Texas 2009 - 81st Regular

Texas Senate Bill SB1416 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	81R7759 PB-F
2	2	By: Hegar S.B. No. 1416
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to certain contracts between pharmacy benefit managers and
8	8	the Employees Retirement System of Texas, the Teacher Retirement
9	9	System of Texas, The Texas A&M University System, or The University
10	10	of Texas System.
11	11	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. Subchapter B, Chapter 1551, Insurance Code, is
13	13	amended by adding Section 1551.067 to read as follows:
14	14	Sec. 1551.067. PHARMACY BENEFIT MANAGER CONTRACTS. (a) In
15	15	awarding a contract to provide pharmacy benefit manager services
16	16	under this chapter the board of trustees is not required to select
17	17	the lowest bid, but must select a contract that meets the criteria
18	18	established by this section.
19	19	(b) The contract must state whether the pharmacy benefit
20	20	manager may or may not engage in therapeutic interchange by
21	21	substituting a prescription drug with a different prescription drug
22	22	preferred by the pharmacy benefit manager. If the contract
23	23	authorizes therapeutic interchange as described by this
24	24	subsection, the contract must provide that the pharmacy benefit
25	25	manager shall maintain documentation of each instance in which
26	26	therapeutic interchange is used.
27	27	(c) The contract must state that the pharmacy benefit
28	28	manager shall disclose in writing the financial and medical reasons
29	29	for the addition, removal, or change in placement of a prescription
30	30	drug from the drug formulary used by the pharmacy benefit manager.
31	31	The disclosure required by this subsection must be made not later
32	32	than the 30th day before the date that the addition, removal, or
33	33	change in placement becomes effective.
34	34	(d) The contract must identify the specialty drugs on the
35	35	drug formulary used by the pharmacy benefit manager and state the
36	36	specialty drug's associated costs, discounts, and other fees that
37	37	apply to the pharmacy benefit manager's services performed under
38	38	the contract.
39	39	(e) The contract must disclose any policy, practice, or
40	40	business relationship of the pharmacy benefit manager that could
41	41	conflict with the performance of the pharmacy benefit manager's
42	42	duties under the contract.
43	43	(f) The contract must describe cost savings initiatives
44	44	used by the pharmacy benefit manager, including the methodology and
45	45	data used to compute any rebate amount that the board of trustees
46	46	receives from the pharmacy benefit manager.
47	47	(g) The contract must include a statement defining the
48	48	maximum allowable cost, or MAC, price list to be used by the
49	49	pharmacy benefit manager in performing the contract.
50	50	(h) The contract must identify and label the specific
51	51	information contained in the contract that is considered
52	52	proprietary information belonging to the pharmacy benefit manager.
53	53	(i) The contract must state whether the pharmacy benefit
54	54	manager has a revenue-sharing agreement concerning the sale of data
55	55	related to the services performed under the contract or whether the
56	56	data can be sold by the pharmacy benefit manager. If data may be
57	57	sold, the contract must:
58	58	(1) disclose the conditions under which the pharmacy
59	59	benefit manager may sell the data; and
60	60	(2) state that the pharmacy benefit manager may not
61	61	disclose any data in connection with the sale of the data before the
62	62	30th day after the date the pharmacy benefit manager has provided
63	63	written notice of that sale to the board of trustees.
64	64	(j) The contract must state that:
65	65	(1) the board of trustees is entitled to audit the
66	66	pharmacy benefit manager to verify costs and discounts associated
67	67	with drug claims, pharmacy benefit manager compliance with contract
68	68	requirements, and services provided by subcontractors;
69	69	(2) the audit must be conducted by an independent
70	70	auditor in accordance with established auditing standards; and
71	71	(3) to conduct the audit, the board of trustees and the
72	72	independent auditor are entitled access to information related to
73	73	the services and the costs associated with the services performed
74	74	under the contract, including access to the pharmacy benefit
75	75	manager's facilities, records, contracts, medical records, and
76	76	agreements with subcontractors.
77	77	(k) The contract must define the information that the
78	78	pharmacy benefit manager is required to provide to the board of
79	79	trustees concerning the audit of the retail, independent, and mail
80	80	order pharmacies performing services under the contract and
81	81	describe how the results of these audits must be reported to the
82	82	board of trustees, including how often the results must be
83	83	reported. The contract must state whether the pharmacy benefit
84	84	manager is required to return recovered overpayments to the board
85	85	of trustees.
