(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 DUR Board.
  (2) Conflict of interest-- A situation that arises wherein a board member or any family member or relative has a financial relationship with an entity, ownership or financial interest with an entity, or any other interest where the member is in a position to derive a personal benefit from action or decisions made in their professional capacity, with an entity.
  (3) DUR Board--Drug Utilization Review Board.
  (4) Entity--Includes an individual, a corporation, organization, business trust, estate, trust, partnership, association, and any other legal entity that may have business come before the DUR Board or before the Medicaid Vendor Drug Program. The term includes:
    (A) a pharmaceutical manufacturer or labeler with a product on the Texas Drug Code Index and any other entity the Texas Health and Human Services Commission (HHSC) has engaged to assist in developing the preferred drug list or in administering of the DUR Program; and
    (B) an "affiliate" or "associate," as defined in Texas Business Organizations Code §1.002, of an entity.
  (5) Family member or relative--An individual who is related within the third degree by consanguinity or within the second degree by affinity, as defined by the Government Code, Chapter 573, Subchapter B (concerning Relationships by Consanguinity or by Affinity).
  (6) Financial relationship--A written or oral agreement between a board member and an entity 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).
  (7) Other interest--Involvement in the affairs of an entity 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.
  (8) Ownership or financial interest--An equity interest in 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.
(b) Policy.
  (1) A board member must avoid conflicts of interest with the member's DUR Board duties.
  (2) To avoid a conflict of interest, a board member must:
    (A) disclose any conflict of interest as defined by subsection (a)(2) of this section; and
    (B) comply with any action the DUR Board or HHSC may require under subsection (d) of this section to mitigate the effect of any relationship disclosed.
(c) Disclosure.
  (1) A board member of or person under consideration for appointment to the DUR Board must report any new or existing financial relationship, ownership or financial interest, or other interest that the board member or their family member or relative, 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 relationships or interests described in paragraph (1) of this subsection within established timeframes to HHSC.
(d) Mitigation. If 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.
  (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; or
    (B) any other action HHSC 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; amended to be effective January 2, 2022, 46 TexReg 8997