H.B. No. 2536
AN ACT
relating to transparency related to drug costs.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle A, Title 6, Health and Safety Code, is
amended by adding Chapter 441 to read as follows:
CHAPTER 441. DRUG COST TRANSPARENCY
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 441.0001. DEFINITIONS. In this chapter:
(1) "Animal health product" means a medical product
approved and licensed for use in animal or veterinary medicine,
including a pharmaceutical, a biologic, an insecticide, and a
parasiticide.
(2) "Pharmaceutical drug manufacturer" means a person
engaged in the business of producing, preparing, propagating,
compounding, converting, processing, packaging, labeling, or
distributing a drug. The term does not include a wholesale
distributor or retailer of prescription drugs or a pharmacist
licensed under Subtitle J, Title 3, Occupations Code.
(3) "Prescription drug" and "drug" have the meanings
assigned by Section 551.003, Occupations Code, except that the term
"prescription drug" does not include a device or an animal health
product.
(4) "Wholesale acquisition cost" means, with respect
to a drug, the pharmaceutical drug manufacturer's list price for
the drug charged to wholesalers or direct purchasers in the United
States, as reported in wholesale price guides or other publications
of drug pricing data. The cost does not include any rebates, prompt
pay or other discounts, or other reductions in price.
Sec. 441.0002. DISCLOSURE OF DRUG PRICING INFORMATION. (a)
Not later than the 15th day of each calendar year, a pharmaceutical
drug manufacturer shall submit a report to the executive
commissioner stating the current wholesale acquisition cost
information for the United States Food and Drug
Administration-approved drugs sold in or into this state by that
manufacturer.
(b) The executive commissioner shall develop an Internet
website to provide to the general public drug price information
submitted under Subsection (a). The Internet website shall be made
available on the Health and Human Services Commission's Internet
website with a dedicated link that is prominently displayed on the
home page or by a separate easily identifiable Internet address.
(c) This subsection applies only to a drug with a wholesale
acquisition cost of at least $100 for a 30-day supply before the
effective date of an increase described by this subsection. Not
later than the 30th day after the effective date of an increase of
40 percent or more over the preceding three calendar years or 15
percent or more in the preceding calendar year in the wholesale
acquisition cost of a drug to which this subsection applies, a
pharmaceutical drug manufacturer shall submit a report to the
executive commissioner. The report must include the following
information:
(1) the name of the drug;
(2) whether the drug is a brand name or generic;
(3) the effective date of the change in wholesale
acquisition cost;
(4) aggregate, company-level research and development
costs for the most recent year for which final audit data is
available;
(5) the name of each of the manufacturer's
prescription drugs approved by the United States Food and Drug
Administration in the previous three calendar years;
(6) the name of each of the manufacturer's
prescription drugs that lost patent exclusivity in the United
States in the previous three calendar years; and
(7) a statement regarding the factor or factors that
caused the increase in the wholesale acquisition cost and an
explanation of the role of each factor's impact on the cost.
(d) The quality and types of information and data that a
pharmaceutical drug manufacturer submits to the executive
commissioner under Subsection (c) must be consistent with the
quality and types of information and data that the manufacturer
includes in the manufacturer's annual consolidated report on
Securities and Exchange Commission Form 10-K or any other public
disclosure.
(e) Not later than the 60th day after receipt of the report
submitted under Subsection (c), the executive commissioner shall
publish the report on the Health and Human Services Commission's
Internet website described by Subsection (b).
(f) The executive commissioner may adopt rules to implement
this section.
SECTION 2. Chapter 1369, Insurance Code, is amended by
adding Subchapter K to read as follows:
SUBCHAPTER K. PRESCRIPTION DRUG COST TRANSPARENCY
Sec. 1369.501. DEFINITIONS. In this subchapter:
(1) "Animal health product" means a medical product
approved and licensed for use in animal or veterinary medicine,
including a pharmaceutical, a biologic, an insecticide, and a
parasiticide.
(2) "Health benefit plan" means an individual,
blanket, or group plan, policy, or contract for health care
services issued or delivered by a health benefit plan issuer in this
state.
(3) "Health benefit plan issuer" means an insurance
company, a health maintenance organization, or a hospital and
medical service corporation.
(4) "Pharmaceutical drug manufacturer" means a person
engaged in the business of producing, preparing, propagating,
compounding, converting, processing, packaging, labeling, or
distributing a prescription drug. The term does not include a
wholesale distributor or retailer of prescription drugs or a
pharmacist licensed under Subtitle J, Title 3, Occupations Code.
