[Congressional Record Volume 155, Number 81 (Tuesday, June 2, 2009)]
[Senate]
[Pages S5952-S5967]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           TEXT OF AMENDMENTS

  SA 1225. Mr. COBURN submitted an amendment intended to be proposed by 
him to the bill H.R. 1256, to protect the public health by providing 
the Food and Drug Administration with certain authority to regulate 
tobacco products, to amend title 5, United States Code, to make certain 
modifications in the Thrift Savings Plan, the Civil Service Retirement 
System, and the Federal Employees' Retirement System, and for other 
purposes; which was ordered to lie on the table; as follows:

       At the appropriate place insert the following:

     SEC. __. MARIJUANA.

       (a) In General.--The Secretary of Health and Human Services 
     shall--
       (1) require that if a State permits the use of marijuana 
     without adhering to the established legal processes 
     associated with the Federal Food, Drug, and Cosmetic Act, the 
     State-permitted marijuana shall be subject to the full 
     regulatory requirements of the Food and Drug Administration, 
     including a risk evaluation and mitigation strategy and all 
     other requirements and penalties of the Federal Food, Drug, 
     and Cosmetic Act (21 U.S.C. 301 et seq.) regarding safe and 
     effective reviews, approval, sale, marketing, and use of 
     pharmaceuticals; and
       (2) require that any State-permitted marijuana likely to be 
     offered to, or purchased by, consumers as marijuana intended 
     to be consumed as a cigarette will be subject to section 900 
     of the Federal Food Drug and Cosmetic Act (as amended by 
     section 101).
       (b) Modification of State Laws.--
       (1) In general.--Section 1926 of the Public Health Service 
     Act (42 U.S.C. 300x-26) is amended--
       (A) in the section heading, by inserting ``AND MARIJUANA'' 
     after ``TOBACCO'';
       (B) in subsection (a)(1), by inserting ``or marijuana'' 
     after ``tobacco''; and
       (C) in subsection (b)--
       (i) in paragraph (1), by inserting ``and marijuana'' after 
     ``tobacco''; and
       (ii) in paragraph (2)(B)(ii), by inserting ``and 
     marijuana'' after ``tobacco''.
       (2) Effective date.--The amendments made by paragraph (1) 
     shall apply with respect to State laws beginning in fiscal 
     year 2010, except that in the case of a State whose 
     legislature does not convene a regular session in fiscal year 
     2009, such amendments shall apply beginning in fiscal year 
     2011.
                                 ______
                                 
  SA 1226. Mr. COBURN submitted an amendment intended to be proposed by 
him to the bill H.R. 1256, to protect the public health by providing 
the Food and Drug Administration with certain authority to regulate 
tobacco products, to amend title 5, United States Code, to make certain 
modifications in the Thrift Savings Plan, the Civil Service Retirement 
System, and the Federal Employees' Retirement System, and for other 
purposes; which was ordered to lie on the table; as follows:

       At the appropriate place in division A insert the 
     following:

     SEC. __. INDEPENDENT STUDY OF FEDERAL TOBACCO REGULATORY 
                   ACTIVITIES EFFECTIVENESS.

       (a) In General.--Not later than 12 months after the date of 
     enactment of this Act, the Comptroller General of the United 
     States shall--
       (1) develop performance measures for the Food and Drug 
     Administration's regulatory activities with respect to 
     tobacco; and
       (2) recommend program evaluations that should be conducted 
     for programs and activities related to tobacco regulation 
     that are administered by the Food and Drug Administration.
       (b) Contents.--The performance measures developed under 
     subsection (a) shall--
       (1) to the maximum extent practicable draw on research-
     based, quantitative data;
       (2) take into account program and activity purpose and 
     design;
       (3) include criteria to evaluate the cost effectiveness of 
     programs and activities conducted by the Food and Drug 
     Administration related to tobacco;
       (4) include criteria to evaluate the administration and 
     management of programs and activities conducted by the Food 
     and Drug Administration related to tobacco;
       (5) include criteria to evaluate harm-reduction strategies 
     approved by the Food and Drug Administration;
       (6) include criteria to evaluate whether consumers are 
     better informed relating to health and dependency effects or 
     safety of tobacco;
       (7) include criteria to evaluate if the Food and Drug 
     Administration's programs make tobacco less accessible to 
     minors; and
       (8) include criteria to evaluate whether the Food and Drug 
     Administration's programs have encouraged smoking cessation 
     and reduced tobacco-related disease
       (c) Report.--Not later than 2 years after the development 
     of the performance measures under subsection (a), and every 5 
     years thereafter, the Comptroller General of the United 
     States shall prepare and submit to the Committee on Health, 
     Education, Labor, and Pensions of the Senate and the 
     Committee on Energy and Commerce of the House of 
     Representatives, a report containing an assessment of each 
     such program and activity with respect to the performance 
     measures and program evaluations developed under subsection 
     (a).
                                 ______
                                 
  SA 1227. Mr. COBURN submitted an amendment intended to be proposed by 
him to the bill H.R. 1256, to protect the public health by providing 
the Food and Drug Administration with certain authority to regulate 
tobacco products, to amend title 5, United States Code, to make certain 
modifications in the Thrift Savings Plan, the Civil Service Retirement 
System, and the Federal Employees' Retirement System, and for other 
purposes; which was ordered to lie on the table; as follows:

       Beginning in section 102(a) of division A, strike paragraph 
     (5) and all that follows through section 103(g) of such 
     division and insert the following:
       (5) Enforcement.--
       (A) In general.--The Secretary of Health and Human Services 
     shall ensure that the provisions of this Act, the amendments 
     made by this Act, and the implementing regulations (including 
     such provisions, amendments, and regulations relating to the 
     retail sale of tobacco products) are enforced with respect to 
     the United States.
       (B) Indian tribes.--The Secretary of Health and Human 
     Services shall ensure that the provisions of this Act, the 
     amendments made by this Act, and the implementing regulations 
     (including such provisions, amendments, and regulations 
     relating to the retail sale of tobacco products) apply to, 
     and are enforced with respect to, Indian tribes.
       (6) Qualified adult-only facility.--A qualified adult-only 
     facility (as such term is defined in section 897.16(d) of the 
     final rule published under paragraph (1)) that is also a 
     retailer and that commits a violation as a retailer shall not 
     be subject to the limitations in section 103(q) and shall be 
     subject to penalties applicable to a qualified adult-only 
     facility.
       (7) Congressional review provisions.--Section 801 of title 
     5, United States Code, shall not apply to the final rule 
     published under paragraph (1).
       (b) Limitation on Advisory Opinions.--As of the date of 
     enactment of this Act, the following documents issued by the 
     Food and Drug Administration shall not constitute advisory 
     opinions under section 10.85(d)(1) of title 21, Code of 
     Federal Regulations, except as they apply to tobacco 
     products, and shall not be cited by the Secretary of Health 
     and Human Services or the Food and Drug Administration as 
     binding precedent:
       (1) The preamble to the proposed rule in the document 
     titled ``Regulations Restricting the Sale and Distribution of 
     Cigarettes and Smokeless Tobacco Products to Protect Children 
     and Adolescents'' (60 Fed. Reg. 41314-41372 (August 11, 
     1995)).
       (2) The document titled ``Nicotine in Cigarettes and 
     Smokeless Tobacco Products is a Drug and These Products Are 
     Nicotine Delivery Devices Under the Federal Food, Drug, and 
     Cosmetic Act'' (60 Fed. Reg. 41453-41787 (August 11, 1995)).
       (3) The preamble to the final rule in the document titled 
     ``Regulations Restricting the Sale and Distribution of 
     Cigarettes and Smokeless Tobacco to Protect Children and 
     Adolescents'' (61 Fed. Reg. 44396-44615 (August 28, 1996)).
       (4) The document titled ``Nicotine in Cigarettes and 
     Smokeless Tobacco is a Drug and These Products are Nicotine 
     Delivery Devices Under the Federal Food, Drug, and Cosmetic 
     Act; Jurisdictional Determination'' (61 Fed. Reg. 44619-45318 
     (August 28, 1996)).

     SEC. 103. CONFORMING AND OTHER AMENDMENTS TO GENERAL 
                   PROVISIONS.

       (a) Amendment of Federal Food, Drug, and Cosmetic Act.--
     Except as otherwise expressly provided, whenever in this 
     section an amendment is expressed in terms of an amendment 
     to, or repeal of, a section or other provision, the reference 
     is to a section or other provision of the Federal Food, Drug, 
     and Cosmetic Act (21 U.S.C. 301 et seq.).
       (b) Section 301.--Section 301 (21 U.S.C. 331) is amended--
       (1) in subsection (a), by inserting ``tobacco product,'' 
     after ``device,'';
       (2) in subsection (b), by inserting ``tobacco product,'' 
     after ``device,'';
       (3) in subsection (c), by inserting ``tobacco product,'' 
     after ``device,'';
       (4) in subsection (e)--
       (A) by striking the period after ``572(i)''; and
       (B) by striking ``or 761 or the refusal to permit access 
     to'' and inserting ``761, 909, or 920 or the refusal to 
     permit access to'';
       (5) in subsection (g), by inserting ``tobacco product,'' 
     after ``device,'';
       (6) in subsection (h), by inserting ``tobacco product,'' 
     after ``device,'';
       (7) in subsection (j)--
       (A) by striking the period after ``573''; and
       (B) by striking ``708, or 721'' and inserting ``708, 721, 
     904, 905, 906, 907, 908, 909, or 920(b)'';
       (8) in subsection (k), by inserting ``tobacco product,'' 
     after ``device,'';

[[Page S5953]]

       (9) by striking subsection (p) and inserting the following:
       ``(p) The failure to register in accordance with section 
     510 or 905, the failure to provide any information required 
     by section 510(j), 510(k), 905(i), or 905(j), or the failure 
     to provide a notice required by section 510(j)(2) or 
     905(i)(3).'';
       (10) by striking subsection (q)(1) and inserting the 
     following:
       ``(q)(1) The failure or refusal--
       ``(A) to comply with any requirement prescribed under 
     section 518, 520(g), 903(b), 907, 908, or 915;
       ``(B) to furnish any notification or other material or 
     information required by or under section 519, 520(g), 904, 
     909, or 920; or
       ``(C) to comply with a requirement under section 522 or 
     913.'';
       (11) in subsection (q)(2), by striking ``device,'' and 
     inserting ``device or tobacco product,'';
       (12) in subsection (r), by inserting ``or tobacco product'' 
     after the term ``device'' each time that such term appears; 
     and
       (13) by adding at the end the following:
       ``(oo) The sale of tobacco products in violation of a no-
     tobacco-sale order issued under section 303(f).
       ``(pp) The introduction or delivery for introduction into 
     interstate commerce of a tobacco product in violation of 
     section 911.
       ``(qq)(1) Forging, counterfeiting, simulating, or falsely 
     representing, or without proper authority using any mark, 
     stamp (including tax stamp), tag, label, or other 
     identification device upon any tobacco product or container 
     or labeling thereof so as to render such tobacco product a 
     counterfeit tobacco product.
       ``(2) Making, selling, disposing of, or keeping in 
     possession, control, or custody, or concealing any punch, 
     die, plate, stone, or other item that is designed to print, 
     imprint, or reproduce the trademark, trade name, or other 
     identifying mark, imprint, or device of another or any 
     likeness of any of the foregoing upon any tobacco product or 
     container or labeling thereof so as to render such tobacco 
     product a counterfeit tobacco product.
       ``(3) The doing of any act that causes a tobacco product to 
     be a counterfeit tobacco product, or the sale or dispensing, 
     or the holding for sale or dispensing, of a counterfeit 
     tobacco product.
       ``(rr) The charitable distribution of tobacco products.
       ``(ss) The failure of a manufacturer or distributor to 
     notify the Attorney General and the Secretary of the Treasury 
     of their knowledge of tobacco products used in illicit trade.
       ``(tt) Making any express or implied statement or 
     representation directed to consumers with respect to a 
     tobacco product, in a label or labeling or through the media 
     or advertising, that either conveys, or misleads or would 
     mislead consumers into believing, that--
       ``(1) the product is approved by the Food and Drug 
     Administration;
       ``(2) the Food and Drug Administration deems the product to 
     be safe for use by consumers;
       ``(3) the product is endorsed by the Food and Drug 
     Administration for use by consumers; or
       ``(4) the product is safe or less harmful by virtue of--
       ``(A) its regulation or inspection by the Food and Drug 
     Administration; or
       ``(B) its compliance with regulatory requirements set by 
     the Food and Drug Administration;

     including any such statement or representation rendering the 
     product misbranded under section 903.''.
       (c) Section 303.--Section 303(f) (21 U.S.C. 333(f)) is 
     amended--
       (1) in paragraph (1)(A), by inserting ``or tobacco 
     products'' after the term ``devices'' each place such term 
     appears;
       (2) in paragraph (5)--
       (A) in subparagraph (A)--
       (i) by striking ``assessed'' the first time it appears and 
     inserting ``assessed, or a no-tobacco-sale order may be 
     imposed,''; and
       (ii) by striking ``penalty'' the second time it appears and 
     inserting ``penalty, or upon whom a no-tobacco-sale order is 
     to be imposed,'';
       (B) in subparagraph (B)--
       (i) by inserting after ``penalty,'' the following: ``or the 
     period to be covered by a no-tobacco-sale order,''; and
       (ii) by adding at the end the following: ``A no-tobacco-
     sale order permanently prohibiting an individual retail 
     outlet from selling tobacco products shall include provisions 
     that allow the outlet, after a specified period of time, to 
     request that the Secretary compromise, modify, or terminate 
     the order.''; and
       (C) by adding at the end the following:
       ``(D) The Secretary may compromise, modify, or terminate, 
     with or without conditions, any no-tobacco-sale order.'';
       (3) in paragraph (6)--
       (A) by inserting ``or the imposition of a no-tobacco-sale 
     order'' after the term ``penalty'' each place such term 
     appears; and
       (B) by striking ``issued.'' and inserting ``issued, or on 
     which the no-tobacco-sale order was imposed, as the case may 
     be.''; and
       (4) by adding at the end the following:
       ``(8) If the Secretary finds that a person has committed 
     repeated violations of restrictions promulgated under section 
     906(d) at a particular retail outlet then the Secretary may 
     impose a no-tobacco-sale order on that person prohibiting the 
     sale of tobacco products in that outlet. A no-tobacco-sale 
     order may be imposed with a civil penalty under paragraph 
     (1). Prior to the entry of a no-sale order under this 
     paragraph, a person shall be entitled to a hearing pursuant 
     to the procedures established through regulations of the Food 
     and Drug Administration for assessing civil money penalties, 
     including at a retailer's request a hearing by telephone, or 
     at the nearest regional or field office of the Food and Drug 
     Administration, or at a Federal, State, or county facility 
     within 100 miles from the location of the retail outlet, if 
     such a facility is available.''.
       (d) Section 304.--Section 304 (21 U.S.C. 334) is amended--
       (1) in subsection (a)(2)--
       (A) by striking ``and'' before ``(D)''; and
       (B) by striking ``device.'' and inserting the following: 
     ``device, and (E) Any adulterated or misbranded tobacco 
     product.'';
       (2) in subsection (d)(1), by inserting ``tobacco product,'' 
     after ``device,'';
       (3) in subsection (g)(1), by inserting ``or tobacco 
     product'' after the term ``device'' each place such term 
     appears; and
       (4) in subsection (g)(2)(A), by inserting ``or tobacco 
     product'' after ``device''.
       (e) Section 505.--Section 505(n)(2) (21 U.S.C. 355(n)(2)) 
     is amended by striking ``section 904'' and inserting 
     ``section 1004''.
       (f) Section 523.--Section 523(b)(2)(D) (21 U.S.C. 
     360m(b)(2)(D)) is amended by striking ``section 903(g)'' and 
     inserting ``section 1003(g)''.
       (g) Section 702.--Section 702(a)(1) (U.S.C. 372(a)(1)) is 
     amended--
       (1) by striking ``(a)(1)'' and inserting ``(a)(1)(A)''; and
       (2) by adding at the end the following:
       ``(B) For a tobacco product, to the extent feasible, the 
     Secretary shall contract with the States in accordance with 
     this paragraph to carry out inspections of retailers within 
     that State in connection with the enforcement of this Act.''.
                                 ______
                                 
  SA 1228. Mr. HATCH submitted an amendment intended to be proposed by 
him to the bill H.R. 1256, to protect the public health by providing 
the Food and Drug Administration with certain authority to regulate 
tobacco products, to amend title 5, United States Code, to make certain 
modifications in the Thrift Savings Plan, the Civil Service Retirement 
System, and the Federal Employees' Retirement System, and for other 
purposes; which was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. STUDY CONCERNING THE IMPACT ON PUBLIC HEALTH 
                   PROGRAMS.

       The Comptroller General of the United States shall conduct 
     a study of the impact that this Act (and the amendments made 
     by this Act) may have on Federal public health programs 
     (including the State Children's Health Insurance Program 
     under title XXI of the Social Security Act). Not later than 1 
     year after the date of enactment of this Act, the Comptroller 
     General shall submit to Congress, a report on the findings 
     made in study conducted under this section.
                                 ______
                                 
  SA 1229. Mr. DORGAN (for himself, Ms. Snowe, Mr. McCain, Ms. 
Stabenow, Mr. Sanders, and Ms. Klobuchar) submitted an amendment 
intended to be proposed by him to the bill H.R. 1256, to protect the 
public health by providing the Food and Drug Administration with 
certain authority to regulate tobacco products, to amend title 5, 
United States Code, to make certain modifications in the Thrift Savings 
Plan, the Civil Service Retirement System, and the Federal Employees' 
Retirement System, and for other purposes; which was ordered to lie on 
the table; as follows:

       At the appropriate place, insert the following:

             DIVISION __--IMPORTATION OF PRESCRIPTION DRUGS

     SEC. 1. SHORT TITLE.

