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A BILL TO BE ENTITLED
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AN ACT
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relating to required prescription drug cost and rebate reporting; |
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authorizing a civil penalty. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 430.001, Health and Safety Code, is |
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amended by amending Subdivision (1) and adding Subdivision (1-a) to |
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read as follows: |
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(1) "Commission" means the Health and Human Services |
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Commission. |
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(1-a) "Commissioner" means the commissioner of state |
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health services. |
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SECTION 2. Subchapter E, Chapter 431, Health and Safety |
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Code, is amended by adding Sections 431.1165 and 431.1166 to read as |
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follows: |
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Sec. 431.1165. PRESCRIPTION DRUG MANUFACTURER COST |
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REPORTING; CIVIL PENALTY. (a) In this section: |
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(1) "Manufacturer" means a person licensed or approved |
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by the United States Food and Drug Administration to engage in the |
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manufacture of drugs or devices, consistent with the federal |
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agency's definition of "manufacturer" under the agency's |
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regulations and guidances implementing the Prescription Drug |
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Marketing Act of 1987 (Pub. L. No. 100-293). The term does not |
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include a pharmacist engaged in compounding that is within the |
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practice of pharmacy and is in accordance with a prescription drug |
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order or initiative from a practitioner for a patient or |
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prepackaging that complies with Section 562.154, Occupations Code. |
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(2) "Prescription drug" has the meaning assigned by 21 |
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C.F.R. Section 203.3. |
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(b) Not later than February 1 of each year, the commission |
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shall: |
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(1) identify the prescription drugs and the wholesale |
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price for each drug the commission determines is essential to |
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treating diabetes in this state, including insulin and biguanides; |
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(2) identify the prescription drugs described by |
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Subdivision (1) for which the wholesale price has increased in an |
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amount equal to or greater than: |
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(A) the percentage of price increase in the |
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medical care component of the consumer price index as published by |
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the Bureau of Labor Statistics of the United States Department of |
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Labor during the preceding calendar year; or |
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(B) two times the percentage of price increase in |
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the medical care component of the consumer price index as published |
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by the Bureau of Labor Statistics of the United States Department of |
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Labor during the preceding two calendar years; and |
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(3) post the information compiled under Subdivisions |
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(1) and (2) on the commission's Internet website. |
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(c) Not later than August 1 of each year, a manufacturer |
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shall submit to the commission, in the manner and form prescribed by |
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the executive commissioner, a report for each prescription drug |
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identified under Subsection (b) that is manufactured by the |
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manufacturer and available for sale in this state. |
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(d) For each prescription drug identified under Subsection |
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(b)(1) and included in the report under Subsection (c), the |
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manufacturer, for the preceding calendar year, shall provide: |
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(1) the cost incurred by the manufacturer in producing |
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the drug; |
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(2) the wholesale price of the drug; |
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(3) a history of any increases in the wholesale price |
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of the drug for the preceding five years, including the amount of |
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each increase expressed as a percentage of the total wholesale |
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price of the drug, the month and year the price increase took |
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effect, and any explanation for the price increase; |
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(4) the profit derived from the sale of the drug, |
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expressed as an amount and as a percentage of the manufacturer's |
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total profit from all prescription drugs sold by the manufacturer; |
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(5) the administrative, marketing, and advertising |
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costs of promoting the drug; |
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(6) the cost to the manufacturer of coupons provided |
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directly to consumers to assist consumers in paying copayments and |
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the value of the coupons redeemed; |
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(7) the cost to the manufacturer of programs designed |
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to assist consumers in paying copayments for the drug; |
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(8) the amount of financial assistance provided for |
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the drug by the manufacturer through patient prescription |
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assistance programs; and |
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(9) the aggregate amount of rebates paid to pharmacy |
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benefit managers, as defined by Section 4151.151, Insurance Code, |
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for sales of the drug in this state. |
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(e) For each prescription drug identified under Subsection |
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(b)(2) and included in the report under Subsection (c), the |
