                                      OFFICE oftheATTORNEY GENERAL
                                                 GREG     ABBOTT




                                               February lo,2003



Eduardo J. Sanchez, M.D., M.P.H.                           Opinion No. GA-001 9
Commissioner of Health
Texas Department of Health                                Re: Whether drug pricing information collected
1100 West 49th Street                                     by the Department of Health and used by the
Austin, Texas 78756-3 199                                 Interagency Council on Pharmaceuticals    Bulk
                                                          Purchasing is subject to disclosure under the
                                                          Public Information Act (RQ-0585-JC)

Dear Commissioner        Sanchez:

        You ask several questions about the release of certain drug pricing information by the Texas
Department of Health (the “Department”) and by the Interagency Council on Pharmaceuticals Bulk
Purchasing (the “Council”).     You also ask whether the Council is subject to the Texas Open
Meetings Act, chapter 55 1 of the Government Code, and if so, whether the Council may meet in
executive session to discuss pricing information received from the Department.

         The 77th Legislature enacted House Bill 915, “an act relating to the bulk purchasing of
prescription drugs by certain state agencies.” Tex. H.B. 915, 77th Leg., R.S. (2001). Section 1
added chapter 110 to the Health and Safety Code to create the Interagency Council on
Pharmaceuticals Bulk Purchasing. * Section 110.002 provides:

                 The Interagency Council on Pharmaceuticals Bulk Purchasing is composed
         of an officer or employee from each of the following agencies, appointed by the
         administrative head of that agency:

                  (1) the Texas Department       of Health;

                  (2) the Texas Department       of Mental Health and Mental Retardation;

                  (3) the Correctional    Managed Health Care Committee;

                  (4) the Employees      Retirement     System of Texas;


          ‘We note that the Legislature inadvertently added another chapter 110 to the Health and Safety Code during
the 77th Legislative session which created the Rural Foundation.   We only address the chapter 110 which created the
Interagency Council on Pharmaceuticals Bulk Purchasing.
Eduardo J. Sanchez, M.D., M.P.H.       - Page 2         (GA-0019)




                (5) the Teacher Retirement    System of Texas; and

                (6) any other agency that purchases pharmaceuticals   designated by the
                commissioner of health and human services.

TEX. HEALTH & SAFETY CODE ANN. 8 110.002 (Vernon Supp. 2003). The Council does not
have its own staff; rather, “[tlhe council’s member agencies shall provide staff for the council.”
Id. 8 110.005.

         Among the Council’s duties are the development of “procedures that member agencies must
follow in purchasing pharmaceuticals.”    Id. 9 110.006(a). In addition, the Council is required to
“investigate any and all options for better purchasing power, including expanding Medicaid
purchasing, qualifying for participation in purchasing programs under 4 1 U.S.C. Section 256b, as
amended, and using rebate programs, hospital disproportionate         share purchasing, and health
department and federally qualified health center purchasing.” Id. 8 11 O.O06(d)( 1). Furthermore, the
Council is to “make recommendations regarding drug utilization review, prior authorization, the use
of restrictive formularies, the use of mail order programs, and copayment structures to member
agencies.” Id. 8 110.006(d)(2). Finally, subsection (g) provides:

                          The council shall develop procedures under which the council
                may disclose information relating to the prices that manufacturers or
                wholesalers      charge    for pharmaceuticals      by category      of
                pharmaceutical.      The council may not disclose information that
                identifies a specific manufacturer or wholesaler or the prices charged
                by a specific        manufacturer    or wholesaler    for a specific
                pharmaceutical.

Id. 8 110.006(g).  Thus, the Council is expressly prohibited from disclosing a specific category of
information - “that [which] identifies a specific manufacturer or wholesaler or the prices charged
by a specific manufacturer or wholesaler for a specific pharmaceutical.” Id. On the other hand, the
Council is specifically directed to “develop procedures under which the council may disclose
information relating to the prices that manufacturers or wholesalers charge for pharmaceuticals by
category of pharmaceutical.”    Id.