       This division may be cited as the ``Pharmaceutical Market 
     Access and Drug Safety Act of 2009''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) Americans unjustly pay up to 5 times more to fill their 
     prescriptions than consumers in other countries;
       (2) the United States is the largest market for 
     pharmaceuticals in the world, yet American consumers pay the 
     highest prices for brand pharmaceuticals in the world;
       (3) a prescription drug is neither safe nor effective to an 
     individual who cannot afford it;
       (4) allowing and structuring the importation of 
     prescription drugs to ensure access to safe and affordable 
     drugs approved by the Food and Drug Administration will 
     provide a level of safety to American consumers that they do 
     not currently enjoy;
       (5) American spend more than $200,000,000,000 on 
     prescription drugs every year;
       (6) the Congressional Budget Office has found that the cost 
     of prescription drugs are between 35 to 55 percent less in 
     other highly-developed countries than in the United States; 
     and
       (7) promoting competitive market pricing would both 
     contribute to health care savings

[[Page S5954]]

     and allow greater access to therapy, improving health and 
     saving lives.

     SEC. 3. REPEAL OF CERTAIN SECTION REGARDING IMPORTATION OF 
                   PRESCRIPTION DRUGS.

       Chapter VIII of the Federal Food, Drug, and Cosmetic Act 
     (21 U.S.C. 381 et seq.) is amended by striking section 804.

     SEC. 4. IMPORTATION OF PRESCRIPTION DRUGS; WAIVER OF CERTAIN 
                   IMPORT RESTRICTIONS.

       (a) In General.--Chapter VIII of the Federal Food, Drug, 
     and Cosmetic Act (21 U.S.C. 381 et seq.), as amended by 
     section 3, is further amended by inserting after section 803 
     the following:

     ``SEC. 804. COMMERCIAL AND PERSONAL IMPORTATION OF 
                   PRESCRIPTION DRUGS.

       ``(a) Importation of Prescription Drugs.--
       ``(1) In general.--In the case of qualifying drugs imported 
     or offered for import into the United States from registered 
     exporters or by registered importers--
       ``(A) the limitation on importation that is established in 
     section 801(d)(1) is waived; and
       ``(B) the standards referred to in section 801(a) regarding 
     admission of the drugs are subject to subsection (g) of this 
     section (including with respect to qualifying drugs to which 
     section 801(d)(1) does not apply).
       ``(2) Importers.--A qualifying drug may not be imported 
     under paragraph (1) unless--
       ``(A) the drug is imported by a pharmacy, group of 
     pharmacies, or a wholesaler that is a registered importer; or
       ``(B) the drug is imported by an individual for personal 
     use or for the use of a family member of the individual (not 
     for resale) from a registered exporter.
       ``(3) Rule of construction.--This section shall apply only 
     with respect to a drug that is imported or offered for import 
     into the United States--
       ``(A) by a registered importer; or
       ``(B) from a registered exporter to an individual.
       ``(4) Definitions.--
       ``(A) Registered exporter; registered importer.--For 
     purposes of this section:
       ``(i) The term `registered exporter' means an exporter for 
     which a registration under subsection (b) has been approved 
     and is in effect.
       ``(ii) The term `registered importer' means a pharmacy, 
     group of pharmacies, or a wholesaler for which a registration 
     under subsection (b) has been approved and is in effect.
       ``(iii) The term `registration condition' means a condition 
     that must exist for a registration under subsection (b) to be 
     approved.
       ``(B) Qualifying drug.--For purposes of this section, the 
     term `qualifying drug' means a drug for which there is a 
     corresponding U.S. label drug.
       ``(C) U.S. label drug.--For purposes of this section, the 
     term `U.S. label drug' means a prescription drug that--
       ``(i) with respect to a qualifying drug, has the same 
     active ingredient or ingredients, route of administration, 
     dosage form, and strength as the qualifying drug;
       ``(ii) with respect to the qualifying drug, is manufactured 
     by or for the person that manufactures the qualifying drug;
       ``(iii) is approved under section 505(c); and
       ``(iv) is not--

       ``(I) a controlled substance, as defined in section 102 of 
     the Controlled Substances Act (21 U.S.C. 802);
       ``(II) a biological product, as defined in section 351 of 
     the Public Health Service Act (42 U.S.C. 262), including--

       ``(aa) a therapeutic DNA plasmid product;
       ``(bb) a therapeutic synthetic peptide product;
       ``(cc) a monoclonal antibody product for in vivo use; and
       ``(dd) a therapeutic recombinant DNA-derived product;

       ``(III) an infused drug, including a peritoneal dialysis 
     solution;
       ``(IV) an injected drug;
       ``(V) a drug that is inhaled during surgery;
       ``(VI) a drug that is the listed drug referred to in 2 or 
     more abbreviated new drug applications under which the drug 
     is commercially marketed; or
       ``(VII) a sterile opthlamic drug intended for topical use 
     on or in the eye.

       ``(D) Other definitions.--For purposes of this section:
       ``(i)(I) The term `exporter' means a person that is in the 
     business of exporting a drug to individuals in the United 
     States from Canada or from a permitted country designated by 
     the Secretary under subclause (II), or that, pursuant to 
     submitting a registration under subsection (b), seeks to be 
     in such business.
       ``(II) The Secretary shall designate a permitted country 
     under subparagraph (E) (other than Canada) as a country from 
     which an exporter may export a drug to individuals in the 
     United States if the Secretary determines that--

       ``(aa) the country has statutory or regulatory standards 
     that are equivalent to the standards in the United States and 
     Canada with respect to--

       ``(AA) the training of pharmacists;
       ``(BB) the practice of pharmacy; and
       ``(CC) the protection of the privacy of personal medical 
     information; and

       ``(bb) the importation of drugs to individuals in the 
     United States from the country will not adversely affect 
     public health.

       ``(ii) The term `importer' means a pharmacy, a group of 
     pharmacies, or a wholesaler that is in the business of 
     importing a drug into the United States or that, pursuant to 
     submitting a registration under subsection (b), seeks to be 
     in such business.
       ``(iii) The term `pharmacist' means a person licensed by a 
     State to practice pharmacy, including the dispensing and 
     selling of prescription drugs.
       ``(iv) The term `pharmacy' means a person that--

       ``(I) is licensed by a State to engage in the business of 
     selling prescription drugs at retail; and
       ``(II) employs 1 or more pharmacists.

       ``(v) The term `prescription drug' means a drug that is 
     described in section 503(b)(1).
       ``(vi) The term `wholesaler'--

       ``(I) means a person licensed as a wholesaler or 
     distributor of prescription drugs in the United States under 
     section 503(e)(2)(A); and
       ``(II) does not include a person authorized to import drugs 
     under section 801(d)(1).

       ``(E) Permitted country.--The term `permitted country' 
     means--
       ``(i) Australia;
       ``(ii) Canada;
       ``(iii) a member country of the European Union, but does 
     not include a member country with respect to which--

       ``(I) the country's Annex to the Treaty of Accession to the 
     European Union 2003 includes a transitional measure for the 
     regulation of human pharmaceutical products that has not 
     expired; or
       ``(II) the Secretary determines that the requirements 
     described in subclauses (I) and (II) of clause (vii) will not 
     be met by the date on which such transitional measure for the 
     regulation of human pharmaceutical products expires;

       ``(iv) Japan;
       ``(v) New Zealand;
       ``(vi) Switzerland; and
       ``(vii) a country in which the Secretary determines the 
     following requirements are met:

       ``(I) The country has statutory or regulatory 
     requirements--

       ``(aa) that require the review of drugs for safety and 
     effectiveness by an entity of the government of the country;
       ``(bb) that authorize the approval of only those drugs that 
     have been determined to be safe and effective by experts 
     employed by or acting on behalf of such entity and qualified 
     by scientific training and experience to evaluate the safety 
     and effectiveness of drugs on the basis of adequate and well-
     controlled investigations, including clinical investigations, 
     conducted by experts qualified by scientific training and 
     experience to evaluate the safety and effectiveness of drugs;
       ``(cc) that require the methods used in, and the facilities 
     and controls used for the manufacture, processing, and 
     packing of drugs in the country to be adequate to preserve 
     their identity, quality, purity, and strength;
       ``(dd) for the reporting of adverse reactions to drugs and 
     procedures to withdraw approval and remove drugs found not to 
     be safe or effective; and
       ``(ee) that require the labeling and promotion of drugs to 
     be in accordance with the approval of the drug.

       ``(II) The valid marketing authorization system in the 
     country is equivalent to the systems in the countries 
     described in clauses (i) through (vi).
       ``(III) The importation of drugs to the United States from 
     the country will not adversely affect public health.

       ``(b) Registration of Importers and Exporters.--
       ``(1) Registration of importers and exporters.--A 
     registration condition is that the importer or exporter 
     involved (referred to in this subsection as a `registrant') 
     submits to the Secretary a registration containing the 
     following:
       ``(A)(i) In the case of an exporter, the name of the 
     exporter and an identification of all places of business of 
     the exporter that relate to qualifying drugs, including each 
     warehouse or other facility owned or controlled by, or 
     operated for, the exporter.
       ``(ii) In the case of an importer, the name of the importer 
     and an identification of the places of business of the 
     importer at which the importer initially receives a 
     qualifying drug after importation (which shall not exceed 3 
     places of business except by permission of the Secretary).
       ``(B) Such information as the Secretary determines to be 
     necessary to demonstrate that the registrant is in compliance 
     with registration conditions under--
       ``(i) in the case of an importer, subsections (c), (d), 
     (e), (g), and (j) (relating to the sources of imported 
     qualifying drugs; the inspection of facilities of the 
     importer; the payment of fees; compliance with the standards 
     referred to in section 801(a); and maintenance of records and 
     samples); or
       ``(ii) in the case of an exporter, subsections (c), (d), 
     (f), (g), (h), (i), and (j) (relating to the sources of 
     exported qualifying drugs; the inspection of facilities of 
     the exporter and the marking of compliant shipments; the 
     payment of fees; and compliance with the standards referred 
     to in section 801(a); being licensed as a pharmacist; 
     conditions for individual importation; and maintenance of 
     records and samples).
       ``(C) An agreement by the registrant that the registrant 
     will not under subsection (a) import or export any drug that 
     is not a qualifying drug.
       ``(D) An agreement by the registrant to--
       ``(i) notify the Secretary of a recall or withdrawal of a 
     qualifying drug distributed

[[Page S5955]]

     in a permitted country that the registrant has exported or 
     imported, or intends to export or import, to the United 
     States under subsection (a);
       ``(ii) provide for the return to the registrant of such 
     drug; and
       ``(iii) cease, or not begin, the exportation or importation 
     of such drug unless the Secretary has notified the registrant 
     that exportation or importation of such drug may proceed.
       ``(E) An agreement by the registrant to ensure and monitor 
     compliance with each registration condition, to promptly 
     correct any noncompliance with such a condition, and to 
     promptly report to the Secretary any such noncompliance.
       ``(F) A plan describing the manner in which the registrant 
     will comply with the agreement under subparagraph (E).
       ``(G) An agreement by the registrant to enforce a contract 
     under subsection (c)(3)(B) against a party in the chain of 
     custody of a qualifying drug with respect to the authority of 
     the Secretary under clauses (ii) and (iii) of that 
     subsection.
       ``(H) An agreement by the registrant to notify the 
     Secretary not more than 30 days before the registrant intends 
     to make the change, of--
       ``(i) any change that the registrant intends to make 
     regarding information provided under subparagraph (A) or (B); 
     and
       ``(ii) any change that the registrant intends to make in 
     the compliance plan under subparagraph (F).
       ``(I) In the case of an exporter:
       ``(i) An agreement by the exporter that a qualifying drug 
     will not under subsection (a) be exported to any individual 
     not authorized pursuant to subsection (a)(2)(B) to be an 
     importer of such drug.
       ``(ii) An agreement to post a bond, payable to the Treasury 
     of the United States that is equal in value to the lesser 
     of--

       ``(I) the value of drugs exported by the exporter to the 
     United States in a typical 4-week period over the course of a 
     year under this section; or
       ``(II) $1,000,000.

       ``(iii) An agreement by the exporter to comply with 
     applicable provisions of Canadian law, or the law of the 
     permitted country designated under subsection 
     (a)(4)(D)(i)(II) in which the exporter is located, that 
     protect the privacy of personal information with respect to 
     each individual importing a prescription drug from the 
     exporter under subsection (a)(2)(B).
       ``(iv) An agreement by the exporter to report to the 
     Secretary--

       ``(I) not later than August 1 of each fiscal year, the 
     total price and the total volume of drugs exported to the 
     United States by the exporter during the 6-month period from 
     January 1 through June 30 of that year; and
       ``(II) not later than January 1 of each fiscal year, the 
     total price and the total volume of drugs exported to the 
     United States by the exporter during the previous fiscal 
     year.

       ``(J) In the case of an importer, an agreement by the 
     importer to report to the Secretary--
       ``(i) not later than August 1 of each fiscal year, the 
     total price and the total volume of drugs imported to the 
     United States by the importer during the 6-month period from 
     January 1 through June 30 of that fiscal year; and
       ``(ii) not later than January 1 of each fiscal year, the 
     total price and the total volume of drugs imported to the 
     United States by the importer during the previous fiscal 
     year.
       ``(K) Such other provisions as the Secretary may require by 
     regulation to protect the public health while permitting--
       ``(i) the importation by pharmacies, groups of pharmacies, 
     and wholesalers as registered importers of qualifying drugs 
     under subsection (a); and
       ``(ii) importation by individuals of qualifying drugs under 
     subsection (a).
       ``(2) Approval or disapproval of registration.--
       ``(A) In general.--Not later than 90 days after the date on 
     which a registrant submits to the Secretary a registration 
     under paragraph (1), the Secretary shall notify the 
     registrant whether the registration is approved or is 
     disapproved. The Secretary shall disapprove a registration if 
     there is reason to believe that the registrant is not in 
     compliance with one or more registration conditions, and 
     shall notify the registrant of such reason. In the case of a 
     disapproved registration, the Secretary shall subsequently 
     notify the registrant that the registration is approved if 
     the Secretary determines that the registrant is in compliance 
     with such conditions.
       ``(B) Changes in registration information.--Not later than 
     30 days after receiving a notice under paragraph (1)(H) from 
     a registrant, the Secretary shall determine whether the 
     change involved affects the approval of the registration of 
     the registrant under paragraph (1), and shall inform the 
     registrant of the determination.
       ``(3) Publication of contact information for registered 
     exporters.--Through the Internet website of the Food and Drug 
     Administration and a toll-free telephone number, the 
     Secretary shall make readily available to the public a list 
     of registered exporters, including contact information for 
     the exporters. Promptly after the approval of a registration 
     submitted under paragraph (1), the Secretary shall update the 
     Internet website and the information provided through the 
     toll-free telephone number accordingly.
       ``(4) Suspension and termination.--
       ``(A) Suspension.--With respect to the effectiveness of a 
     registration submitted under paragraph (1):
       ``(i) Subject to clause (ii), the Secretary may suspend the 
     registration if the Secretary determines, after notice and 
     opportunity for a hearing, that the registrant has failed to 
     maintain substantial compliance with a registration 
     condition.
       ``(ii) If the Secretary determines that, under color of the 
     registration, the exporter has exported a drug or the 
     importer has imported a drug that is not a qualifying drug, 
     or a drug that does not comply with subsection (g)(2)(A) or 
     (g)(4), or has exported a qualifying drug to an individual in 
     violation of subsection (i)(2)(F), the Secretary shall 
     immediately suspend the registration. A suspension under the 
     preceding sentence is not subject to the provision by the 
     Secretary of prior notice, and the Secretary shall provide to 
     the registrant an opportunity for a hearing not later than 10 
     days after the date on which the registration is suspended.
       ``(iii) The Secretary may reinstate the registration, 
     whether suspended under clause (i) or (ii), if the Secretary 
     determines that the registrant has demonstrated that further 
     violations of registration conditions will not occur.
       ``(B) Termination.--The Secretary, after notice and 
     opportunity for a hearing, may terminate the registration 
     under paragraph (1) of a registrant if the Secretary 
     determines that the registrant has engaged in a pattern or 
     practice of violating 1 or more registration conditions, or 
     if on 1 or more occasions the Secretary has under 
     subparagraph (A)(ii) suspended the registration of the 
     registrant. The Secretary may make the termination permanent, 
     or for a fixed period of not less than 1 year. During the 
     period in which the registration is terminated, any 
     registration submitted under paragraph (1) by the registrant, 
     or a person that is a partner in the export or import 
     enterprise, or a principal officer in such enterprise, and 
     any registration prepared with the assistance of the 
     registrant or such a person, has no legal effect under this 
     section.
       ``(5) Default of bond.--A bond required to be posted by an 
     exporter under paragraph (1)(I)(ii) shall be defaulted and 
     paid to the Treasury of the United States if, after 
     opportunity for an informal hearing, the Secretary determines 
     that the exporter has--
       ``(A) exported a drug to the United States that is not a 
     qualifying drug or that is not in compliance with subsection 
     (g)(2)(A), (g)(4), or (i); or
       ``(B) failed to permit the Secretary to conduct an 
     inspection described under subsection (d).
       ``(c) Sources of Qualifying Drugs.--A registration 
     condition is that the exporter or importer involved agrees 
     that a qualifying drug will under subsection (a) be exported 
     or imported into the United States only if there is 
     compliance with the following:
       ``(1) The drug was manufactured in an establishment--
       ``(A) required to register under subsection (h) or (i) of 
     section 510; and
       ``(B)(i) inspected by the Secretary; or
       ``(ii) for which the Secretary has elected to rely on a 
     satisfactory report of a good manufacturing practice 
     inspection of the establishment from a permitted country 
     whose regulatory system the Secretary recognizes as 
     equivalent under a mutual recognition agreement, as provided 
     for under section 510(i)(3), section 803, or part 26 of title 
     21, Code of Federal Regulations (or any corresponding 
     successor rule or regulation).
       ``(2) The establishment is located in any country, and the 
     establishment manufactured the drug for distribution in the 
     United States or for distribution in 1 or more of the 
     permitted countries (without regard to whether in addition 
     the drug is manufactured for distribution in a foreign 
     country that is not a permitted country).
       ``(3) The exporter or importer obtained the drug--
       ``(A) directly from the establishment; or
       ``(B) directly from an entity that, by contract with the 
     exporter or importer--
       ``(i) provides to the exporter or importer a statement (in 
     such form and containing such information as the Secretary 
     may require) that, for the chain of custody from the 
     establishment, identifies each prior sale, purchase, or trade 
     of the drug (including the date of the transaction and the 
     names and addresses of all parties to the transaction);
       ``(ii) agrees to permit the Secretary to inspect such 
     statements and related records to determine their accuracy;
       ``(iii) agrees, with respect to the qualifying drugs 
     involved, to permit the Secretary to inspect warehouses and 
     other facilities, including records, of the entity for 
     purposes of determining whether the facilities are in 
     compliance with any standards under this Act that are 
     applicable to facilities of that type in the United States; 
     and
       ``(iv) has ensured, through such contractual relationships 
     as may be necessary, that the Secretary has the same 
     authority regarding other parties in the chain of custody 
     from the establishment that the Secretary has under clauses 
     (ii) and (iii) regarding such entity.
       ``(4)(A) The foreign country from which the importer will 
     import the drug is a permitted country; or
       ``(B) The foreign country from which the exporter will 
     export the drug is the permitted country in which the 
     exporter is located.
       ``(5) During any period in which the drug was not in the 
     control of the manufacturer

