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A BILL TO BE ENTITLED
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AN ACT
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relating to prescription drug cost increases; imposing a civil |
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penalty. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subtitle A, Title 6, Health and Safety Code, is |
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amended by adding Chapter 441 to read as follows: |
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CHAPTER 441. PRESCRIPTION DRUG COST TRANSPARENCY |
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SUBCHAPTER A. GENERAL PROVISIONS |
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Sec. 441.0001. DEFINITIONS. In this chapter: |
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(1) "Commission" means the Health and Human Services |
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Commission. |
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(2) "Health benefit plan issuer" means an insurer, |
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health maintenance organization, or other entity authorized to |
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provide health benefit coverage under the laws of this state. |
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(3) "Manufacturer" means a person engaged in the |
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business of producing, preparing, propagating, compounding, |
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converting, processing, packaging, labeling, or distributing a |
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prescription drug. The term does not include a wholesale |
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distributor or retailer of prescription drugs or a pharmacist |
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licensed under Subtitle J, Title 3, Occupations Code. |
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(4) "Prescription drug" has the meaning assigned by |
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Section 551.003, Occupations Code. |
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Sec. 441.0002. REQUEST FOR INFORMATION. The commission or |
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attorney general may request information necessary to carry out the |
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purposes of this chapter from another state agency. A state agency |
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receiving a request under this section shall provide the requested |
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information in a reasonable time. |
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SUBCHAPTER B. LISTS OF PRESCRIPTION DRUGS |
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Sec. 441.0051. COMMISSION LIST BY WHOLESALE ACQUISITION |
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COST. (a) The commission shall annually compile a list of |
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prescription drugs by wholesale acquisition cost. |
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(b) The list described by Subsection (a) must: |
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(1) include 10 prescription drugs: |
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(A) on which the commission or another state |
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agency spends a significant amount of money under a health benefit |
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plan administered by the agency; and |
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(B) for which the wholesale acquisition cost has |
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increased by at least: |
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(i) 50 percent during the previous five |
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calendar years; or |
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(ii) 15 percent during the previous |
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calendar year; |
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(2) include at least one generic and one brand name |
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drug; |
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(3) indicate which drugs on the list are specialty |
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drugs; |
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(4) include the percentage increase of the wholesale |
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acquisition cost for each drug on the list during the previous |
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calendar year and during the previous five calendar years; |
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(5) rank the drugs on the list from those with the |
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largest increase in wholesale acquisition cost to those with the |
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smallest increase in wholesale acquisition cost based on the |
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previous calendar year; |
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(6) state whether each drug on the list was included on |
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the list because of the wholesale acquisition cost increase over |
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the past five years or during the previous calendar year or both; |
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and |
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(7) provide the state's total expenditure for each |
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drug on the list during the previous calendar year. |
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Sec. 441.0052. COMMISSION LIST BY STATE COST. (a) In |
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addition to the list described by Section 441.0051, the commission |
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shall annually compile a list of prescription drugs by state cost. |
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(b) The list described by Subsection (a) must: |
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(1) include 10 prescription drugs: |
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(A) on which the commission or another state |
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agency spends a significant amount of money under a health benefit |
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plan administered by the agency; and |
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(B) for which the cost to the agency, excluding |
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any rebate or other price concession, has increased by at least: |
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(i) 50 percent during the previous five |
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calendar years; or |
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(ii) 15 percent during the previous |
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calendar year; |
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(2) include at least one generic and one brand name |
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drug; |
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(3) indicate which drugs on the list are specialty |
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drugs; |
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(4) rank the drugs on the list from those with the |
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largest increase in net cost to those with the smallest increase |
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based on the previous calendar year; and |
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(5) state whether each drug on the list was included on |
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the list because of the cost increase over the past five years or |
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during the previous calendar year or both. |
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Sec. 441.0053. MAJOR HEALTH BENEFIT PLAN ISSUER LIST; |
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REPORT. (a) This section applies only to a health benefit plan |
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issuer that is authorized to write a health benefit plan in this |
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state and that provides health benefit plan coverage for at least |
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5,000 enrollees. |
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(b) A health benefit plan issuer shall annually compile a |
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list of prescription drugs by cost. |
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(c) The list described by Subsection (b) must: |
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(1) include 10 prescription drugs: |
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(A) on which the health benefit plan issuer |
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spends a significant amount of money; and |
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(B) for which the cost to the issuer's health |
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benefit plans, excluding any rebate or other price concession, has |
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increased by at least: |
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(i) 50 percent during the previous five |
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calendar years; or |
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(ii) 15 percent during the previous |
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calendar year; |
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(2) include at least one generic and one brand name |
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drug; |
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(3) indicate which drugs on the list are specialty |
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drugs; |
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(4) rank the drugs on the list from those with the |
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largest increase in net cost to those with the smallest increase |
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based on the previous calendar year; and |
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(5) state whether each drug on the list was included on |
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the list because of the cost increase over the past five years or |
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during the previous calendar year or both. |
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(d) A health benefit plan issuer shall provide to the |
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attorney general an annual written report on the list described by |
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Subsection (b) that states: |
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(1) the percentage by which the net cost to the |
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issuer's health benefit plans has increased during the previous |
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calendar year and during the previous five calendar years for each |
