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Amend CSHB 2145, Senate committee printing, as follows:
(1) Insert the following new SECTIONS, appropriately
numbered:
SECTION ____. Subtitle H, Title 8, Insurance Code, is
amended by adding Chapter 1626 to read as follows:
CHAPTER 1626. DRUG INTERCHANGE PROGRAMS WITH CERTAIN GOVERNMENT
HEALTH BENEFIT PLANS
Sec. 1626.001. DEFINITIONS. In this chapter:
(1) "Actual cost savings" means, with respect to a
proposed drug interchange, the actual amount in dollars a client
plan and patient, respectively, will save in net drug costs
annually if a drug interchange occurs at the expected dosage,
assuming the patient will use the drug for 12 months.
(2) "Board" means the Texas State Board of Pharmacy.
(3) "Class E pharmacy" has the meaning assigned by
Section 560.051(f), Occupations Code.
(4) "Clear and conspicuous," as regards a disclosure
under this chapter, means a disclosure made in such a size, color,
contrast, and location that:
(A) is readily noticeable, readable, and
understandable;
(B) is presented in proximity to all information
necessary to prevent it from being misleading or deceptive;
(C) is presented in a manner that the information
is readily noticeable, readable, and understandable and not
obscured in any manner; and
(D) if a print disclosure, appears in a type
size, contrast, and location sufficient for a patient or
practitioner to read and comprehend the disclosure.
(5) "Client plan" means a health benefit plan provided
under Chapter 1551, 1575, 1579, or 1601 for which a Class E
pharmacy, under contract, provides or administers pharmacy
benefits.
(6) "Currently prescribed drug" means a drug
prescribed for a patient that is the subject of a drug interchange
solicitation by a Class E pharmacy.
(7) "Drug interchange" means any change from one
prescription drug to another that is requested by a Class E
pharmacy. The term does not include a drug interchange:
(A) initiated under a drug utilization review;
(B) initiated for patient safety reasons;
(C) required due to market unavailability of the
currently prescribed drug;
(D) from a brand drug to a generically or
pharmaceutically equivalent drug, as defined by Section 562.001,
Occupations Code; or
(E) required because the currently prescribed
drug is not covered by the formulary or plan applicable to the
patient.
(8) "Drug interchange-related health care costs"
means a patient's copayments or deductibles for tests, doctor
visits, and other health care services that are incurred in
accordance with a treating physician's instructions, and are
incurred as a result of:
(A) a drug interchange for the purpose of
assessing the continuum of the previous therapy for up to six months
following the drug interchange; or
(B) a drug interchange solicitation for the
purpose of assessing whether to undertake a proposed drug
interchange.
(9) "Drug interchange solicitation" means a
communication by a Class E pharmacy to request a drug interchange.
(10) "Generically equivalent" has the meaning
assigned by Section 562.001, Occupations Code.
(11) "Manufacturer additional payments" means all
manufacturer payments other than manufacturer formulary payments.
(12) "Manufacturer formulary payments" means payments
that:
(A) a Class E pharmacy receives from a
manufacturer in return for formulary placement or access; or
(B) are characterized as "formulary" or "base"
rebates under agreements by the Class E pharmacy with
pharmaceutical manufacturers.
(13) "Manufacturer payments" means all compensation a
Class E pharmacy receives from a pharmaceutical manufacturer,
including rebates, regardless of how categorized, market share
incentives, commissions, mail service purchase discounts,
administrative or management fees, and any fees received for sales
of utilization data to a pharmaceutical manufacturer. The term
does not include purchase discounts based on invoiced purchase
terms.
(14) "Minimum cost savings" means the minimum dollar
amount a client plan and patient, respectively, will save annually
if a drug interchange occurred at the expected dosage.
(15) "Net drug cost" means the price a Class E pharmacy
charges a client plan or patient for a prescription drug whether
that drug is delivered through a retail pharmacy or mail order. The
term may include all discounts, rebates, credits, or other payments
that lower the cost of the drug, to the extent those payments are
provided to the client plan, and may be reduced by manufacturer
payments to the extent those payments are provided to the client
plan, but may not be reduced by manufacturer payments that are paid
to and retained by the Class E pharmacy.
(16) "Patient" means a person whose prescription drug
benefit is administered by a Class E pharmacy.
(17) "Practitioner" has the meaning assigned by
Section 551.003(34), Occupations Code.
(18) "Proposed drug" means a drug that a Class E
pharmacy in its drug interchange solicitation proposes to
substitute for a currently prescribed drug.
