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78R10723 CLG-D
By: Delisi, Menendez, Harper-Brown H.B. No. 1804
Substitute the following for H.B. No. 1804:
By: Deshotel C.S.H.B. No. 1804
A BILL TO BE ENTITLED
AN ACT
relating to operation of the Medicaid vendor drug program,
including the adoption of a preferred drug list and the negotiation
of supplemental drug rebates.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter B, Chapter 32, Human Resources Code,
is amended by adding Sections 32.0462-32.0467 to read as follows:
Sec. 32.0462. PHARMACY BENEFIT MANAGER FOR VENDOR DRUG
PROGRAM. (a) In this section, "pharmacy benefit manager" has the
meaning assigned by Section 1, Article 21.07-6, Insurance Code.
(b) The Health and Human Services Commission may contract
with a pharmacy benefit manager or other entity that has experience
in the development of preferred drug lists or in negotiating
supplemental rebates with pharmaceutical manufacturers to
administer all or part of the vendor drug program.
Sec. 32.0463. SUPPLEMENTAL MEDICAL ASSISTANCE REBATES. (a)
In this section:
(1) "Labeler" means a person that:
(A) has a labeler code from the United States
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),
as amended, including a subsidiary or affiliate of a manufacturer.
(3) "Wholesaler" means a person licensed under
Subchapter I, Chapter 431, Health and Safety Code.
(b) The Health and Human Services Commission shall
negotiate with manufacturers and labelers of brand name
prescription drugs to obtain supplemental medical assistance
rebates for prescription drugs sold in this state.
(c) A manufacturer or labeler that sells prescription drugs
in this state may voluntarily negotiate with the commission and
enter into an agreement to provide supplemental medical assistance
rebates for prescription drugs provided under the vendor drug
program in excess of the rebates required by 42 U.S.C. Section
1396r-8, as amended.
(d) In negotiating terms for a supplemental medical
assistance rebate amount, the commission shall:
(1) consider:
(A) rebates calculated under the medical
assistance rebate program in accordance with 42 U.S.C. Section
1396r-8, as amended; and
(B) any other available information on
prescription drug prices or rebates; and
(2) ensure that the cost basis of a product is the
product's average manufacturer price, as defined by 42 U.S.C.
Section 1396r-8(k)(1), as amended.
(e) The commission or the commission's designated
representative shall conduct a closed meeting to consider or
discuss the negotiations of a supplemental medical assistance
rebate agreement under this section or any other information
relating to supplemental medical assistance rebates, including
trade secrets, rebate amount, rebate percentage, and manufacturer
or labeler pricing. Information considered or discussed at a
closed meeting under this subsection is confidential and not
subject to disclosure under Chapter 552, Government Code.
Sec. 32.0464. CONFIDENTIALITY OF REBATES, PRICING, AND
NEGOTIATIONS. Information obtained or maintained by the Health and
Human Services Commission regarding supplemental medical
assistance rebate negotiations or a supplemental medical
assistance rebate agreement, including trade secrets, rebate
amount, rebate percentage, and manufacturer or labeler pricing, is
confidential and not subject to disclosure under Chapter 552,
Government Code.
Sec. 32.0465. PREFERRED DRUG LIST FOR VENDOR DRUG PROGRAM.
(a) The Health and Human Services Commission shall adopt a
preferred drug list for the vendor drug program. In making a
decision regarding the placement of a drug on the preferred drug
list, the commission shall consider:
(1) evidence-based procedures;
(2) the recommendations of the Medical Assistance
Pharmaceutical and Therapeutics Committee established under
Section 32.0467;
(3) the clinical efficacy of the drug;
(4) the safety of the drug;
(5) the cost-effectiveness of the drug; and
(6) the cost of the drug, including consideration of
any savings resulting from the state's ability to obtain a
supplemental rebate for the drug under Section 32.0463.
(b) The commission shall establish categories of drugs for
purposes of the preferred drug list, and each category must include
at least two drugs. In establishing the drug categories, the
commission shall review and use each of the therapeutic categories
of drugs established by the United States Food and Drug
Administration.