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prescription drug on the list; and |
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(2) the issuer's total expenditure, excluding any |
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rebate or other price concession, for each drug on the list during |
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the previous calendar year. |
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(e) Except as provided by Section 441.0054(b), information |
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provided to the attorney general under Subsection (d) is |
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confidential and excepted from disclosure under Chapter 552, |
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Government Code. |
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(f) The commissioner of insurance, in consultation with the |
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executive commissioner, may adopt rules necessary to implement this |
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section, including rules: |
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(1) designating which prescription drugs are |
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considered to be specialty drugs for purposes of this chapter; and |
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(2) governing the manner in which a health benefit |
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plan issuer identifies a drug as a specialty drug for purposes of |
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this chapter. |
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Sec. 441.0054. REPORT TO ATTORNEY GENERAL. (a) Not later |
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than June 1 of each year, the commission and each health benefit |
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plan issuer to which Section 441.0053 applies shall provide each |
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list required under this subchapter to the attorney general. |
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(b) The attorney general and commission shall post the lists |
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described by Subsection (a) on the attorney general's and |
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commission's Internet websites. |
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SUBCHAPTER C. PRICE JUSTIFICATION |
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Sec. 441.0101. ATTORNEY GENERAL LIST. (a) Using the lists |
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provided under Section 441.0054 and except as provided by |
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Subsection (b), the attorney general shall compile an aggregate |
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list of 15 prescription drugs for which the greatest amount of money |
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was spent across all payers during the previous calendar year. |
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(b) If fewer than 15 prescription drugs appear on more than |
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one payer's list, the attorney general shall rank the remaining |
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drugs based on the amount of money spent by any one payer during the |
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previous calendar year, in descending order, and may select as many |
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of the drugs based on that ranking as necessary to reach a total of |
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15 drugs required under Subsection (a). |
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(c) The attorney general shall provide written notice to |
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each manufacturer of a prescription drug on the list described by |
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Subsection (a) of the drug's placement on the list and the |
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manufacturer's duties under this subchapter. |
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Sec. 441.0102. PRICE JUSTIFICATION REQUIRED. (a) On |
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receipt of the notice described by Section 441.0101(c), a |
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manufacturer shall provide to the attorney general in the form and |
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manner prescribed by the attorney general a written report on the |
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prescription drug described by the notice. |
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(b) The report described by Subsection (a) must include: |
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(1) a justification for the increase in the net cost of |
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the prescription drug for the commission, a health benefit plan |
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issuer, or both; and |
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(2) all relevant information and supporting |
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documentation necessary to support the justification described by |
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Subdivision (1), including: |
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(A) each factor that specifically caused the net |
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cost increase; |
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(B) the percentage of the total cost increase |
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attributable to each factor; and |
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(C) an explanation of the role of each factor in |
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contributing to the cost increase. |
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(c) A manufacturer shall provide the report described by |
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Subsection (a) in the form and manner prescribed by the attorney |
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general to the attorney general. |
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(d) A manufacturer shall provide additional information |
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concerning a listed prescription drug or a cost increase to the |
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attorney general on request by the attorney general. |
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(e) A manufacturer may request a portion of the information |
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provided to be excepted from publication and held as confidential |
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in accordance with Section 552.110, Government Code, or other |
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applicable law, and shall provide an explanation for each request |
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to the attorney general. If the attorney general finds that the |
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request is justified, the information shall: |
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(1) be redacted from the report provided under this |
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section; |
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(2) be confidential; and |
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(3) be excepted from disclosure under Chapter 552, |
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Government Code. |
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(f) The attorney general may adopt rules necessary to |
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implement this section. |
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Sec. 441.0103. ATTORNEY GENERAL REPORT TO LEGISLATURE. (a) |
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Not later than December 1 of each year, the attorney general shall |
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provide a written report to the legislature on the manufacturer |
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reports described by Section 441.0102 received by the attorney |
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general during the previous calendar year. |
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(b) The attorney general and commission shall post the |
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report described by Subsection (a) and each copy of a |
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manufacturer's report provided under Section 441.0102, redacted as |
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necessary, on the attorney general's and commission's Internet |
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websites. The attorney general and commission may inform the |
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public of the availability of the reports posted under this |
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subsection. |
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Sec. 441.0104. CONSTRUCTION OF SUBCHAPTER. This subchapter |
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may not be construed to restrict the legal ability of a manufacturer |
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to increase prescription drug prices in accordance with federal |
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law. |
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Sec. 441.0105. ENFORCEMENT. A manufacturer that violates |
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Section 441.0102 or a rule adopted under this chapter is liable to |
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the state for a civil penalty of not more than $10,000 for each |
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violation. Each failure to provide information to the attorney |
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general is a separate violation. The attorney general may bring |
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suit to provide for injunctive relief or to recover a civil penalty, |
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or both. The attorney general may recover court costs and |
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reasonable attorney's fees. |
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SECTION 2. 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 identify, provide to the attorney |
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general, and post on the commission's Internet website the list of |
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prescription drugs and manufacturers required by Sections 441.0051 |
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and 441.0052, Health and Safety Code, as added by this Act. |
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SECTION 3. Notwithstanding Section 441.0103, Health and |
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|
Safety Code, as added by this Act, the attorney general is not |
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required to submit the initial report required by that section |
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before December 1, 2020. |
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SECTION 4. This Act takes effect September 1, 2019. |