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78R5813 KKA-F
By: Raymond H.B. No. 1545
A BILL TO BE ENTITLED
AN ACT
relating to a prescription drug purchasing program and an
associated assistance program.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 531, Government Code, is amended by
adding Subchapter K to read as follows:
SUBCHAPTER K. FAIR MARKET PRESCRIPTION DRUG PRICING AND
PRESCRIPTION DRUG ASSISTANCE PROGRAM
Sec. 531.401. DEFINITIONS. In this subchapter:
(1) "Labeler" means a person that:
(A) has a labeler code from the Food and Drug
Administration under 21 C.F.R. Section 207.20; and
(B) receives prescription drugs from a
manufacturer or wholesaler and repackages those drugs for later
retail sale.
(2) "Manufacturer" means a manufacturer of
prescription drugs as defined by 42 U.S.C. Section 1396r-8(k)(5),
including a subsidiary or affiliate of a manufacturer.
(3) "Publicly funded entity" means an entity funded
wholly or partly with state or local government funds. The term
includes a public hospital, a hospital district, a community mental
health and mental retardation center, and a county providing
indigent health care services under Chapter 61, Health and Safety
Code.
(4) "Wholesaler" means a person licensed under
Subchapter I, Chapter 431, Health and Safety Code.
Sec. 531.402. NEGOTIATED PRESCRIPTION DRUG REBATES AND
DISCOUNT PRICES. (a) The commission shall negotiate with
manufacturers and labelers to obtain supplemental Medicaid rebates
or discount prices for prescription drugs sold in this state,
including prescription drugs sold to a publicly funded entity. In
negotiating terms for rebates, supplemental rebates, or discount
prices, the commission shall:
(1) attempt to obtain the lowest of the following
prices for each unit of a prescription drug:
(A) the price calculated each quarter under the
Medicaid rebate program in accordance with 42 U.S.C. Section
1396r-8;
(B) the price calculated each quarter under 42
U.S.C. Section 256b;
(C) the lowest price available each quarter to
any publicly funded entity; or
(D) any other price lower than the prices
specified by Paragraphs (A), (B), and (C) that the commission may
obtain through negotiation; and
(2) consider any available information on
prescription drug prices or discounts.
(b) A manufacturer or labeler may voluntarily negotiate
with the commission and enter into an agreement to provide:
(1) supplemental rebates for prescription drugs
provided under the Medicaid program in excess of the rebates
required by 42 U.S.C. Section 1396r-8;
(2) discount prices for prescription drugs provided
under the state pharmaceutical assistance program established
under Section 531.404; or
(3) discount prices for prescription drugs provided by
any other publicly funded entity.
(c) The commission may combine negotiations for the benefit
of the state pharmaceutical assistance program under Subsection
(b)(2) with any other state negotiations regarding prescription
drug prices as necessary to maximize the amount of rebates
available.
Sec. 531.403. PRIOR AUTHORIZATION REQUIREMENTS. (a) If
the commission and a manufacturer or labeler fail to reach an
agreement on supplemental Medicaid rebates and discount pricing for
the state pharmaceutical assistance program established under
Section 531.404 resulting in the availability of prescription drugs
at prices not more than the lowest price specified by Section
531.402(a)(1)(A), (B), or (C), the commission shall:
(1) place the products of the manufacturer or labeler
on the state's list of products requiring prior authorization under
the Medicaid program or any other state-funded program; and
(2) post the name of the manufacturer or labeler on the
commission's Internet site.
(b) Placement of products on a prior authorization list in
accordance with this section must be conducted in a manner that
complies with 42 U.S.C. Section 1396r-8(d)(5).
(c) The commission shall distribute to physicians,
pharmacists, and other health professionals in this state
information regarding the relative costs of prescription drugs
provided by manufacturers and labelers who have entered into
agreements with the commission under this subchapter and
prescription drugs provided by manufacturers and labelers who have
not entered into agreements with the commission under this
subchapter.
Sec. 531.404. STATE PHARMACEUTICAL ASSISTANCE PROGRAM:
GENERAL PROVISIONS. (a) The commission shall establish a state
pharmaceutical assistance program under 42 U.S.C. Section
1396r-8(c)(1)(C).
(b) The program shall promote the use of effective drugs by
providing for the availability of discounted prices to program
participants for each prescription drug available under the program
through an agreement under Section 531.402.
(c) A person is eligible to participate in the program if
the person is a resident of this state and:
(1) qualifies for the program under procedures
established by the commission;
(2) participates in any health program provided by a
publicly funded entity; and
(3) is not covered by an insurance policy or health
benefit plan, including a Medicare supplement policy or health
benefit plan, that provides benefits for prescription drugs.
(d) A program participant is entitled to obtain, from a
retail pharmacy that voluntarily participates in the program, a
prescription drug under the program at a price that does not exceed
the sum of:
(1) the pharmacy's discounted acquisition cost under
the program; and
(2) a dispensing fee in an amount equal to 105 percent
of the dispensing fee paid for providing the drug under the Medicaid
program.