[[Page S5956]]

     of the drug, the drug did not enter any country that is not a 
     permitted country.
       ``(6) The exporter or importer retains a sample of each lot 
     of the drug for testing by the Secretary.
       ``(d) Inspection of Facilities; Marking of Shipments.--
       ``(1) Inspection of facilities.--A registration condition 
     is that, for the purpose of assisting the Secretary in 
     determining whether the exporter involved is in compliance 
     with all other registration conditions--
       ``(A) the exporter agrees to permit the Secretary--
       ``(i) to conduct onsite inspections, including monitoring 
     on a day-to-day basis, of places of business of the exporter 
     that relate to qualifying drugs, including each warehouse or 
     other facility owned or controlled by, or operated for, the 
     exporter;
       ``(ii) to have access, including on a day-to-day basis, 
     to--

       ``(I) records of the exporter that relate to the export of 
     such drugs, including financial records; and
       ``(II) samples of such drugs;

       ``(iii) to carry out the duties described in paragraph (3); 
     and
       ``(iv) to carry out any other functions determined by the 
     Secretary to be necessary regarding the compliance of the 
     exporter; and
       ``(B) the Secretary has assigned 1 or more employees of the 
     Secretary to carry out the functions described in this 
     subsection for the Secretary randomly, but not less than 12 
     times annually, on the premises of places of businesses 
     referred to in subparagraph (A)(i), and such an assignment 
     remains in effect on a continuous basis.
       ``(2) Marking of compliant shipments.--A registration 
     condition is that the exporter involved agrees to affix to 
     each shipping container of qualifying drugs exported under 
     subsection (a) such markings as the Secretary determines to 
     be necessary to identify the shipment as being in compliance 
     with all registration conditions. Markings under the 
     preceding sentence shall--
       ``(A) be designed to prevent affixation of the markings to 
     any shipping container that is not authorized to bear the 
     markings; and
       ``(B) include anticounterfeiting or track-and-trace 
     technologies, taking into account the economic and technical 
     feasibility of those technologies.
       ``(3) Certain duties relating to exporters.--Duties of the 
     Secretary with respect to an exporter include the following:
       ``(A) Inspecting, randomly, but not less than 12 times 
     annually, the places of business of the exporter at which 
     qualifying drugs are stored and from which qualifying drugs 
     are shipped.
       ``(B) During the inspections under subparagraph (A), 
     verifying the chain of custody of a statistically significant 
     sample of qualifying drugs from the establishment in which 
     the drug was manufactured to the exporter, which shall be 
     accomplished or supplemented by the use of anticounterfeiting 
     or track-and-trace technologies, taking into account the 
     economic and technical feasibility of those technologies, 
     except that a drug that lacks such technologies from the 
     point of manufacture shall not for that reason be excluded 
     from importation by an exporter.
       ``(C) Randomly reviewing records of exports to individuals 
     for the purpose of determining whether the drugs are being 
     imported by the individuals in accordance with the conditions 
     under subsection (i). Such reviews shall be conducted in a 
     manner that will result in a statistically significant 
     determination of compliance with all such conditions.
       ``(D) Monitoring the affixing of markings under paragraph 
     (2).
       ``(E) Inspecting as the Secretary determines is necessary 
     the warehouses and other facilities, including records, of 
     other parties in the chain of custody of qualifying drugs.
       ``(F) Determining whether the exporter is in compliance 
     with all other registration conditions.
       ``(4) Prior notice of shipments.--A registration condition 
     is that, not less than 8 hours and not more than 5 days in 
     advance of the time of the importation of a shipment of 
     qualifying drugs, the importer involved agrees to submit to 
     the Secretary a notice with respect to the shipment of drugs 
     to be imported or offered for import into the United States 
     under subsection (a). A notice under the preceding sentence 
     shall include--
       ``(A) the name and complete contact information of the 
     person submitting the notice;
       ``(B) the name and complete contact information of the 
     importer involved;
       ``(C) the identity of the drug, including the established 
     name of the drug, the quantity of the drug, and the lot 
     number assigned by the manufacturer;
       ``(D) the identity of the manufacturer of the drug, 
     including the identity of the establishment at which the drug 
     was manufactured;
       ``(E) the country from which the drug is shipped;
       ``(F) the name and complete contact information for the 
     shipper of the drug;
       ``(G) anticipated arrival information, including the port 
     of arrival and crossing location within that port, and the 
     date and time;
       ``(H) a summary of the chain of custody of the drug from 
     the establishment in which the drug was manufactured to the 
     importer;
       ``(I) a declaration as to whether the Secretary has ordered 
     that importation of the drug from the permitted country cease 
     under subsection (g)(2)(C) or (D); and
       ``(J) such other information as the Secretary may require 
     by regulation.
       ``(5) Marking of compliant shipments.--A registration 
     condition is that the importer involved agrees, before 
     wholesale distribution (as defined in section 503(e)) of a 
     qualifying drug that has been imported under subsection (a), 
     to affix to each container of such drug such markings or 
     other technology as the Secretary determines necessary to 
     identify the shipment as being in compliance with all 
     registration conditions, except that the markings or other 
     technology shall not be required on a drug that bears 
     comparable, compatible markings or technology from the 
     manufacturer of the drug. Markings or other technology under 
     the preceding sentence shall--
       ``(A) be designed to prevent affixation of the markings or 
     other technology to any container that is not authorized to 
     bear the markings; and
       ``(B) shall include anticounterfeiting or track-and-trace 
     technologies, taking into account the economic and technical 
     feasibility of such technologies.
       ``(6) Certain duties relating to importers.--Duties of the 
     Secretary with respect to an importer include the following:
       ``(A) Inspecting, randomly, but not less than 12 times 
     annually, the places of business of the importer at which a 
     qualifying drug is initially received after importation.
       ``(B) During the inspections under subparagraph (A), 
     verifying the chain of custody of a statistically significant 
     sample of qualifying drugs from the establishment in which 
     the drug was manufactured to the importer, which shall be 
     accomplished or supplemented by the use of anticounterfeiting 
     or track-and-trace technologies, taking into account the 
     economic and technical feasibility of those technologies, 
     except that a drug that lacks such technologies from the 
     point of manufacture shall not for that reason be excluded 
     from importation by an importer.
       ``(C) Reviewing notices under paragraph (4).
       ``(D) Inspecting as the Secretary determines is necessary 
     the warehouses and other facilities, including records of 
     other parties in the chain of custody of qualifying drugs.
       ``(E) Determining whether the importer is in compliance 
     with all other registration conditions.
       ``(e) Importer Fees.--
       ``(1) Registration fee.--A registration condition is that 
     the importer involved pays to the Secretary a fee of $10,000 
     due on the date on which the importer first submits the 
     registration to the Secretary under subsection (b).
       ``(2) Inspection fee.--A registration condition is that the 
     importer involved pays a fee to the Secretary in accordance 
     with this subsection. Such fee shall be paid not later than 
     October 1 and April 1 of each fiscal year in the amount 
     provided for under paragraph (3).
       ``(3) Amount of inspection fee.--
       ``(A) Aggregate total of fees.--Not later than 30 days 
     before the start of each fiscal year, the Secretary, in 
     consultation with the Secretary of Homeland Security and the 
     Secretary of the Treasury, shall establish an aggregate total 
     of fees to be collected under paragraph (2) for importers for 
     that fiscal year that is sufficient, and not more than 
     necessary, to pay the costs for that fiscal year of 
     administering this section with respect to registered 
     importers, including the costs associated with--
       ``(i) inspecting the facilities of registered importers, 
     and of other entities in the chain of custody of a qualifying 
     drug as necessary, under subsection (d)(6);
       ``(ii) developing, implementing, and operating under such 
     subsection an electronic system for submission and review of 
     the notices required under subsection (d)(4) with respect to 
     shipments of qualifying drugs under subsection (a) to assess 
     compliance with all registration conditions when such 
     shipments are offered for import into the United States; and
       ``(iii) inspecting such shipments as necessary, when 
     offered for import into the United States to determine if 
     such a shipment should be refused admission under subsection 
     (g)(5).
       ``(B) Limitation.--Subject to subparagraph (C), the 
     aggregate total of fees collected under paragraph (2) for a 
     fiscal year shall not exceed 2.5 percent of the total price 
     of qualifying drugs imported during that fiscal year into the 
     United States by registered importers under subsection (a).
       ``(C) Total price of drugs.--
       ``(i) Estimate.--For the purposes of complying with the 
     limitation described in subparagraph (B) when establishing 
     under subparagraph (A) the aggregate total of fees to be 
     collected under paragraph (2) for a fiscal year, the 
     Secretary shall estimate the total price of qualifying drugs 
     imported into the United States by registered importers 
     during that fiscal year by adding the total price of 
     qualifying drugs imported by each registered importer during 
     the 6-month period from January 1 through June 30 of the 
     previous fiscal year, as reported to the Secretary by each 
     registered importer under subsection (b)(1)(J).
       ``(ii) Calculation.--Not later than March 1 of the fiscal 
     year that follows the fiscal year for which the estimate 
     under clause (i) is made, the Secretary shall calculate the 
     total price of qualifying drugs imported into the United 
     States by registered importers during that fiscal year by 
     adding the total price of qualifying drugs imported by each 
     registered importer during that fiscal year, as reported

[[Page S5957]]

     to the Secretary by each registered importer under subsection 
     (b)(1)(J).
       ``(iii) Adjustment.--If the total price of qualifying drugs 
     imported into the United States by registered importers 
     during a fiscal year as calculated under clause (ii) is less 
     than the aggregate total of fees collected under paragraph 
     (2) for that fiscal year, the Secretary shall provide for a 
     pro-rata reduction in the fee due from each registered 
     importer on April 1 of the subsequent fiscal year so that the 
     limitation described in subparagraph (B) is observed.
       ``(D) Individual importer fee.--Subject to the limitation 
     described in subparagraph (B), the fee under paragraph (2) to 
     be paid on October 1 and April 1 by an importer shall be an 
     amount that is proportional to a reasonable estimate by the 
     Secretary of the semiannual share of the importer of the 
     volume of qualifying drugs imported by importers under 
     subsection (a).
       ``(4) Use of fees.--
       ``(A) In general.--Subject to appropriations Acts, fees 
     collected by the Secretary under paragraphs (1) and (2) shall 
     be credited to the appropriation account for salaries and 
     expenses of the Food and Drug Administration until expended 
     (without fiscal year limitation), and the Secretary may, in 
     consultation with the Secretary of Homeland Security and the 
     Secretary of the Treasury, transfer some proportion of such 
     fees to the appropriation account for salaries and expenses 
     of the Bureau of Customs and Border Protection until expended 
     (without fiscal year limitation).
       ``(B) Sole purpose.--Fees collected by the Secretary under 
     paragraphs (1) and (2) are only available to the Secretary 
     and, if transferred, to the Secretary of Homeland Security, 
     and are for the sole purpose of paying the costs referred to 
     in paragraph (3)(A).
       ``(5) Collection of fees.--In any case where the Secretary 
     does not receive payment of a fee assessed under paragraph 
     (1) or (2) within 30 days after it is due, such fee shall be 
     treated as a claim of the United States Government subject to 
     subchapter II of chapter 37 of title 31, United States Code.
       ``(f) Exporter Fees.--
       ``(1) Registration fee.--A registration condition is that 
     the exporter involved pays to the Secretary a fee of $10,000 
     due on the date on which the exporter first submits that 
     registration to the Secretary under subsection (b).
       ``(2) Inspection fee.--A registration condition is that the 
     exporter involved pays a fee to the Secretary in accordance 
     with this subsection. Such fee shall be paid not later than 
     October 1 and April 1 of each fiscal year in the amount 
     provided for under paragraph (3).
       ``(3) Amount of inspection fee.--
       ``(A) Aggregate total of fees.--Not later than 30 days 
     before the start of each fiscal year, the Secretary, in 
     consultation with the Secretary of Homeland Security and the 
     Secretary of the Treasury, shall establish an aggregate total 
     of fees to be collected under paragraph (2) for exporters for 
     that fiscal year that is sufficient, and not more than 
     necessary, to pay the costs for that fiscal year of 
     administering this section with respect to registered 
     exporters, including the costs associated with--
       ``(i) inspecting the facilities of registered exporters, 
     and of other entities in the chain of custody of a qualifying 
     drug as necessary, under subsection (d)(3);
       ``(ii) developing, implementing, and operating under such 
     subsection a system to screen marks on shipments of 
     qualifying drugs under subsection (a) that indicate 
     compliance with all registration conditions, when such 
     shipments are offered for import into the United States; and
       ``(iii) screening such markings, and inspecting such 
     shipments as necessary, when offered for import into the 
     United States to determine if such a shipment should be 
     refused admission under subsection (g)(5).
       ``(B) Limitation.--Subject to subparagraph (C), the 
     aggregate total of fees collected under paragraph (2) for a 
     fiscal year shall not exceed 2.5 percent of the total price 
     of qualifying drugs imported during that fiscal year into the 
     United States by registered exporters under subsection (a).
       ``(C) Total price of drugs.--
       ``(i) Estimate.--For the purposes of complying with the 
     limitation described in subparagraph (B) when establishing 
     under subparagraph (A) the aggregate total of fees to be 
     collected under paragraph (2) for a fiscal year, the 
     Secretary shall estimate the total price of qualifying drugs 
     imported into the United States by registered exporters 
     during that fiscal year by adding the total price of 
     qualifying drugs exported by each registered exporter during 
     the 6-month period from January 1 through June 30 of the 
     previous fiscal year, as reported to the Secretary by each 
     registered exporter under subsection (b)(1)(I)(iv).
       ``(ii) Calculation.--Not later than March 1 of the fiscal 
     year that follows the fiscal year for which the estimate 
     under clause (i) is made, the Secretary shall calculate the 
     total price of qualifying drugs imported into the United 
     States by registered exporters during that fiscal year by 
     adding the total price of qualifying drugs exported by each 
     registered exporter during that fiscal year, as reported to 
     the Secretary by each registered exporter under subsection 
     (b)(1)(I)(iv).
       ``(iii) Adjustment.--If the total price of qualifying drugs 
     imported into the United States by registered exporters 
     during a fiscal year as calculated under clause (ii) is less 
     than the aggregate total of fees collected under paragraph 
     (2) for that fiscal year, the Secretary shall provide for a 
     pro-rata reduction in the fee due from each registered 
     exporter on April 1 of the subsequent fiscal year so that the 
     limitation described in subparagraph (B) is observed.
       ``(D) Individual exporter fee.--Subject to the limitation 
     described in subparagraph (B), the fee under paragraph (2) to 
     be paid on October 1 and April 1 by an exporter shall be an 
     amount that is proportional to a reasonable estimate by the 
     Secretary of the semiannual share of the exporter of the 
     volume of qualifying drugs exported by exporters under 
     subsection (a).
       ``(4) Use of fees.--
       ``(A) In general.--Subject to appropriations Acts, fees 
     collected by the Secretary under paragraphs (1) and (2) shall 
     be credited to the appropriation account for salaries and 
     expenses of the Food and Drug Administration until expended 
     (without fiscal year limitation), and the Secretary may, in 
     consultation with the Secretary of Homeland Security and the 
     Secretary of the Treasury, transfer some proportion of such 
     fees to the appropriation account for salaries and expenses 
     of the Bureau of Customs and Border Protection until expended 
     (without fiscal year limitation).
       ``(B) Sole purpose.--Fees collected by the Secretary under 
     paragraphs (1) and (2) are only available to the Secretary 
     and, if transferred, to the Secretary of Homeland Security, 
     and are for the sole purpose of paying the costs referred to 
     in paragraph (3)(A).
       ``(5) Collection of fees.--In any case where the Secretary 
     does not receive payment of a fee assessed under paragraph 
     (1) or (2) within 30 days after it is due, such fee shall be 
     treated as a claim of the United States Government subject to 
     subchapter II of chapter 37 of title 31, United States Code.
       ``(g) Compliance With Section 801(a).--
       ``(1) In general.--A registration condition is that each 
     qualifying drug exported under subsection (a) by the 
     registered exporter involved or imported under subsection (a) 
     by the registered importer involved is in compliance with the 
     standards referred to in section 801(a) regarding admission 
     of the drug into the United States, subject to paragraphs 
     (2), (3), and (4).
       ``(2) Section 505; approval status.--
       ``(A) In general.--A qualifying drug that is imported or 
     offered for import under subsection (a) shall comply with the 
     conditions established in the approved application under 
     section 505(b) for the U.S. label drug as described under 
     this subsection.
       ``(B) Notice by manufacturer; general provisions.--
       ``(i) In general.--The person that manufactures a 
     qualifying drug that is, or will be, introduced for 
     commercial distribution in a permitted country shall in 
     accordance with this paragraph submit to the Secretary a 
     notice that--