(19) "Total product revenue" means a Class E
pharmacy's net revenue that consists principally of sales of
prescription drugs to clients.
Sec. 1626.002. PROHIBITED ACTS. (a) Unless otherwise
specifically directed by a client plan with respect to a proposed
drug interchange, a Class E pharmacy may not make a drug interchange
solicitation under which:
(1) the net drug cost of the proposed drug exceeds that
of the currently prescribed drug;
(2) the currently prescribed drug has a generically
equivalent drug and the proposed drug does not have a generically
equivalent drug, unless the proposed drug has a lower net drug cost
than all generically equivalent drugs of the currently prescribed
drug; or
(3) the patent protection for the currently prescribed
drug is scheduled to expire within six months of the drug
interchange solicitation, or the reasonable effect of the proposed
drug interchange is to avoid substitution for, or generic
competition against, the currently prescribed drug, other than a
drug interchange that has the effect of decreasing net drug costs.
(b) A Class E pharmacy may not make any drug interchange
that fails to disclose to practitioners and patients, clearly and
conspicuously, minimum cost savings or actual cost savings, as well
as the difference, if any, in copayments to be made by the patient,
or, if there is no effect, the absence of effect on copayments. In
making a disclosure, a Class E pharmacy may reasonably rely on
information provided by the client plan with respect to eligibility
and copayments without regard to applicable deductibles and maximum
plan benefits.
(c) A Class E pharmacy may not make any drug interchange
solicitation to a patient who, within two years preceding the
solicitation, and with respect to the same therapeutic class of
drug products involved in the proposed drug interchange, has:
(1) interchanged the patient's drug following a drug
interchange solicitation from the Class E pharmacy; or
(2) interchanged the patient's drug following a Class
E pharmacy drug interchange solicitation but had the interchange
reversed, unless all of the proposed drugs in the current drug
interchange solicitation were not among the proposed drugs included
in the prior drug interchange solicitation.
Sec. 1626.003. PAYMENT OF DRUG INTERCHANGE RELATED COSTS:
DISCLOSURE REQUIREMENTS. (a) A Class E pharmacy shall pay all
out-of-pocket costs for drug interchange-related health care costs
incurred by a patient by reimbursing the patient for those costs not
later than the 30th day after receipt by the pharmacy of a claim
form for those costs.
(b) Each Class E pharmacy shall enact and follow a procedure
for reimbursing patients for out-of-pocket costs described by
Subsection (a) under which the Class E pharmacy shall:
(1) permit patients, practitioners, or treating
physicians to request the reimbursement by telephone or in writing;
and
(2) on receipt of the request, provide a single-page
claim form with instructions to request reimbursement.
(c) For reimbursement requests initiated by patients, the
Class E pharmacy may require that the patient's reimbursement claim
provide information showing that the patient incurred drug
interchange-related health care costs. The patient may satisfy the
requirement by providing the physician's or practitioner's notation
at a designated place on the claim form or the physician's written
order, or through other evidence that shows payment of costs,
including costs for copayments or deductibles for tests or doctor
visits incurred as a result of a drug interchange. The Class E
pharmacy may not directly or indirectly prevent or discourage
patients or physicians from requesting or receiving reimbursement
for drug interchange-related health care costs.
(d) The Class E pharmacy's written communications to both
practitioners and patients concerning drug interchanges must
clearly and conspicuously disclose the pharmacy's policy,
consistent with this section, with respect to drug
interchange-related health care costs. Telephone communications
by the pharmacy with practitioners and patients concerning drug
interchanges must communicate the existence of the pharmacy's
policies with respect to drug interchange-related health care
costs. Communications under this subsection with practitioners,
patients, and client plans may not misrepresent, directly or
indirectly, the pharmacy's policy with respect to drug
interchange-related health care costs.
(e) If drug interchange-related health care costs paid to a
patient with respect to any particular interchange exceed $500, the
Class E pharmacy, while complying with the timely reimbursement
requirement under Subsection (a), may choose to have a third party
chosen by the pharmacy review the costs paid. If a determination is
made that the costs were not related to an interchange, this section
may not be construed as preventing the pharmacy from pursuing any
legal remedies the pharmacy may have against the patient and any
other involved party.
