By: Hegar, Van de Putte S.B. No. 1834
 
 
A BILL TO BE ENTITLED
AN ACT
relating to treatment of pharmaceutical services provided through
specialty and mail order pharmacy services operated under contracts
between governmental entities and pharmacy benefit managers.
       BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
       SECTION 1.  Subchapter B, Chapter 531, Government Code, is
amended by adding Sections 531.0746, 531.0747, 531.0748, and
531.0749 to read as follows:
       Sec. 531.0746.  SPECIALTY PHARMACY SERVICES. (a)  In this
section:
             (1)  "Pharmacy benefit manager" means a person, other
than a pharmacy or pharmacist, who acts as an administrator in
connection with 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 any program under the jurisdiction of the
commission that includes specialty pharmacy services must provide
that the pharmacy benefit manager shall:
             (1)  pass through to the commission for deposit in the
general revenue 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 commission 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. 531.0747.  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 a person, other
than a pharmacy or pharmacist, who acts as an administrator in
connection with pharmacy benefits.
       (b)  A contract with a pharmacy benefit manager entered into
with respect to any program under the jurisdiction of the
commission that includes pharmacy services must provide that the
pharmacy benefit manager shall agree to charge the commission 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. 531.0748.  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 531.0746 or
531.0747.
       (b)  Information designated as confidential under this
section may not be disclosed by the commission 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 of insurance or the
attorney general in connection with an investigation authorized by
this code, the Insurance Code, or any other law.
       Sec. 531.0749.  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.
       (b)  A contract with a pharmacy benefit manager entered into
with respect to any mail order or specialty pharmacy services
program under the jurisdiction of the commission must provide that
the commission, using an auditor selected by the commission, may
audit:
             (1)  the program's pharmacy benefit claims;
             (2)  the pharmacy benefit manager's contracts with
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.
       SECTION 2.  Subchapter D, Chapter 1001, Health and Safety
Code, is amended by adding Sections 1001.081, 1001.082, 1001.083,
and 1001.084 to read as follows:
       Sec. 1001.081.  SPECIALTY PHARMACY SERVICES. (a)  In this
section:
             (1)  "Pharmacy benefit manager" means a person, other
than a pharmacy or pharmacist, who acts as an administrator in
connection with 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 any program under the jurisdiction of the
department that includes specialty pharmacy services must provide
that the pharmacy benefit manager shall:
             (1)  pass through to the department for deposit in the
general revenue fund 100 percent of any of the 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 department 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. 1001.082.  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 a person, other
than a pharmacy or pharmacist, who acts as an administrator in
connection with pharmacy benefits.
       (b)  A contract with a pharmacy benefit manager entered into
with respect to any program under the jurisdiction of the
department that includes pharmacy services must provide that the
pharmacy benefit manager shall agree to charge the department 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. 1001.083.  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 1001.081 or
1001.082.
       (b)  Information designated as confidential under this
section may not be disclosed by the department 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 of insurance or the
attorney general in connection with an investigation authorized by
this code, the Insurance Code, or any other law.
       Sec. 1001.084.  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.
       (b)  A contract with a pharmacy benefit manager entered into
with respect to any mail order or specialty pharmacy services
program under the jurisdiction of the department must provide that
the department, using an auditor selected by the department, may
audit:
             (1)  the program's pharmacy benefit claims;
             (2)  the pharmacy benefit manager's contracts with
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.
       SECTION 3.  Subchapter B, Chapter 1551, Insurance Code, is
amended by adding Sections 1551.073, 1551.074, 1551.075, and
1551.076 to read as follows:
       Sec. 1551.073.  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 benefits program that includes specialty
pharmacy services must provide that the pharmacy benefit manager
shall:
             (1)  pass through to the board of trustees for deposit
to the credit of the employees life, accident, and health insurance
and benefits 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 board of trustees 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. 1551.074.  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 benefits program that includes pharmacy
services must provide that the pharmacy benefit manager shall agree
to charge the board of trustees 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. 1551.075.  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 1551.073 or
1551.074.
       (b)  Information designated as confidential under this
section may not be disclosed by the board of trustees 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.
       Sec. 1551.076.  AUDIT OF PHARMACY BENEFIT MANAGERS.  (a)  In
this section, "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 any mail order or specialty pharmacy services
program under the jurisdiction of the board of trustees, using an
auditor selected by the board of trustees, may audit:
             (1)  the program's pharmacy benefit claims;
             (2)  the pharmacy benefit manager's contracts with
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.
       SECTION 4.  Subchapter B, Chapter 1575, Insurance Code, is
amended by adding Sections 1575.062, 1575.063, 1575.064, and
1575.065 to read as follows:
       Sec. 1575.062.  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. 1575.063.  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. 1575.064.  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 1575.062 or
1575.063.
       (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.
       Sec. 1575.065.  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 any mail order or specialty pharmacy services
program under the jurisdiction of the trustee 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
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.
       SECTION 5.  Subchapter B, Chapter 1579, Insurance Code, is
amended by adding Sections 1579.061, 1579.062, 1579.063, and
1579.064 to read as follows:
       Sec. 1579.061.  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 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 Texas school employees uniform group coverage trust
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. 1579.062.  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 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. 1579.063.  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 1579.061 or
1579.062.
       (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.
       Sec. 1579.064.  AUDIT OF PHARMACY BENEFIT MANAGERS.  (a)  In
this section, "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 any mail order or specialty pharmacy services
program under the jurisdiction of the trustee 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
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.
       SECTION 6.  The change in law made by this Act applies only
to a contract with a pharmacy benefit manager executed or renewed on
or after the effective date of this Act.
       SECTION 7.  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, 2007.