       ``(I) includes each difference in the qualifying drug from 
     a condition established in the approved application for the 
     U.S. label drug beyond--

       ``(aa) the variations provided for in the application; and
       ``(bb) any difference in labeling (except ingredient 
     labeling); or

       ``(II) states that there is no difference in the qualifying 
     drug from a condition established in the approved application 
     for the U.S. label drug beyond--

       ``(aa) the variations provided for in the application; and
       ``(bb) any difference in labeling (except ingredient 
     labeling).
       ``(ii) Information in notice.--A notice under clause (i)(I) 
     shall include the information that the Secretary may require 
     under section 506A, any additional information the Secretary 
     may require (which may include data on bioequivalence if such 
     data are not required under section 506A), and, with respect 
     to the permitted country that approved the qualifying drug 
     for commercial distribution, or with respect to which such 
     approval is sought, include the following:

       ``(I) The date on which the qualifying drug with such 
     difference was, or will be, introduced for commercial 
     distribution in the permitted country.
       ``(II) Information demonstrating that the person submitting 
     the notice has also notified the government of the permitted 
     country in writing that the person is submitting to the 
     Secretary a notice under clause (i)(I), which notice 
     describes the difference in the qualifying drug from a 
     condition established in the approved application for the 
     U.S. label drug.
       ``(III) The information that the person submitted or will 
     submit to the government of the permitted country for 
     purposes of obtaining approval for commercial distribution of 
     the drug in the country which, if in a language other than 
     English, shall be accompanied by an English translation 
     verified to be complete and accurate, with the name, address, 
     and a brief statement of the qualifications of the person 
     that made the translation.

       ``(iii) Certifications.--The chief executive officer and 
     the chief medical officer of the manufacturer involved shall 
     each certify in the notice under clause (i) that--

       ``(I) the information provided in the notice is complete 
     and true; and
       ``(II) a copy of the notice has been provided to the 
     Federal Trade Commission and to the State attorneys general.

       ``(iv) Fee.--If a notice submitted under clause (i) 
     includes a difference that would, under section 506A, require 
     the submission of a supplemental application if made as a

[[Page S5958]]

     change to the U.S. label drug, the person that submits the 
     notice shall pay to the Secretary a fee in the same amount as 
     would apply if the person were paying a fee pursuant to 
     section 736(a)(1)(A)(ii). Subject to appropriations Acts, 
     fees collected by the Secretary under the preceding sentence 
     are available only to the Secretary and are for the sole 
     purpose of paying the costs of reviewing notices submitted 
     under clause (i).
       ``(v) Timing of submission of notices.--

       ``(I) Prior approval notices.--A notice under clause (i) to 
     which subparagraph (C) applies shall be submitted to the 
     Secretary not later than 120 days before the qualifying drug 
     with the difference is introduced for commercial distribution 
     in a permitted country, unless the country requires that 
     distribution of the qualifying drug with the difference begin 
     less than 120 days after the country requires the difference.
       ``(II) Other approval notices.--A notice under clause (i) 
     to which subparagraph (D) applies shall be submitted to the 
     Secretary not later than the day on which the qualifying drug 
     with the difference is introduced for commercial distribution 
     in a permitted country.
       ``(III) Other notices.--A notice under clause (i) to which 
     subparagraph (E) applies shall be submitted to the Secretary 
     on the date that the qualifying drug is first introduced for 
     commercial distribution in a permitted country and annually 
     thereafter.

       ``(vi) Review by secretary.--

       ``(I) In general.--In this paragraph, the difference in a 
     qualifying drug that is submitted in a notice under clause 
     (i) from the U.S. label drug shall be treated by the 
     Secretary as if it were a manufacturing change to the U.S. 
     label drug under section 506A.
       ``(II) Standard of review.--Except as provided in subclause 
     (III), the Secretary shall review and approve or disapprove 
     the difference in a notice submitted under clause (i), if 
     required under section 506A, using the safe and effective 
     standard for approving or disapproving a manufacturing change 
     under section 506A.
       ``(III) Bioequivalence.--If the Secretary would approve the 
     difference in a notice submitted under clause (i) using the 
     safe and effective standard under section 506A and if the 
     Secretary determines that the qualifying drug is not 
     bioequivalent to the U.S. label drug, the Secretary shall--

       ``(aa) include in the labeling provided under paragraph (3) 
     a prominent advisory that the qualifying drug is safe and 
     effective but is not bioequivalent to the U.S. label drug if 
     the Secretary determines that such an advisory is necessary 
     for health care practitioners and patients to use the 
     qualifying drug safely and effectively; or
       ``(bb) decline to approve the difference if the Secretary 
     determines that the availability of both the qualifying drug 
     and the U.S. label drug would pose a threat to the public 
     health.

       ``(IV) Review by the secretary.--The Secretary shall review 
     and approve or disapprove the difference in a notice 
     submitted under clause (i), if required under section 506A, 
     not later than 120 days after the date on which the notice is 
     submitted.
       ``(V) Establishment inspection.--If review of such 
     difference would require an inspection of the establishment 
     in which the qualifying drug is manufactured--

       ``(aa) such inspection by the Secretary shall be 
     authorized; and
       ``(bb) the Secretary may rely on a satisfactory report of a 
     good manufacturing practice inspection of the establishment 
     from a permitted country whose regulatory system the 
     Secretary recognizes as equivalent under a mutual recognition 
     agreement, as provided under section 510(i)(3), section 803, 
     or part 26 of title 21, Code of Federal Regulations (or any 
     corresponding successor rule or regulation).
       ``(vii) Publication of information on notices.--

       ``(I) In general.--Through the Internet website of the Food 
     and Drug Administration and a toll-free telephone number, the 
     Secretary shall readily make available to the public a list 
     of notices submitted under clause (i).
       ``(II) Contents.--The list under subclause (I) shall 
     include the date on which a notice is submitted and whether--

       ``(aa) a notice is under review;
       ``(bb) the Secretary has ordered that importation of the 
     qualifying drug from a permitted country cease; or
       ``(cc) the importation of the drug is permitted under 
     subsection (a).

       ``(III) Update.--The Secretary shall promptly update the 
     Internet website with any changes to the list.

       ``(C) Notice; drug difference requiring prior approval.--In 
     the case of a notice under subparagraph (B)(i) that includes 
     a difference that would, under section 506A(c) or 
     (d)(3)(B)(i), require the approval of a supplemental 
     application before the difference could be made to the U.S. 
     label drug the following shall occur:
       ``(i) Promptly after the notice is submitted, the Secretary 
     shall notify registered exporters, registered importers, the 
     Federal Trade Commission, and the State attorneys general 
     that the notice has been submitted with respect to the 
     qualifying drug involved.
       ``(ii) If the Secretary has not made a determination 
     whether such a supplemental application regarding the U.S. 
     label drug would be approved or disapproved by the date on 
     which the qualifying drug involved is to be introduced for 
     commercial distribution in a permitted country, the Secretary 
     shall--

       ``(I) order that the importation of the qualifying drug 
     involved from the permitted country not begin until the 
     Secretary completes review of the notice; and
       ``(II) promptly notify registered exporters, registered 
     importers, the Federal Trade Commission, and the State 
     attorneys general of the order.

       ``(iii) If the Secretary determines that such a 
     supplemental application regarding the U.S. label drug would 
     not be approved, the Secretary shall--

       ``(I) order that the importation of the qualifying drug 
     involved from the permitted country cease, or provide that an 
     order under clause (ii), if any, remains in effect;
       ``(II) notify the permitted country that approved the 
     qualifying drug for commercial distribution of the 
     determination; and
       ``(III) promptly notify registered exporters, registered 
     importers, the Federal Trade Commission, and the State 
     attorneys general of the determination.

       ``(iv) If the Secretary determines that such a supplemental 
     application regarding the U.S. label drug would be approved, 
     the Secretary shall--

       ``(I) vacate the order under clause (ii), if any;
       ``(II) consider the difference to be a variation provided 
     for in the approved application for the U.S. label drug;
       ``(III) permit importation of the qualifying drug under 
     subsection (a); and
       ``(IV) promptly notify registered exporters, registered 
     importers, the Federal Trade Commission, and the State 
     attorneys general of the determination.

       ``(D) Notice; drug difference not requiring prior 
     approval.--In the case of a notice under subparagraph (B)(i) 
     that includes a difference that would, under section 
     506A(d)(3)(B)(ii), not require the approval of a supplemental 
     application before the difference could be made to the U.S. 
     label drug the following shall occur:
       ``(i) During the period in which the notice is being 
     reviewed by the Secretary, the authority under this 
     subsection to import the qualifying drug involved continues 
     in effect.
       ``(ii) If the Secretary determines that such a supplemental 
     application regarding the U.S. label drug would not be 
     approved, the Secretary shall--

       ``(I) order that the importation of the qualifying drug 
     involved from the permitted country cease;
       ``(II) notify the permitted country that approved the 
     qualifying drug for commercial distribution of the 
     determination; and
       ``(III) promptly notify registered exporters, registered 
     importers, the Federal Trade Commission, and the State 
     attorneys general of the determination.

       ``(iii) If the Secretary determines that such a 
     supplemental application regarding the U.S. label drug would 
     be approved, the difference shall be considered to be a 
     variation provided for in the approved application for the 
     U.S. label drug.
       ``(E) Notice; drug difference not requiring approval; no 
     difference.--In the case of a notice under subparagraph 
     (B)(i) that includes a difference for which, under section 
     506A(d)(1)(A), a supplemental application would not be 
     required for the difference to be made to the U.S. label 
     drug, or that states that there is no difference, the 
     Secretary--
       ``(i) shall consider such difference to be a variation 
     provided for in the approved application for the U.S. label 
     drug;
       ``(ii) may not order that the importation of the qualifying 
     drug involved cease; and
       ``(iii) shall promptly notify registered exporters and 
     registered importers.
       ``(F) Differences in active ingredient, route of 
     administration, dosage form, or strength.--
       ``(i) In general.--A person who manufactures a drug 
     approved under section 505(b) shall submit an application 
     under section 505(b) for approval of another drug that is 
     manufactured for distribution in a permitted country by or 
     for the person that manufactures the drug approved under 
     section 505(b) if--

       ``(I) there is no qualifying drug in commercial 
     distribution in permitted countries whose combined population 
     represents at least 50 percent of the total population of all 
     permitted countries with the same active ingredient or 
     ingredients, route of administration, dosage form, and 
     strength as the drug approved under section 505(b); and
       ``(II) each active ingredient of the other drug is related 
     to an active ingredient of the drug approved under section 
     505(b), as defined in clause (v).

       ``(ii) Application under section 505(b).--The application 
     under section 505(b) required under clause (i) shall--

       ``(I) request approval of the other drug for the indication 
     or indications for which the drug approved under section 
     505(b) is labeled;
       ``(II) include the information that the person submitted to 
     the government of the permitted country for purposes of 
     obtaining approval for commercial distribution of the other 
     drug in that country, which if in a language other than 
     English, shall be accompanied by an English translation 
     verified to be complete and accurate, with the name, address, 
     and a brief statement of the qualifications of the person 
     that made the translation;
       ``(III) include a right of reference to the application for 
     the drug approved under section 505(b); and
       ``(IV) include such additional information as the Secretary 
     may require.

[[Page S5959]]

       ``(iii) Timing of submission of application.--An 
     application under section 505(b) required under clause (i) 
     shall be submitted to the Secretary not later than the day on 
     which the information referred to in clause (ii)(II) is 
     submitted to the government of the permitted country.
       ``(iv) Notice of decision on application.--The Secretary 
     shall promptly notify registered exporters, registered 
     importers, the Federal Trade Commission, and the State 
     attorneys general of a determination to approve or to 
     disapprove an application under section 505(b) required under 
     clause (i).
       ``(v) Related active ingredients.--For purposes of clause 
     (i)(II), 2 active ingredients are related if they are--

       ``(I) the same; or
       ``(II) different salts, esters, or complexes of the same 
     moiety.

       ``(3) Section 502; labeling.--
       ``(A) Importation by registered importer.--
       ``(i) In general.--In the case of a qualifying drug that is 
     imported or offered for import by a registered importer, such 
     drug shall be considered to be in compliance with section 502 
     and the labeling requirements under the approved application 
     for the U.S. label drug if the qualifying drug bears--

       ``(I) a copy of the labeling approved for the U.S. label 
     drug under section 505, without regard to whether the copy 
     bears any trademark involved;
       ``(II) the name of the manufacturer and location of the 
     manufacturer;
       ``(III) the lot number assigned by the manufacturer;
       ``(IV) the name, location, and registration number of the 
     importer; and
       ``(V) the National Drug Code number assigned to the 
     qualifying drug by the Secretary.

       ``(ii) Request for copy of the labeling.--The Secretary 
     shall provide such copy to the registered importer involved, 
     upon request of the importer.
       ``(iii) Requested labeling.--The labeling provided by the 
     Secretary under clause (ii) shall--

       ``(I) include the established name, as defined in section 
     502(e)(3), for each active ingredient in the qualifying drug;
       ``(II) not include the proprietary name of the U.S. label 
     drug or any active ingredient thereof;
       ``(III) if required under paragraph (2)(B)(vi)(III), a 
     prominent advisory that the qualifying drug is safe and 
     effective but not bioequivalent to the U.S. label drug; and
       ``(IV) if the inactive ingredients of the qualifying drug 
     are different from the inactive ingredients for the U.S. 
     label drug, include--

       ``(aa) a prominent notice that the ingredients of the 
     qualifying drug differ from the ingredients of the U.S. label 
     drug and that the qualifying drug must be dispensed with an 
     advisory to people with allergies about this difference and a 
     list of ingredients; and
       ``(bb) a list of the ingredients of the qualifying drug as 
     would be required under section 502(e).
       ``(B) Importation by individual.--
       ``(i) In general.--In the case of a qualifying drug that is 
     imported or offered for import by a registered exporter to an 
     individual, such drug shall be considered to be in compliance 
     with section 502 and the labeling requirements under the 
     approved application for the U.S. label drug if the packaging 
     and labeling of the qualifying drug complies with all 
     applicable regulations promulgated under sections 3 and 4 of 
     the Poison Prevention Packaging Act of 1970 (15 U.S.C. 1471 
     et seq.) and the labeling of the qualifying drug includes--

       ``(I) directions for use by the consumer;
       ``(II) the lot number assigned by the manufacturer;
       ``(III) the name and registration number of the exporter;
       ``(IV) if required under paragraph (2)(B)(vi)(III), a 
     prominent advisory that the drug is safe and effective but 
     not bioequivalent to the U.S. label drug;
       ``(V) if the inactive ingredients of the drug are different 
     from the inactive ingredients for the U.S. label drug--

       ``(aa) a prominent advisory that persons with an allergy 
     should check the ingredient list of the drug because the 
     ingredients of the drug differ from the ingredients of the 
     U.S. label drug; and
       ``(bb) a list of the ingredients of the drug as would be 
     required under section 502(e); and

       ``(VI) a copy of any special labeling that would be 
     required by the Secretary had the U.S. label drug been 
     dispensed by a pharmacist in the United States, without 
     regard to whether the special labeling bears any trademark 
     involved.

       ``(ii) Packaging.--A qualifying drug offered for import to 
     an individual by an exporter under this section that is 
     packaged in a unit-of-use container (as those items are 
     defined in the United States Pharmacopeia and National 
     Formulary) shall not be repackaged, provided that--

       ``(I) the packaging complies with all applicable 
     regulations under sections 3 and 4 of the Poison Prevention 
     Packaging Act of 1970 (15 U.S.C. 1471 et seq.); or
       ``(II) the consumer consents to waive the requirements of 
     such Act, after being informed that the packaging does not 
     comply with such Act and that the exporter will provide the 
     drug in packaging that is compliant at no additional cost.

