Bill Text: TX HB3496 | 2019-2020 | 86th Legislature | Comm Sub

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Relating to the licensing and regulation of certain pharmacies; providing an administrative penalty.

Spectrum: Partisan Bill (Republican 4-0)

Status: (Passed) 2019-06-10 - Effective on 1/1/20 [HB3496 Detail]

Download: Texas-2019-HB3496-Comm_Sub.html

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86R28443 SOS-F
By: Sheffield H.B. No. 3496
Substitute the following for H.B. No. 3496:
By: Sheffield C.S.H.B. No. 3496

A BILL TO BE ENTITLED
AN ACT
relating to the licensing and regulation of certain pharmacies;
providing an administrative penalty.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 560.052(b), Occupations Code, is amended
to read as follows:
(b) To qualify for a pharmacy license, an applicant must
submit to the board:
(1) a license fee set by the board, except as provided
by Subsection (d); [and]
(2) a completed application that:
(A) is on a form prescribed by the board;
(B) includes notice that a surety bond may be
required under Section 565.0551;
(C) is given under oath;
(D) [(C)] includes proof that:
(i) a pharmacy license held by the
applicant in this state or another state, if applicable, has not
been restricted, suspended, revoked, or surrendered for any reason;
and
(ii) no owner of the pharmacy for which the
application is made has held a pharmacist license in this state or
another state, if applicable, that has been restricted, suspended,
revoked, or surrendered for any reason; and
(E) [(D)] includes a statement of:
(i) the ownership;
(ii) the location of the pharmacy;
(iii) the license number of each pharmacist
who is employed by the pharmacy, if the pharmacy is located in this
state, or who is licensed to practice pharmacy in this state, if the
pharmacy is located in another state;
(iv) the pharmacist license number of the
pharmacist-in-charge; and
(v) any other information the board
determines necessary; and
(3) a disclosure statement required under Section
560.0521, unless:
(A) the pharmacy for which the application is
made is operated by a publicly traded company;
(B) the pharmacy for which the application is
made is wholly owned by a retail grocery store chain; or
(C) the applicant is applying for a Class B or
Class C pharmacy license.
SECTION 2. Subchapter B, Chapter 560, Occupations Code, is
amended by adding Section 560.0521 to read as follows:
Sec. 560.0521. SWORN DISCLOSURE STATEMENT. (a) A
disclosure statement included with an application under Section
560.052(b)(3) must include:
(1) the name of the pharmacy;
(2) the name of each person who has a direct financial
investment in the pharmacy;
(3) the name of each person who:
(A) is not an individual;
(B) has any financial investment in the pharmacy;
and
(C) is not otherwise disclosed under Subdivision
(2);
(4) the total amount or percentage of the financial
investment made by each person described by Subdivision (2); and
(5) the name of each of the following persons, if
applicable, connected to the pharmacy if the person is not
otherwise disclosed under Subdivision (2) or (3):
(A) a partner;
(B) an officer;
(C) a director;
(D) a managing employee;
(E) an owner or person who controls the owner;
and
(F) a person who acts as a controlling person of
the pharmacy through the exercise of direct or indirect influence
or control over the management of the pharmacy, the expenditure of
money by the pharmacy, or a policy of the pharmacy, including:
(i) a management company, landlord,
marketing company, or similar person who operates or contracts for
the operation of a pharmacy and, if the pharmacy is a publicly
traded corporation or is controlled by a publicly traded
corporation, an officer or director of the corporation but not a
shareholder or lender of the corporation;
(ii) an individual who has a personal,
familial, or other relationship with an owner, manager, landlord,
tenant, or provider of a pharmacy that allows the individual to
exercise actual control of the pharmacy; and
(iii) any other person the board by rule
requires to be included based on the person's exercise of direct or
indirect influence or control.
(b) An applicant shall notify the board not later than the
60th day after the date any administrative sanction or criminal
penalty is imposed against a person described by Subsection (a).
(c) The board may adopt rules regarding the disclosure of
the source of a financial investment under Subsection (a).
(d) A disclosure statement under this section shall be given
under oath as prescribed by board rule.
