[Congressional Record Volume 158, Number 92 (Monday, June 18, 2012)]
[House]
[Pages H3719-H3721]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




            COUNTERFEIT DRUG PENALTY ENHANCEMENT ACT OF 2012

  Mr. SMITH of Texas. Mr. Speaker, I move to suspend the rules and pass 
the bill (H.R. 3668) to prevent trafficking in counterfeit drugs, as 
amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 3668

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Counterfeit Drug Penalty 
     Enhancement Act of 2012''.

     SEC. 2. COUNTERFEIT DRUG PENALTY ENHANCEMENT.

       (a) Offense.--Section 2320(a) of title 18, United States 
     Code, is amended--
       (1) by striking ``or'' at the end of paragraph (2);
       (2) by inserting ``or'' at the end of paragraph (3);
       (3) by inserting after paragraph (3) the following:
       ``(4) traffics in a counterfeit drug,''; and
       (4) by striking ``through (3)'' and inserting ``through 
     (4)''.
       (b) Penalties.--Section 2320(b)(3) of title 18, United 
     States Code, is amended--
       (1) in the heading, by inserting ``and counterfeit drugs'' 
     after ``services''; and
       (2) by inserting ``or counterfeit drug'' after ``service''.
       (c) Definition.--Section 2320(f) of title 18, United States 
     Code, is amended--
       (1) by striking ``and'' at the end of paragraph (4);
       (2) by striking the period at the end of paragraph (5) and 
     inserting ``; and''; and
       (3) by adding at the end the following:
       ``(6) the term `counterfeit drug' means a drug, as defined 
     by section 201 of the Federal Food, Drug, and Cosmetic Act, 
     that uses a counterfeit mark on or in connection with the 
     drug.''.
       (d) Priority Given to Certain Investigations and 
     Prosecutions.--The Attorney General shall give increased 
     priority to efforts to investigate and prosecute offenses 
     under section 2320 of title 18, United States Code, that 
     involve counterfeit drugs.

     SEC. 3. SENTENCING COMMISSION DIRECTIVE.

       (a) Directive to Sentencing Commission.--Pursuant to its 
     authority under section 994(p) of title 28, United States 
     Code, and in accordance with this section, the United States 
     Sentencing Commission shall review and amend, if appropriate, 
     its guidelines and its policy statements applicable to 
     persons convicted of an offense described in section 
     2320(a)(4) of title 18, United States Code, as amended by 
     section 2, in order to reflect the intent of Congress that 
     such penalties be increased in comparison to those currently 
     provided by the guidelines and policy statements.
       (b) Requirements.--In carrying out this section, the 
     Commission shall--
       (1) ensure that the sentencing guidelines and policy 
     statements reflect the intent of Congress that the guidelines 
     and policy statements reflect the serious nature of the 
     offenses described in subsection (a) and the need for an 
     effective deterrent and appropriate punishment to prevent 
     such offenses;
       (2) consider the extent to which the guidelines may or may 
     not appropriately account for the potential and actual harm 
     to the public resulting from the offense;
       (3) assure reasonable consistency with other relevant 
     directives and with other sentencing guidelines;
       (4) account for any additional aggravating or mitigating 
     circumstances that might justify exceptions to the generally 
     applicable sentencing ranges;
       (5) make any necessary conforming changes to the sentencing 
     guidelines; and
       (6) assure that the guidelines adequately meet the purposes 
     of sentencing as set forth in section 3553(a)(2) of title 18, 
     United States Code.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Texas (Mr. Smith) and the gentlewoman from California (Ms. Chu) each 
will control 20 minutes.
  The Chair recognizes the gentleman from Texas.


                             General Leave

  Mr. SMITH of Texas. Mr. Speaker, I ask unanimous consent that all 
Members may have 5 legislative days to revise and extend their remarks 
and include extraneous material on the bill under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Texas?
  There was no objection.
  Mr. SMITH of Texas. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, I thank Mr. Meehan of Pennsylvania and Ms. Linda Sanchez 
of California for their work on this issue. This is a bipartisan, 
bicameral bill. Similar legislation sponsored by Senator Leahy was 
approved by the Senate last March by voice vote.
  This bill enacts penalties for trafficking in counterfeit drugs 
similar to those for trafficking in military goods and services, as 
established in the National Defense Authorization Act, which Congress 
passed last December.
  Counterfeit military goods affect the credibility of the supply 
chains that support our national defense, and counterfeit drugs call 
into doubt the credibility of America's pharmaceutical legal drug 
supply. In both situations, the significant and multiple dangers to the 
public demand enhanced penalties.
  Counterfeit drugs are fake drugs. They may be contaminated, contain 
the wrong ingredient or no ingredient at all, or have the right active 
ingredient but the wrong dose. They are intentionally packaged to 
convince the consumer they are genuine. Counterfeit drugs are illegal 
and can be harmful to a person's health and even deadly.

