|(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.
(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.
(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
(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
(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.