Bill Text: TX HB4990 | 2023-2024 | 88th Legislature | Comm Sub

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Relating to the Texas Pharmaceutical Initiative and a governing board and advisory council for the initiative.

Spectrum: Partisan Bill (Republican 4-0)

Status: (Passed) 2023-06-13 - Effective immediately [HB4990 Detail]

Download: Texas-2023-HB4990-Comm_Sub.html

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By: Bonnen, Frank, Oliverson H.B. No. 4990
(Senate Sponsor - Kolkhorst)
(In the Senate - Received from the House May 3, 2023;
May 12, 2023, read first time and referred to Committee on Health &
Human Services; May 21, 2023, reported favorably by the following
vote: Yeas 8, Nays 1; May 21, 2023, sent to printer.)
Click here to see the committee vote

A BILL TO BE ENTITLED
AN ACT
relating to the Texas Pharmaceutical Initiative; authorizing fees.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle D, Title 10, Government Code, is
amended by adding Chapter 2177 to read as follows:
CHAPTER 2177. TEXAS PHARMACEUTICAL INITIATIVE
Sec. 2177.001. DEFINITIONS. In this chapter:
(1) "Board" means the governing board of the
initiative.
(2) "Fund" means the Texas Pharmaceutical Initiative
fund.
(3) "Generic biological product" means a biological
product approved pursuant to an application under Section 351(k),
Public Health Service Act (42 U.S.C. Section 262(k)).
(4) "Generic drug" means a prescription drug approved
pursuant to an application under Section 505(j), Federal Food,
Drug, and Cosmetic Act (21 U.S.C. Section 355(j)).
(5) "Initiative" means the Texas Pharmaceutical
Initiative established under this chapter.
Sec. 2177.002. TEXAS PHARMACEUTICAL INITIATIVE. (a) The
Texas Pharmaceutical Initiative is established to provide
cost-effective access to prescription drugs and other medical
supplies for:
(1) employees, dependents, and retirees of public
higher education systems and institutions;
(2) Employees Retirement System of Texas members;
(3) Teacher Retirement System of Texas members;
(4) persons confined by the Texas Department of
Criminal Justice or the Texas Juvenile Justice Department;
(5) recipients of medical assistance under Chapter 32,
Human Resources Code; and
(6) enrollees of the child health plan program under
Chapter 62, Health and Safety Code.
(b) A state entity or managed care organization as defined
by Chapter 533, Government Code, that provides health benefit plan
coverage to individuals described by Subsection (a) as the entity
or managed care organization determines appropriate may elect to
provide access to prescription drugs and other medical supplies
under the initiative.
Sec. 2177.003. BOARD. (a) The initiative is governed by a
board composed of:
(1) the executive commissioner of the Health and Human
Services Commission or the executive commissioner's designee;
(2) the executive director of the Employees Retirement
System of Texas or the executive director's designee;
(3) the executive director of the Teacher Retirement
System of Texas or the executive director's designee;
(4) three members appointed by the governor;
(5) one member appointed by the governor from a list of
three names submitted by the lieutenant governor;
(6) one member appointed by the governor from a list of
three names submitted by the speaker of the house of
representatives; and
(7) the chancellor of The University of Texas System,
or the chancellor's designee, who serves in an ex-officio capacity.
(b) A vacancy on the board shall be filled in the same manner
as the original appointment.
(c) The appointed board members serve staggered six-year
terms.
(d) The governor shall designate the presiding officer of
the board.
(e) A board member serves without compensation but may be
reimbursed for travel and other actual and reasonable expenses
incurred in the performance of the member's duties on the board.
(f) The board is administratively attached to the Health and
Human Services Commission.
Sec. 2177.004. DUTIES OF BOARD. (a) The board shall:
(1) develop and implement the initiative and related
programs established by this chapter;
(2) establish procedures and policies for the
administration of the initiative;
(3) establish procedures to document compliance by
board members and personnel with applicable laws governing
conflicts of interest;
(4) ensure that a program or entity created under this
chapter meets any applicable licensing or accreditation
requirements under state or federal law; and
(5) recommend rules necessary to implement this
chapter for adoption by the executive commissioner of the Health
and Human Services Commission.
(b) To carry out the purposes of this chapter the board may:
(1) execute contracts and other instruments and
conduct all activities the board determines necessary for those
purposes;
(2) authorize one or more board members to execute
contracts and other instruments on behalf of the board;
(3) establish a committee or other similar entity to
exercise powers delegated by the board and exercise any other
administrative duties or powers as the board considers necessary;
(4) employ an executive director and necessary
personnel to provide administrative support; and
(5) award grants to public or private persons to
implement the initiative.
(c) The board may refrain from establishing a program or
entity under this chapter if the board determines that
establishment is not feasible with current resources or considering
other state-funded programs.
(d) A contract or agreement executed under this chapter must
comply with Chapter 2254, if applicable.
Sec. 2177.005. PHARMACY BENEFIT MANAGER. (a) The board
shall contract for a statewide pharmacy benefit manager, as
provided by Subchapter H, Chapter 2158, to provide cost-effective