                              {time}  1700

  Counterfeit drugs present not only a financial loss to the 
manufacturer or mark holder, but also a real health risk to consumers.
  While current law technically includes counterfeit drugs, the law 
does

[[Page H3720]]

not expressly prohibit trafficking in counterfeit drugs and carries a 
maximum penalty of only 10 years.
  Late last month, the U.S. Food and Drug Administration warned 
consumers and health care professionals about a counterfeit version of 
Adderall that is available for sale on the Internet. Approved for 
treatment of attention deficit hyperactivity disorders, this medication 
is a prescription drug classified as a controlled substance, a class of 
drugs for which special controls are required for dispensing by 
pharmacists. The FDA's preliminary laboratory test revealed that the 
counterfeit version of this drug contained the wrong active 
ingredients. The counterfeit product contained none of the four active 
ingredients found in the genuine medication. In fact, it contained two 
different drugs found in medicines used to treat acute pain.
  Rogue Web sites and corrupt distributors now prey on the fears of 
Americans when medicines are in short supply. Drug shortages have 
increased in frequency and severity in recent years and adversely 
affect patient care. An unfortunate and potentially deadly side effect 
of drug shortages is counterfeit drug trafficking.
  Last February, the FDA warned health care professionals and patients 
about a counterfeit version of Avastin, a cancer treatment. Tests 
revealed the counterfeit version did not contain the medicine's active 
ingredient. This may have resulted in patients not receiving needed 
cancer therapy. Several medical practices in the United States may have 
purchased the counterfeit drug from a foreign supplier. The FDA 
requested that the medical practices stop the use of any remaining 
products from this supplier. Unfortunately, in this case alone, there 
were dozens of cancer patients who may never know that they did not 
receive lifesaving cancer drugs. Instead, they got a useless 
counterfeit drug, a drug counterfeited and sold only for the purpose of 
financial gain. These recent situations prove that those who traffic in 
counterfeit drugs should be subject to enhanced penalties.
  I urge my colleagues to support this bicameral legislation, and I 
reserve the balance of my time.
  Ms. CHU. Mr. Speaker, I yield myself as much time as I may consume.
  Mr. Speaker, H.R. 3668, the Counterfeit Drug Penalty Enhancement Act 
of 2012, would increase the maximum criminal penalties for trafficking 
in counterfeit drugs. Counterfeit drugs are a serious public threat to 
all Americans for several reasons.
  To begin with, a person who unknowingly consumes a counterfeit 
medication may be harmed by dangerous but undisclosed substances in the 
drug. As a Food and Drug Administration representative testified at a 
hearing before the Judiciary Committee's Crime Subcommittee, ``a 
counterfeit drug could be made using ingredients that are toxic to 
patients and processed under poorly controlled and unsanitary 
conditions.''
  Also, an individual who consumes a counterfeit drug is deprived of 
meaningful treatment that can respond to life-threatening illnesses. 
Consider, for example, a patient suffering from a heart ailment or a 
child who is desperately fighting an aggressive life-threatening 
infection. The consequences of consuming an ineffective counterfeit 
drug are blatantly obvious.
  By receiving these counterfeit drugs instead of the real medications 
that they require, each of these individuals would be denied receiving 
the effective treatment that they must quickly be given in order to 
address their illnesses.
  Finally, the proliferation of counterfeit drugs poses a grave 
nationwide risk to the public health and safety of all of our citizens. 
Current technology and distribution channels present the real danger 
that a very large quantity of these counterfeit drugs could enter into 
the marketplace where they can injure and possibly risk the lives of 
many Americans before they are even detected.
  The Food and Drug Administration is working with medical product 
supply chain stakeholders to respond to this emerging threat, but we 
need to do more. It is critically important for us to reinforce our 
criminal law so that it clearly addresses the national menace presented 
by large-scale, intentional trafficking in counterfeit drugs.
  Under current law, trafficking in counterfeit drugs receives the same 
criminal penalty as trafficking in other less dangerous items. This 
shortcoming in current law explains why the U.S. Intellectual Property 
Enforcement Coordinator supports H.R. 3668, as stated in her recent 
annual report to Congress.
  This bill not only appropriately recognizes the need to treat crimes 
involving counterfeit medications more seriously, but also requires the 
Justice Department to prioritize its investigatory and prosecutorial 
efforts with respect to these crimes.
  I am particularly pleased that during the Judiciary Committee's 
markup of the bill, an amendment offered by my colleague, Congressman 
Bobby Scott, was adopted that would direct the Attorney General to give 
increased priority to efforts to investigate and prosecute these 
offenses.
  As amended, this measure appropriately recognizes that, while penalty 
increases may be warranted, effective deterrence depends mostly on the 
likelihood of apprehension and conviction of offenders.
  I commend the efforts of my colleagues, Congressman Patrick Meehan 
and Congresswoman Linda Sanchez, for introducing this important 
legislation.
  I urge my colleagues to support H.R. 3668, and I reserve the balance 
of my time.
  Mr. SMITH of Texas. Mr. Speaker, I yield as much time as he may 
consume to the gentleman from Pennsylvania (Mr. Meehan), who is the 
sponsor of this legislation.
  Mr. MEEHAN. I thank the chairman.
  Mr. Speaker, I rise today in support of H.R. 3668, the Counterfeit 
Drug Penalty Enhancement Act.

