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