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RULE §354.1942Conflict of Interest Policy

(a) Definitions. The following words or phrases have the meaning indicated for purposes of this section:

  (1) Board member--A person who is appointed to the Drug Utilization Review Board (DUR Board).

  (2) Contractual relationship--A written or oral agreement between a board member and a third party that results in the payment of federally reportable income to the board member (i.e., income reported on IRS Form 1099 or Form W-2).

  (3) Other interest--Involvement in the affairs of a third party that impairs or may be perceived as impairing a board member's independence of judgment regarding the board member's performance of duties for the DUR Board.

  (4) Ownership interest--An equity interest in a third party where a board member exercises control over the selection of investments and any other financial interest whose value cannot be readily determined through reference to public records.

  (5) Third party--A pharmaceutical manufacturer or labeler with a product on the Texas Drug Code Index and any other entity engaged by the Health and Human Services Commission (HHSC) to assist in the administration of the DUR Board.

(b) Policy.

  (1) Persons appointed to the DUR Board must be free of personal financial interests and other relationships that may conflict with their duties as to the Medicaid DUR Program under Social Security Act §1927(g) and Texas Government Code §531.0735. Specifically, in accordance with Texas Government Code §531.0737, a board member must not have a contractual relationship with or an ownership interest or other interest in:

    (A) a pharmaceutical manufacturer or labeler; or

    (B) an entity engaged by HHSC to assist in the development of the preferred drug lists or administration of the DUR Board.

  (2) Persons appointed to the DUR Board must disclose any apparent or potential conflict of interest under subsection (c) of this section and take affirmative steps to mitigate the effect of each conflict under subsection (d) of this section.

(c) Disclosure.

  (1) Each board member of or person under consideration for appointment to the DUR Board must report any new or existing contractual relationship, ownership interest, or other interest that the board member, the board member's parent, the board member's spouse, or the board member's son or daughter holds or acquires during the board member's tenure on the DUR Board or that was held or acquired during the two-year period that immediately precedes the board member's tenure.

  (2) A board member must report any conflict of interest on a form developed by HHSC.

(d) Mitigation. If the DUR Board or HHSC determines that a potential conflict of interest exists, the following actions are taken.

  (1) HHSC determines whether the potential conflict will impair the board member's exercise of independent judgment and recommends appropriate action to the DUR Board. HHSC examines the extent of the potential conflict, the length of time the potential conflict existed, and the impact of the potential conflict on any matter on which the board member may be required to deliberate or discuss.

  (2) HHSC informs the board member and the DUR Board chair of its recommended action.

  (3) In response to a recommendation from HHSC, the DUR Board may require:

    (A) recusal of the board member on any discussion or action that relates to a specific product marketed by a third party for which the board member may have a conflict;

    (B) recusal of the board member on any discussion or action that relates to all products marketed by a third party for which the board member may have a conflict;

    (C) recusal of the board member on any discussion or action that involves a class of pharmaceuticals for which the board member may have a conflict; or

    (D) any other action the DUR Board determines necessary to avoid or mitigate a potential conflict of interest.

Source Note: The provisions of this §354.1942 adopted to be effective February 9, 2016, 41 TexReg 960

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