81R1959 JSC-D

By: West S.B. No. 296

A BILL TO BE ENTITLED

AN ACT

relating to the disclosure of certain payments or other transfers of value by manufacturers of prescription drugs, medical devices, and medical supplies; providing a penalty.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subtitle H, Title 2, Health and Safety Code, is amended by adding Chapter 174 to read as follows:

CHAPTER 174. REPORTING REQUIREMENTS FOR MANUFACTURERS OF

PRESCRIPTION DRUGS, MEDICAL DEVICES, AND MEDICAL SUPPLIES

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 174.001. APPLICABILITY. This chapter applies to a manufacturer that exceeds $1 million in annual gross revenue and produces, prepares, compounds, converts, or processes a prescription drug, medical device, or medical supply for which payment is available through the medical assistance program under Chapter 32, Human Resources Code, or under Title XVIII, XIX, or XXI of the Social Security Act (42 U.S.C. Sections 1395 et seq., 1396 et seq., and 1397aa et seq.).

Sec. 174.002. RULES. The attorney general shall adopt rules necessary to implement this chapter.

[Sections 174.003-174.050 reserved for expansion]

SUBCHAPTER B. REPORTING REQUIREMENTS

Sec. 174.051. QUARTERLY REPORT. (a) A manufacturer doing business in this state shall submit a report for each fiscal quarter to the attorney general that discloses any payment or other transfer of value provided directly, indirectly, or through an agent, subsidiary, or other third party to:

(1) a physician;

(2) an entity that a physician is employed by, has tenure with, or has a significant ownership interest in; or

(3) an organization involved in health care financing, organization, or delivery and in which a physician is a voluntary paying member or through which a physician receives professional certification.

(b) For each payment or other transfer of value reported, the quarterly report shall list:

(1) the name of the physician and, if applicable:

(A) the entity required to be listed by Subsection (a)(2); or

(B) the organization required to be listed by Subsection (a)(3);

(2) the address of the physician's office or primary address of the entity required to be listed by Subsection (a)(2) or the organization required to be listed by Subsection (a)(3);

(3) the facility with which the physician is affiliated, if any;

(4) the value of the payment or other transfer of value;

(5) the date on which the payment or other transfer of value was provided;

(6) a description of the nature of the payment or other transfer of value; and

(7) the purpose of the payment or other transfer of value.

(c) The following payments or other transfers of value are exempt from the quarterly reporting requirement:

(1) free samples of prescription drugs intended for distribution to patients;

(2) a transfer of anything of value to a physician who is a patient and not acting in the physician's professional capacity;

(3) a gift, payment, fee, subsidy, or other economic benefit valued at less than $25; and

(4) compensation paid by a manufacturer to a physician who is directly employed by and works solely for the manufacturer.

(d) A manufacturer shall submit each quarterly report electronically in the manner prescribed by the attorney general not later than the 30th day after the date the state fiscal year quarter ends.

Sec. 174.052. ANNUAL SUMMARY REPORT. (a) Not later than October 15 of each year, each manufacturer that is required to submit quarterly reports under Section 174.051 shall submit an annual summary report to the attorney general that:

(1) summarizes each submission of information under Section 174.051 made by the manufacturer during the previous fiscal year; and

(2) includes the aggregate amount of all transfers of anything of value less than $25 for the previous fiscal year.

(b) The manufacturer shall submit the annual summary report electronically in the manner prescribed by the attorney general.

(c) The attorney general may assess a fee for filing the annual summary report in an amount sufficient to recover the cost of administering this chapter.

Sec. 174.053. PUBLICATION OF REPORTS. (a) The attorney general shall review and make available to the public information reported under Sections 174.051 and 174.052.

(b) The attorney general shall publish the quarterly and annual summary reports on the attorney general's website and shall make printed copies of the reports available on request.

Sec. 174.054. REPORT TO THE LEGISLATURE. Not later than December 1 of each year, the attorney general shall submit a report to the legislature that includes:

(1) information collected under Sections 174.051 and 174.052 for the preceding fiscal year; and

(2) a description of any action taken to enforce this chapter during the preceding fiscal year.

Sec. 174.055. CIVIL PENALTY. (a) A manufacturer that fails to report a payment or other transfer of value is liable to the state for a civil penalty of not less than $500 but not more than $2,500 for each violation, not to exceed $50,000 in one fiscal year.

(b) A manufacturer that fails to file a quarterly or annual summary report required under this subchapter is liable to the state for a civil penalty of not less than $5,000 but not more than $25,000, not to exceed $250,000 in one fiscal year.

(c) Each failure to report a payment or other transfer of value or failure to file a quarterly or annual summary report constitutes a separate violation.

(d) The attorney general may sue to collect a penalty under this section.

SECTION 2. (a) The attorney general shall require the first quarterly report under Section 174.051, Health and Safety Code, as added by this Act, to be submitted not later than December 30, 2009.

(b) The attorney general shall require the first annual summary report under Section 174.052, Health and Safety Code, as added by this Act, to be submitted not later than October 15, 2010.

(c) The attorney general shall submit the first report to the legislature required by Section 174.054, Health and Safety Code, as added by this Act, not later than December 1, 2010.

(d) As soon as practicable after the effective date of this Act, the attorney general shall adopt rules required by Section 174.002, as added by this Act.

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, 2009.