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manufacturer, for the preceding calendar year, shall provide |
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information that justifies the increase in the wholesale price, |
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including: |
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(1) the factors contributing to the wholesale price |
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increase; |
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(2) the percentage of the total wholesale price |
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increase attributable to each factor; and |
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(3) an explanation of the role of each factor in |
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contributing to the wholesale price increase. |
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(f) Not later than December 1 of each year, the commission |
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shall prepare and post on the commission's Internet website a |
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report outlining the information provided by a manufacturer under |
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this section. The report may not include information likely to |
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compromise the financial, competitive, or proprietary nature of the |
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information. |
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(g) Information provided by a manufacturer to the |
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commission under this section is confidential and is not subject to |
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disclosure under Chapter 552, Government Code. |
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(h) A manufacturer that does not submit the report required |
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by Subsection (c) is liable to the state for a civil penalty of not |
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more than $5,000 for each violation. The commission may waive the |
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civil penalty if a manufacturer provides good cause for the |
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manufacturer's failure to submit the report. Each failure to |
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provide information to the commission is a separate violation and |
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each day of continuing violation constitutes a separate violation. |
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The attorney general at the request of the commission may bring suit |
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to provide for injunctive relief or to recover a civil penalty, or |
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both. The attorney general may recover court costs and reasonable |
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attorney's fees. |
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Sec. 431.1166. PHARMACY BENEFIT MANAGER PRESCRIPTION DRUG |
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REBATE REPORTING. (a) In this section: |
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(1) "Manufacturer" means a person licensed or approved |
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by the United States Food and Drug Administration to engage in the |
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manufacture of drugs or devices, consistent with the federal |
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agency's definition of "manufacturer" under the agency's |
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|
regulations and guidances implementing the Prescription Drug |
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Marketing Act of 1987 (Pub. L. No. 100-293). The term does not |
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|
include a pharmacist engaged in compounding that is within the |
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practice of pharmacy and is in accordance with a prescription drug |
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order or initiative from a practitioner for a patient or |
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prepackaging that complies with Section 562.154, Occupations Code. |
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(2) "Pharmacy benefit manager" has the meaning |
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assigned by Section 4151.151, Insurance Code. |
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(3) "Prescription drug" has the meaning assigned by 21 |
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C.F.R. Section 203.3. |
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(b) Not later than August 1 of each year, a pharmacy benefit |
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manager shall submit a report to the commission, in the manner and |
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form prescribed by the executive commissioner, regarding rebates |
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for each prescription drug identified under Section 431.1165(b)(1) |
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that is available for sale in this state. The report must include: |
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(1) the total amount of rebates the pharmacy benefit |
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manager negotiated with all manufacturers during the preceding |
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calendar year; |
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(2) the amount of the rebates described in Subdivision |
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(1) that were retained by the pharmacy benefit manager; and |
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(3) the amount of any rebates described in Subdivision |
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(1) that were negotiated for use by persons who receive |
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prescription drug benefits or assistance under Medicare or a state, |
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local, or federal public program. |
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(c) This section does not apply to prescription drug |
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benefits provided under a health care benefit plan established |
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under the Employee Retirement Income Security Act of 1974 (29 |
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U.S.C. Section 1001 et seq.). |
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(d) Not later than December 1 of each year, the commission |
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shall prepare and post on the commission's Internet website a |
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report outlining the information provided by a pharmacy benefit |
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manager under this section. The report may not include information |
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that is likely to compromise the financial, competitive, or |
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proprietary nature of the information. |
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(e) Information provided by a pharmacy benefit manager to |
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the commission under this section is confidential and is not |
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subject to disclosure under Chapter 552, Government Code. |
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SECTION 3. As soon as practicable after the effective date |
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of this Act, the executive commissioner of the Health and Human |
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Services Commission shall adopt rules necessary to implement |
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Sections 431.1165 and 431.1166, Health and Safety Code, as added by |
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this Act. |
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SECTION 4. This Act takes effect September 1, 2019. |