prescription drugs through the establishment of a pharmacy network
to state entities served by the initiative.
(b) The pharmacy benefit manager shall provide pricing
transparency, a pass-through of all rebates and fees, and fair and
equitable pricing to a pharmacy that participates in the pharmacy
benefit manager's pharmacy network.
(c) The pharmacy benefit manager shall contract with
appropriate persons to:
(1) provide an evidence-based benefit design, a prior
authorization process, and a new drug review process; and
(2) partner with suppliers, pharmaceutical
manufacturers, and group purchasing organizations for competitive
acquisition of prescription drugs and medical supplies.
Sec. 2177.006. DISTRIBUTION OF PRESCRIPTION DRUGS AND
MEDICAL SUPPLIES. (a) The board shall establish and implement a
central service center and an associated network of satellite
distribution facilities to provide prescription drugs and medical
supplies to individuals described by Section 2177.002 for state
entities that elect to participate in the initiative. The center
must:
(1) be constructed to withstand extreme weather
conditions, natural disasters, and power outages;
(2) be capable of providing disaster preparedness and
response resources statewide; and
(3) include a mail order pharmacy and specialty
pharmacy.
(b) The central service center may assess an inventory
storage charge, transaction fees, or other fees on persons
obtaining prescription drugs and medical supplies from the center
to support the center's distribution and other operational costs,
including overhead and margin.
(c) The mail order and specialty pharmacy established in the
central service center may assess delivery and handling fees on
persons receiving prescription drugs from the pharmacy.
Sec. 2177.007. PHARMACEUTICAL ADVANCED PREPARATION
FACILITY. (a) The board shall establish a pharmaceutical advanced
preparation facility to serve as an outsourcing facility in
compliance with Section 503B, Federal Food, Drug, and Cosmetic Act
(21 U.S.C. Section 353b), to:
(1) manufacture and provide compounded drugs;
(2) provide chimeric antigen receptor T-cell
treatment and other gene therapies, including precision medicine;
and
(3) provide advanced laboratories for quality
control, preparation, and compounding of drugs in support of
innovative therapeutics and drug research.
(b) The pharmaceutical advanced preparation facility shall
be operated by an organization established by the board that is
exempt from federal income taxation under Section 501(a), Internal
Revenue Code of 1986, by being listed as an exempt entity under
Section 501(c)(3) of that code.
(c) The pharmaceutical advanced preparation facility may
charge fees to persons to whom the facility provides drugs,
treatment, supplies, or other services to support the operational
costs of the facility, including overhead and margin.
Sec. 2177.008. ADVANCED HEALTH CARE COST AND CLAIMS
ANALYTIC SERVICES. (a) The board shall contract with a person to
provide advanced health care claims analytics software to support
the programs and entities created by this chapter and to support
population health research.
(b) The board shall develop criteria for the evaluation of
applications or proposals submitted by a person seeking to contract
with the board under this section.
Sec. 2177.009. GENERIC BIOLOGICAL PRODUCT AND GENERIC DRUG
MANUFACTURING FACILITY. (a) The board may enter into an agreement
with a person to establish a facility that manufactures generic
biological products and generic drugs in compliance with any
requirements of the federal Food and Drug Administration. In
entering into the agreement, the board shall prioritize savings and
access to affordable medications.
(b) The board shall develop criteria for the evaluation of
applications or proposals submitted by a person seeking to contract
with the board under this section.
Sec. 2177.010. CONFIDENTIALITY OF CERTAIN INFORMATION. Any
information received by the board, a program or entity created by
this chapter, a state entity participating in the initiative, or a
contractor or agent of the board that if directly or indirectly
disclosed is likely to compromise the financial, competitive, or
proprietary nature of the information, is confidential and not
subject to disclosure under Chapter 552.
Sec. 2177.011. TEXAS PHARMACEUTICAL INITIATIVE FUND. (a)
The Texas Pharmaceutical Initiative fund is created as a trust fund
to be held by the comptroller outside the state treasury.
(b) The fund consists of:
(1) money from gifts, grants, and donations to the
fund;
(2) any additional legislative appropriations of
money for the purposes of the fund; and
(3) interest, dividends, and other income of the fund.
(c) The board may only use money in the fund to carry out the
purposes of this chapter.
(d) The board shall develop procedures for administration
and approval of expenditures of the fund.
Sec. 2177.012. FUNDING. The board may accept gifts,
grants, and donations from any public or private source for the
purpose of carrying out this chapter.
Sec. 2177.013. ANNUAL REPORT. Not later than December 31 of
each year, the board shall submit to the legislature a written
report on:
(1) the activities and objectives of the initiative;
(2) any cost savings for state entities that
participate in the initiative; and
(3) any recommendations for legislative or other
action.
Sec. 2177.014. SUNSET PROVISION. The board and the
initiative established under this chapter are subject to Chapter
325, Government Code (Texas Sunset Act). Unless continued in
existence as provided by that chapter, the board and the initiative
are abolished and this chapter expires September 1, 2035.
SECTION 2. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2023.
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