LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
March 20, 2001
TO: Honorable Patricia Gray, Chair, House Committee on Public
Health
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB915 by Gray (Relating to bulk purchasing of
prescription drugs by certain state agencies.), As
Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB915, As Introduced: positive impact of $543,000 through the *
* biennium ending August 31, 2003. *
* *
* The bill would make no appropriation but could provide the legal *
* basis for an appropriation of funds to implement the provisions of *
* the bill. *
**************************************************************************
General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2002 $249,000 *
* 2003 294,000 *
* 2004 338,000 *
* 2005 389,000 *
* 2006 442,000 *
****************************************************
All Funds, Five-Year Impact:
*****************************************************
* Fiscal Year Probable Savings to General *
* Revenue Fund *
* 0001 *
* 2002 $249,000 *
* 2003 294,000 *
* 2004 338,000 *
* 2005 389,000 *
* 2006 442,000 *
*****************************************************
Fiscal Analysis
The bill would create the "Interagency Council on Pharmaceuticals Bulk
Purchasing." The council would be composed of an officer or employee of
the following agencies: Department of Health (TDH), Department of Mental
Health and Mental Retardation (MHMR), Texas Department of Criminal
Justice (TDCJ), Employees Retirement System (ERS), Teacher Retirement
System (TRS), and any other agency that purchases pharmaceuticals.
The council would develop procedures for pharmaceutical purchases by
member agencies. One member agency would be designated as the central
purchasing agency and would operate through a memorandum of
understanding with other member agencies. The bill would require that
the council file a report with the Legislative Budget Board detailing
the savings gained by bulk purchasing of pharmaceuticals.
Methodology
It is assumed that staffing support and operating expenses related to the
council would be provided using the existing resources of member
agencies. Reimbursement for travel expenses incurred by a member while
conducting business of the council could be provided subject to
authorization in the General Appropriations Act.
TDH estimated a General Revenue savings on prescriptions purchased
through the South Texas Hospital and the Texas Center for Infectious
Disease, based on securing a 60% discount from the Average Wholesale
Price through negotiations with pharmaceutical manufacturers and/or
wholesale distributors. Savings would total $249,000 in FY 2002,
$294,000 in FY 2003, $338,000 in FY 2004, $389,000 in FY 2005, and
$442,000 in FY 2006. TDH did not estimate savings for the Medicaid
Vendor Drug program or any other TDH program providing prescription drug
benefits.
MHMR, TDCJ, ERS, and TRS estimated no significant fiscal impact.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 501 Texas Department of Health, 323 Teacher
Retirement System, 655 TX Dept. of Mental Health &
Mental Retardation, 696 Texas Department of
Criminal Justice, 327 Employees Retirement System
LBB Staff: JK, HD, PP, SW