM.  (a)  In this
 1-9     section, "participant" means a provider in the vendor drug program
1-10     who chooses to participate in the senior drug assistance program.
1-11           (b)  The department by rule shall develop and implement a
1-12     voluntary pricing program under which a provider in the vendor drug
1-13     program may agree to provide to a Medicare recipient eligible under
1-14     Subsection (c) prescription drugs available to a recipient of
1-15     medical assistance under the vendor drug program at a price not
1-16     greater than the lesser of:
1-17                 (1)  the usual and customary price for the drug; or
1-18                 (2)  the sum of:
1-19                       (A)  the amount of reimbursement the provider
1-20     would have received for providing the drug to a recipient of
1-21     medical assistance; and
1-22                       (B)  an administrative fee of $1.
1-23           (c)  A Medicare recipient is eligible to receive a
1-24     prescription drug available to a recipient of medical assistance
1-25     under the vendor drug program at a reduced price in accordance with
 2-1     the senior drug assistance program only if the recipient does not
 2-2     have insurance coverage or other health benefit plan coverage that
 2-3     provides pharmaceutical benefits for that drug.
 2-4           (d)  The department may provide a participant with a rebate
 2-5     from the department for each prescription drug provided to an
 2-6     eligible Medicare recipient at a reduced price under the senior
 2-7     drug assistance program.  The department shall determine the amount
 2-8     of the rebate based on the amount of funds available to the
 2-9     department for that purpose.
2-10           (e)  The department shall negotiate rebate agreements and
2-11     other terms with pharmaceutical companies whose products are
2-12     covered under the vendor drug program to provide the rebates
2-13     prescribed by Subsection (d).
2-14           (f)  If the savings or other sources of funding obtained
2-15     through negotiations with pharmaceutical companies under Subsection
2-16     (e) exceed the cost of implementing, administrating, and operating
2-17     the senior drug assistance program, the department may return
2-18     excess rebate revenue to participating pharmaceutical companies
2-19     based on an equitable method of distribution determined by the
2-20     department.
2-21           (g)  In implementing the senior drug assistance program under
2-22     this section, the department shall:
2-23                 (1)  require an eligible Medicare recipient, as a
2-24     condition of receiving a reduced price under the senior drug
2-25     assistance program, to:
2-26                       (A)  present the recipient's Medicare card and
 3-1     any other documentation required by the department to confirm the
 3-2     recipient's eligibility for the reduced price; and
 3-3                       (B)  provide a prescription for the drug that
 3-4     names the recipient; and
 3-5                 (2)  ensure that information concerning prices that may
 3-6     be charged under the senior drug assistance program is readily
 3-7     available to participants.
 3-8           (h)  The department shall:
 3-9                 (1)  monitor provider participation in the senior drug
3-10     assistance program;
3-11                 (2)  evaluate the effect of the senior drug assistance
3-12     program on the availability of prescription drugs to eligible
3-13     Medicare recipients; and
3-14                 (3)  develop recommendations for improving the
3-15     availability of prescription drugs to eligible Medicare recipients.
3-16           (i)  Not later than January 1 of each year, the department
3-17     shall submit a report to the legislature containing the information
3-18     obtained and developed by the department under Subsection (h).
3-19           (j)  Pharmacies may participate in the senior drug assistance
3-20     program before the department successfully negotiates rebate
3-21     agreements under Subsection (e) with pharmaceutical companies that
3-22     sell prescription drugs.  The department shall favorably note any
3-23     participation by pharmacies under this subsection to the
3-24     legislature during the next legislative session.
3-25           SECTION 2.  If, before implementing any provision of this
3-26     Act, a state agency determines that a waiver or authorization from
 4-1     a federal agency is necessary for implementation of that provision,
 4-2     the agency affected by the provision shall request the waiver or
 4-3     authorization and may delay implementing that provision until the
 4-4     waiver or authorization is granted.  If the state agency determines
 4-5     that a waiver or authorization is necessary, the agency shall
 4-6     submit an implementation plan to the legislature during the next
 4-7     regular legislative session or to the Legislative Budget Board
 4-8     during the interim on receipt of the waiver or authorization and
 4-9     before its implementation.
4-10           SECTION 3.  This Act takes effect September 1, 2001.