         Section 2 of House Bill 915 added section 43 1.116 to the Health and Safety Code.      That
provision states, in relevant part:

                (b) A person who manufactures a drug, including a person who
                manufactures a generic drug, that is sold in this state shall file with
                the department:

                        (1) the average manufacturer   price for the drug; and
Eduardo J. Sanchez, M.D., M.P.H. - Page 3               (GA-0019)




                        (2) the price that each wholesaler in this state pays the
                        manufacturer to purchase the drug.

                (c) The information required under Subsection (b) must be filed
                annually or more frequently as determined by the department.

                (d) The department and the attorney general may investigate the
                manufacturer to determine the accuracy of the information provided
                under Subsection (b). The attorney general may take action to
                enforce this section.

                (e) The department shall report the information collected under
                Subsection (b) to the Interagency Council on Pharmaceuticals Bulk
                Purchasing.

TEX. HEALTH & SAFETYCODE ANN. 8 431.116 (Vernon Supp. 2003).

         You first ask whether the pricing information collected by the Department and received by
the Council is excepted from disclosure under the Public Information Act, chapter 552 of the
Government Code. That statute defines “public information” as “information that is collected,
assembled, or maintained under a law or ordinance or in connection with the transaction of official
business: (1) by a governmental body; or (2) for a governmental body and the governmental body
owns the information or has a right of access to it.” TEX. GOV’T CODE ANN. 8 552.002(a) (Vernon
Supp. 2003). The Public Information Act also contains a large number of exceptions to disclosure.
Section 552.101 excepts from disclosure “information considered to be confidential by law, either
constitutional, statutory, or by judicial decision.” Id. 8 552.101 (Vernon 1994). The second sentence
of section 110.006(g) of the Health and Safety Code prohibits the Council from disclosing
“information that identifies a specific manufacturer or wholesaler or the prices charged by a specific
manufacturer or wholesaler for a specific pharmaceutical.”        TEX. HEALTH & SAFETY CODE ANN.
8 110.006(g) (V emon Supp. 2003). “A law does not have to use the word ‘confidential’ to expressly
impose confidentiality.”    In re City of Georgetown, 53 S.W.3d 328, 334 (Tex. 2001). Thus, such
information in the possession of the Council is excepted from disclosure under the Public
Information Act as information considered to be confidential by statutory law, specifically, section
110.006(g) of the Health and Safety Code.

        You next ask whether the pricing information covered by section 110.006(g) is confidential
when in the possession of the Department. As we have noted, drug manufacturers are required to
report drug pricing information to the Department, which is in turn directed to report this information
to the Council. Section 43 1.116 of the Health and Safety Code contains no confidentiality provision
equivalent to section 110.006(g).

        Both chapter 110 and section 43 1.116 were enacted as part of the same bill. If we were to
conclude that section 43 1.116 could be used to gain access to information expressly made
confidential by chapter 110, House Bill 915 would be rendered virtually meaningless.     The Code
Eduardo J. Sanchez, M.D., M.P.H.      - Page 4         (GA-0019)




Construction Act declares that “[i]n enacting a statute, it is presumed that . . . a just and reasonable
result is intended.” TEX. GOV’T CODE ANN. 6 3 11.021(3) (Vernon 1998). A court will not read a
statute in a manner that will lead to a foolish or absurd result when another alternative is available.
Del Indus., Inc. v. Tex. Workers ’Comp. Ins. Fund, 973 S.W.2d 743,747 (Tex. App.-Austin 1998),
aff d, 35 S.W.3d 591 (Tex. 2000). Furthermore, in construing a statute, we may consider, inter alia,
the “object sought to be attained,” and the “consequences of a particular construction.” TEX. GOV’T
CODE ANN. 0 3 11.023(l), (5) (Vernon 1998). Where application of a statute’s plain language would
lead to absurd consequences that the legislature could not possibly have intended, a court will not
apply the statutory language literally.        Korndorffer v. Baker, 976 S.W.2d 696, 699 (Tex.
App.-Houston      [ 1st Dist] 1997, pet. dism’d w.o.j.); see also Tex. Dep ‘t of Pub. Safety v. LaFleur,
32 S.W.3d 911,915 (Tex. App.-Texarkana 2000, no pet.).

