Bill Text: TX HB1298 | 2019-2020 | 86th Legislature | Introduced

---

Bill Title: Relating to prescription drug cost increases; imposing a civil penalty.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2019-02-27 - Referred to Insurance [HB1298 Detail]

Download: Texas-2019-HB1298-Introduced.html

---

86R6237 SCL-D
By: Davis of Harris H.B. No. 1298

A BILL TO BE ENTITLED
AN ACT
relating to prescription drug cost increases; imposing a civil
penalty.
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. PRESCRIPTION DRUG COST TRANSPARENCY
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 441.0001. DEFINITIONS. In this chapter:
(1) "Commission" means the Health and Human Services
Commission.
(2) "Health benefit plan issuer" means an insurer,
health maintenance organization, or other entity authorized to
provide health benefit coverage under the laws of this state.
(3) "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.
(4) "Prescription drug" has the meaning assigned by
Section 551.003, Occupations Code.
Sec. 441.0002. REQUEST FOR INFORMATION. The commission or
attorney general may request information necessary to carry out the
purposes of this chapter from another state agency. A state agency
receiving a request under this section shall provide the requested
information in a reasonable time.
SUBCHAPTER B. LISTS OF PRESCRIPTION DRUGS
Sec. 441.0051. COMMISSION LIST BY WHOLESALE ACQUISITION
COST. (a) The commission shall annually compile a list of
prescription drugs by wholesale acquisition cost.
(b) The list described by Subsection (a) must:
(1) include 10 prescription drugs:
(A) on which the commission or another state
agency spends a significant amount of money under a health benefit
plan administered by the agency; and
(B) for which the wholesale acquisition cost has
increased by at least:
(i) 50 percent during the previous five
calendar years; or
(ii) 15 percent during the previous
calendar year;
(2) include at least one generic and one brand name
drug;
(3) indicate which drugs on the list are specialty
drugs;
(4) include the percentage increase of the wholesale
acquisition cost for each drug on the list during the previous
calendar year and during the previous five calendar years;
(5) rank the drugs on the list from those with the
largest increase in wholesale acquisition cost to those with the
smallest increase in wholesale acquisition cost based on the
previous calendar year;
(6) state whether each drug on the list was included on
the list because of the wholesale acquisition cost increase over
the past five years or during the previous calendar year or both;
and
(7) provide the state's total expenditure for each
drug on the list during the previous calendar year.
Sec. 441.0052. COMMISSION LIST BY STATE COST. (a) In
addition to the list described by Section 441.0051, the commission
shall annually compile a list of prescription drugs by state cost.
(b) The list described by Subsection (a) must:
(1) include 10 prescription drugs:
(A) on which the commission or another state
agency spends a significant amount of money under a health benefit
plan administered by the agency; and
(B) for which the cost to the agency, excluding
any rebate or other price concession, has increased by at least:
(i) 50 percent during the previous five
calendar years; or
(ii) 15 percent during the previous
calendar year;
(2) include at least one generic and one brand name
drug;
(3) indicate which drugs on the list are specialty
drugs;
(4) rank the drugs on the list from those with the
largest increase in net cost to those with the smallest increase
based on the previous calendar year; and
(5) state whether each drug on the list was included on
the list because of the cost increase over the past five years or
during the previous calendar year or both.
Sec. 441.0053. MAJOR HEALTH BENEFIT PLAN ISSUER LIST;
REPORT. (a) This section applies only to a health benefit plan
issuer that is authorized to write a health benefit plan in this
state and that provides health benefit plan coverage for at least
5,000 enrollees.
(b) A health benefit plan issuer shall annually compile a
list of prescription drugs by cost.
(c) The list described by Subsection (b) must:
(1) include 10 prescription drugs:
(A) on which the health benefit plan issuer
spends a significant amount of money; and
(B) for which the cost to the issuer's health
benefit plans, excluding any rebate or other price concession, has
increased by at least:
(i) 50 percent during the previous five
calendar years; or
(ii) 15 percent during the previous
calendar year;
(2) include at least one generic and one brand name
drug;
(3) indicate which drugs on the list are specialty
drugs;
(4) rank the drugs on the list from those with the
largest increase in net cost to those with the smallest increase
based on the previous calendar year; and
(5) state whether each drug on the list was included on
the list because of the cost increase over the past five years or
during the previous calendar year or both.
(d) A health benefit plan issuer shall provide to the
attorney general an annual written report on the list described by
Subsection (b) that states:
(1) the percentage by which the net cost to the
issuer's health benefit plans has increased during the previous
calendar year and during the previous five calendar years for each
prescription drug on the list; and
(2) the issuer's total expenditure, excluding any
rebate or other price concession, for each drug on the list during
the previous calendar year.
