Relating to the Texas Pharmaceutical Initiative, the official text

H.B. No. 4638

AN ACT

relating to the Texas Pharmaceutical Initiative.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 2177.003(a), Government Code, is amended

to read as follows:

(a) The initiative is governed by a board composed of five

[three] members appointed by the governor.

SECTION 2. Chapter 2177, Government Code, is amended by

adding Section 2177.0035 to read as follows:

Sec. 2177.0035. TERMS; VACANCIES. (a) Board members serve

staggered six-year terms, with one-third or as near as possible to

one-third of the members' terms expiring February 1 of each

odd-numbered year.

(b) A vacancy on the board shall be filled for the unexpired

term in the same manner as the original appointment.

SECTION 3. Section 2177.006, Government Code, is amended to

read as follows:

Sec. 2177.006. BUSINESS PLAN. Not later than June 1 of each

even-numbered year [October 1, 2024], the board shall prepare

[develop] and submit to the governor, the legislature, and the

Legislative Budget Board a business plan on:

(1) implementing the initiative, including the

initiative's organizational structure and related programs;

(2) establishing procedures and policies for the

administration of the initiative, including documenting the

process and resources required for the provision to individuals

described by Section 2177.002 of the following services:

(A) establishing or contracting for statewide

pharmacy benefit manager services;

(B) establishing policies and conditions to

operate or contract for the operation of a distribution network,

central service center, and associated network of satellite

distribution facilities to distribute prescription drugs and

related medical supplies; and

(C) providing advanced pharmaceutical

preparation and related services, including:

(i) manufacturing generic drugs and generic

biological products;

(ii) providing gene therapies and precision

medicine; and

(iii) providing advanced laboratories for

quality control, preparation, and compounding of drugs in support

of innovative therapeutics and drug research;

(3) establishing procedures to document compliance by

board members and personnel with applicable laws governing

conflicts of interest;

(4) establishing the conditions for state agencies

that facilitate health plans to participate in the initiative;

(5) identifying potential cost savings from

implementation of the initiative;

(6) identifying the funding and resources needed to

implement this chapter;

(7) providing recommendations on best practices and

cost savings related to the provision of pharmacy benefits using

program utilization; and

(8) [(7)] providing other board recommendations, with

supporting documentation, on continuation of the initiative.

SECTION 4. Section 2177.010, Government Code, is amended to

read as follows:

Sec. 2177.010. EXPIRATION OF CHAPTER. This chapter expires

September 1, 2027 [2025].

SECTION 5. (a) As soon as practicable after the effective

date of this Act, the governor shall appoint the governing board

members for the Texas Pharmaceutical Initiative as required by

Section 2177.003, Government Code, as amended by this Act.

(b) Notwithstanding Section 2177.0035, Government Code, as

added by this Act, in making the appointments of the governing board

members for the Texas Pharmaceutical Initiative under Subsection

(a) of this section, the governor shall designate:

(1) two members to serve terms expiring February 1,

2027;

(2) two members to serve terms expiring February 1,

2029; and

(3) one member to serve a term expiring February 1,

2031.

SECTION 6. This Act takes effect September 1, 2025.

______________________________
______________________________

President of the Senate
Speaker of the House

I certify that H.B. No. 4638 was passed by the House on May 7,

2025, by the following vote: Yeas 140, Nays 6, 1 present, not

voting; and that the House concurred in Senate amendments to H.B.

No. 4638 on May 29, 2025, by the following vote: Yeas 124, Nays 11,

1 present, not voting.

______________________________

Chief Clerk of the House

I certify that H.B. No. 4638 was passed by the Senate, with

amendments, on May 27, 2025, by the following vote: Yeas 29, Nays

2.

______________________________

Secretary of the Senate

APPROVED: __________________

Date

__________________

Governor