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78R5404 KKA-F
By: Ellis S.B. No. 797
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. PURPOSE. The purpose of this subchapter is
to:
(1) reduce the cost of prescription drugs provided by
the state through the Medicaid program and other state-funded
programs;
(2) make prescription drugs more affordable for
uninsured or underinsured state residents; and
(3) prevent uninsured and underinsured state
residents from requiring assistance under the Medicaid program as a
result of the inability of those residents to otherwise obtain
medically necessary care due to excessive prescription drug prices.
Sec. 531.402. 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) "Wholesaler" means a person licensed under
Subchapter I, Chapter 431, Health and Safety Code.
Sec. 531.403. NEGOTIATED PRESCRIPTION DRUG REBATES AND
DISCOUNT PRICES. (a) The commission shall negotiate with
manufacturers and labelers to obtain rebates or discount prices for
prescription drugs sold in this state. In negotiating terms for
rebates or discount prices, the commission shall consider:
(1) rebates calculated under the Medicaid rebate
program in accordance with 42 U.S.C. Section 1396r-8;
(2) prices at which prescription drugs are provided to
eligible entities under 42 U.S.C. Section 256b; and
(3) any other available information on prescription
drug prices, rebates, 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) rebates for prescription drugs provided under the
Tex-Rx card program established under Section 531.405; or
(3) rebates or discount prices for prescription drugs
provided under any other state program that pays for or acquires
prescription drugs.
Sec. 531.404. PRIOR AUTHORIZATION REQUIREMENTS. (a) If
the commission and a manufacturer or labeler fail to reach an
agreement on supplemental Medicaid rebates and rebates for the
Tex-Rx card program established under Section 531.405 resulting in
the availability of prescription drugs at prices available to
eligible entities under 42 U.S.C. Section 256b, 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. 531.405. TEX-RX CARD PROGRAM: GENERAL PROVISIONS.
(a) Using rebates obtained through negotiations required by
Section 531.403, the commission shall establish a Tex-Rx card
program as a state pharmaceutical assistance program under 42
U.S.C. Section 1396r-8(c)(1)(C)(i)(III).
(b) The program does not pay for any prescription drug for
any program participant, but promotes the use of certain effective
prescription drugs by enabling participants to purchase those drugs
at a discounted price.
(c) The program shall provide discounted prices to program
participants for each prescription drug subject to a rebate through
an agreement under Section 531.403(b)(2).
(d) The commission shall contract with wholesalers or
retail pharmacies that voluntarily elect to participate in the
program as necessary to deliver discounted prices to program
participants.
(e) Subject to Subsection (f), a person is eligible to
participate in the program if the person is a resident of this state
and:
(1) is eligible for assistance under the Medicare
program; or
(2) has a net family income that is below 300 percent
of the federal poverty level.
(f) A person may not participate in the program if the
person is:
(1) eligible for assistance under the Medicaid
program; or
(2) covered by an insurance policy or health benefit
plan that provides benefits for prescription drugs at a level at
least equal to the benefits provided by the program, as determined
in accordance with commission rules.
(g) The commission shall engage in outreach activities to
publicize the availability of discounted prescription drug prices
under the program and shall establish simple procedures for
enrolling program participants.
Sec. 531.406. PARTICIPATING RETAIL PHARMACIES AND
WHOLESALERS. (a) A retail pharmacy that voluntarily participates
in the Tex-Rx card program established under Section 531.405 shall
provide a prescription drug available through the program to a
program participant at a price not to exceed the sum of:
(1) the pharmacy's 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.
(b) 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;
(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; and
(3) return excess prescription drugs obtained by the
pharmacy under the program to the appropriate wholesaler from whom
the drugs were obtained.
(c) 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.
(d) If the commission, after notice and opportunity for a
hearing, determines that a participating retail pharmacy or
wholesaler has acted in violation of Subsection (c), 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. 531.407. REBATE DISPUTES OR DISCREPANCIES. (a) A
dispute or discrepancy in the amount of a rebate negotiated under
Section 531.403 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. 531.408. RULEMAKING. The commission shall adopt rules
as necessary to administer this subchapter.
Sec. 531.409. ANNUAL REPORT. Not later than January 1 of
each odd-numbered year, the commission shall report to the
legislature on the commission's activities under this subchapter.
The report must include:
(1) the number of persons enrolled in the Tex-Rx card
program established under Section 531.405 and information
regarding the financial condition of that program; and
(2) the amount of savings achieved for the state as a
result of rebates and discount prices negotiated in accordance with
Section 531.403.
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 531.403 and 531.404, Government Code, as
added by this Act, not later than January 1, 2004.
(b) The Health and Human Services Commission shall
implement the Tex-Rx card program required by Sections 531.405 and
531.406 not later than January 1, 2005, if the commission
determines that adequate resources are available to support the
program as a result of the negotiations required by Section
531.403, Government Code, as added by this Act. If adequate
resources are not available to support implementation of the
program, the commission may delay implementation of the program
until adequate resources are available.
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.