       ``(iii) Request for copy of special labeling and ingredient 
     list.--The Secretary shall provide to the registered exporter 
     involved a copy of the special labeling, the advisory, and 
     the ingredient list described under clause (i), upon request 
     of the exporter.
       ``(iv) Requested labeling and ingredient list.--The 
     labeling and ingredient list provided by the Secretary under 
     clause (iii) shall--

       ``(I) include the established name, as defined in section 
     502(e)(3), for each active ingredient in the drug; and
       ``(II) not include the proprietary name of the U.S. label 
     drug or any active ingredient thereof.

       ``(4) Section 501; adulteration.--A qualifying drug that is 
     imported or offered for import under subsection (a) shall be 
     considered to be in compliance with section 501 if the drug 
     is in compliance with subsection (c).
       ``(5) Standards for refusing admission.--A drug exported 
     under subsection (a) from a registered exporter or imported 
     by a registered importer may be refused admission into the 
     United States if 1 or more of the following applies:
       ``(A) The drug is not a qualifying drug.
       ``(B) A notice for the drug required under paragraph (2)(B) 
     has not been submitted to the Secretary.
       ``(C) The Secretary has ordered that importation of the 
     drug from the permitted country cease under paragraph (2) (C) 
     or (D).
       ``(D) The drug does not comply with paragraph (3) or (4).
       ``(E) The shipping container appears damaged in a way that 
     may affect the strength, quality, or purity of the drug.
       ``(F) The Secretary becomes aware that--
       ``(i) the drug may be counterfeit;
       ``(ii) the drug may have been prepared, packed, or held 
     under insanitary conditions; or
       ``(iii) the methods used in, or the facilities or controls 
     used for, the manufacturing, processing, packing, or holding 
     of the drug do not conform to good manufacturing practice.
       ``(G) The Secretary has obtained an injunction under 
     section 302 that prohibits the distribution of the drug in 
     interstate commerce.
       ``(H) The Secretary has under section 505(e) withdrawn 
     approval of the drug.
       ``(I) The manufacturer of the drug has instituted a recall 
     of the drug.
       ``(J) If the drug is imported or offered for import by a 
     registered importer without submission of a notice in 
     accordance with subsection (d)(4).
       ``(K) If the drug is imported or offered for import from a 
     registered exporter to an individual and 1 or more of the 
     following applies:
       ``(i) The shipping container for such drug does not bear 
     the markings required under subsection (d)(2).
       ``(ii) The markings on the shipping container appear to be 
     counterfeit.
       ``(iii) The shipping container or markings appear to have 
     been tampered with.
       ``(h) Exporter Licensure in Permitted Country.--A 
     registration condition is that the exporter involved agrees 
     that a qualifying drug will be exported to an individual only 
     if the Secretary has verified that--
       ``(1) the exporter is authorized under the law of the 
     permitted country in which the exporter is located to 
     dispense prescription drugs; and
       ``(2) the exporter employs persons that are licensed under 
     the law of the permitted country in which the exporter is 
     located to dispense prescription drugs in sufficient number 
     to dispense safely the drugs exported by the exporter to 
     individuals, and the exporter assigns to those persons 
     responsibility for dispensing such drugs to individuals.
       ``(i) Individuals; Conditions for Importation.--
       ``(1) In general.--For purposes of subsection (a)(2)(B), 
     the importation of a qualifying drug by an individual is in 
     accordance with this subsection if the following conditions 
     are met:
       ``(A) The drug is accompanied by a copy of a prescription 
     for the drug, which prescription--
       ``(i) is valid under applicable Federal and State laws; and
       ``(ii) was issued by a practitioner who, under the law of a 
     State of which the individual is a resident, or in which the 
     individual receives care from the practitioner who issues the 
     prescription, is authorized to administer prescription drugs.
       ``(B) The drug is accompanied by a copy of the 
     documentation that was required under the law or regulations 
     of the permitted country in which the exporter is located, as 
     a condition of dispensing the drug to the individual.
       ``(C) The copies referred to in subparagraphs (A)(i) and 
     (B) are marked in a manner sufficient--
       ``(i) to indicate that the prescription, and the equivalent 
     document in the permitted country in which the exporter is 
     located, have been filled; and
       ``(ii) to prevent a duplicative filling by another 
     pharmacist.
       ``(D) The individual has provided to the registered 
     exporter a complete list of all drugs used by the individual 
     for review by the individuals who dispense the drug.
       ``(E) The quantity of the drug does not exceed a 90-day 
     supply.
       ``(F) The drug is not an ineligible subpart H drug. For 
     purposes of this section, a prescription drug is an 
     `ineligible subpart H drug' if the drug was approved by the 
     Secretary under subpart H of part 314 of title 21,

[[Page S5960]]

     Code of Federal Regulations (relating to accelerated 
     approval), with restrictions under section 520 of such part 
     to assure safe use, and the Secretary has published in the 
     Federal Register a notice that the Secretary has determined 
     that good cause exists to prohibit the drug from being 
     imported pursuant to this subsection.
       ``(2) Notice regarding drug refused admission.--If a 
     registered exporter ships a drug to an individual pursuant to 
     subsection (a)(2)(B) and the drug is refused admission to the 
     United States, a written notice shall be sent to the 
     individual and to the exporter that informs the individual 
     and the exporter of such refusal and the reason for the 
     refusal.
       ``(j) Maintenance of Records and Samples.--
       ``(1) In general.--A registration condition is that the 
     importer or exporter involved shall--
       ``(A) maintain records required under this section for not 
     less than 2 years; and
       ``(B) maintain samples of each lot of a qualifying drug 
     required under this section for not more than 2 years.
       ``(2) Place of record maintenance.--The records described 
     under paragraph (1) shall be maintained--
       ``(A) in the case of an importer, at the place of business 
     of the importer at which the importer initially receives the 
     qualifying drug after importation; or
       ``(B) in the case of an exporter, at the facility from 
     which the exporter ships the qualifying drug to the United 
     States.
       ``(k) Drug Recalls.--
       ``(1) Manufacturers.--A person that manufactures a 
     qualifying drug imported from a permitted country under this 
     section shall promptly inform the Secretary--
       ``(A) if the drug is recalled or withdrawn from the market 
     in a permitted country;
       ``(B) how the drug may be identified, including lot number; 
     and
       ``(C) the reason for the recall or withdrawal.
       ``(2) Secretary.--With respect to each permitted country, 
     the Secretary shall--
       ``(A) enter into an agreement with the government of the 
     country to receive information about recalls and withdrawals 
     of qualifying drugs in the country; or
       ``(B) monitor recalls and withdrawals of qualifying drugs 
     in the country using any information that is available to the 
     public in any media.
       ``(3) Notice.--The Secretary may notify, as appropriate, 
     registered exporters, registered importers, wholesalers, 
     pharmacies, or the public of a recall or withdrawal of a 
     qualifying drug in a permitted country.
       ``(l) Drug Labeling and Packaging.--
       ``(1) In general.--When a qualifying drug that is imported 
     into the United States by an importer under subsection (a) is 
     dispensed by a pharmacist to an individual, the pharmacist 
     shall provide that the packaging and labeling of the drug 
     complies with all applicable regulations promulgated under 
     sections 3 and 4 of the Poison Prevention Packaging Act of 
     1970 (15 U.S.C. 1471 et seq.) and shall include with any 
     other labeling provided to the individual the following:
       ``(A) The lot number assigned by the manufacturer.
       ``(B) The name and registration number of the importer.
       ``(C) If required under paragraph (2)(B)(vi)(III) of 
     subsection (g), a prominent advisory that the drug is safe 
     and effective but not bioequivalent to the U.S. label drug.
       ``(D) If the inactive ingredients of the drug are different 
     from the inactive ingredients for the U.S. label drug--
       ``(i) a prominent advisory that persons with allergies 
     should check the ingredient list of the drug because the 
     ingredients of the drug differ from the ingredients of the 
     U.S. label drug; and
       ``(ii) a list of the ingredients of the drug as would be 
     required under section 502(e).
       ``(2) Packaging.--A qualifying drug that is packaged in a 
     unit-of-use container (as those terms are defined in the 
     United States Pharmacopeia and National Formulary) shall not 
     be repackaged, provided that--
       ``(A) the packaging complies with all applicable 
     regulations under sections 3 and 4 of the Poison Prevention 
     Packaging Act of 1970 (15 U.S.C. 1471 et seq.); or
       ``(B) the consumer consents to waive the requirements of 
     such Act, after being informed that the packaging does not 
     comply with such Act and that the pharmacist will provide the 
     drug in packaging that is compliant at no additional cost.
       ``(m) Charitable Contributions.--Notwithstanding any other 
     provision of this section, this section does not authorize 
     the importation into the United States of a qualifying drug 
     donated or otherwise supplied for free or at nominal cost by 
     the manufacturer of the drug to a charitable or humanitarian 
     organization, including the United Nations and affiliates, or 
     to a government of a foreign country.
       ``(n) Unfair and Discriminatory Acts and Practices.--
       ``(1) In general.--It is unlawful for a manufacturer, 
     directly or indirectly (including by being a party to a 
     licensing agreement or other agreement), to--
       ``(A) discriminate by charging a higher price for a 
     prescription drug sold to a registered exporter or other 
     person in a permitted country that exports a qualifying drug 
     to the United States under this section than the price that 
     is charged, inclusive of rebates or other incentives to the 
     permitted country or other person, to another person that is 
     in the same country and that does not export a qualifying 
     drug into the United States under this section;
       ``(B) discriminate by charging a higher price for a 
     prescription drug sold to a registered importer or other 
     person that distributes, sells, or uses a qualifying drug 
     imported into the United States under this section than the 
     price that is charged to another person in the United States 
     that does not import a qualifying drug under this section, or 
     that does not distribute, sell, or use such a drug;
       ``(C) discriminate by denying, restricting, or delaying 
     supplies of a prescription drug to a registered exporter or 
     other person in a permitted country that exports a qualifying 
     drug to the United States under this section or to a 
     registered importer or other person that distributes, sells, 
     or uses a qualifying drug imported into the United States 
     under this section;
       ``(D) discriminate by publicly, privately, or otherwise 
     refusing to do business with a registered exporter or other 
     person in a permitted country that exports a qualifying drug 
     to the United States under this section or with a registered 
     importer or other person that distributes, sells, or uses a 
     qualifying drug imported into the United States under this 
     section;
       ``(E) knowingly fail to submit a notice under subsection 
     (g)(2)(B)(i), knowingly fail to submit such a notice on or 
     before the date specified in subsection (g)(2)(B)(v) or as 
     otherwise required under subsection (e) (3), (4), and (5) of 
     section 4 of the Pharmaceutical Market Access and Drug Safety 
     Act of 2009, knowingly submit such a notice that makes a 
     materially false, fictitious, or fraudulent statement, or 
     knowingly fail to provide promptly any information requested 
     by the Secretary to review such a notice;
       ``(F) knowingly fail to submit an application required 
     under subsection (g)(2)(F), knowingly fail to submit such an 
     application on or before the date specified in subsection 
     (g)(2)(F)(ii), knowingly submit such an application that 
     makes a materially false, fictitious, or fraudulent 
     statement, or knowingly fail to provide promptly any 
     information requested by the Secretary to review such an 
     application;
       ``(G) cause there to be a difference (including a 
     difference in active ingredient, route of administration, 
     dosage form, strength, formulation, manufacturing 
     establishment, manufacturing process, or person that 
     manufactures the drug) between a prescription drug for 
     distribution in the United States and the drug for 
     distribution in a permitted country;
       ``(H) refuse to allow an inspection authorized under this 
     section of an establishment that manufactures a qualifying 
     drug that is, or will be, introduced for commercial 
     distribution in a permitted country;
       ``(I) fail to conform to the methods used in, or the 
     facilities used for, the manufacturing, processing, packing, 
     or holding of a qualifying drug that is, or will be, 
     introduced for commercial distribution in a permitted country 
     to good manufacturing practice under this Act;
       ``(J) become a party to a licensing agreement or other 
     agreement related to a qualifying drug that fails to provide 
     for compliance with all requirements of this section with 
     respect to such drug;
       ``(K) enter into a contract that restricts, prohibits, or 
     delays the importation of a qualifying drug under this 
     section;
       ``(L) engage in any other action to restrict, prohibit, or 
     delay the importation of a qualifying drug under this 
     section; or
       ``(M) engage in any other action that the Federal Trade 
     Commission determines to discriminate against a person that 
     engages or attempts to engage in the importation of a 
     qualifying drug under this section.
       ``(2) Referral of potential violations.--The Secretary 
     shall promptly refer to the Federal Trade Commission each 
     potential violation of subparagraph (E), (F), (G), (H), or 
     (I) of paragraph (1) that becomes known to the Secretary.
       ``(3) Affirmative defense.--
       ``(A) Discrimination.--It shall be an affirmative defense 
     to a charge that a manufacturer has discriminated under 
     subparagraph (A), (B), (C), (D), or (M) of paragraph (1) that 
     the higher price charged for a prescription drug sold to a 
     person, the denial, restriction, or delay of supplies of a 
     prescription drug to a person, the refusal to do business 
     with a person, or other discriminatory activity against a 
     person, is not based, in whole or in part, on--
       ``(i) the person exporting or importing a qualifying drug 
     into the United States under this section; or
       ``(ii) the person distributing, selling, or using a 
     qualifying drug imported into the United States under this 
     section.
       ``(B) Drug differences.--It shall be an affirmative defense 
     to a charge that a manufacturer has caused there to be a 
     difference described in subparagraph (G) of paragraph (1) 
     that--
       ``(i) the difference was required by the country in which 
     the drug is distributed;
       ``(ii) the Secretary has determined that the difference was 
     necessary to improve the safety or effectiveness of the drug;
       ``(iii) the person manufacturing the drug for distribution 
     in the United States has given notice to the Secretary under 
     subsection (g)(2)(B)(i) that the drug for distribution in the 
     United States is not different from a drug for distribution 
     in permitted countries whose combined population represents 
     at least 50 percent of the total population of all permitted 
     countries; or

[[Page S5961]]

       ``(iv) the difference was not caused, in whole or in part, 
     for the purpose of restricting importation of the drug into 
     the United States under this section.
       ``(4) Effect of subsection.--
       ``(A) Sales in other countries.--This subsection applies 
     only to the sale or distribution of a prescription drug in a 
     country if the manufacturer of the drug chooses to sell or 
     distribute the drug in the country. Nothing in this 
     subsection shall be construed to compel the manufacturer of a 
     drug to distribute or sell the drug in a country.
       ``(B) Discounts to insurers, health plans, pharmacy benefit 
     managers, and covered entities.--Nothing in this subsection 
     shall be construed to--
       ``(i) prevent or restrict a manufacturer of a prescription 
     drug from providing discounts to an insurer, health plan, 
     pharmacy benefit manager in the United States, or covered 
     entity in the drug discount program under section 340B of the 
     Public Health Service Act (42 U.S.C. 256b) in return for 
     inclusion of the drug on a formulary;
       ``(ii) require that such discounts be made available to 
     other purchasers of the prescription drug; or
       ``(iii) prevent or restrict any other measures taken by an 
     insurer, health plan, or pharmacy benefit manager to 
     encourage consumption of such prescription drug.
       ``(C) Charitable contributions.--Nothing in this subsection 
     shall be construed to--
       ``(i) prevent a manufacturer from donating a prescription 
     drug, or supplying a prescription drug at nominal cost, to a 
     charitable or humanitarian organization, including the United 
     Nations and affiliates, or to a government of a foreign 
     country; or
       ``(ii) apply to such donations or supplying of a 
     prescription drug.
       ``(5) Enforcement.--
       ``(A) Unfair or deceptive act or practice.--A violation of 
     this subsection shall be treated as a violation of a rule 
     defining an unfair or deceptive act or practice prescribed 
     under section 18(a)(1)(B) of the Federal Trade Commission Act 
     (15 U.S.C. 57a(a)(1)(B)).
       ``(B) Actions by the commission.--The Federal Trade 
     Commission--
       ``(i) shall enforce this subsection in the same manner, by 
     the same means, and with the same jurisdiction, powers, and 
     duties as though all applicable terms and provisions of the 
     Federal Trade Commission Act (15 U.S.C. 41 et seq.) were 
     incorporated into and made a part of this section; and
       ``(ii) may seek monetary relief threefold the damages 
     sustained, in addition to any other remedy available to the 
     Federal Trade Commission under the Federal Trade Commission 
     Act (15 U.S.C. 41 et seq.).
       ``(6) Actions by states.--
       ``(A) In general.--
       ``(i) Civil actions.--In any case in which the attorney 
     general of a State has reason to believe that an interest of 
     the residents of that State have been adversely affected by 
     any manufacturer that violates paragraph (1), the attorney 
     general of a State may bring a civil action on behalf of the 
     residents of the State, and persons doing business in the 
     State, in a district court of the United States of 
     appropriate jurisdiction to--

       ``(I) enjoin that practice;
       ``(II) enforce compliance with this subsection;
       ``(III) obtain damages, restitution, or other compensation 
     on behalf of residents of the State and persons doing 
     business in the State, including threefold the damages; or
       ``(IV) obtain such other relief as the court may consider 
     to be appropriate.

       ``(ii) Notice.--

       ``(I) In general.--Before filing an action under clause 
     (i), the attorney general of the State involved shall provide 
     to the Federal Trade Commission--

       ``(aa) written notice of that action; and
       ``(bb) a copy of the complaint for that action.

       ``(II) Exemption.--Subclause (I) shall not apply with 
     respect to the filing of an action by an attorney general of 
     a State under this paragraph, if the attorney general 
     determines that it is not feasible to provide the notice 
     described in that subclause before filing of the action. In 
     such case, the attorney general of a State shall provide 
     notice and a copy of the complaint to the Federal Trade 
     Commission at the same time as the attorney general files the 
     action.

