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) 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.
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