(c) On adoption of the preferred drug list and following any
updates or other changes to the list, the commission shall provide
for distribution of current copies of the preferred drug list in an
electronic format to all pharmacists participating in the medical
assistance program and other providers of medical assistance in
this state. The commission shall also make copies of the preferred
drug list and information regarding updates and other changes to
the list available in writing, on request, to pharmacists and other
providers participating in the medical assistance program.
Sec. 32.0466. PRIOR AUTHORIZATION UNDER VENDOR DRUG
PROGRAM. (a) In this section, "nonpreferred drug" means a
prescribed drug that is not included in the preferred drug list
adopted under Section 32.0465.
(b) The Health and Human Services Commission, in its rules
and standards governing the vendor drug program, shall establish a
system under which reimbursement for a nonpreferred drug is not
available unless the prescribing physician obtains prior
authorization for prescribing the drug.
(c) The commission shall establish procedures for the prior
authorization system to ensure that:
(1) a request for prior authorization can be made to
the commission or the commission's designated representative 24
hours a day;
(2) there will be a response to a request for prior
authorization by telephone or other telecommunications device
within 18 hours after receipt of a request for prior authorization
from the prescribing physician;
(3) a 72-hour supply of the drug prescribed will be
provided in an emergency or if the commission does not provide a
response within the time required by Subdivision (2);
(4) a chronically ill recipient of medical assistance
who at the time the commission adopts a preferred drug list under
Section 32.0465 is being treated with a nonpreferred drug is
allowed after the adoption of the list to continue to receive the
medication as prescribed, including the number of refills permitted
under the prescription; and
(5) a patient for whom a prescribing physician obtains
prior authorization under this section for treatment with a
nonpreferred drug is not required to obtain any further prior
authorization for any future or new prescriptions of that drug.
(d) A recipient of drug benefits under the vendor drug
program may use the Medicaid fair hearing process to appeal a denial
of a request for prior authorization.
(e) Each prescribed drug for treatment of the following
illnesses or conditions is exempt from the prior authorization
system:
(1) human immunodeficiency virus (HIV) infection;
(2) acquired immune deficiency syndrome (AIDS);
(3) cancer;
(4) schizophrenia;
(5) bipolar disorder; and
(6) hemophilia.
(f) Notwithstanding any other provision of this section but
subject to Subsection (h), reimbursement may be provided for a
nonpreferred drug that is prescribed without prior authorization if
the prescribing physician communicates to the pharmacist that the
drug is medically necessary in accordance with this subsection. A
drug is considered medically necessary under this subsection if:
(1) treatment with each alternative drug available
under the preferred drug list adopted under Section 32.0465 has
been ineffective in treating the patient; or
(2) the patient suffers from a specific clinical
condition that precludes use of each alternative drug available
under the preferred drug list adopted under Section 32.0465.
(g) The commission shall monitor the degree to which drugs
are prescribed under Subsection (f) by drug name and name of the
prescribing physician.
(h) If considered necessary by the commission to prevent
abuse or otherwise ensure proper operation of the vendor drug
program, the commission may prohibit or limit the availability of
reimbursement for a particular drug prescribed under Subsection
(f). The commission's authority under this subsection includes the
authority to prohibit or limit the availability of reimbursement
for a particular drug only when prescribed by a particular
physician.
(i) Notwithstanding any other provision of this section,
reimbursement may be provided for a new drug described by Section
32.0467(k) for which the commission has not yet made a decision
regarding the drug's placement on the preferred drug list adopted
under Section 32.0465 if the prescribing physician:
(1) obtains prior authorization under this section to
prescribe the drug; or
(2) communicates to a pharmacist that the drug is
medically necessary as provided by Subsection (f).
Sec. 32.0467. MEDICAL ASSISTANCE PHARMACEUTICAL AND
THERAPEUTICS COMMITTEE. (a) The Medical Assistance Pharmaceutical
and Therapeutics Committee is established for the purpose of
developing recommendations for a preferred drug list for the vendor
drug program.
