By: Hegar  S.B. No. 1834
         (In the Senate - Filed March 9, 2007; March 22, 2007, read
  first time and referred to Committee on Health and Human Services;
  April 23, 2007, reported favorably by the following vote:  Yeas 9,
  Nays 0; April 23, 2007, sent to printer.)
 
 
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, and 531.0748 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.
         SECTION 2.  Subchapter D, Chapter 1001, Health and Safety
  Code, is amended by adding Sections 1001.081, 1001.082, and
  1001.083 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.
         SECTION 3.  Subchapter B, Chapter 1551, Insurance Code, is
  amended by adding Sections 1551.073, 1551.074, and 1551.075 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.
         SECTION 4.  Subchapter B, Chapter 1575, Insurance Code, is
  amended by adding Sections 1575.062, 1575.063, and 1575.064 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.
         SECTION 5.  Subchapter B, Chapter 1579, Insurance Code, is
  amended by adding Sections 1579.061, 1579.062, and 1579.063 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.
         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.
 
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