Sec. 1626.004. SOLICITATION PROCESS; DISCLOSURE OF PRICING
INFORMATION. (a) A Class E pharmacy may not interchange, or obtain
an interchange promise for, the prescription drug of any patient
without first obtaining the express verifiable authorization of the
practitioner who prescribed the currently prescribed drug. Each
drug interchange solicitation to a practitioner must:
(1) identify the name and title of the person making
the drug interchange solicitation;
(2) state that the Class E pharmacy is soliciting a
drug interchange;
(3) identify the minimum cost savings or actual cost
savings to be achieved by interchanging to the proposed drug from
the currently prescribed drug;
(4) describe under what circumstances the currently
prescribed drug will continue to be covered by the client plan, if
that is the case;
(5) describe the difference in the applicable
copayment, if any, or the absence of any effect on the applicable
copayment;
(6) if the pharmacy receives manufacturer payments
from a drug manufacturer as a result of the proposed drug
interchange or the interchange solicitation that is not reflected
in the net drug cost because the manufacturer payments do not inure
to the pharmacy's client plan, disclose that the pharmacy receives
those payments or potential payments;
(7) disclose the existence of the pharmacy's policy
with respect to drug interchange-related health care costs, as
described by Section 1626.003; and
(8) disclose any material differences between the
currently prescribed drug and the proposed drug regarding side
effects or potential effects on patient health and safety.
(b) A Class E pharmacy may not interchange a patient's drug
without express verifiable authorization from the practitioner as
communicated directly by the practitioner, either in writing or
verbally, or by a person who affirms in writing or verbally that the
interchange has been authorized by the practitioner. If the
authorization is by a person other than the practitioner and
verbal, the Class E pharmacy shall request that person's name and
title or position. The Class E pharmacy shall maintain records
documenting, with respect to each drug interchange, how the express
verifiable authorization was obtained, including the name of the
person providing the authorization, whether the authorization was
written or verbal, and, if verbal and by a person other than the
practitioner, that person's title or position, if provided.
(c) On receipt of authorization under Subsection (b), the
Class E pharmacy shall send a written communication to the
practitioner confirming the interchange. If the interchange
solicitation under Subsection (a) was not in writing, the written
confirmation must include the information required by Subsection
(a). Regardless of whether the interchange solicitation was in
writing, the written confirmation must:
(1) identify the minimum cost savings or actual cost
savings resulting from the interchange;
(2) clearly and conspicuously disclose the pharmacy's
policy with respect to drug interchange-related health care costs,
in accordance with Section 1626.003; and
(3) provide a toll-free telephone number for the
prescribing practitioner.
Sec. 1626.005. PATIENT DRUG INTERCHANGE NOTICE. (a) With
respect to home delivery prescriptions, not later than the earlier
of 24 hours after receipt of an authorization of a drug interchange
by the practitioner or dispensing the proposed drug, the Class E
pharmacy shall send the patient a written notice and make a
telephonic communication advising the patient of the
practitioner's approval of the drug interchange.
(b) Following receipt of authorization for a non-home
delivery prescription, the pharmacy shall send the patient a
written notice that clearly and conspicuously:
(1) states that the pharmacy requested a drug
interchange by contacting the patient's practitioner;
(2) states that, following the pharmacy's interchange
solicitation, the practitioner approved the drug interchange;
(3) identifies the proposed drug and the currently
prescribed drug;
(4) identifies the minimum cost savings or actual cost
savings;
(5) describes under what circumstances the currently
prescribed drug will continue to be covered by the client plan, if
that is the case;
(6) describes any difference in the applicable
copayment or the absence of any effect on the applicable copayment;
(7) if the pharmacy receives compensation from a drug
manufacturer as a result of the proposed drug interchange or the
drug interchange solicitation that is not reflected in the net drug
cost because it is compensation that does not inure to the
pharmacy's client plan, discloses the fact of that compensation or
potential compensation;
(8) discloses the pharmacy's policy with respect to
drug interchange-related health care costs, in accordance with
Section 1626.003; and
(9) advises the patient that the patient may decline
the drug interchange, in which case the patient will receive the
currently prescribed drug if the currently prescribed drug remains
on the client plan's formulary and the patient is willing to pay any
difference in the applicable copayment.
(c) The telephonic communication described by Subsection
(a) must:
(1) state that the Class E pharmacy requested a drug
interchange by contacting the patient's practitioner;
(2) state that, following the pharmacy's interchange
solicitation, the practitioner approved the drug interchange;
(3) advise the patient that further written
information about the drug interchange will arrive in the mail; and
(4) provide the pharmacy's toll-free telephone number
so that the patient may speak to a customer service representative
about the interchange.
(d) A disclosure under Subsection (b) or (c) may not
represent that the practitioner initiated the drug interchange.
Sec. 1626.006. REJECTED INTERCHANGES. (a) Unless a
currently prescribed drug is no longer on the client plan's
formulary or the patient is unwilling to pay any higher applicable
copayment or other costs, a Class E pharmacy shall cancel and
reverse a drug interchange on written or verbal instructions from a
practitioner or patient. The Class E pharmacy shall maintain a
toll-free telephone number during business hours to handle
telephone calls from patients and practitioners in response to the
pharmacy's interchange confirmations, and the customer service
standards for those telephone numbers must be equivalent to the
pharmacy's other customer service standards.
(b) On cancellation, if the Class E pharmacy has not yet
dispensed the proposed drug, the pharmacy on approval of the
practitioner shall dispense the currently prescribed drug. If the
pharmacy has already dispensed the proposed drug, the pharmacy
shall obtain a prescription for and dispense the currently
prescribed drug, and may charge the patient only one copayment and
shipping and handling fees. Unless otherwise provided by contract
with a client plan, the pharmacy shall also bear the expense of
shipping the proposed drug back to the pharmacy, either by offset or
by reversing and crediting the initial copayment.
(c) Each Class E pharmacy shall provide notice to each
client plan that the client plan may request information regarding
the costs to the plan resulting from a patient's rejection of a
proposed drug interchange. If a patient will exhaust the patient's
supply of the currently prescribed drug before a replacement
shipment will arrive to the patient, the pharmacy shall arrange for
dispensing of an appropriate quantity of replacement medications at
a participating network pharmacy at no additional cost to the
patient. If a patient reverses an interchange and the Class E
pharmacy is unable to obtain approval from the practitioner or a
physician covering for the practitioner for the currently
prescribed drug, the pharmacy shall take reasonable steps to
provide the currently prescribed drug or the proposed drug before
the patient exhausts the patient's existing supply.
Sec. 1626.007. ROLE OF ADVISORY COMMITTEE. (a) If a Class
E pharmacy uses an advisory committee of health care professionals
to assist the pharmacy in establishing drug formularies and
determining clinical criteria used by the pharmacy as a basis for
the pharmacy's drug interchange program, the pharmacy may not
misrepresent the role of the advisory committee in initiating,
reviewing, approving, or endorsing a proposed drug interchange or
interchange solicitation. If the pharmacy mentions the advisory
committee in any interchange solicitation or communication related
to drug interchanges, the pharmacy shall clearly and conspicuously
disclose:
(1) the role of the advisory committee in the
pharmacy's interchange proposal;
(2) that the interchange being proposed was not
initiated by the advisory committee and not initiated due to
medical care considerations; and
(3) that the advisory committee did not consider cost
issues, if such is the case.
(b) With respect to the operation of the advisory committee,
the Class E pharmacy shall provide to each client plan at the plan's
expense, unless the client plan contract provides otherwise, on
request:
(1) copies of all information provided to the advisory
committee; and
(2) copies of all minutes of the advisory committee
that include:
(A) the list of attendees at the advisory
committee meeting;
(B) the record of all votes to approve or
disapprove a drug for a formulary, recommend a therapeutically
equivalent drug interchange, or take other action;
(C) a summary of any discussion of material
differences between a currently prescribed drug and a proposed drug
with respect to side effects or potential effects on patient health
and safety; and
(D) a summary of all discussions on each agenda
point.
(c) In addition to the requirements under Subsections (a)
and (b), the Class E pharmacy shall advise each client plan that the
plan may send a representative, at the plan's expense, to attend any
advisory committee meeting.
(d) If an advisory committee approves a drug interchange
with conditions, the Class E pharmacy shall provide a complete
description of those conditions to the practitioner at the time of
the interchange solicitation.
Sec. 1626.008. MONITORING OF HEALTH EFFECTS OF DRUG
INTERCHANGE. Each Class E pharmacy shall monitor the effects of
drug interchanges requested by the pharmacy on the health of
patients, and shall report to its advisory committee, if any, not
less than quarterly, the results of that monitoring. The
monitoring must include a system designed to identify patient and
practitioner communications with the pharmacy that concern the
efficacy or health effects of a drug interchange, and maintain the
information received from those communications in a manner that
allows the pharmacy to collect and generate reports on patient and
practitioner communications concerning drug interchanges. The
pharmacy shall report the results of the monitoring to its advisory
committee, if any, not less than quarterly, and the committee shall
reasonably consider the results of the monitoring.
