SRC-TJG S.B. 1456 78(R)   BILL ANALYSIS


Senate Research Center   S.B. 1456
By: Zaffirini
Health & Human Services
4/8/2003
As Filed


DIGEST AND PURPOSE 

Prescription drugs are a covered benefit of the Texas Medicaid program.
Prescription drug costs are one of the fastest growing segments of health
care spending nationwide.  As proposed, S.B. 1456 implements a preferred
drug list and requires the Health and Human Services Commission to
negotiate with manufacturers and labelers to obtain rebates or discounts
for prescription drugs sold in this state. 

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to
a state officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Chapter 531, Government Code, by adding Subchapter K,
as follows: 

SUBCHAPTER K.  A PREFERRED DRUG LIST PROGRAM

Sec. 531.401.  PURPOSE.  Provides that the purpose of this subchapter is
to reduce the cost of prescription drugs provided by the state through the
Medicaid program. 

Sec. 531.402.  DEFINITIONS.  Defines "labeler," "manufacturer," and
"wholesaler." 

Sec. 531.403.  NEGOTIATED PRESCRIPTION DRUG REBATES.  (a) Requires the
Health and Human Services Commission (HHSC) to negotiate with
manufacturers and labelers to obtain rebates or discount prices for
prescription drugs sold in this state. Requires HHSC, in negotiated terms
for rebates or discount prices, to consider certain information. 

(b) Authorizes a manufacturer or labeler to voluntarily negotiate with
HHSC and enter into an agreement to provide supplemental rebates for
prescription drugs provided under the Medicaid program in excess of the
rebates required by 42 U.S.C. Section 1396r-8. 

Sec. 531.404.  PRIOR AUTHORIZATION REQUIREMENTS.  (a) Requires HHSC to
place the products of the manufacturer or labeler on the state's list of
products requiring prior authorization under the Medicaid program, if HHSC
and the manufacturer or labeler fail to reach an agreement on supplemental
Medicaid rebates. 

(b) Requires placement of products on a prior authorization list in
accordance with this section to be conducted in a manner that complies
with 42 U.S.C. 1396r8(d)(5). 

SECTION 2.  Requires the agency affected by the provision to request the
waiver or authorization and authorizes the agency to delay implementing
that provision until the waiver or authorization is granted, if before
implementing any provision of the Act a state agency determines that a
waiver or authorization from a federal agency is necessary for the
implementation of that provision. 
 
SECTION 3.  Effective date: upon passage or September 1, 2003.