(e) Information contained in a disclosure statement under
this section is confidential and not subject to disclosure under
Chapter 552, Government Code.
SECTION 3. Section 565.002(a), Occupations Code, is amended
to read as follows:
(a) The board may discipline an applicant for or the holder
of a pharmacy license, including a Class E pharmacy license subject
to Section 565.003, if the board finds that the applicant or license
holder has:
(1) been convicted of or placed on deferred
adjudication community supervision or deferred disposition or the
applicable federal equivalent for:
(A) a misdemeanor:
(i) involving moral turpitude; or
(ii) under Chapter 481 or 483, Health and
Safety Code, or the Comprehensive Drug Abuse Prevention and Control
Act of 1970 (21 U.S.C. Section 801 et seq.); or
(B) a felony;
(2) advertised a prescription drug or device in a
deceitful, misleading, or fraudulent manner;
(3) violated any provision of this subtitle or any
rule adopted under this subtitle or that an owner or employee of a
pharmacy has violated any provision of this subtitle or any rule
adopted under this subtitle;
(4) sold without legal authorization a prescription
drug or device to a person other than:
(A) a pharmacy licensed by the board;
(B) a practitioner;
(C) a person who procures a prescription drug or
device for lawful research, teaching, or testing, and not for
resale;
(D) a manufacturer or wholesaler licensed by the
commissioner of public health as required by Chapter 431, Health
and Safety Code; or
(E) a carrier or warehouseman;
(5) allowed an employee who is not a pharmacist to
practice pharmacy;
(6) sold an adulterated or misbranded prescription or
nonprescription drug;
(7) failed to engage in or ceased to engage in the
business described in the application for a license;
(8) failed to maintain records as required by this
subtitle, Chapter 481 or 483, Health and Safety Code, the
Comprehensive Drug Abuse Prevention and Control Act of 1970 (21
U.S.C. Section 801 et seq.), or any rule adopted under this subtitle
or Chapter 483, Health and Safety Code;
(9) failed to establish and maintain effective
controls against diversion of prescription drugs into other than a
legitimate medical, scientific, or industrial channel as provided
by this subtitle, another state statute or rule, or a federal
statute or rule;
(10) engaged in fraud, deceit, or misrepresentation as
defined by board rule in:
(A) operating a pharmacy;
(B) [or in] applying for a license to operate a
pharmacy; or
(C) dispensing drugs for nontherapeutic
purposes;
(11) violated a disciplinary order;
(12) been responsible for a drug audit shortage;
(13) been disciplined by the regulatory board of
another state for conduct substantially equivalent to conduct
described under this subsection; or
(14) waived, discounted, or reduced, or offered to
waive, discount, or reduce, a patient copayment or deductible for a
compounded drug in the absence of:
(A) a legitimate, documented financial hardship
of the patient; or
(B) evidence of a good faith effort to collect
the copayment or deductible from the patient.
SECTION 4. Subchapter B, Chapter 565, Occupations Code, is
amended by adding Section 565.0551 to read as follows:
Sec. 565.0551. SURETY BOND. (a) The executive director of
the board may require a license holder to submit a surety bond to
the board in an amount as prescribed by board rule, not to exceed
$25,000.
(b) The board may use a pharmacy's surety bond to secure the
payment of a fine, fee, or penalty imposed on the pharmacy or costs
incurred by the board in conducting an investigation of the
pharmacy only under Section 565.002(a)(7) or (10) if the pharmacy
fails to pay the fine, fee, penalty, or cost as prescribed by board
rule.
SECTION 5. Section 566.001, Occupations Code, is amended to
read as follows:
Sec. 566.001. IMPOSITION OF PENALTY. The board may impose
an administrative penalty on:
(1) a person licensed or regulated under this subtitle
who violates this subtitle or a rule or order adopted under this
subtitle; and
(2) an applicant who fails to submit a sworn
disclosure statement with an application if required by Section
560.052(b)(3).
SECTION 6. The changes in law made by this Act apply only to
an application for a pharmacy license that is submitted on or after
the effective date of this Act. An application for a pharmacy
license that was submitted before the effective date of this Act is
governed by the law in effect on the date the application was
submitted, and the former law is continued in effect for that
purpose.
SECTION 7. This Act takes effect January 1, 2020.