(5) "Pharmacy benefit manager" has the meaning
assigned by Section 4151.151.
(6) "Prescription drug" has the meaning assigned by
Section 551.003, Occupations Code, except that the term
"prescription drug" does not include a device or an animal health
product.
(7) "Rebate" means a discount or concession that
affects the price of a prescription drug to a pharmacy benefit
manager or health benefit plan issuer for a prescription drug
manufactured by the pharmaceutical drug manufacturer.
(8) "Specialty drug" means a prescription drug covered
under Medicare Part D that exceeds the specialty tier cost
threshold established by the Centers for Medicare and Medicaid
Services.
(9) "Utilization management" means a set of formal
techniques designed to monitor the use of, or evaluate the medical
necessity, appropriateness, efficacy, or efficiency of, health
care services, procedures, or settings.
Sec. 1369.502. PHARMACY BENEFIT MANAGER INFORMATION. (a)
Not later than February 1 of each year, each pharmacy benefit
manager shall file a report with the commissioner. The report must
state for the immediately preceding calendar year:
(1) the aggregated rebates, fees, price protection
payments, and any other payments collected from pharmaceutical drug
manufacturers; and
(2) the aggregated dollar amount of rebates, fees,
price protection payments, and any other payments collected from
pharmaceutical drug manufacturers that were:
(A) passed to:
(i) health benefit plan issuers; or
(ii) enrollees at the point of sale of a
prescription drug; or
(B) retained as revenue by the pharmacy benefit
manager.
(a-1) Notwithstanding Subsection (a), the report due not
later than February 1, 2020, under that subsection must state the
required information for the immediately preceding three calendar
years in addition to stating the required information for the
preceding calendar year. This subsection expires September 1,
2021.
(b) A report submitted by a pharmacy benefit manager may not
disclose the identity of a specific health benefit plan or
enrollee, the price charged for a specific prescription drug or
class of prescription drugs, or the amount of any rebate or fee
provided for a specific prescription drug or class of prescription
drugs.
(c) Not later than May 1 of each year, the commissioner
shall publish the aggregated data from all reports for that year
required by this section in an appropriate location on the
department's Internet website. The combined aggregated data from
the reports must be published in a manner that does not disclose or
tend to disclose proprietary or confidential information of any
pharmacy benefit manager.
Sec. 1369.503. HEALTH BENEFIT PLAN ISSUER INFORMATION. (a)
Not later than February 1 of each year, each health benefit plan
issuer shall submit to the commissioner a report that states for the
immediately preceding calendar year:
(1) the names of the 25 most frequently prescribed
prescription drugs across all plans;
(2) the percent increase in annual net spending for
prescription drugs across all plans;
(3) the percent increase in premiums that were
attributable to prescription drugs across all plans;
(4) the percentage of specialty drugs with utilization
management requirements across all plans; and
(5) the premium reductions that were attributable to
specialty drug utilization management.
(b) A report submitted by a health benefit plan issuer may
not disclose the identity of a specific health benefit plan or the
price charged for a specific prescription drug or class of
prescription drugs.
(c) Not later than May 1 of each year, the commissioner
shall publish the aggregated data from all reports for that year
required by this section in an appropriate location on the
department's Internet website. The combined aggregated data from
the reports must be published in a manner that does not disclose or
tend to disclose proprietary or confidential information of any
health benefit plan issuer.
Sec. 1369.504. RULES. The commissioner may adopt rules to
implement this subchapter.
SECTION 3. Notwithstanding Chapter 441, Health and Safety
Code, as added by this Act, and Subchapter K, Chapter 1369,
Insurance Code, as added by this Act, a pharmaceutical drug
manufacturer, pharmacy benefit manager, or health benefit plan
issuer is not required to submit a summary report as required by
Chapter 441, Health and Safety Code, as added by this Act, or
Subchapter K, Chapter 1369, Insurance Code, as added by this Act, as
applicable, before January 1, 2020.
SECTION 4. This Act takes effect September 1, 2019.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 2536 was passed by the House on May
10, 2019, by the following vote: Yeas 134, Nays 0, 1 present, not
voting; and that the House concurred in Senate amendments to H.B.
No. 2536 on May 24, 2019, by the following vote: Yeas 142, Nays 0,
2 present, not voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 2536 was passed by the Senate, with
amendments, on May 22, 2019, by the following vote: Yeas 27, Nays
4.
______________________________
Secretary of the Senate
APPROVED: __________________
Date
__________________
Governor