        In addition, when the Department collects the drug pricing information at issue here, it is
acting as the agent of the Council. As we have noted, the Council has no staff of its own, but relies
on its member agencies for staffing. Although the Council has numerous duties with regard to the
drug pricing information it receives from the Department, the Department has only one duty with
respect to such information. While the Department, along with the attorney general, may investigate
the manufacturer to determine the accuracy of the information, its only duty consists in reporting the
information to the Council. Thus, it may reasonably be said that the Department acts, with respect
to drug pricing information, merely as a conduit of that information.

         In Attorney General Opinion JM-446, this office considered whether the State Purchasing
and General Services Commission (the “Commission”) was required to furnish, under the Open
Records Act (now the Public Information Act), “the records . . . of long-distance calls made from
telephone numbers assigned to the state Supreme Court.” Tex. Att’y Gen. Op. No. JM-446 (1986)
at 1. The opinion found that the Commission “is properly to be considered the agent of the Texas
Supreme Court in collecting the records and abstracting information from them, and their disposition
is the prerogative of the court, not of the commission.” Id. at 2. “Open Records Act exceptions or
exclusions applicable to records in the hands of the principal also apply to such records in the hands
of the agent.” Id. See also Tex. Att’y Gen. ORD Nos. 411 (1984), 398 (1983) (district attorney
holds grand jury records as the custodian or agent of the grand jury).

        In the same manner, the Department, pursuant to section 43 1.116 of the Health and Safety
Code, merely acts as the collecting agent for the Council. The Department, beyond determining “the
accuracy of the information,” TEX. HEALTH & SAFETY CODE ANN. 8 43 1.116(d) (Vernon Supp.
2003), is charged with only one duty with regard to the information it collects, and that duty is to
“report the information collected . . . to the Interagency Council on Pharmaceuticals          Bulk
Purchasing.”    Id. 8 43 I. 116(e). Accordingly, information that is confidential under section
110.116(g) in the possession of the Council is also confidential while in the possession of the
Department.

        You next ask, whether, if a member of the Council shares with his or her agency the pricing
information made confidential by section 110.006(g), that information is excepted from disclosure
under the Public Information Act. Section 110.006(g) expressly declares that the Council “may not
Eduardo J. Sanchez, M.D., M.P.H.     - Page 5         (GA-0019)




disclose information that identifies a specific manufacturer or wholesaler or the prices charged by
a specific manufacturer or wholesaler for a specific pharmaceutical.”    Id. 8 110.006(g) (emphasis
added). A statute that is plain and unambiguous on its face will generally be construed as written.
Brazos River Auth. v. City of Graham, 354 S.W.2d 99, 109 (Tex. 1961). See also Fitzgerald v.
Advanced Spine Fixation Sys., Inc., 996 S.W.2d 864,865 (Tex. 1999) (where a statute is clear, courts
will not look to extrinsic aids such as legislative history to determine the legislature’s intent).
Because section 110.006(g) prohibits the Council from disclosing the specific drug pricing
information referred to therein, a member of the Council is not permitted to share such information
with his or her agency. Thus, in answer to your specific question, we conclude that pricing
information made confidential by section 110.006(g) is excepted from disclosure under the Public
Information Act.

        Your final two questions inquire as to whether the Council is subject to the Open Meetings
Act, and if it is, whether the Council may meet in executive session to discuss drug pricing
information received from the Department. The Open Meetings Act, chapter 55 1 of the Government
Code, provides that “[elvery regular, special, or called meeting of a governmental body shall be open
to the public, except as provided by this chapter.” TEX. GOV’T CODE ANN. 8 551.002 (Vernon
1994). “Governmental body” is defined, inter alia, to include “a board, commission, department,
committee, or agency within the executive or legislative branch of state government that is directed
by one or more elected or appointed members.”            Id. 8 551.001(3).    The Council is clearly a
committee within the executive branch of government.           It is directed by at least five members
“appointed by the administrative head” of at least five agencies. See TEX. HEALTH& SAFETYCODE
ANN. 8 110.002 (Vernon Supp. 2003).

