HBA-NRS H.B. 417 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 417
By: Maxey
Public Health
2/7/2001
Introduced



BACKGROUND AND PURPOSE 

Most third party drug programs, including state Medicaid outpatient drug
programs, pay pharmacy providers based on an estimated cost of the drugs.
The federal Omnibus Budget Reconciliation Act of 1990 created the Medicaid
Drug Rebate Program for states to obtain post payment rebates from drug
manufacturers for state overpayments because of inaccurate cost estimates.
As part of the rebate program, drug manufacturers are required to provide
the federal government with average manufacturer price (AMP) data for drugs
sold by the manufacturer. States offering Medicaid, including Texas,
currently do not receive this AMP data. Having access to the data would
enhance accurate drug pricing at the state level for the purpose of
estimating drug payments. House Bill 417  requires drug manufacturers to
provide AMP data to the Texas Department of Health. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

ANALYSIS

House Bill 417 amends the Health and Safety Code to require a person who
manufactures a drug that is sold in this state to annually file with the
Texas Department of Health the average manufacturer price for the drug and
the price that each wholesaler in this state pays the manufacturer to
purchase the drug. The bill authorizes the Texas Department of Health and
the attorney general to investigate the manufacturer to determine the
accuracy of the "average manufacturer price" as defined by 42 U.S.C.
Section 1396r8(k)(1).  

EFFECTIVE DATE

September 1, 2001.