SECTION 230.1. Average Manufacture Price and Purchase Price Reporting for Pharmaceuticals

(a) Definitions. The following words and terms when used in this chapter shall have the following meanings.

(1) Actual price--The weighted median invoice price at which a wholesale distributor sells a prescription drug to Texas retail pharmacies from the first day of the month through the last day of the calendar month prior to the date of the request.

(2) Average manufacture price--The average price paid to the manufacturer for a prescription drug in the United States by wholesalers for prescription drugs distributed to the retail pharmacy class of trade, after deducting customary prompt pay discounts, calculated for the most recent required quarterly report to the Secretary of Health and Human Services.

(3) BFDS--The Bureau of Food and Drug Safety within the Texas Department of Health.

(4) Council--The Interagency Council on Pharmaceuticals Bulk Purchasing.

(5) Department--The Texas Department of Health.

(6) Drug manufacturer--A person licensed by Chapter 229 of this title who manufactures, prepares, propagates, compounds, processes, packages, repackages, or changes the container, wrapper, or labeling of any drug product.

(7) Prescription Drug--Any drug as defined by the Health and Safety Code, §431.002(14) that is further described in 21 U.S.C. §503(b)(1) and is a finished pharmaceutical.

(8) Retail pharmacy, for the purpose of actual price--Any Class A pharmacy or community pharmacy authorized to dispense a drug or device to the public under a prescription drug order. It does not, however, include long-term care pharmacies, physicians' offices, closed-door pharmacies, or outpatient pharmacies affiliated with health systems.

(9) Wholesale drug distributor--A person licensed by Chapter 229 of this title to engage in the wholesale distribution of prescription drugs to retail pharmacies in Texas including, but not limited to: manufacturers; repackers; own-label distributors; private-label distributors; jobbers; brokers; warehouses, including manufacturers' and distributors' warehouses, chain drug warehouses, and wholesale drug warehouses; independent wholesale drug traders; and retail pharmacies that conduct wholesale distributions.

(b) Exemptions. The following entities, upon furnishing affirmative proof, are exempted from the reporting requirements of this section.

(1) Manufacturers or wholesale drug distributors of only:

(A) veterinary drugs or medical equipment;

(B) durable medical equipment;

(C) medical gasses;

(D) salvaged drugs or devices;

(E) dental anesthetics or equipment;

(F) cosmetics; and/or

(G) any substance that may be lawfully sold over the counter without a prescription under the federal Food, Drug, and Cosmetic Act, 21 U.S.C. 301, et seq.

(2) Manufacturers or wholesale drug distributors who are:

(A) health care clinics;

(B) hospitals or hospital districts;

(C) university health care systems and/or pharmacy schools;

(D) blood and tissue centers;

(E) other non-profit health care systems;

(F) repackers;

(G) contract manufacturers;

(H) reverse distributors; or

(I) kit manufacturers.

(c) Reporting procedures.

(1) Requests. No later than the 25th day of each month, the council's designee(s) shall submit a list of prescription drugs about which pricing information is desired, to the BFDS. The list from the council will be in a standardized format, which identifies each drug by the National Drug Code (NDC) for the drug, the name of the drug, the manufacturer of the drug, the form size, the unit dosage and the count, and the name of the manufacturer. The BFDS will then submit the request electronically to all manufacturers and wholesale drug distributors by the 5th day of the next month.

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(2) Reports. Every manufacturer and wholesale distributor shall report to BFDS on a standardized electronic format no later than the 30th day after receipt of the request. The manufacturer shall report the most recent average manufacturer price that was required to be reported to the Secretary of Health and Human Services under 42 U.S.C., §1396r-8(k), as amended, and the manufacturer national rebate agreement, and the wholesale drug distributor shall report the actual price for the prescription drug.

(A) Report of Actual Price Information from a Wholesale Drug Distributor.

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(B) Report of Average Manufacturer Price Information from a Manufacturer.

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(3) The BFDS will provide all reports to the council designee(s). BFDS will provide the council with a monthly report of those manufacturers and wholesale drug distributors not filing the required report.

(d) Confidentiality. Information provided by a manufacturer and a wholesale drug distributor pursuant to these rules and the Health and Safety Code, Chapter 110, may only be disclosed pursuant to the Health and Safety Code, Chapter 110, and the procedures of the council.

(e) Enforcement.

(1) The BFDS will provide electronic notice of a failure to report to a manufacturer or wholesale drug distributor from whom the council did not receive a requested report. The manufacturer or wholesale drug distributor must submit the report within 15 days after receipt of the notice of failure to report.

(2) If the council disputes the accuracy of the information on a particular NDC or NDCs provided by the manufacturer or wholesale drug distributor, then a confidential settlement conference on only those particular NDC or NDCs with the manufacturer or wholesale drug distributor, a member of the council, and BFDS will be offered.

(3) If a manufacturer or wholesale drug distributor fails to file the requested report after being provided the 15-day opportunity to cure, or if the accuracy of the report cannot be reconciled, BFDS shall consider the manufacturer's or wholesale drug distributor's demonstration of good faith prior to any referral to the Office of the Attorney General for investigation and/or action.

Source Note: The provisions of this §230.1 adopted to be effective July 1, 2003, 27 TexReg 11919