(b) The committee consists of the following members
appointed by the governor:
(1) five physicians who are licensed under Subtitle B,
Title 3, Occupations Code, and who represent a range of clinical
specialties;
(2) two pharmacists who are licensed under Subtitle J,
Title 3, Occupations Code, and who represent retail pharmacies;
(3) two pharmacists who are licensed under Subtitle J,
Title 3, Occupations Code, and who represent academic pharmacies or
clinical doctors of pharmacy;
(4) one member who is a registered nurse, advanced
nurse practitioner, or physician assistant; and
(5) one member who is licensed in the practice of an
allied health profession.
(c) In making appointments to the committee under
Subsection (b), the governor shall ensure that the committee
includes physicians or pharmacists participating in the medical
assistance program who:
(1) provide services to the program's diverse
population; and
(2) have experience in either developing or practicing
under a preferred drug list.
(d) A member of the committee is appointed for a two-year
term and may serve not more than three consecutive terms.
(e) The committee shall elect a physician member of the
committee as presiding officer. The presiding officer shall serve a
one-year term.
(f) The committee shall meet at least quarterly at the call
of the presiding officer.
(g) A member of the committee may not receive compensation
for serving on the committee but is entitled to reimbursement for
reasonable and necessary travel expenses incurred by the member
while conducting the business of the committee, as provided by the
General Appropriations Act.
(h) In developing its recommendations for the preferred
drug list, the committee shall consider:
(1) evidence-based procedures;
(2) the clinical efficacy of a product;
(3) the safety of a product;
(4) the cost-effectiveness of a product;
(5) the availability of over-the-counter alternatives
to a product;
(6) any clinical information provided by a
pharmaceutical manufacturer;
(7) any written testimony provided by a pharmaceutical
manufacturer regarding a product's clinical efficacy; and
(8) the cost of a product, including consideration of
any savings resulting from the state's ability to obtain a
supplemental rebate for the product under Section 32.0463.
(i) The Health and Human Services Commission shall adopt
rules governing the operation of the committee, including rules
governing the procedures used by the committee for providing notice
of a meeting. The committee shall comply with the rules adopted
under this subsection.
(j) To the extent feasible, the committee shall review all
drug categories included in the preferred drug list adopted under
Section 32.0465 at least once every 12 months and may recommend
inclusions to and exclusions from the list to ensure that the list
provides for cost-effective medically appropriate drug therapies
for recipients of medical assistance.
(k) In this subsection, "labeler" and "manufacturer" have
the meanings assigned by Section 32.0463. After receiving notice
of the drug's availability from its manufacturer or labeler, the
committee shall schedule a review at the next regularly scheduled
meeting of the committee for a new drug that has been approved or
has had any of its particular uses approved by the United States
Food and Drug Administration.
(l) The Health and Human Services Commission shall provide
administrative support and resources as necessary for the committee
to perform its duties under this section.
(m) Chapter 2110, Government Code, does not apply to the
committee.
(n) The committee is considered part of the executive branch
of state government, and any action undertaken by the committee is
considered an administrative action for purposes of Chapter 305,
Government Code.
(o) After each meeting, the committee shall prepare a report
regarding the clinical basis for the committee's preferred drug
list decision regarding each drug reviewed or considered by the
committee at the meeting. The report must be made available to the
public.
SECTION 2. If before implementing any provision of this Act
a state agency determines that a waiver or other authorization from
a federal agency is necessary for implementation, the state agency
shall request the waiver or authorization and may delay
implementing that provision until the waiver or authorization is
granted.
SECTION 3. Not later than November 1, 2003, the governor
shall appoint members to the Medical Assistance Pharmaceutical and
Therapeutics Committee established under Section 32.0467, Human
Resources Code, as added by this Act.
SECTION 4. Not later than January 1, 2004, the Health and
Human Services Commission shall implement Section 32.0463, Human
Resources Code, as added by this Act.
SECTION 5. (a) Not later than January 1, 2004, the Medical
Assistance Pharmaceutical and Therapeutics Committee established
under Section 32.0467, Human Resources Code, as added by this Act,
shall submit recommendations for the preferred drug list the
committee is required to develop under that section to the Health
and Human Services Commission.
(b) Not later than March 1, 2004, the Health and Human
Services Commission shall adopt the preferred drug list as required
by Section 32.0465, Human Resources Code, as added by this Act.
SECTION 6. 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.