[Congressional Record Volume 159, Number 131 (Saturday, September 28, 2013)]
[House]
[Pages H5946-H5965]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
DRUG QUALITY AND SECURITY ACT
Mr. UPTON. Mr. