By: Bonnen H.B. No. 4990       A BILL TO BE ENTITLED   AN ACT   relating to the creation, management, and administration of the   Texas Pharmaceutical Initiative.          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)  "Initiative" means the Texas Pharmaceutical   Initiative established in Sec. 2177.002.                (2)  "Board" means the governing board established in   Sec. 2177.003.          Sec. 2177.002.  TEXAS PHARMACEUTICAL INITIATIVE;   ESTABLISHMENT. The Texas Pharmaceutical Initiative is established   to provide cost effective prescription drug access for employees,   dependents, and retirees of public higher education systems and   institutions, Employees Retirement System of Texas members,   Teacher Retirement System of Texas members, persons confined by the   Texas Department of Criminal Justice or the Texas Juvenile Justice   Department, recipients of medical assistance, enrollees of the   child health plan program, and other public, non-profit, and   for-profit entities.          Sec. 2177.003.  GOVERNING BOARD. (a) The initiative shall   be governed by a board that consists of:                (1)  the commissioner of the Texas Health and Human   Services Commission, or their designee;                (2)  the executive director of the Employees Retirement   System of Texas, or their designee;                (3)  the executive director of the Teacher Retirement   System of Texas, or their 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                (6)  the chancellor of the University of Texas System,   or the chancellor's designee, in an ex-officio capacity.          (b)  A vacancy on the board shall be filled in the same manner   as the original appointment.          (c)  The board is administratively attached to the Health and   Human Services Commission.          (d)  The governor shall select the presiding officer of the   board.          Sec. 2177.004.  GENERAL DUTIES. (a) The board established   under SECTION 2177.003 shall:                (1)  develop and implement the initiative and related   programs established in this chapter;                (2)  establish procedures and policies for the   administration of the board;                (3)  establish procedures to document compliance by   board members and staff with applicable laws governing conflicts of   interest; and                (4)  adopt all necessary rules to implement this   chapter.          (b)  The board may:                (1)  execute all contracts and other documents, adopt   all proceedings, and conduct all activities determined by the board   to be necessary to carry out the purposes of this chapter. The   board may authorize one or more members of the board to execute   contracts and other documents on behalf of the board; and                (2)  establish and create any committees or other   entities the board may deem necessary to exercise the powers   provided in this act. The board may delegate to such committees or   other entities administrative duties and other powers as the board   may deem necessary;                (3)  hire a chief executive officer and employ   necessary staff to provide administrative support;                (4)  make grants to provide funds to public or private   persons to implement the Texas Pharmaceutical Initiative.          (c)  the board is required to implement a provision of this   chapter only if the legislature appropriates money specifically for   that purpose. If the legislature does not appropriate money   specifically for that purpose, the board may, but is not required   to, implement a provision of this chapter.          Sec. 2177.005.  TRANSPARENT PHARMACY BENEFIT MANAGER.  (a)   The board shall establish and implement a statewide transparent   pharmacy benefit manager to provide cost-effective prescription   drugs to entities and organizations served by the Initiative.          (b)  The pharmacy benefit manager shall provide pricing   transparency, pass-through of all rebates and fees, and fair and   equitable pricing to any pharmacy that chooses to participate in   the pharmacy benefit manager's pharmacy network.          (c)  The pharmacy benefit manager shall contract with   appropriate entities to:                (1)  provide evidence-based benefit design, prior   authorization, and new drug review; and                (2)  partner with suppliers, pharmaceutical   manufacturers, and group purchasing organizations for competitive   drug acquisition.          (d)  The pharmacy benefit manager may charge fees for   startup, enrollment, and ongoing management to support operational   costs, program development, and expansion.          Sec. 2177.006.  CENTRAL SERVICE CENTER AND SATELLITE   DISTRIBUTION FACILITIES. (a) The board shall establish and   implement a central service center and associated network of   satellite distribution facilities to provide pharmacy and medical   supplies in support of Texas public higher education systems and   institutions, the Employees Retirement System of Texas, the Teacher   Retirement System of Texas, the Texas Department of Criminal   Justice, the Texas Juvenile Justice Department, and other public,   non-profit, and for-profit entities. The center shall:                (1)  be constructed to withstand severe weather,   natural disasters, and power outages, and shall be capable of   supporting disaster preparedness and relief statewide; and                (2)  include a mail order pharmacy and specialty   pharmacy.          (b)  The center may assess a stock carrying charge,   transaction fees, or other fees to support distribution and other   operational costs, including overhead and margin.          (c)  The mail order and specialty pharmacy may receive   payment for dispensing prescription drugs and may assess   dispensing, delivery, and handling fees.          Sec. 2177.007  PHARMACEUTICAL ADVANCED PREPARATION   FACILITY.  (a)  The board shall establish a pharmaceutical advanced   preparation facility to provide Food and Drug Administration   approved 503B compounding, manufacturing, CAR-T and other gene   therapies, precision medicine, and advanced labs for quality   control, preparation and compounding in support of innovative   therapeutics and drug research.          (b)  The facility shall be operated by a 501 c(3) established   by the board.          (c)  The facility may charge fees for drug preparation,   manufacturing, CAR-T, gene therapy, and 503B compounding to support   operational costs, including overhead and margin.           Sec. 2177.008  ADVANCED HEALTH CARE COST AND CLAIMS ANALYTIC   SERVICES. (a) The board shall contract to provide advanced health   care cost and claims analytic services to support the transparent   pharmacy benefit manager, mail order and specialty pharmacies,   central service center, and pharmaceutical advanced preparation   facility established in this chapter, and to support population   health and research.          Sec. 2177.009  GENERIC DRUG MANUFACTURING FACILITY. (a) The   board may enter into an agreement to establish a facility providing   for the manufacturing of generic drugs. In entering into an   agreement, the board shall prioritize savings and access to   affordable medications.          Sec. 2177.010  TEXAS PHARMACY INITIATIVE FUND. (a) The   Texas Pharmaceutical Initiative Fund is created as a trust fund   outside the treasury with the comptroller. The fund consists of   money from:                (1)  gifts, grants, or donations to the executive   committee; and                (2)  any other source appropriated or designated by the   legislature.          (b)  The board may utilize the fund for the purpose of   carrying out this chapter.          (c)  The board shall develop procedures for administration   and approval of expenditures through the fund.          Sec. 2177.011.  GIFTS, GRANTS, AND DONATIONS. The board may   accept on behalf of the initiative gifts, grants, or donations from   any public or private source for the purpose of carrying out this   chapter.          Sec. 2177.012.  ANNUAL REPORT. Not later than December 31 of   each year, the board shall submit to the Texas Legislature a written   report that outlines:                (1)  the activities and objectives of the initiative;                (2)  cost savings derived by state entities as a result   of participation in the initiative; and                (3)  any legislative recommendations.          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.