(e) The commission shall engage in outreach activities to
publicize the availability of discounted prescription drug prices
under the program and to maximize enrollment in the program. The
commission shall establish simplified procedures for enrolling
program participants.
Sec. 531.405. PARTICIPATING WHOLESALERS AND RETAIL
PHARMACIES. (a) The commission shall contract with each
wholesaler that:
(1) elects to participate in the state pharmaceutical
assistance program established under Section 531.404; and
(2) satisfies the commission's participation
requirements.
(b) A contract between the commission and a wholesaler must
require the wholesaler to:
(1) provide prescription drugs available through the
program to participating retail pharmacies at a price not to exceed
the sum of:
(A) the wholesaler's discounted acquisition cost
under the program; and
(B) a reasonable delivery fee in an amount
negotiated by the wholesaler and the commission, which fee may vary
based on the monthly volume of prescription drugs provided by the
wholesaler and the number of required weekly deliveries;
(2) meet service levels specified in the contract;
(3) provide next-day delivery service on all orders
under the program by participating retail pharmacies;
(4) provide software and data interface capacity to
participating retail pharmacies as necessary to enable pharmacies
to comply with Subsection (d); and
(5) participate in the program on an ongoing basis for
the period specified in the contract.
(c) The commission shall collect utilization information
from each participating wholesaler as necessary to administer the
program. The commission shall protect the confidentiality of any
information obtained by the commission under this subsection that
is confidential under state or federal law, rule, or regulation.
(d) The commission by rule shall require a participating
retail pharmacy to:
(1) maintain a separate inventory of prescription
drugs obtained by the pharmacy under the program or segregate those
drugs from the pharmacy's other prescription drug stock; and
(2) maintain separate records of acquisition and
disposition of prescription drugs obtained by the pharmacy under
the program, and ensure that all computer records regarding those
drugs are readily available to the commission.
(e) A participating retail pharmacy or wholesaler may not
resell or otherwise transfer a prescription drug obtained under the
program to:
(1) a retail pharmacy that is not participating in the
program; or
(2) a consumer who is not a program participant.
(f) If the commission, after notice and opportunity for a
hearing, determines that a participating retail pharmacy or
wholesaler has acted in violation of Subsection (e), the pharmacy
or wholesaler is liable to the manufacturer of the prescription
drug in an amount equal to the difference between:
(1) the retail price of the drug at the time of the
wrongful resale or transfer; and
(2) the price at which the drug was obtained by the
pharmacy or wholesaler under the program.
Sec. 531.406. CERTAIN REBATE DISPUTES OR DISCREPANCIES.
(a) A dispute or discrepancy in the amount of a supplemental
Medicaid rebate negotiated under Section 531.402 must be resolved
using the process established in this section.
(b) The commission may hire an independent auditor
acceptable to all affected parties to perform an audit at the
commission's expense if there is a dispute or discrepancy in favor
of a manufacturer or labeler relating to the amount rebated for a
prescription drug provided by the manufacturer or labeler. If the
audit does not resolve the dispute or discrepancy, the manufacturer
or labeler shall:
(1) provide justification for the dispute or
discrepancy that is satisfactory to the commission; or
(2) pay the additional amount due.
(c) A manufacturer or labeler may hire an independent
auditor acceptable to all affected parties to perform an audit at
the expense of the manufacturer or labeler if there is a dispute or
discrepancy in favor of this state relating to the amount rebated
for a prescription drug provided by the manufacturer or labeler. If
the audit does not resolve the dispute or discrepancy, the
commission shall:
(1) provide justification for the dispute or
discrepancy that is satisfactory to the manufacturer or labeler; or
(2) refund to the manufacturer or labeler the amount
due.
(d) Any party not satisfied with the resolution of a dispute
or discrepancy in accordance with Subsection (b) or (c) may request
in writing a hearing before the State Office of Administrative
Hearings. The party must include supporting documentation with the
request for a hearing.
Sec. 531.407. RULEMAKING. The commission may adopt rules
as necessary to administer this subchapter.
Sec. 531.408. ANNUAL REPORT. Not later than January 1 of
each year, the commission shall report to the legislature on the
commission's activities under this subchapter. The report must
include the number of persons enrolled in the state pharmaceutical
assistance program established under Section 531.404 and
information regarding the financial condition of that program.
SECTION 2. If before implementing any provision of this Act
a state agency determines that a waiver or authorization from a
federal agency is necessary for implementation of that provision,
the agency affected by the provision shall request the waiver or
authorization and may delay implementing that provision until the
waiver or authorization is granted.
SECTION 3. (a) The Health and Human Services Commission
shall implement Sections 531.402 and 531.403, Government Code, as
added by this Act, not later than January 1, 2004.
(b) The Health and Human Services Commission shall
implement the state pharmaceutical assistance program required by
Sections 531.404 and 531.405 not later than January 1, 2005.
SECTION 4. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2003.