86	86	(l) The contract must state that any audit of a mail order
87	87	pharmacy owned by the pharmacy benefit manager must be conducted by
88	88	an independent auditor selected by the board of trustees in
89	89	accordance with established auditing standards.
90	90	SECTION 2. Subchapter C, Chapter 1575, Insurance Code, is
91	91	amended by adding Section 1575.110 to read as follows:
92	92	Sec. 1575.110. PHARMACY BENEFIT MANAGER CONTRACTS. (a) In
93	93	awarding a contract to provide pharmacy benefit manager services
94	94	under this chapter the trustee is not required to select the lowest
95	95	bid, but must select a contract that meets the criteria established
96	96	by this section.
97	97	(b) The contract must state whether the pharmacy benefit
98	98	manager may or may not engage in therapeutic interchange by
99	99	substituting a prescription drug with a different prescription drug
100	100	preferred by the pharmacy benefit manager. If the contract
101	101	authorizes therapeutic interchange as described by this
102	102	subsection, the contract must provide that the pharmacy benefit
103	103	manager shall maintain documentation of each instance in which
104	104	therapeutic interchange is used.
105	105	(c) The contract must state that the pharmacy benefit
106	106	manager shall disclose in writing the financial and medical reasons
107	107	for the addition, removal, or change in placement of a prescription
108	108	drug from the drug formulary used by the pharmacy benefit manager.
109	109	The disclosure required by this subsection must be made not later
110	110	than the 30th day before the date that the addition, removal, or
111	111	change in placement becomes effective.
112	112	(d) The contract must identify the specialty drugs on the
113	113	drug formulary used by the pharmacy benefit manager and state the
114	114	specialty drug's associated costs, discounts, and other fees that
115	115	apply to the pharmacy benefit manager's services performed under
116	116	the contract.
117	117	(e) The contract must disclose any policy, practice, or
118	118	business relationship of the pharmacy benefit manager that could
119	119	conflict with the performance of the pharmacy benefit manager's
120	120	duties under the contract.
121	121	(f) The contract must describe cost savings initiatives
122	122	used by the pharmacy benefit manager, including the methodology and
123	123	data used to compute any rebate amount that the trustee receives
124	124	from the pharmacy benefit manager.
125	125	(g) The contract must include a statement defining the
126	126	maximum allowable cost, or MAC, price list to be used by the
127	127	pharmacy benefit manager in performing the contract.
128	128	(h) The contract must identify and label the specific
129	129	information contained in the contract that is considered
130	130	proprietary information belonging to the pharmacy benefit manager.
131	131	(i) The contract must state whether the pharmacy benefit
132	132	manager has a revenue-sharing agreement concerning the sale of data
133	133	related to the services performed under the contract or whether the
134	134	data can be sold by the pharmacy benefit manager. If data may be
135	135	sold, the contract must:
136	136	(1) disclose the conditions under which the pharmacy
137	137	benefit manager may sell the data; and
138	138	(2) state that the pharmacy benefit manager may not
139	139	disclose any data in connection with the sale of the data before the
140	140	30th day after the date the pharmacy benefit manager has provided
141	141	written notice of that sale to the trustee.
142	142	(j) The contract must state that:
143	143	(1) the trustee is entitled to audit the pharmacy
144	144	benefit manager to verify costs and discounts associated with drug
145	145	claims, pharmacy benefit manager compliance with contract
146	146	requirements, and services provided by subcontractors;
147	147	(2) the audit must be conducted by an independent
148	148	auditor in accordance with established auditing standards; and
149	149	(3) to conduct the audit, the trustee and the
150	150	independent auditor are entitled access to information related to
151	151	the services and the costs associated with the services performed
152	152	under the contract, including access to the pharmacy benefit
153	153	manager's facilities, records, contracts, medical records, and
154	154	agreements with subcontractors.
155	155	(k) The contract must define the information that the
156	156	pharmacy benefit manager is required to provide to the trustee
157	157	concerning the audit of the retail, independent, and mail order
158	158	pharmacies performing services under the contract and describe how
159	159	the results of these audits must be reported to the trustee,
160	160	including how often the results must be reported. The contract must
161	161	state whether the pharmacy benefit manager is required to return
162	162	recovered overpayments to the trustee.
163	163	(l) The contract must state that any audit of a mail order
164	164	pharmacy owned by the pharmacy benefit manager must be conducted by
165	165	an independent auditor selected by the trustee in accordance with
166	166	established auditing standards.
