Bill Text: TX HB970 | 2025-2026 | 89th Legislature | Introduced
Bill Title: Relating to the application of prescription drug price reductions; imposing a civil penalty.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced) 2024-11-12 - Filed [HB970 Detail]
Download: Texas-2025-HB970-Introduced.html
By: Harrison | H.B. No. 970 |
|
||
|
||
relating to the application of prescription drug price reductions; | ||
imposing a civil penalty. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Chapter 1369, Insurance Code, is amended by | ||
adding Subchapter B-3 to read as follows: | ||
SUBCHAPTER B-3. PRESCRIPTION DRUG PRICE REDUCTIONS | ||
Sec. 1369.095. DEFINITIONS. In this subchapter: | ||
(1) "Manufacturer" means a person who is engaged in | ||
making, preparing, propagating, fabricating, compounding, | ||
processing, packaging, repackaging, labeling or relabeling of a | ||
prescription drug or biological product. | ||
(2) "Pharmacy benefit manager" and "prescription | ||
drug" have the meanings assigned by Section 1369.501. | ||
Sec. 1369.096. APPLICABILITY OF SUBCHAPTER. (a) This | ||
subchapter applies only to a health benefit plan that provides | ||
benefits for medical or surgical expenses incurred as a result of a | ||
health condition, accident, or sickness, including an individual, | ||
group, blanket, or franchise insurance policy or insurance | ||
agreement, a group hospital service contract, or an individual or | ||
group evidence of coverage or similar coverage document that is | ||
issued by: | ||
(1) an insurance company; | ||
(2) a group hospital service corporation operating | ||
under Chapter 842; | ||
(3) a health maintenance organization operating under | ||
Chapter 843; | ||
(4) an approved nonprofit health corporation that | ||
holds a certificate of authority under Chapter 844; | ||
(5) a multiple employer welfare arrangement that holds | ||
a certificate of authority under Chapter 846; | ||
(6) a stipulated premium company operating under | ||
Chapter 884; | ||
(7) a fraternal benefit society operating under | ||
Chapter 885; | ||
(8) a Lloyd's plan operating under Chapter 941; or | ||
(9) an exchange operating under Chapter 942. | ||
(b) Notwithstanding any other law, this subchapter applies | ||
to: | ||
(1) a small employer health benefit plan subject to | ||
Chapter 1501, including coverage provided through a health group | ||
cooperative under Subchapter B of that chapter; | ||
(2) a standard health benefit plan issued under | ||
Chapter 1507; | ||
(3) a basic coverage plan under Chapter 1551; | ||
(4) a basic plan under Chapter 1575; | ||
(5) a primary care coverage plan under Chapter 1579; | ||
(6) a plan providing basic coverage under Chapter | ||
1601; | ||
(7) group health coverage made available by a school | ||
district in accordance with Section 22.004, Education Code; | ||
(8) a regional or local health care program operated | ||
under Section 75.104, Health and Safety Code; | ||
(9) a self-funded health benefit plan sponsored by a | ||
professional employer organization under Chapter 91, Labor Code; | ||
(10) county employee group health benefits provided | ||
under Chapter 157, Local Government Code; and | ||
(11) health and accident coverage provided by a risk | ||
pool created under Chapter 172, Local Government Code. | ||
Sec. 1369.097. EXCEPTIONS TO APPLICABILITY OF SUBCHAPTER. | ||
This subchapter does not apply to an issuer or provider of health | ||
benefits under or a pharmacy benefit manager administering pharmacy | ||
benefits under: | ||
(1) the state Medicaid program, including the Medicaid | ||
managed care program under Chapter 540, Government Code; | ||
(2) the child health plan program under Chapter 62, | ||
Health and Safety Code; | ||
(3) the TRICARE military health system; or | ||
(4) a workers' compensation insurance policy or other | ||
form of providing medical benefits under Title 5, Labor Code. | ||
Sec. 1369.098. APPLICATION OF PRICE REDUCTIONS. (a) A | ||
pharmacy benefit manager that obtains, directly or indirectly, from | ||
a manufacturer a reduction in price, whether by discount, rebate, | ||
or otherwise, on a prescription drug, on behalf of a health benefit | ||
plan issuer or on its own behalf, shall ensure through contracts | ||
with the health benefit plan issuer, manufacturer, pharmacy, or any | ||
other necessary party that the reduction in price is reflected | ||
completely in the price of the prescription drug when it is | ||
dispensed to a health benefit plan enrollee at a pharmacy. | ||
(b) Charging the patient a fixed dollar copayment less than | ||
the net price negotiated by the pharmacy benefit manager or health | ||
plan satisfies the intent of this section. | ||
(c) Any coinsurance charged by the pharmacy benefit manager | ||
or health plan shall be calculated off the net price that reflects | ||
the reduction in price by discount, rebate, or otherwise negotiated | ||
with the manufacturer. | ||
(d) The pharmacy benefit manager or health plan may provide | ||
the full price reduction provided by the manufacturer directly to | ||
the dispensing pharmacy or require the manufacturer to provide the | ||
full price reduction, directly or indirectly, through a | ||
point-of-sale chargeback or series of point-of-sale chargebacks or | ||
as otherwise required by law. | ||
Sec. 1369.099. CIVIL PENALTY; INJUNCTIVE RELIEF. (a) A | ||
pharmacy benefit manager that violates Section 1369.098 is liable | ||
to the state for a civil penalty of three times the total amount of | ||
the price reduction that was not reflected in the price of the | ||
prescription drug at the time it was dispensed plus $5,000 for each | ||
violation that occurs. | ||
(b) The attorney general may bring an action in the name of | ||
the state against a person that violates Section 1369.098 for: | ||
(1) injunctive relief; | ||
(2) recovery of a civil penalty imposed under this | ||
section; or | ||
(3) both injunctive relief and a civil penalty. | ||
(c) An action under this section may be brought in a | ||
district court in: | ||
(1) Travis County; or | ||
(2) a county in which any part of the violation occurs. | ||
SECTION 2. Subchapter B-3, Chapter 1369, Insurance Code, as | ||
added by this Act, applies only to a health benefit plan delivered, | ||
issued for delivery, or renewed on or after January 1, 2026. | ||
SECTION 3. This Act takes effect September 1, 2025. |