OFFICE ofthe ATTORNEY GENERAL 

GREG ABBOTT 

February lo,2003 

Eduardo J. Sanchez, M.D., M.P.H. 

Commissioner of Health 

Texas Department of Health 

1100 West 49th Street 

Austin, Texas 78756-3 199 

Opinion No. GA-001 9 

Re: Whether drug pricing information collected 

by the Department of Health and used by the 

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 & SAFETY CODE 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 [ 1 st 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 & SAFETY CODE 

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 & SAFETY CODE 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