       ``(B) Intervention.--
       ``(i) In general.--On receiving notice under subparagraph 
     (A)(ii), the Federal Trade Commission shall have the right to 
     intervene in the action that is the subject of the notice.
       ``(ii) Effect of intervention.--If the Federal Trade 
     Commission intervenes in an action under subparagraph (A), it 
     shall have the right--

       ``(I) to be heard with respect to any matter that arises in 
     that action; and
       ``(II) to file a petition for appeal.

       ``(C) Construction.--For purposes of bringing any civil 
     action under subparagraph (A), nothing in this subsection 
     shall be construed to prevent an attorney general of a State 
     from exercising the powers conferred on the attorney general 
     by the laws of that State to--
       ``(i) conduct investigations;
       ``(ii) administer oaths or affirmations; or
       ``(iii) compel the attendance of witnesses or the 
     production of documentary and other evidence.
       ``(D) Actions by the commission.--In any case in which an 
     action is instituted by or on behalf of the Federal Trade 
     Commission for a violation of paragraph (1), a State may not, 
     during the pendency of that action, institute an action under 
     subparagraph (A) for the same violation against any defendant 
     named in the complaint in that action.
       ``(E) Venue.--Any action brought under subparagraph (A) may 
     be brought in the district court of the United States that 
     meets applicable requirements relating to venue under section 
     1391 of title 28, United States Code.
       ``(F) Service of process.--In an action brought under 
     subparagraph (A), process may be served in any district in 
     which the defendant--
       ``(i) is an inhabitant; or
       ``(ii) may be found.
       ``(G) Measurement of damages.--In any action under this 
     paragraph to enforce a cause of action under this subsection 
     in which there has been a determination that a defendant has 
     violated a provision of this subsection, damages may be 
     proved and assessed in the aggregate by statistical or 
     sampling methods, by the computation of illegal overcharges 
     or by such other reasonable system of estimating aggregate 
     damages as the court in its discretion may permit without the 
     necessity of separately proving the individual claim of, or 
     amount of damage to, persons on whose behalf the suit was 
     brought.
       ``(H) Exclusion on duplicative relief.--The district court 
     shall exclude from the amount of monetary relief awarded in 
     an action under this paragraph brought by the attorney 
     general of a State any amount of monetary relief which 
     duplicates amounts which have been awarded for the same 
     injury.
       ``(7) Effect on antitrust laws.--Nothing in this subsection 
     shall be construed to modify, impair, or supersede the 
     operation of the antitrust laws. For the purpose of this 
     subsection, the term `antitrust laws' has the meaning given 
     it in the first section of the Clayton Act, except that it 
     includes section 5 of the Federal Trade Commission Act to the 
     extent that such section 5 applies to unfair methods of 
     competition.
       ``(8) Manufacturer.--In this subsection, the term 
     `manufacturer' means any entity, including any affiliate or 
     licensee of that entity, that is engaged in--
       ``(A) the production, preparation, propagation, 
     compounding, conversion, or processing of a prescription 
     drug, either directly or indirectly by extraction from 
     substances of natural origin, or independently by means of 
     chemical synthesis, or by a combination of extraction and 
     chemical synthesis; or
       ``(B) the packaging, repackaging, labeling, relabeling, or 
     distribution of a prescription drug.''.
       (b) Prohibited Acts.--The Federal Food, Drug, and Cosmetic 
     Act is amended--
       (1) in section 301 (21 U.S.C. 331), by striking paragraph 
     (aa) and inserting the following:
       ``(aa)(1) The sale or trade by a pharmacist, or by a 
     business organization of which the pharmacist is a part, of a 
     qualifying drug that under section 804(a)(2)(A) was imported 
     by the pharmacist, other than--
       ``(A) a sale at retail made pursuant to dispensing the drug 
     to a customer of the pharmacist or organization; or
       ``(B) a sale or trade of the drug to a pharmacy or a 
     wholesaler registered to import drugs under section 804.
       ``(2) The sale or trade by an individual of a qualifying 
     drug that under section 804(a)(2)(B) was imported by the 
     individual.
       ``(3) The making of a materially false, fictitious, or 
     fraudulent statement or representation, or a material 
     omission, in a notice under clause (i) of section 
     804(g)(2)(B) or in an application required under section 
     804(g)(2)(F), or the failure to submit such a notice or 
     application.
       ``(4) The importation of a drug in violation of a 
     registration condition or other requirement under section 
     804, the falsification of any record required to be 
     maintained, or provided to the Secretary, under such section, 
     or the violation of any registration condition or other 
     requirement under such section.''; and
       (2) in section 303(a) (21 U.S.C. 333(a)), by striking 
     paragraph (6) and inserting the following:
       ``(6) Notwithstanding subsection (a), any person that 
     knowingly violates section 301(i) (2) or (3) or section 
     301(aa)(4) shall be imprisoned not more than 10 years, or 
     fined in accordance with title 18, United States Code, or 
     both.''.
       (c) Amendment of Certain Provisions.--
       (1) In general.--Section 801 of the Federal Food, Drug, and 
     Cosmetic Act (21 U.S.C. 381) is amended by striking 
     subsection (g) and inserting the following:
       ``(g) With respect to a prescription drug that is imported 
     or offered for import into the United States by an individual 
     who is not in the business of such importation, that is not 
     shipped by a registered exporter under section 804, and that 
     is refused admission under subsection (a), the Secretary 
     shall notify the individual that--
       ``(1) the drug has been refused admission because the drug 
     was not a lawful import under section 804;
       ``(2) the drug is not otherwise subject to a waiver of the 
     requirements of subsection (a);
       ``(3) the individual may under section 804 lawfully import 
     certain prescription drugs from exporters registered with the 
     Secretary under section 804; and
       ``(4) the individual can find information about such 
     importation, including a list of registered exporters, on the 
     Internet website of the Food and Drug Administration or 
     through a toll-free telephone number required under section 
     804.''.

[[Page S5962]]

       (2) Establishment registration.--Section 510(i) of the 
     Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360(i)) is 
     amended in paragraph (1) by inserting after ``import into the 
     United States'' the following: ``, including a drug that is, 
     or may be, imported or offered for import into the United 
     States under section 804,''.
       (3) Effective date.--The amendments made by this subsection 
     shall take effect on the date that is 90 days after the date 
     of enactment of this division.
       (d) Exhaustion.--
       (1) In general.--Section 271 of title 35, United States 
     Code, is amended--
       (A) by redesignating subsections (h) and (i) as (i) and 
     (j), respectively; and
       (B) by inserting after subsection (g) the following:
       ``(h) It shall not be an act of infringement to use, offer 
     to sell, or sell within the United States or to import into 
     the United States any patented invention under section 804 of 
     the Federal Food, Drug, and Cosmetic Act that was first sold 
     abroad by or under authority of the owner or licensee of such 
     patent.''.
       (2) Rule of construction.--Nothing in the amendment made by 
     paragraph (1) shall be construed to affect the ability of a 
     patent owner or licensee to enforce their patent, subject to 
     such amendment.
       (e) Effect of Section 804.--
       (1) In general.--Section 804 of the Federal Food, Drug, and 
     Cosmetic Act, as added by subsection (a), shall permit the 
     importation of qualifying drugs (as defined in such section 
     804) into the United States without regard to the status of 
     the issuance of implementing regulations--
       (A) from exporters registered under such section 804 on the 
     date that is 90 days after the date of enactment of this 
     division; and
       (B) from permitted countries, as defined in such section 
     804, by importers registered under such section 804 on the 
     date that is 1 year after the date of enactment of this 
     division.
       (2) Review of registration by certain exporters.--
       (A) Review priority.--In the review of registrations 
     submitted under subsection (b) of such section 804, 
     registrations submitted by entities in Canada that are 
     significant exporters of prescription drugs to individuals in 
     the United States as of the date of enactment of this 
     division will have priority during the 90 day period that 
     begins on such date of enactment.
       (B) Period for review.--During such 90-day period, the 
     reference in subsection (b)(2)(A) of such section 804 to 90 
     days (relating to approval or disapproval of registrations) 
     is, as applied to such entities, deemed to be 30 days.
       (C) Limitation.--That an exporter in Canada exports, or has 
     exported, prescription drugs to individuals in the United 
     States on or before the date that is 90 days after the date 
     of enactment of this division shall not serve as a basis, in 
     whole or in part, for disapproving a registration under such 
     section 804 from the exporter.
       (D) First year limit on number of exporters.--During the 1-
     year period beginning on the date of enactment of this 
     division, the Secretary of Health and Human Services 
     (referred to in this section as the ``Secretary'') may limit 
     the number of registered exporters under such section 804 to 
     not less than 50, so long as the Secretary gives priority to 
     those exporters with demonstrated ability to process a high 
     volume of shipments of drugs to individuals in the United 
     States.
       (E) Second year limit on number of exporters.--During the 
     1-year period beginning on the date that is 1 year after the 
     date of enactment of this division, the Secretary may limit 
     the number of registered exporters under such section 804 to 
     not less than 100, so long as the Secretary gives priority to 
     those exporters with demonstrated ability to process a high 
     volume of shipments of drugs to individuals in the United 
     States.
       (F) Further limit on number of exporters.--During any 1-
     year period beginning on a date that is 2 or more years after 
     the date of enactment of this division, the Secretary may 
     limit the number of registered exporters under such section 
     804 to not less than 25 more than the number of such 
     exporters during the previous 1-year period, so long as the 
     Secretary gives priority to those exporters with demonstrated 
     ability to process a high volume of shipments of drugs to 
     individuals in the United States.
       (3) Limits on number of importers.--
       (A) First year limit on number of importers.--During the 1-
     year period beginning on the date that is 1 year after the 
     date of enactment of this division, the Secretary may limit 
     the number of registered importers under such section 804 to 
     not less than 100 (of which at least a significant number 
     shall be groups of pharmacies, to the extent feasible given 
     the applications submitted by such groups), so long as the 
     Secretary gives priority to those importers with demonstrated 
     ability to process a high volume of shipments of drugs 
     imported into the United States.
       (B) Second year limit on number of importers.--During the 
     1-year period beginning on the date that is 2 years after the 
     date of enactment of this division, the Secretary may limit 
     the number of registered importers under such section 804 to 
     not less than 200 (of which at least a significant number 
     shall be groups of pharmacies, to the extent feasible given 
     the applications submitted by such groups), so long as the 
     Secretary gives priority to those importers with demonstrated 
     ability to process a high volume of shipments of drugs into 
     the United States.
       (C) Further limit on number of importers.--During any 1-
     year period beginning on a date that is 3 or more years after 
     the date of enactment of this division, the Secretary may 
     limit the number of registered importers under such section 
     804 to not less than 50 more (of which at least a significant 
     number shall be groups of pharmacies, to the extent feasible 
     given the applications submitted by such groups) than the 
     number of such importers during the previous 1-year period, 
     so long as the Secretary gives priority to those importers 
     with demonstrated ability to process a high volume of 
     shipments of drugs to the United States.
       (4) Notices for drugs for import from canada.--The notice 
     with respect to a qualifying drug introduced for commercial 
     distribution in Canada as of the date of enactment of this 
     division that is required under subsection (g)(2)(B)(i) of 
     such section 804 shall be submitted to the Secretary not 
     later than 30 days after the date of enactment of this 
     division if--
       (A) the U.S. label drug (as defined in such section 804) 
     for the qualifying drug is 1 of the 100 prescription drugs 
     with the highest dollar volume of sales in the United States 
     based on the 12 calendar month period most recently completed 
     before the date of enactment of this division; or
       (B) the notice is a notice under subsection 
     (g)(2)(B)(i)(II) of such section 804.
       (5) Notice for drugs for import from other countries.--The 
     notice with respect to a qualifying drug introduced for 
     commercial distribution in a permitted country other than 
     Canada as of the date of enactment of this division that is 
     required under subsection (g)(2)(B)(i) of such section 804 
     shall be submitted to the Secretary not later than 180 days 
     after the date of enactment of this division if--
       (A) the U.S. label drug for the qualifying drug is 1 of the 
     100 prescription drugs with the highest dollar volume of 
     sales in the United States based on the 12 calendar month 
     period that is first completed on the date that is 120 days 
     after the date of enactment of this division; or
       (B) the notice is a notice under subsection 
     (g)(2)(B)(i)(II) of such section 804.
       (6) Notice for other drugs for import.--
       (A) Guidance on submission dates.--The Secretary shall by 
     guidance establish a series of submission dates for the 
     notices under subsection (g)(2)(B)(i) of such section 804 
     with respect to qualifying drugs introduced for commercial 
     distribution as of the date of enactment of this division and 
     that are not required to be submitted under paragraph (4) or 
     (5).
       (B) Consistent and efficient use of resources.--The 
     Secretary shall establish the dates described under 
     subparagraph (A) so that such notices described under 
     subparagraph (A) are submitted and reviewed at a rate that 
     allows consistent and efficient use of the resources and 
     staff available to the Secretary for such reviews. The 
     Secretary may condition the requirement to submit such a 
     notice, and the review of such a notice, on the submission by 
     a registered exporter or a registered importer to the 
     Secretary of a notice that such exporter or importer intends 
     to import such qualifying drug to the United States under 
     such section 804.
       (C) Priority for drugs with higher sales.--The Secretary 
     shall establish the dates described under subparagraph (A) so 
     that the Secretary reviews the notices described under such 
     subparagraph with respect to qualifying drugs with higher 
     dollar volume of sales in the United States before the 
     notices with respect to drugs with lower sales in the United 
     States.
       (7) Notices for drugs approved after effective date.--The 
     notice required under subsection (g)(2)(B)(i) of such section 
     804 for a qualifying drug first introduced for commercial 
     distribution in a permitted country (as defined in such 
     section 804) after the date of enactment of this division 
     shall be submitted to and reviewed by the Secretary as 
     provided under subsection (g)(2)(B) of such section 804, 
     without regard to paragraph (4), (5), or (6).
       (8) Report.--Beginning with the first full fiscal year 
     after the date of enactment of this division, not later than 
     90 days after the end of each fiscal year during which the 
     Secretary reviews a notice referred to in paragraph (4), (5), 
     or (6), the Secretary shall submit a report to Congress 
     concerning the progress of the Food and Drug Administration 
     in reviewing the notices referred to in paragraphs (4), (5), 
     and (6).
       (9) User fees.--
       (A) Exporters.--When establishing an aggregate total of 
     fees to be collected from exporters under subsection (f)(2) 
     of such section 804, the Secretary shall, under subsection 
     (f)(3)(C)(i) of such section 804, estimate the total price of 
     drugs imported under subsection (a) of such section 804 into 
     the United States by registered exporters during the first 
     fiscal year in which this division takes effect to be an 
     amount equal to the amount which bears the same ratio to 
     $1,000,000,000 as the number of days in such fiscal year 
     during which this division is effective bears to 365.

[[Page S5963]]

       (B) Importers.--When establishing an aggregate total of 
     fees to be collected from importers under subsection (e)(2) 
     of such section 804, the Secretary shall, under subsection 
     (e)(3)(C)(i) of such section 804, estimate the total price of 
     drugs imported under subsection (a) of such section 804 into 
     the United States by registered importers during--
       (i) the first fiscal year in which this division takes 
     effect to be an amount equal to the amount which bears the 
     same ratio to $1,000,000,000 as the number of days in such 
     fiscal year during which this division is effective bears to 
     365; and
       (ii) the second fiscal year in which this division is in 
     effect to be $3,000,000,000.
       (C) Second year adjustment.--
       (i) Reports.--Not later than February 20 of the second 
     fiscal year in which this division is in effect, registered 
     importers shall report to the Secretary the total price and 
     the total volume of drugs imported to the United States by 
     the importer during the 4-month period from October 1 through 
     January 31 of such fiscal year.
       (ii) Reestimate.--Notwithstanding subsection (e)(3)(C)(ii) 
     of such section 804 or subparagraph (B), the Secretary shall 
     reestimate the total price of qualifying drugs imported under 
     subsection (a) of such section 804 into the United States by 
     registered importers during the second fiscal year in which 
     this division is in effect. Such reestimate shall be equal 
     to--

       (I) the total price of qualifying drugs imported by each 
     importer as reported under clause (i); multiplied by
       (II) 3.