         “Meeting” is defined in the Open Meetings Act as “a deliberation between a quorum of a
governmental body, or between a quorum of a governmental body and another person, during which
public business or public policy over which the governmental body has supervision or control is
discussed or considered or during which the governmental body takes formal action.” TEX. GOV’T
CODE ANN. 8 55 l.OOl(4) (Vernon 1994). Thus, a governmental body that has supervision or control
over public business is subject to the Open Meetings Act. See Tex. Att’y Gen. Op. Nos. H-772
(1976), H-438 (1974). It is obvious that the Council has numerous substantive policy-making
powers. It is required to “develop procedures that member agencies must follow in purchasing
pharmaceuticals.”   TEX. HEALTH & SAFETY CODE ANN. 0 110.006(a) (Vernon Supp. 2003). It is
directed to “investigate any and all options for better purchasing power, including expanding
Medicaid purchasing, qualifying for participation in purchasing programs under 42 U.S.C. Section
256b, as amended, and using rebate programs, hospital disproportionate share purchasing, and health
department and federally qualified health center purchasing.” Id. 8 11 O.O06(d)( 1). Furthermore, the
Council “may enter into agreements with a local governmental entity to purchase pharmaceuticals
for the local governmental entity.” Id. 5 110.006(f).

       In Attorney General Opinion JC-0053, this office said that a pricing committee appointed by
the Texas Public Finance Authority Board of Directors to act on the board’s behalf in negotiating
a bond sale and executing a contract is an entity subject to the Open Meetings Act. Tex. Att’y Gen.
Op. No. JC-0053 (1999) at 7. House Bill 915 transfers authority to negotiate the best drug price
Eduardo J. Sanchez, M.D., M.P.H.     - Page 6         (GA-0019)




from each member agency to the Council itself. The statute leaves no room for doubt that the
Council is a governmental body that has supervision or control over public business, and is thus
subject to the Open Meetings Act.

         Finally, you ask whether the Council may meet in executive session to discuss drug pricing
information received from the Department. Since 1978, the Attorney General has consistently held
that there can be no implied authority for a governmental body to meet in executive session, and that
exceptions from disclosure under the Public Information Act cannot be grafted onto the Open
Meetings Act to permit an executive session where none is authorized by the latter. See Tex. Att’y
Gen. Op. No. MW-578 (1982). The Public Information Act does not authorize a governmental body
to hold an executive session to discuss particular information merely because the information falls
within the exceptions to the Public Information Act. See Tex. Att’y Gen. Op. No. JM-595 (1986).
We conclude that the Council is not authorized to meet in executive session to discuss drug pricing
information made confidential under section 110.006(g) of the Health and Safety Code.
Eduardo J. Sanchez, M.D., M.P.H.     - Page 7         (GA-0019)




                                       SUMMARY

                       Neither the Texas Department of Health nor the Interagency
               Council    on Pharmaceuticals      Bulk Purchasing     may disclose
               “information that identifies a specific manufacturer or wholesaler or
               the prices charged by a specific manufacturer or wholesaler for a
               specific pharmaceutical.”   See TEX. HEALTH& SAFETYCODE ANN.
               $110.006(g) (V emon Supp. 2003). Information in the possession of
               the Council is excepted from disclosure under the Public Information
               Act as information considered to be confidential by statutory law.

                        Information that is confidential under section 110.006(g) in
               the possession of the Council is also confidential while in the
               possession of the Department. A member of the Council may not
               share with his or her agency the pricing information            made
               confidential by section 110.006(g).

                        The Interagency Council on Pharmaceuticals Bulk Purchasing
               is a governmental body that has supervision or control over public
               business, and is thus subject to the Open Meetings Act. The Council
               is not authorized to meet in executive session to discuss drug pricing
               information made confidential under section 110.006(g) ofthe Health
               and Safety Code.

                                              Yours very truly,




BARRY R. MCBEE
First Assistant Attorney General

NANCY S. FULLER
Deputy Attorney General - General Counsel

RICK GILPIN
Deputy Chair, Opinion Committee

Rick Gilpin
Assistant Attorney General, Opinion Committee
