1-1     By:  Duncan, Moncrief                                  S.B. No. 556
 1-2           (In the Senate - Filed February 6, 2001; February 7, 2001,
 1-3     read first time and referred to Committee on Health and Human
 1-4     Services; March 28, 2001, reported adversely, with favorable
 1-5     Committee Substitute by the following vote:  Yeas 5, Nays 0;
 1-6     March 28, 2001, sent to printer.)
 1-7     COMMITTEE SUBSTITUTE FOR S.B. No. 556                  By:  Bernsen
 1-8                            A BILL TO BE ENTITLED
 1-9                                   AN ACT
1-10     relating to prices of prescription drugs provided to certain
1-11     Medicare recipients by certain pharmacies participating in the
1-12     Medicaid vendor drug program.
1-13           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-14           SECTION 1.  Subchapter B, Chapter 32, Human Resources Code,
1-15     is amended by adding Section 32.0462 to read as follows:
1-16           Sec. 32.0462. SENIOR DRUG ASSISTANCE PROGRAM.  (a)  In this
1-17     section, "participant" means a provider in the vendor drug program
1-18     who chooses to participate in the senior drug assistance program.
1-19           (b)  The department by rule shall develop and implement a
1-20     voluntary pricing program under which a provider in the vendor drug
1-21     program may agree to provide to a Medicare recipient eligible under
1-22     Subsection (c) prescription drugs available to a recipient of
1-23     medical assistance under the vendor drug program at a price not
1-24     greater than the lesser of:
1-25                 (1)  the usual and customary price for the drug; or
1-26                 (2)  the sum of:
1-27                       (A)  the amount of reimbursement the provider
1-28     would have received for providing the drug to a recipient of
1-29     medical assistance; and
1-30                       (B)  an administrative fee of $1.
1-31           (c)  A Medicare recipient is eligible to receive a
1-32     prescription drug available to a recipient of medical assistance
1-33     under the vendor drug program at a reduced price in accordance with
1-34     the senior drug assistance program only if the recipient does not
1-35     have insurance coverage or other health benefit plan coverage that
1-36     provides pharmaceutical benefits for that drug.
1-37           (d)  The department may provide a participant with a rebate
1-38     from the department for each prescription drug provided to an
1-39     eligible Medicare recipient at a reduced price under the senior
1-40     drug assistance program.  The department shall determine the amount
1-41     of the rebate based on the amount of funds available to the
1-42     department for that purpose.
1-43           (e)  The department shall negotiate rebate agreements and
1-44     other terms with pharmaceutical companies whose products are
1-45     covered under the vendor drug program to provide the rebates
1-46     prescribed by Subsection (d).
1-47           (f)  If the savings or other sources of funding obtained
1-48     through negotiations with pharmaceutical companies under Subsection
1-49     (e) exceed the cost of implementing, administrating, and operating
1-50     the senior drug assistance program, the department may return
1-51     excess rebate revenue to participating pharmaceutical companies
1-52     based on an equitable method of distribution determined by the
1-53     department.
1-54           (g)  In implementing the senior drug assistance program under
1-55     this section, the department shall:
1-56                 (1)  require an eligible Medicare recipient, as a
1-57     condition of receiving a reduced price under the senior drug
1-58     assistance program, to:
1-59                       (A)  present the recipient's Medicare card and
1-60     any other documentation required by the department to confirm the
1-61     recipient's eligibility for the reduced price; and
1-62                       (B)  provide a prescription for the drug that
1-63     names the recipient; and
1-64                 (2)  ensure that information concerning prices that may
 2-1     be charged under the senior drug assistance program is readily
 2-2     available to participants.
 2-3           (h)  The department shall take all possible action, including
 2-4     any administrative action available to the department in connection
 2-5     with the operation of any department program, to encourage:
 2-6                 (1)  providers in the vendor drug program to
 2-7     participate in the senior drug assistance program; and
 2-8                 (2)  pharmaceutical companies to negotiate rebate
 2-9     agreements under Subsection (e) to enable the department to
2-10     successfully implement the senior drug assistance program.
2-11           (i)  The department shall:
2-12                 (1)  monitor provider participation in the senior drug
2-13     assistance program;
2-14                 (2)  evaluate the effect of the senior drug assistance
2-15     program on the availability of prescription drugs to eligible
2-16     Medicare recipients; and
2-17                 (3)  develop recommendations for improving the
2-18     availability of prescription drugs to eligible Medicare recipients.
2-19           (j)  Not later than January 1 of each year, the department
2-20     shall submit a report to the legislature containing the information
2-21     obtained and developed by the department under Subsection (i).
2-22           (k)  Pharmacies may participate in the senior drug assistance
2-23     program before the department successfully negotiates rebate
2-24     agreements under Subsection (e) with pharmaceutical companies that
2-25     sell prescription drugs.  The department shall favorably note any
2-26     participation by pharmacies under this subsection to the
2-27     legislature during the next legislative session.
2-28           SECTION 2.  If, before implementing any provision of this
2-29     Act, a state agency determines that a waiver or authorization from
2-30     a federal agency is necessary for implementation of that provision,
2-31     the agency affected by the provision shall request the waiver or
2-32     authorization and may delay implementing that provision until the
2-33     waiver or authorization is granted.  If the state agency determines
2-34     that a waiver or authorization is necessary, the agency shall
2-35     submit an implementation plan to the legislature during the next
2-36     regular legislative session or to the Legislative Budget Board
2-37     during the interim on receipt of the waiver or authorization and
2-38     before its implementation.
2-39           SECTION 3.  This Act takes effect September 1, 2001.
2-40                                  * * * * *