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By:  Zaffirini                                                    S.B. No. 1456


A BILL TO BE ENTITLED

AN ACT

relating to a preferred drug list program for state medical 
assistance programs.
	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.  A PREFERRED DRUG LIST PROGRAM
	Sec. 531.401.  PURPOSE.  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.  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  
(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; and
		(2)  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 
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)  If the commission and a manufacturer or labeler fail to reach 
an agreement on supplemental Medicaid rebates rebates, the 
commission shall place the products of the manufacturer or labeler 
on the state's list of products requiring prior authorization under 
the Medicaid program.
		(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).
	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.  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.