       (iii) Adjustment.--The Secretary shall adjust the fee due 
     on April 1 of the second fiscal year in which this division 
     is in effect, from each importer so that the aggregate total 
     of fees collected under subsection (e)(2) for such fiscal 
     year does not exceed the total price of qualifying drugs 
     imported under subsection (a) of such section 804 into the 
     United States by registered importers during such fiscal year 
     as reestimated under clause (ii).
       (D) Failure to pay fees.--Notwithstanding any other 
     provision of this section, the Secretary may prohibit a 
     registered importer or exporter that is required to pay user 
     fees under subsection (e) or (f) of such section 804 and that 
     fails to pay such fees within 30 days after the date on which 
     it is due, from importing or offering for importation a 
     qualifying drug under such section 804 until such fee is 
     paid.
       (E) Annual report.--
       (i) Food and drug administration.--Not later than 180 days 
     after the end of each fiscal year during which fees are 
     collected under subsection (e), (f), or (g)(2)(B)(iv) of such 
     section 804, the Secretary shall prepare and submit to the 
     House of Representatives and the Senate a report on the 
     implementation of the authority for such fees during such 
     fiscal year and the use, by the Food and Drug Administration, 
     of the fees collected for the fiscal year for which the 
     report is made and credited to the Food and Drug 
     Administration.
       (ii) Customs and border control.--Not later than 180 days 
     after the end of each fiscal year during which fees are 
     collected under subsection (e) or (f) of such section 804, 
     the Secretary of Homeland Security, in consultation with the 
     Secretary of the Treasury, shall prepare and submit to the 
     House of Representatives and the Senate a report on the use, 
     by the Bureau of Customs and Border Protection, of the fees, 
     if any, transferred by the Secretary to the Bureau of Customs 
     and Border Protection for the fiscal year for which the 
     report is made.
       (10) Special rule regarding importation by individuals.--
       (A) In general.--Notwithstanding any provision of this 
     division (or an amendment made by this division), the 
     Secretary shall expedite the designation of any additional 
     countries from which an individual may import a qualifying 
     drug into the United States under such section 804 if any 
     action implemented by the Government of Canada has the effect 
     of limiting or prohibiting the importation of qualifying 
     drugs into the United States from Canada.
       (B) Timing and criteria.--The Secretary shall designate 
     such additional countries under subparagraph (A)--
       (i) not later than 6 months after the date of the action by 
     the Government of Canada described under such subparagraph; 
     and
       (ii) using the criteria described under subsection 
     (a)(4)(D)(i)(II) of such section 804.
       (f) Implementation of Section 804.--
       (1) Interim rule.--The Secretary may promulgate an interim 
     rule for implementing section 804 of the Federal Food, Drug, 
     and Cosmetic Act, as added by subsection (a) of this section.
       (2) No notice of proposed rulemaking.--The interim rule 
     described under paragraph (1) may be developed and 
     promulgated by the Secretary without providing general notice 
     of proposed rulemaking.
       (3) Final rule.--Not later than 1 year after the date on 
     which the Secretary promulgates an interim rule under 
     paragraph (1), the Secretary shall, in accordance with 
     procedures under section 553 of title 5, United States Code, 
     promulgate a final rule for implementing such section 804, 
     which may incorporate by reference provisions of the interim 
     rule provided for under paragraph (1), to the extent that 
     such provisions are not modified.
       (g) Consumer Education.--The Secretary shall carry out 
     activities that educate consumers--
       (1) with regard to the availability of qualifying drugs for 
     import for personal use from an exporter registered with and 
     approved by the Food and Drug Administration under section 
     804 of the Federal Food, Drug, and Cosmetic Act, as added by 
     this section, including information on how to verify whether 
     an exporter is registered and approved by use of the Internet 
     website of the Food and Drug Administration and the toll-free 
     telephone number required by this division;
       (2) that drugs that consumers attempt to import from an 
     exporter that is not registered with and approved by the Food 
     and Drug Administration can be seized by the United States 
     Customs Service and destroyed, and that such drugs may be 
     counterfeit, unapproved, unsafe, or ineffective;
       (3) with regard to the suspension and termination of any 
     registration of a registered importer or exporter under such 
     section 804; and
       (4) with regard to the availability at domestic retail 
     pharmacies of qualifying drugs imported under such section 
     804 by domestic wholesalers and pharmacies registered with 
     and approved by the Food and Drug Administration.
       (h) Effect on Administration Practices.--Notwithstanding 
     any provision of this division (and the amendments made by 
     this division), the practices and policies of the Food and 
     Drug Administration and Bureau of Customs and Border 
     Protection, in effect on January 1, 2004, with respect to the 
     importation of prescription drugs into the United States by 
     an individual, on the person of such individual, for personal 
     use, shall remain in effect.
       (i) Report to Congress.--The Federal Trade Commission 
     shall, on an annual basis, submit to Congress a report that 
     describes any action taken during the period for which the 
     report is being prepared to enforce the provisions of section 
     804(n) of the Federal Food, Drug, and Cosmetic Act (as added 
     by this division), including any pending investigations or 
     civil actions under such section.

     SEC. 5. DISPOSITION OF CERTAIN DRUGS DENIED ADMISSION INTO 
                   UNITED STATES.

       (a) In General.--Chapter VIII of the Federal Food, Drug, 
     and Cosmetic Act (21 U.S.C. 381 et seq.), as amended by 
     section 4, is further amended by adding at the end the 
     following section:

     ``SEC. 805. DISPOSITION OF CERTAIN DRUGS DENIED ADMISSION.

       ``(a) In General.--The Secretary of Homeland Security shall 
     deliver to the Secretary a shipment of drugs that is imported 
     or offered for import into the United States if--
       ``(1) the shipment has a declared value of less than 
     $10,000; and
       ``(2)(A) the shipping container for such drugs does not 
     bear the markings required under section 804(d)(2); or
       ``(B) the Secretary has requested delivery of such shipment 
     of drugs.
       ``(b) No Bond or Export.--Section 801(b) does not authorize 
     the delivery to the owner or consignee of drugs delivered to 
     the Secretary under subsection (a) pursuant to the execution 
     of a bond, and such drugs may not be exported.
       ``(c) Destruction of Violative Shipment.--The Secretary 
     shall destroy a shipment of drugs delivered by the Secretary 
     of Homeland Security to the Secretary under subsection (a) 
     if--
       ``(1) in the case of drugs that are imported or offered for 
     import from a registered exporter under section 804, the 
     drugs are in violation of any standard described in section 
     804(g)(5); or
       ``(2) in the case of drugs that are not imported or offered 
     for import from a registered exporter under section 804, the 
     drugs are in violation of a standard referred to in section 
     801(a) or 801(d)(1).
       ``(d) Certain Procedures.--
       ``(1) In general.--The delivery and destruction of drugs 
     under this section may be carried out without notice to the 
     importer, owner, or consignee of the drugs except as required 
     by section 801(g) or section 804(i)(2). The issuance of 
     receipts for the drugs, and recordkeeping activities 
     regarding the drugs, may be carried out on a summary basis.
       ``(2) Objective of procedures.--Procedures promulgated 
     under paragraph (1) shall be designed toward the objective of 
     ensuring that, with respect to efficiently utilizing Federal 
     resources available for carrying out this section, a 
     substantial majority of shipments of drugs subject to 
     described in subsection (c) are identified and destroyed.
       ``(e) Evidence Exception.--Drugs may not be destroyed under 
     subsection (c) to the extent that the Attorney General of the 
     United States determines that the drugs should be preserved 
     as evidence or potential evidence with respect to an offense 
     against the United States.
       ``(f) Rule of Construction.--This section may not be 
     construed as having any legal effect on applicable law with 
     respect to a shipment of drugs that is imported or offered 
     for import into the United States and has a declared value 
     equal to or greater than $10,000.''.
       (b) Procedures.--Procedures for carrying out section 805 of 
     the Federal Food, Drug, and Cosmetic Act, as added by 
     subsection (a), shall be established not later than 90 days 
     after the date of the enactment of this division.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on the date that is 90 days after the date 
     of enactment of this division.

[[Page S5964]]

     SEC. 6. WHOLESALE DISTRIBUTION OF DRUGS; STATEMENTS REGARDING 
                   PRIOR SALE, PURCHASE, OR TRADE.

       (a) Striking of Exemptions; Applicability to Registered 
     Exporters.--Section 503(e) of the Federal Food, Drug, and 
     Cosmetic Act (21 U.S.C. 353(e)) is amended--
       (1) in paragraph (1)--
       (A) by striking ``and who is not the manufacturer or an 
     authorized distributor of record of such drug'';
       (B) by striking ``to an authorized distributor of record 
     or''; and
       (C) by striking subparagraph (B) and inserting the 
     following:
       ``(B) The fact that a drug subject to subsection (b) is 
     exported from the United States does not with respect to such 
     drug exempt any person that is engaged in the business of the 
     wholesale distribution of the drug from providing the 
     statement described in subparagraph (A) to the person that 
     receives the drug pursuant to the export of the drug.
       ``(C)(i) The Secretary shall by regulation establish 
     requirements that supersede subparagraph (A) (referred to in 
     this subparagraph as `alternative requirements') to identify 
     the chain of custody of a drug subject to subsection (b) from 
     the manufacturer of the drug throughout the wholesale 
     distribution of the drug to a pharmacist who intends to sell 
     the drug at retail if the Secretary determines that the 
     alternative requirements, which may include standardized 
     anti-counterfeiting or track-and-trace technologies, will 
     identify such chain of custody or the identity of the 
     discrete package of the drug from which the drug is dispensed 
     with equal or greater certainty to the requirements of 
     subparagraph (A), and that the alternative requirements are 
     economically and technically feasible.
       ``(ii) When the Secretary promulgates a final rule to 
     establish such alternative requirements, the final rule in 
     addition shall, with respect to the registration condition 
     established in clause (i) of section 804(c)(3)(B), establish 
     a condition equivalent to the alternative requirements, and 
     such equivalent condition may be met in lieu of the 
     registration condition established in such clause (i).'';
       (2) in paragraph (2)(A), by adding at the end the 
     following: ``The preceding sentence may not be construed as 
     having any applicability with respect to a registered 
     exporter under section 804.''; and
       (3) in paragraph (3), by striking ``and subsection (d)--'' 
     in the matter preceding subparagraph (A) and all that follows 
     through ``the term `wholesale distribution' means'' in 
     subparagraph (B) and inserting the following: ``and 
     subsection (d), the term `wholesale distribution' means''.
       (b) Conforming Amendment.--Section 503(d) of the Federal 
     Food, Drug, and Cosmetic Act (21 U.S.C. 353(d)) is amended by 
     adding at the end the following:
       ``(4) Each manufacturer of a drug subject to subsection (b) 
     shall maintain at its corporate offices a current list of the 
     authorized distributors of record of such drug.
       ``(5) For purposes of this subsection, the term `authorized 
     distributors of record' means those distributors with whom a 
     manufacturer has established an ongoing relationship to 
     distribute such manufacturer's products.''.
       (c) Effective Date.--
       (1) In general.--The amendments made by paragraphs (1) and 
     (3) of subsection (a) and by subsection (b) shall take effect 
     on January 1, 2012.
       (2) Drugs imported by registered importers under section 
     804.--Notwithstanding paragraph (1), the amendments made by 
     paragraphs (1) and (3) of subsection (a) and by subsection 
     (b) shall take effect on the date that is 90 days after the 
     date of enactment of this division with respect to qualifying 
     drugs imported under section 804 of the Federal Food, Drug, 
     and Cosmetic Act, as added by section 4.
       (3) Effect with respect to registered exporters.--The 
     amendment made by subsection (a)(2) shall take effect on the 
     date that is 90 days after the date of enactment of this 
     division.
       (4) Alternative requirements.--The Secretary shall issue 
     regulations to establish the alternative requirements, 
     referred to in the amendment made by subsection (a)(1), that 
     take effect not later than January 1, 2012.
       (5) Intermediate requirements.--The Secretary shall by 
     regulation require the use of standardized anti-
     counterfeiting or track-and-trace technologies on 
     prescription drugs at the case and pallet level effective not 
     later than 1 year after the date of enactment of this 
     division.
       (6) Additional requirements.--
       (A) In general.--Notwithstanding any other provision of 
     this section, the Secretary shall, not later than 18 months 
     after the date of enactment of this division, require that 
     the packaging of any prescription drug incorporates--
       (i) a standardized numerical identifier unique to each 
     package of such drug, applied at the point of manufacturing 
     and repackaging (in which case the numerical identifier shall 
     be linked to the numerical identifier applied at the point of 
     manufacturing); and
       (ii)(I) overt optically variable counterfeit-resistant 
     technologies that--

       (aa) are visible to the naked eye, providing for visual 
     identification of product authenticity without the need for 
     readers, microscopes, lighting devices, or scanners;
       (bb) are similar to that used by the Bureau of Engraving 
     and Printing to secure United States currency;
       (cc) are manufactured and distributed in a highly secure, 
     tightly controlled environment; and
       (dd) incorporate additional layers of nonvisible convert 
     security features up to and including forensic capability, as 
     described in subparagraph (B); or

       (II) technologies that have a function of security 
     comparable to that described in subclause (I), as determined 
     by the Secretary.
       (B) Standards for packaging.--For the purpose of making it 
     more difficult to counterfeit the packaging of drugs subject 
     to this paragraph, the manufacturers of such drugs shall 
     incorporate the technologies described in subparagraph (A) 
     into at least 1 additional element of the physical packaging 
     of the drugs, including blister packs, shrink wrap, package 
     labels, package seals, bottles, and boxes.

     SEC. 7. INTERNET SALES OF PRESCRIPTION DRUGS.

       (a) In General.--Chapter V of the Federal Food, Drug, and 
     Cosmetic Act (21 U.S.C. 351 et seq.) is amended by inserting 
     after section 503B the following:

     ``SEC. 503C. INTERNET SALES OF PRESCRIPTION DRUGS.

       ``(a) Requirements Regarding Information on Internet 
     Site.--
       ``(1) In general.--A person may not dispense a prescription 
     drug pursuant to a sale of the drug by such person if--
       ``(A) the purchaser of the drug submitted the purchase 
     order for the drug, or conducted any other part of the sales 
     transaction for the drug, through an Internet site;
       ``(B) the person dispenses the drug to the purchaser by 
     mailing or shipping the drug to the purchaser; and
       ``(C) such site, or any other Internet site used by such 
     person for purposes of sales of a prescription drug, fails to 
     meet each of the requirements specified in paragraph (2), 
     other than a site or pages on a site that--
       ``(i) are not intended to be accessed by purchasers or 
     prospective purchasers; or
       ``(ii) provide an Internet information location tool within 
     the meaning of section 231(e)(5) of the Communications Act of 
     1934 (47 U.S.C. 231(e)(5)).
       ``(2) Requirements.--With respect to an Internet site, the 
     requirements referred to in subparagraph (C) of paragraph (1) 
     for a person to whom such paragraph applies are as follows:
       ``(A) Each page of the site shall include either the 
     following information or a link to a page that provides the 
     following information:
       ``(i) The name of such person.
       ``(ii) Each State in which the person is authorized by law 
     to dispense prescription drugs.
       ``(iii) The address and telephone number of each place of 
     business of the person with respect to sales of prescription 
     drugs through the Internet, other than a place of business 
     that does not mail or ship prescription drugs to purchasers.
       ``(iv) The name of each individual who serves as a 
     pharmacist for prescription drugs that are mailed or shipped 
     pursuant to the site, and each State in which the individual 
     is authorized by law to dispense prescription drugs.
       ``(v) If the person provides for medical consultations 
     through the site for purposes of providing prescriptions, the 
     name of each individual who provides such consultations; each 
     State in which the individual is licensed or otherwise 
     authorized by law to provide such consultations or practice 
     medicine; and the type or types of health professions for 
     which the individual holds such licenses or other 
     authorizations.
       ``(B) A link to which paragraph (1) applies shall be 
     displayed in a clear and prominent place and manner, and 
     shall include in the caption for the link the words 
     `licensing and contact information'.
       ``(b) Internet Sales Without Appropriate Medical 
     Relationships.--
       ``(1) In general.--Except as provided in paragraph (2), a 
     person may not dispense a prescription drug, or sell such a 
     drug, if--
       ``(A) for purposes of such dispensing or sale, the 
     purchaser communicated with the person through the Internet;
       ``(B) the patient for whom the drug was dispensed or 
     purchased did not, when such communications began, have a 
     prescription for the drug that is valid in the United States;
       ``(C) pursuant to such communications, the person provided 
     for the involvement of a practitioner, or an individual 
     represented by the person as a practitioner, and the 
     practitioner or such individual issued a prescription for the 
     drug that was purchased;
       ``(D) the person knew, or had reason to know, that the 
     practitioner or the individual referred to in subparagraph 
     (C) did not, when issuing the prescription, have a qualifying 
     medical relationship with the patient; and
       ``(E) the person received payment for the dispensing or 
     sale of the drug.