Sec. 1626.009. DISCLOSURE TO CLIENT PLANS OF COMPENSATION
FROM DRUG MANUFACTURERS. (a) With respect to each client plan that
has contracted to receive any manufacturer payments from a Class E
pharmacy, for each pharmacy fiscal year during which the client
plan receives a manufacturer payment, the pharmacy shall provide a
report for each fiscal quarter and fiscal year. A payment report
must provide the information required under Subsection (b). If the
precise reported figure is not known by the pharmacy at the time of
the report, the pharmacy shall provide its current best estimate of
the reported information, and shall provide an update to the
reported information to reflect any revision.
(b) The report must include:
(1) the dollar amount of total product revenue for the
reporting period, with respect to the Class E pharmacy's entire
client base;
(2) the dollar amount of total drug expenditures for
each client plan;
(3) the dollar amount of all manufacturer payments
earned by the pharmacy for the reporting period;
(4) the percentage of all manufacturer payments earned
by the pharmacy for the reporting period that were manufacturer
formulary payments; and
(5) the percentage of all manufacturer payments
received by the pharmacy during the reporting period that were
manufacturer additional payments.
(c) A manufacturer payment report must present the required
information in a clear and conspicuous manner that serves to inform
client plans of all manufacturer payments earned by the Class E
pharmacy, including client plans that share in manufacturer
formulary payments but not manufacturer additional payments.
(d) The Class E pharmacy shall disclose to each client plan
or prospective client plan, in advance of executing an initial or
renewal contract with the plan:
(1) that the pharmacy solicits and receives
manufacturer payments and may pass through those payments to client
plans or may retain those payments, depending on contract terms;
(2) the information required under Subsection (b)
concerning the most recent fiscal year for which the information is
publicly available at the time of the communication under this
subsection; and
(3) that the pharmacy must report, quarterly and
annually, on manufacturer payments, as required by this section.
Sec. 1626.010. PHARMACY ETHICS. (a) Each Class E pharmacy
contracting to provide pharmacy benefits for a client plan shall
adopt the code of ethics of the American Pharmacists Association or
an analogous code of ethics recognized by the board for its employed
pharmacists. The pharmacy shall accept the association's
principles of practice for pharmaceutical care or analogous
principles recognized by the board as a framework for ongoing
evolution of its pharmacy practice. The pharmacy shall provide
these documents to all staff pharmacists with any explanations as
necessary to make clear to staff pharmacists that the Class E
pharmacy is striving to achieve the objectives established by the
profession.
(b) The Class E pharmacy shall make available to its
employed pharmacists, client plans, and patients copies of those
codes of ethics or professional standards, which may be made
available in electronic form or on an Internet website.
(c) The Class E pharmacy shall require its pharmacists to
comply with all state law requirements governing pharmacists.
(d) The Class E pharmacy shall permit its pharmacists to
give good faith professional opinions.
(e) The Class E pharmacy shall require that its pharmacists
form an independent professional judgment that a drug interchange
would be in a patient's best interest before soliciting a drug
interchange.
Sec. 1626.011. ADDITIONAL PRICE TRANSPARENCY REMEDIES. (a)
A Class E pharmacy contracting to provide pharmacy benefits for a
client plan may not refuse to respond to a request for a proposal or
a request for a bid from a client plan on the grounds that the
proposal does not use the average wholesale price or prohibits the
use of the average wholesale price in pricing terms, and the
pharmacy, if asked, shall communicate to each plan that pricing
methods other than use of the average wholesale price are
available.
(b) The pharmacy may not describe relative prices of drugs
by use of symbols or other indirect means without disclosing the
price range those symbols represent.
SECTION ____. Section 562.013, Occupations Code, is amended
to read as follows:
Sec. 562.013. APPLICABILITY OF SUBCHAPTER. (a) Unless a
drug is determined to be generically equivalent to the brand
prescribed, drug selection as authorized by this subchapter does
not apply to:
(1) an enteric-coated tablet;
(2) a controlled release product;
(3) an injectable suspension, other than an
antibiotic;
(4) a suppository containing active ingredients for
which systemic absorption is necessary for therapeutic activity; or
(5) a different delivery system for aerosol or
nebulizer drugs.
(b) This subchapter applies to a drug interchange program
described by Chapter 1626, Insurance Code, except to the extent of
any conflict with that chapter. In the event of a conflict between
Chapter 1626, Insurance Code, and this subchapter, Chapter 1626,
Insurance Code, controls.
SECTION ____. This Act applies to a health benefit plan
provided under Subtitle H, Title 8, Insurance Code, beginning with
the 2005-2006 plan year.
(2) Strike SECTION 5 (page 2, lines 2-3, senate committee
printing).
(3) Renumber the SECTIONS of the bill accordingly.