By: Bonnen, Frank, Oliverson H.B. No. 4990       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.