     For purposes of subparagraph (E), payment is received if 
     money or other valuable consideration is received.
       ``(2) Exceptions.--Paragraph (1) does not apply to--
       ``(A) the dispensing or selling of a prescription drug 
     pursuant to telemedicine practices sponsored by--
       ``(i) a hospital that has in effect a provider agreement 
     under title XVIII of the Social Security Act (relating to the 
     Medicare program); or

[[Page S5965]]

       ``(ii) a group practice that has not fewer than 100 
     physicians who have in effect provider agreements under such 
     title; or
       ``(B) the dispensing or selling of a prescription drug 
     pursuant to practices that promote the public health, as 
     determined by the Secretary by regulation.
       ``(3) Qualifying medical relationship.--
       ``(A) In general.--With respect to issuing a prescription 
     for a drug for a patient, a practitioner has a qualifying 
     medical relationship with the patient for purposes of this 
     section if--
       ``(i) at least one in-person medical evaluation of the 
     patient has been conducted by the practitioner; or
       ``(ii) the practitioner conducts a medical evaluation of 
     the patient as a covering practitioner.
       ``(B) In-person medical evaluation.--A medical evaluation 
     by a practitioner is an in-person medical evaluation for 
     purposes of this section if the practitioner is in the 
     physical presence of the patient as part of conducting the 
     evaluation, without regard to whether portions of the 
     evaluation are conducted by other health professionals.
       ``(C) Covering practitioner.--With respect to a patient, a 
     practitioner is a covering practitioner for purposes of this 
     section if the practitioner conducts a medical evaluation of 
     the patient at the request of a practitioner who has 
     conducted at least one in-person medical evaluation of the 
     patient and is temporarily unavailable to conduct the 
     evaluation of the patient. A practitioner is a covering 
     practitioner without regard to whether the practitioner has 
     conducted any in-person medical evaluation of the patient 
     involved.
       ``(4) Rules of construction.--
       ``(A) Individuals represented as practitioners.--A person 
     who is not a practitioner (as defined in subsection (e)(1)) 
     lacks legal capacity under this section to have a qualifying 
     medical relationship with any patient.
       ``(B) Standard practice of pharmacy.--Paragraph (1) may not 
     be construed as prohibiting any conduct that is a standard 
     practice in the practice of pharmacy.
       ``(C) Applicability of requirements.--Paragraph (3) may not 
     be construed as having any applicability beyond this section, 
     and does not affect any State law, or interpretation of State 
     law, concerning the practice of medicine.
       ``(c) Actions by States.--
       ``(1) In general.--Whenever an attorney general of any 
     State has reason to believe that the interests of the 
     residents of that State have been or are being threatened or 
     adversely affected because any person has engaged or is 
     engaging in a pattern or practice that violates section 
     301(l), the State may bring a civil action on behalf of its 
     residents in an appropriate district court of the United 
     States to enjoin such practice, to enforce compliance with 
     such section (including a nationwide injunction), to obtain 
     damages, restitution, or other compensation on behalf of 
     residents of such State, to obtain reasonable attorneys fees 
     and costs if the State prevails in the civil action, or to 
     obtain such further and other relief as the court may deem 
     appropriate.
       ``(2) Notice.--The State shall serve prior written notice 
     of any civil action under paragraph (1) or (5)(B) upon the 
     Secretary and provide the Secretary with a copy of its 
     complaint, except that if it is not feasible for the State to 
     provide such prior notice, the State shall serve such notice 
     immediately upon instituting such action. Upon receiving a 
     notice respecting a civil action, the Secretary shall have 
     the right--
       ``(A) to intervene in such action;
       ``(B) upon so intervening, to be heard on all matters 
     arising therein; and
       ``(C) to file petitions for appeal.
       ``(3) Construction.--For purposes of bringing any civil 
     action under paragraph (1), nothing in this chapter shall 
     prevent an attorney general of a State from exercising the 
     powers conferred on the attorney general by the laws of such 
     State to conduct investigations or to administer oaths or 
     affirmations or to compel the attendance of witnesses or the 
     production of documentary and other evidence.
       ``(4) Venue; service of process.--Any civil action brought 
     under paragraph (1) in a district court of the United States 
     may be brought in the district in which the defendant is 
     found, is an inhabitant, or transacts business or wherever 
     venue is proper under section 1391 of title 28, United States 
     Code. Process in such an action may be served in any district 
     in which the defendant is an inhabitant or in which the 
     defendant may be found.
       ``(5) Actions by other state officials.--
       ``(A) Nothing contained in this section shall prohibit an 
     authorized State official from proceeding in State court on 
     the basis of an alleged violation of any civil or criminal 
     statute of such State.
       ``(B) In addition to actions brought by an attorney general 
     of a State under paragraph (1), such an action may be brought 
     by officers of such State who are authorized by the State to 
     bring actions in such State on behalf of its residents.
       ``(d) Effect of Section.--This section shall not apply to a 
     person that is a registered exporter under section 804.
       ``(e) General Definitions.--For purposes of this section:
       ``(1) The term `practitioner' means a practitioner referred 
     to in section 503(b)(1) with respect to issuing a written or 
     oral prescription.
       ``(2) The term `prescription drug' means a drug that is 
     described in section 503(b)(1).
       ``(3) The term `qualifying medical relationship', with 
     respect to a practitioner and a patient, has the meaning 
     indicated for such term in subsection (b).
       ``(f) Internet-Related Definitions.--
       ``(1) In general.--For purposes of this section:
       ``(A) The term `Internet' means collectively the myriad of 
     computer and telecommunications facilities, including 
     equipment and operating software, which comprise the 
     interconnected world-wide network of networks that employ the 
     transmission control protocol/internet protocol, or any 
     predecessor or successor protocols to such protocol, to 
     communicate information of all kinds by wire or radio.
       ``(B) The term `link', with respect to the Internet, means 
     one or more letters, words, numbers, symbols, or graphic 
     items that appear on a page of an Internet site for the 
     purpose of serving, when activated, as a method for executing 
     an electronic command--
       ``(i) to move from viewing one portion of a page on such 
     site to another portion of the page;
       ``(ii) to move from viewing one page on such site to 
     another page on such site; or
       ``(iii) to move from viewing a page on one Internet site to 
     a page on another Internet site.
       ``(C) The term `page', with respect to the Internet, means 
     a document or other file accessed at an Internet site.
       ``(D)(i) The terms `site' and `address', with respect to 
     the Internet, mean a specific location on the Internet that 
     is determined by Internet Protocol numbers. Such term 
     includes the domain name, if any.
       ``(ii) The term `domain name' means a method of 
     representing an Internet address without direct reference to 
     the Internet Protocol numbers for the address, including 
     methods that use designations such as `.com', `.edu', `.gov', 
     `.net', or `.org'.
       ``(iii) The term `Internet Protocol numbers' includes any 
     successor protocol for determining a specific location on the 
     Internet.
       ``(2) Authority of secretary.--The Secretary may by 
     regulation modify any definition under paragraph (1) to take 
     into account changes in technology.
       ``(g) Interactive Computer Service; Advertising.--No 
     provider of an interactive computer service, as defined in 
     section 230(f)(2) of the Communications Act of 1934 (47 
     U.S.C. 230(f)(2)), or of advertising services shall be liable 
     under this section for dispensing or selling prescription 
     drugs in violation of this section on account of another 
     person's selling or dispensing such drugs, provided that the 
     provider of the interactive computer service or of 
     advertising services does not own or exercise corporate 
     control over such person.''.
       (b) Inclusion as Prohibited Act.--Section 301 of the 
     Federal Food, Drug, and Cosmetic Act (21 U.S.C. 331) is 
     amended by inserting after paragraph (k) the following:
       ``(l) The dispensing or selling of a prescription drug in 
     violation of section 503C.''.
       (c) Internet Sales of Prescription Drugs; Consideration by 
     Secretary of Practices and Procedures for Certification of 
     Legitimate Businesses.--In carrying out section 503C of the 
     Federal Food, Drug, and Cosmetic Act (as added by subsection 
     (a) of this section), the Secretary of Health and Human 
     Services shall take into consideration the practices and 
     procedures of public or private entities that certify that 
     businesses selling prescription drugs through Internet sites 
     are legitimate businesses, including practices and procedures 
     regarding disclosure formats and verification programs.
       (d) Reports Regarding Internet-Related Violations of 
     Federal and State Laws on Dispensing of Drugs.--
       (1) In general.--The Secretary of Health and Human Services 
     (referred to in this subsection as the ``Secretary'') shall, 
     pursuant to the submission of an application meeting the 
     criteria of the Secretary, make an award of a grant or 
     contract to the National Clearinghouse on Internet 
     Prescribing (operated by the Federation of State Medical 
     Boards) for the purpose of--
       (A) identifying Internet sites that appear to be in 
     violation of Federal or State laws concerning the dispensing 
     of drugs;
       (B) reporting such sites to State medical licensing boards 
     and State pharmacy licensing boards, and to the Attorney 
     General and the Secretary, for further investigation; and
       (C) submitting, for each fiscal year for which the award 
     under this subsection is made, a report to the Secretary 
     describing investigations undertaken with respect to 
     violations described in subparagraph (A).
       (2) Authorization of appropriations.--For the purpose of 
     carrying out paragraph (1), there is authorized to be 
     appropriated $100,000 for each of the first 3 fiscal years in 
     which this section is in effect.
       (e) Effective Date.--The amendments made by subsections (a) 
     and (b) take effect 90 days after the date of enactment of 
     this division, without regard to whether a final rule to 
     implement such amendments has been promulgated by the 
     Secretary of Health and Human Services under section 701(a) 
     of the Federal Food, Drug, and Cosmetic Act. The preceding 
     sentence may not be construed as affecting the authority of 
     such Secretary to promulgate such a final rule.

     SEC. 8. PROHIBITING PAYMENTS TO UNREGISTERED FOREIGN 
                   PHARMACIES.

       (a) In General.--Section 303 of the Federal Food, Drug, and 
     Cosmetic Act (21 U.S.C. 333)

[[Page S5966]]

     is amended by adding at the end the following:
       ``(h) Restricted Transactions.--
       ``(1) In general.--The introduction of restricted 
     transactions into a payment system or the completion of 
     restricted transactions using a payment system is prohibited.
       ``(2) Payment system.--
       ``(A) In general.--The term `payment system' means a system 
     used by a person described in subparagraph (B) to effect a 
     credit transaction, electronic fund transfer, or money 
     transmitting service that may be used in connection with, or 
     to facilitate, a restricted transaction, and includes--
       ``(i) a credit card system;
       ``(ii) an international, national, regional, or local 
     network used to effect a credit transaction, an electronic 
     fund transfer, or a money transmitting service; and
       ``(iii) any other system that is centrally managed and is 
     primarily engaged in the transmission and settlement of 
     credit transactions, electronic fund transfers, or money 
     transmitting services.
       ``(B) Persons described.--A person referred to in 
     subparagraph (A) is--
       ``(i) a creditor;
       ``(ii) a credit card issuer;
       ``(iii) a financial institution;
       ``(iv) an operator of a terminal at which an electronic 
     fund transfer may be initiated;
       ``(v) a money transmitting business; or
       ``(vi) a participant in an international, national, 
     regional, or local network used to effect a credit 
     transaction, electronic fund transfer, or money transmitting 
     service.
       ``(3) Restricted transaction.--The term `restricted 
     transaction' means a transaction or transmittal, on behalf of 
     an individual who places an unlawful drug importation request 
     to any person engaged in the operation of an unregistered 
     foreign pharmacy, of--
       ``(A) credit, or the proceeds of credit, extended to or on 
     behalf of the individual for the purpose of the unlawful drug 
     importation request (including credit extended through the 
     use of a credit card);
       ``(B) an electronic fund transfer or funds transmitted by 
     or through a money transmitting business, or the proceeds of 
     an electronic fund transfer or money transmitting service, 
     from or on behalf of the individual for the purpose of the 
     unlawful drug importation request;
       ``(C) a check, draft, or similar instrument which is drawn 
     by or on behalf of the individual for the purpose of the 
     unlawful drug importation request and is drawn on or payable 
     at or through any financial institution; or
       ``(D) the proceeds of any other form of financial 
     transaction (identified by the Board by regulation) that 
     involves a financial institution as a payor or financial 
     intermediary on behalf of or for the benefit of the 
     individual for the purpose of the unlawful drug importation 
     request.
       ``(4) Unlawful drug importation request.--The term 
     `unlawful drug importation request' means the request, or 
     transmittal of a request, made to an unregistered foreign 
     pharmacy for a prescription drug by mail (including a private 
     carrier), facsimile, phone, or electronic mail, or by a means 
     that involves the use, in whole or in part, of the Internet.
       ``(5) Unregistered foreign pharmacy.--The term 
     `unregistered foreign pharmacy' means a person in a country 
     other than the United States that is not a registered 
     exporter under section 804.
       ``(6) Other definitions.--
       ``(A) Credit; creditor; credit card.--The terms `credit', 
     `creditor', and `credit card' have the meanings given the 
     terms in section 103 of the Truth in Lending Act (15 U.S.C. 
     1602).
       ``(B) Access device; electronic fund transfer.--The terms 
     `access device' and `electronic fund transfer'--
       ``(i) have the meaning given the term in section 903 of the 
     Electronic Fund Transfer Act (15 U.S.C. 1693a); and
       ``(ii) the term `electronic fund transfer' also includes 
     any fund transfer covered under Article 4A of the Uniform 
     Commercial Code, as in effect in any State.
       ``(C) Financial institution.--The term `financial 
     institution'--
       ``(i) has the meaning given the term in section 903 of the 
     Electronic Transfer Fund Act (15 U.S.C. 1693a); and
       ``(ii) includes a financial institution (as defined in 
     section 509 of the Gramm-Leach-Bliley Act (15 U.S.C. 6809)).
       ``(D) Money transmitting business; money transmitting 
     service.--The terms `money transmitting business' and `money 
     transmitting service' have the meaning given the terms in 
     section 5330(d) of title 31, United States Code.
       ``(E) Board.--The term `Board' means the Board of Governors 
     of the Federal Reserve System.
       ``(7) Policies and procedures required to prevent 
     restricted transactions.--
       ``(A) Regulations.--The Board shall promulgate regulations 
     requiring--
       ``(i) an operator of a credit card system;
       ``(ii) an operator of an international, national, regional, 
     or local network used to effect a credit transaction, an 
     electronic fund transfer, or a money transmitting service;
       ``(iii) an operator of any other payment system that is 
     centrally managed and is primarily engaged in the 
     transmission and settlement of credit transactions, 
     electronic transfers or money transmitting services where at 
     least one party to the transaction or transfer is an 
     individual; and
       ``(iv) any other person described in paragraph (2)(B) and 
     specified by the Board in such regulations,

     to establish policies and procedures that are reasonably 
     designed to prevent the introduction of a restricted 
     transaction into a payment system or the completion of a 
     restricted transaction using a payment system
       ``(B) Requirements for policies and procedures.--In 
     promulgating regulations under subparagraph (A), the Board 
     shall--
       ``(i) identify types of policies and procedures, including 
     nonexclusive examples, that shall be considered to be 
     reasonably designed to prevent the introduction of restricted 
     transactions into a payment system or the completion of 
     restricted transactions using a payment system; and
       ``(ii) to the extent practicable, permit any payment 
     system, or person described in paragraph (2)(B), as 
     applicable, to choose among alternative means of preventing 
     the introduction or completion of restricted transactions.
       ``(C) No liability for blocking or refusing to honor 
     restricted transaction.--
       ``(i) In general.--A payment system, or a person described 
     in paragraph (2)(B) that is subject to a regulation issued 
     under this subsection, and any participant in such payment 
     system that prevents or otherwise refuses to honor 
     transactions in an effort to implement the policies and 
     procedures required under this subsection or to otherwise 
     comply with this subsection shall not be liable to any party 
     for such action.
       ``(ii) Compliance.--A person described in paragraph (2)(B) 
     meets the requirements of this subsection if the person 
     relies on and complies with the policies and procedures of a 
     payment system of which the person is a member or in which 
     the person is a participant, and such policies and procedures 
     of the payment system comply with the requirements of the 
     regulations promulgated under subparagraph (A).
       ``(D) Enforcement.--
       ``(i) In general.--This section shall be enforced by the 
     Federal functional regulators and the Federal Trade 
     Commission under applicable law in the manner provided in 
     section 505(a) of the Gramm-Leach-Bliley Act (15 U.S.C. 
     6805(a)).
       ``(ii) Factors to be considered.--In considering any 
     enforcement action under this subsection against a payment 
     system or person described in paragraph (2)(B), the Federal 
     functional regulators and the Federal Trade Commission shall 
     consider the following factors:

       ``(I) The extent to which the payment system or person 
     knowingly permits restricted transactions.
       ``(II) The history of the payment system or person in 
     connection with permitting restricted transactions.
       ``(III) The extent to which the payment system or person 
     has established and is maintaining policies and procedures in 
     compliance with regulations prescribed under this subsection.

       ``(8) Transactions permitted.--A payment system, or a 
     person described in paragraph (2)(B) that is subject to a 
     regulation issued under this subsection, is authorized to 
     engage in transactions with foreign pharmacies in connection 
     with investigating violations or potential violations of any 
     rule or requirement adopted by the payment system or person 
     in connection with complying with paragraph (7). A payment 
     system, or such a person, and its agents and employees shall 
     not be found to be in violation of, or liable under, any 
     Federal, State or other law by virtue of engaging in any such 
     transaction.
       ``(9) Relation to state laws.--No requirement, prohibition, 
     or liability may be imposed on a payment system, or a person 
     described in paragraph (2)(B) that is subject to a regulation 
     issued under this subsection, under the laws of any state 
     with respect to any payment transaction by an individual 
     because the payment transaction involves a payment to a 
     foreign pharmacy.
       ``(10) Timing of requirements.--A payment system, or a 
     person described in paragraph (2)(B) that is subject to a 
     regulation issued under this subsection, must adopt policies 
     and procedures reasonably designed to comply with any 
     regulations required under paragraph (7) within 60 days after 
     such regulations are issued in final form.''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect on the day that is 90 days after the date 
     of enactment of this division.
       (c) Implementation.--The Board of Governors of the Federal 
     Reserve System shall promulgate regulations as required by 
     subsection (h)(7) of section 303 of the Federal Food, Drug, 
     and Cosmetic Act (21 U.S.C. 333), as added by subsection (a), 
     not later than 90 days after the date of enactment of this 
     division.

     SEC. 9. IMPORTATION EXEMPTION UNDER CONTROLLED SUBSTANCES 
                   IMPORT AND EXPORT ACT.

       Section 1006(a)(2) of the Controlled Substances Import and 
     Export Act (21 U.S.C. 956(a)(2)) is amended by striking ``not 
     import the controlled substance into the United States in an 
     amount that exceeds 50 dosage units of the controlled 
     substance.'' and inserting ``import into the United States 
     not more than 10 dosage units combined of all such controlled 
     substances.''.

     SEC. 10. SEVERABILITY.

       If any provision of this division, an amendment by this 
     division, or the application of such provision or amendment 
     to any person or circumstance is held to be unconstitutional, 
     the remainder of this division, the

[[Page S5967]]

     amendments made by this division, and the application of the 
     provisions of such to any person or circumstance shall not 
     affected thereby.

                          ____________________