(e) Except as provided by Section 441.0054(b), information
provided to the attorney general under Subsection (d) is
confidential and excepted from disclosure under Chapter 552,
Government Code.
(f) The commissioner of insurance, in consultation with the
executive commissioner, may adopt rules necessary to implement this
section, including rules:
(1) designating which prescription drugs are
considered to be specialty drugs for purposes of this chapter; and
(2) governing the manner in which a health benefit
plan issuer identifies a drug as a specialty drug for purposes of
this chapter.
Sec. 441.0054. REPORT TO ATTORNEY GENERAL. (a) Not later
than June 1 of each year, the commission and each health benefit
plan issuer to which Section 441.0053 applies shall provide each
list required under this subchapter to the attorney general.
(b) The attorney general and commission shall post the lists
described by Subsection (a) on the attorney general's and
commission's Internet websites.
SUBCHAPTER C. PRICE JUSTIFICATION
Sec. 441.0101. ATTORNEY GENERAL LIST. (a) Using the lists
provided under Section 441.0054 and except as provided by
Subsection (b), the attorney general shall compile an aggregate
list of 15 prescription drugs for which the greatest amount of money
was spent across all payers during the previous calendar year.
(b) If fewer than 15 prescription drugs appear on more than
one payer's list, the attorney general shall rank the remaining
drugs based on the amount of money spent by any one payer during the
previous calendar year, in descending order, and may select as many
of the drugs based on that ranking as necessary to reach a total of
15 drugs required under Subsection (a).
(c) The attorney general shall provide written notice to
each manufacturer of a prescription drug on the list described by
Subsection (a) of the drug's placement on the list and the
manufacturer's duties under this subchapter.
Sec. 441.0102. PRICE JUSTIFICATION REQUIRED. (a) On
receipt of the notice described by Section 441.0101(c), a
manufacturer shall provide to the attorney general in the form and
manner prescribed by the attorney general a written report on the
prescription drug described by the notice.
(b) The report described by Subsection (a) must include:
(1) a justification for the increase in the net cost of
the prescription drug for the commission, a health benefit plan
issuer, or both; and
(2) all relevant information and supporting
documentation necessary to support the justification described by
Subdivision (1), including:
(A) each factor that specifically caused the net
cost increase;
(B) the percentage of the total cost increase
attributable to each factor; and
(C) an explanation of the role of each factor in
contributing to the cost increase.
(c) A manufacturer shall provide the report described by
Subsection (a) in the form and manner prescribed by the attorney
general to the attorney general.
(d) A manufacturer shall provide additional information
concerning a listed prescription drug or a cost increase to the
attorney general on request by the attorney general.
(e) A manufacturer may request a portion of the information
provided to be excepted from publication and held as confidential
in accordance with Section 552.110, Government Code, or other
applicable law, and shall provide an explanation for each request
to the attorney general. If the attorney general finds that the
request is justified, the information shall:
(1) be redacted from the report provided under this
section;
(2) be confidential; and
(3) be excepted from disclosure under Chapter 552,
Government Code.
(f) The attorney general may adopt rules necessary to
implement this section.
Sec. 441.0103. ATTORNEY GENERAL REPORT TO LEGISLATURE. (a)
Not later than December 1 of each year, the attorney general shall
provide a written report to the legislature on the manufacturer
reports described by Section 441.0102 received by the attorney
general during the previous calendar year.
(b) The attorney general and commission shall post the
report described by Subsection (a) and each copy of a
manufacturer's report provided under Section 441.0102, redacted as
necessary, on the attorney general's and commission's Internet
websites. The attorney general and commission may inform the
public of the availability of the reports posted under this
subsection.
Sec. 441.0104. CONSTRUCTION OF SUBCHAPTER. This subchapter
may not be construed to restrict the legal ability of a manufacturer
to increase prescription drug prices in accordance with federal
law.
Sec. 441.0105. ENFORCEMENT. A manufacturer that violates
Section 441.0102 or a rule adopted under this chapter is liable to
the state for a civil penalty of not more than $10,000 for each
violation. Each failure to provide information to the attorney
general is a separate violation. The attorney general 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.
SECTION 2. As soon as practicable after the effective date
of this Act, the executive commissioner of the Health and Human
Services Commission shall identify, provide to the attorney
general, and post on the commission's Internet website the list of
prescription drugs and manufacturers required by Sections 441.0051
and 441.0052, Health and Safety Code, as added by this Act.
SECTION 3. Notwithstanding Section 441.0103, Health and
Safety Code, as added by this Act, the attorney general is not
required to submit the initial report required by that section
before December 1, 2020.
SECTION 4. This Act takes effect September 1, 2019.