Amend CSSB 1846 (house committee printing) by inserting the 
following new SECTIONS to the bill, appropriately numbered, and 
renumbering subsequent SECTIONS of the bill accordingly:
	SECTION ____.  Subchapter B, Chapter 1575, Insurance Code, 
is amended by adding Sections 1575.057, 1575.058, 1575.059, 
1575.060, 1575.061, and 1575.062 to read as follows:
	Sec. 1575.057.  TREATMENT OF CERTAIN REVENUE FROM 
PHARMACEUTICAL MANUFACTURERS IN CONTRACTS WITH PHARMACY BENEFIT 
MANAGERS.  (a)  In this section, "pharmacy benefit manager" means a 
person, other than a pharmacy or pharmacist, who acts as an 
administrator in connection with pharmacy benefits.  The term 
includes an administrator subject to Chapter 4151 who administers 
pharmacy benefits.
	(b)  A contract with a pharmacy benefit manager entered into 
with respect to the group program must provide that:
		(1)  with respect to any transaction with a 
pharmaceutical manufacturer or labeler in relation to the program, 
the pharmacy benefit manager represents the interests of the 
program; and
		(2)  any compensation provided by a pharmaceutical 
manufacturer or labeler to the pharmacy benefit manager in relation 
to the program must be remitted to the trustee for deposit to the 
credit of the retired school employees group insurance fund, 
including compensation provided for formulary management and 
drug-switch programs, educational support, claims processing and 
pharmacy network fees that are charged from retail pharmacies, and 
data sales fees.
	Sec. 1575.058.  SPECIALTY PHARMACY SERVICES.  (a)  In this 
section:   
		(1)  "Pharmacy benefit manager" means an administering 
firm or other person, other than a pharmacy or pharmacist, who acts 
as an administrator in connection with pharmacy benefits.  The term 
includes an administrator subject to Chapter 4151 who administers 
pharmacy benefits.
		(2)  "Specialty pharmacy service" means a service 
offered by a pharmacy benefit manager in relation to benefits that 
involve chronic conditions, unusually high treatment costs, or 
management of complex care issues.  The term specifically includes 
the provision of pharmaceutical benefits involving:
			(A)  injectable and infusion therapies;                               
			(B)  therapies with annual costs to the patient of 
$5,000 or more; and
			(C)  therapies requiring complex care.                                
	(b)  A contract with a pharmacy benefit manager entered into 
with respect to the group program that includes specialty pharmacy 
services must provide that the pharmacy benefit manager shall:
		(1)  pass through to the trustee for deposit to the 
credit of the retired school employees group insurance fund 100 
percent of any revenue associated with distribution of a specialty 
pharmacy product paid by a pharmaceutical manufacturer or labeler 
to the pharmacy benefit manager;
		(2)  agree to charge the trustee on an acquisition cost 
basis, which may include a dispensing fee, for all specialty 
pharmacy prescriptions, based on actual inventory costs or 
wholesale acquisition cost; and
		(3)  provide case management for critical disease 
conditions, as specified by the contract, and agree not to 
incorporate the costs of the case management into the costs 
assessed for drug ingredients for the specialty pharmacy product.
	Sec. 1575.059.  MAIL ORDER PHARMACY SERVICES.  (a)  In this 
section:  
		(1)  "Mail order pharmacy" means a pharmacy that is 
licensed as a Class A or Class E pharmacy under Chapter 560, 
Occupations Code, and that primarily delivers prescription drugs to 
an enrollee through the United States Postal Service or a 
commercial delivery service.
		(2)  "Pharmacy benefit manager" means an administering 
firm or other person, other than a pharmacy or pharmacist, who acts 
as an administrator in connection with pharmacy benefits.  The term 
includes an administrator subject to Chapter 4151 who administers 
pharmacy benefits.
	(b)  A contract with a pharmacy benefit manager entered into 
with respect to the group program that includes pharmacy services 
must provide that the pharmacy benefit manager shall agree to 
charge the trustee on an acquisition cost basis, which may include a 
dispensing fee, for all prescriptions filled by a mail order 
pharmacy, based on actual inventory costs or wholesale acquisition 
cost.
	Sec. 1575.060.  AMOUNTS CHARGED BY PHARMACY BENEFIT MANAGERS 
FOR CERTAIN CLAIMS.  (a)  In this section, "pharmacy benefit 
manager" means a person, other than a pharmacy or pharmacist, who 
acts as an administrator in connection with pharmacy benefits.  The 
term includes an administrator subject to Chapter 4151 who 
administers pharmacy benefits.
	(b)  A contract with a pharmacy benefit manager entered into 
with respect to the group program must provide that the pharmacy 
benefit manager may not charge the program an amount for a brand 
retail claim payment or generic retail claim payment that is more 
than the amount the pharmacy benefit manager pays a pharmacy in the 
pharmacy benefit manager's retail network for the same claim.
	Sec. 1575.061.  AUDIT OF PHARMACY BENEFIT MANAGERS.  (a)  In 
this section, "pharmacy benefit manager" means a person, other than 
a pharmacy or pharmacist, who acts as an administrator in 
connection with pharmacy benefits.  The term includes an 
administrator subject to Chapter 4151 who administers pharmacy 
benefits.
	(b)  A contract with a pharmacy benefit manager entered into 
with respect to the group program must provide that the trustee, 
using an auditor selected by the trustee, may audit:
		(1)  the program's pharmacy benefit claims;                            
		(2)  the pharmacy benefit manager's contracts with 
pharmacies and pharmaceutical manufacturers and labelers;
		(3)  the pharmacy benefit manager's utilization 
management clinical criteria; and
		(4)  mail service purchasing invoices related to 
benefits provided under the program.
	(c)  This section does not affect the state auditor's 
authority to access information or conduct an audit.
	Sec. 1575.062.  PHARMACY BENEFIT MANAGERS:  DESIGNATION OF 
CONFIDENTIAL INFORMATION.  (a) A pharmacy benefit manager may 
designate as confidential any information the pharmacy benefit 
manager is required to disclose to comply with Section 1575.057, 
1575.058, 1575.059, 1575.060, or 1575.061.
	(b)  Information designated as confidential under this 
section may not be disclosed by the trustee to any person without 
the consent of the pharmacy benefit manager unless the disclosure 
is:
		(1)  ordered by a court for good cause shown;                          
		(2)  made under seal in a court filing; or                             
		(3)  made to the commissioner or the attorney general 
in connection with an investigation authorized by this code or any 
other law.
	SECTION ____.  The change in law made by this Act in adding 
Sections 1575.057, 1575.058, 1575.059, 1575.060, 1575.061, and 
1575.062, Insurance Code, applies only to a contract entered into 
with a pharmacy benefit manager under Chapter 1575, Insurance Code, 
on or after the effective date of this Act.