167	167	SECTION 3. Subchapter B, Chapter 1601, Insurance Code, is
168	168	amended by adding Section 1601.064 to read as follows:
169	169	Sec. 1601.064. PHARMACY BENEFIT MANAGER CONTRACTS. (a) In
170	170	awarding a contract to provide pharmacy benefit manager services
171	171	under this chapter a system is not required to select the lowest
172	172	bid, but must select a contract that meets the criteria established
173	173	by this section.
174	174	(b) The contract must state whether the pharmacy benefit
175	175	manager may or may not engage in therapeutic interchange by
176	176	substituting a prescription drug with a different prescription drug
177	177	preferred by the pharmacy benefit manager. If the contract
178	178	authorizes therapeutic interchange as described by this
179	179	subsection, the contract must provide that the pharmacy benefit
180	180	manager shall maintain documentation of each instance in which
181	181	therapeutic interchange is used.
182	182	(c) The contract must state that the pharmacy benefit
183	183	manager shall disclose in writing the financial and medical reasons
184	184	for the addition, removal, or change in placement of a prescription
185	185	drug from the drug formulary used by the pharmacy benefit manager.
186	186	The disclosure required by this subsection must be made not later
187	187	than the 30th day before the date that the addition, removal, or
188	188	change in placement becomes effective.
189	189	(d) The contract must identify the specialty drugs on the
190	190	drug formulary used by the pharmacy benefit manager and state the
191	191	specialty drug's associated costs, discounts, and other fees that
192	192	apply to the pharmacy benefit manager's services performed under
193	193	the contract.
194	194	(e) The contract must disclose any policy, practice, or
195	195	business relationship of the pharmacy benefit manager that could
196	196	conflict with the performance of the pharmacy benefit manager's
197	197	duties under the contract.
198	198	(f) The contract must describe cost savings initiatives
199	199	used by the pharmacy benefit manager, including the methodology and
200	200	data used to compute any rebate amount that the system receives from
201	201	the pharmacy benefit manager.
202	202	(g) The contract must include a statement defining the
203	203	maximum allowable cost, or MAC, price list to be used by the
204	204	pharmacy benefit manager in performing the contract.
205	205	(h) The contract must identify and label the specific
206	206	information contained in the contract that is considered
207	207	proprietary information belonging to the pharmacy benefit manager.
208	208	(i) The contract must state whether the pharmacy benefit
209	209	manager has a revenue-sharing agreement concerning the sale of data
210	210	related to the services performed under the contract or whether the
211	211	data can be sold by the pharmacy benefit manager. If data may be
212	212	sold, the contract must:
213	213	(1) disclose the conditions under which the pharmacy
214	214	benefit manager may sell the data; and
215	215	(2) state that the pharmacy benefit manager may not
216	216	disclose any data in connection with the sale of the data before the
217	217	30th day after the date the pharmacy benefit manager has provided
218	218	written notice of that sale to the system.
219	219	(j) The contract must state that:
220	220	(1) the system is entitled to audit the pharmacy
221	221	benefit manager to verify costs and discounts associated with drug
222	222	claims, pharmacy benefit manager compliance with contract
223	223	requirements, and services provided by subcontractors;
224	224	(2) the audit must be conducted by an independent
225	225	auditor in accordance with established auditing standards; and
226	226	(3) to conduct the audit, the system and the
227	227	independent auditor are entitled access to information related to
228	228	the services and the costs associated with the services performed
229	229	under the contract, including access to the pharmacy benefit
230	230	manager's facilities, records, contracts, medical records, and
231	231	agreements with subcontractors.
232	232	(k) The contract must define the information that the
233	233	pharmacy benefit manager is required to provide to the system
234	234	concerning the audit of the retail, independent, and mail order
235	235	pharmacies performing services under the contract and describe how
236	236	the results of these audits must be reported to the system,
237	237	including how often the results must be reported. The contract must
238	238	state whether the pharmacy benefit manager is required to return
239	239	recovered overpayments to the system.
240	240	(l) The contract must state that any audit of a mail order
241	241	pharmacy owned by the pharmacy benefit manager must be conducted by
242	242	an independent auditor selected by the system in accordance with
243	243	established auditing standards.
244	244	SECTION 4. The change in law made by this Act applies only
245	245	to a contract with a pharmacy benefit manager executed or renewed on
246	246	or after the effective date of this Act.
247	247	SECTION 5. This Act takes effect September 1, 2009.