86R1825 KKR-D
By: Blanco H.B. No. 697
A BILL TO BE ENTITLED
AN ACT
relating to required prescription drug cost and rebate reporting;
authorizing a civil penalty.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 430.001, Health and Safety Code, is
amended by amending Subdivision (1) and adding Subdivision (1-a) to
read as follows:
(1) "Commission" means the Health and Human Services
Commission.
(1-a) "Commissioner" means the commissioner of state
health services.
SECTION 2. Subchapter E, Chapter 431, Health and Safety
Code, is amended by adding Sections 431.1165 and 431.1166 to read as
follows:
Sec. 431.1165. PRESCRIPTION DRUG MANUFACTURER COST
REPORTING; CIVIL PENALTY. (a) In this section:
(1) "Manufacturer" means a person licensed or approved
by the United States Food and Drug Administration to engage in the
manufacture of drugs or devices, consistent with the federal
agency's definition of "manufacturer" under the agency's
regulations and guidances implementing the Prescription Drug
Marketing Act of 1987 (Pub. L. No. 100-293). The term does not
include a pharmacist engaged in compounding that is within the
practice of pharmacy and is in accordance with a prescription drug
order or initiative from a practitioner for a patient or
prepackaging that complies with Section 562.154, Occupations Code.
(2) "Prescription drug" has the meaning assigned by 21
C.F.R. Section 203.3.
(b) Not later than February 1 of each year, the commission
shall:
(1) identify the prescription drugs and the wholesale
price for each drug the commission determines is essential to
treating diabetes in this state, including insulin and biguanides;
(2) identify the prescription drugs described by
Subdivision (1) for which the wholesale price has increased in an
amount equal to or greater than:
(A) the percentage of price increase in the
medical care component of the consumer price index as published by
the Bureau of Labor Statistics of the United States Department of
Labor during the preceding calendar year; or
(B) two times the percentage of price increase in
the medical care component of the consumer price index as published
by the Bureau of Labor Statistics of the United States Department of
Labor during the preceding two calendar years; and
(3) post the information compiled under Subdivisions
(1) and (2) on the commission's Internet website.
(c) Not later than August 1 of each year, a manufacturer
shall submit to the commission, in the manner and form prescribed by
the executive commissioner, a report for each prescription drug
identified under Subsection (b) that is manufactured by the
manufacturer and available for sale in this state.
(d) For each prescription drug identified under Subsection
(b)(1) and included in the report under Subsection (c), the
manufacturer, for the preceding calendar year, shall provide:
(1) the cost incurred by the manufacturer in producing
the drug;
(2) the wholesale price of the drug;
(3) a history of any increases in the wholesale price
of the drug for the preceding five years, including the amount of
each increase expressed as a percentage of the total wholesale
price of the drug, the month and year the price increase took
effect, and any explanation for the price increase;
(4) the profit derived from the sale of the drug,
expressed as an amount and as a percentage of the manufacturer's
total profit from all prescription drugs sold by the manufacturer;
(5) the administrative, marketing, and advertising
costs of promoting the drug;
(6) the cost to the manufacturer of coupons provided
directly to consumers to assist consumers in paying copayments and
the value of the coupons redeemed;
(7) the cost to the manufacturer of programs designed
to assist consumers in paying copayments for the drug;
(8) the amount of financial assistance provided for
the drug by the manufacturer through patient prescription
assistance programs; and
(9) the aggregate amount of rebates paid to pharmacy
benefit managers, as defined by Section 4151.151, Insurance Code,
for sales of the drug in this state.
(e) For each prescription drug identified under Subsection
(b)(2) and included in the report under Subsection (c), the
manufacturer, for the preceding calendar year, shall provide
information that justifies the increase in the wholesale price,
including:
(1) the factors contributing to the wholesale price
increase;
(2) the percentage of the total wholesale price
increase attributable to each factor; and
(3) an explanation of the role of each factor in
contributing to the wholesale price increase.
(f) Not later than December 1 of each year, the commission
shall prepare and post on the commission's Internet website a
report outlining the information provided by a manufacturer under
this section. The report may not include information likely to
compromise the financial, competitive, or proprietary nature of the
information.
(g) Information provided by a manufacturer to the
commission under this section is confidential and is not subject to
disclosure under Chapter 552, Government Code.
(h) A manufacturer that does not submit the report required
by Subsection (c) is liable to the state for a civil penalty of not
more than $5,000 for each violation. The commission may waive the
civil penalty if a manufacturer provides good cause for the
manufacturer's failure to submit the report. Each failure to
provide information to the commission is a separate violation and
each day of continuing violation constitutes a separate violation.
The attorney general at the request of the commission may bring suit
to provide for injunctive relief or to recover a civil penalty, or
both. The attorney general may recover court costs and reasonable
attorney's fees.
Sec. 431.1166. PHARMACY BENEFIT MANAGER PRESCRIPTION DRUG
REBATE REPORTING. (a) In this section:
(1) "Manufacturer" means a person licensed or approved
by the United States Food and Drug Administration to engage in the
manufacture of drugs or devices, consistent with the federal
agency's definition of "manufacturer" under the agency's
regulations and guidances implementing the Prescription Drug
Marketing Act of 1987 (Pub. L. No. 100-293). The term does not
include a pharmacist engaged in compounding that is within the
practice of pharmacy and is in accordance with a prescription drug
order or initiative from a practitioner for a patient or
prepackaging that complies with Section 562.154, Occupations Code.
(2) "Pharmacy benefit manager" has the meaning
assigned by Section 4151.151, Insurance Code.
(3) "Prescription drug" has the meaning assigned by 21
C.F.R. Section 203.3.
(b) Not later than August 1 of each year, a pharmacy benefit
manager shall submit a report to the commission, in the manner and
form prescribed by the executive commissioner, regarding rebates
for each prescription drug identified under Section 431.1165(b)(1)
that is available for sale in this state. The report must include:
(1) the total amount of rebates the pharmacy benefit
manager negotiated with all manufacturers during the preceding
calendar year;
(2) the amount of the rebates described in Subdivision
(1) that were retained by the pharmacy benefit manager; and
(3) the amount of any rebates described in Subdivision
(1) that were negotiated for use by persons who receive
prescription drug benefits or assistance under Medicare or a state,
local, or federal public program.
(c) This section does not apply to prescription drug
benefits provided under a health care benefit plan established
under the Employee Retirement Income Security Act of 1974 (29
U.S.C. Section 1001 et seq.).
(d) Not later than December 1 of each year, the commission
shall prepare and post on the commission's Internet website a
report outlining the information provided by a pharmacy benefit
manager under this section. The report may not include information
that is likely to compromise the financial, competitive, or
proprietary nature of the information.
(e) Information provided by a pharmacy benefit manager to
the commission under this section is confidential and is not
subject to disclosure under Chapter 552, Government Code.
SECTION 3. As soon as practicable after the effective date
of this Act, the executive commissioner of the Health and Human
Services Commission shall adopt rules necessary to implement
Sections 431.1165 and 431.1166, Health and Safety Code, as added by
this Act.
SECTION 4. This Act takes effect September 1, 2019.