  I want to thank the distinguished gentleman from Texas for his 
leadership on this issue on the Judiciary Committee, and I also want to 
thank my colleagues from the other side of the aisle as we rise in a 
truly bipartisan, bicameral fashion in working for the passage of this 
very important legislation. So I appreciate the kind remarks of the 
gentlelady from California in support of this bill as well.
  Like so many other health care costs, prescription drugs are 
expensive, and the cost is rising. So what we are beginning to see 
increasingly is people going online to make the purchases of those 
drugs. It's an issue that I saw firsthand as a Federal prosecutor who 
began to work on the proliferation of illegal drug sales over the 
Internet. Oftentimes, the people who are purchasing these are senior 
citizens.
  Online, there are not the kinds of protections that would exist 
traditionally as there are in a pharmacy setting where, not only do you 
have the ability to have the advice of a pharmacist, but the certainty 
of the chain of custody, so to speak, for the drugs that have been 
traveling in commerce.
  What we are finding is that close to 90 percent of counterfeit drugs 
are sold online. And we're not just talking about mislabeled pills 
here. The fakes could actually contain no active ingredients, the wrong 
active ingredient, or even a contaminant.
  The counterfeit medicines pose a threat because of the conditions 
under which they are manufactured, often in unregulated locations and 
frequently under unsanitary conditions. In many instances, they contain 
none of the active pharmaceutical ingredients found in the authentic 
medicine or are in incorrect doses. In others, they may contain toxic 
ingredients, such as heavy metals, arsenic, pesticides, rat poison, 
brick dust, floor wax, and even leaded highway paint. In a worst-case 
scenario, the medicine itself is a fake, and the result of the 
counterfeit sale is harm to the patient's health and safety.
  And while all types of drugs are counterfeited, what's of particular 
concern to me is the illicit market in significant drugs, cancer drugs, 
like Avastin and Altuzan; ADHD drugs, like Adderall; and pain 
treatments, like Vicodin.
  This is an economic harm. Estimates are that there are $75 billion 
worth of counterfeit drug sales annually. But it's not just the 
economic harm that is of the greatest concern to me; it is the consumer 
safety associated with this.
  The World Health Organization, in their estimates, predicted or 
believed that counterfeit drugs caused 100,000 deaths worldwide last 
year. This is an

[[Page H3721]]

issue of such importance, it even captured the attention of the world 
governments, with the G 8 leaders at Camp David issuing a declaration 
on the need to address this international crisis.
  Today it's illegal to introduce counterfeit drugs into interstate 
commerce, but the penalties are no different than those assessed for 
trafficking other counterfeit products, such as movies or fashion 
products like purses.

                              {time}  1710

  That's why our bill seeks to have sentencing laws reflect the 
seriousness of the crime. The bill increases fines to a maximum of $4 
million for the first offense and $8 million for subsequent offenses, 
and prison terms for a maximum of 10 to 20 years. This is an overdue 
and needed change--and I can say that as a prosecutor.
  I would like to thank Congresswoman Sanchez for her leadership on 
this issue. I want to thank my colleague from Pennsylvania, Congressman 
Tom Marino, for his hard work on the Judiciary Committee, working with 
Chairman Smith on this issue. And I want to thank the Members in both 
parties that should be recognized for bringing this critical measure to 
the floor so expeditiously.
  I encourage my colleagues on both sides of the aisle to lend their 
support for this very important legislation.
  Ms. CHU. Mr. Speaker, I yield back the balance of my time.
  Mr. SMITH of Texas. I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Texas (Mr. Smith) that the House suspend the rules and 
pass the bill, H.R. 3668, as amended.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

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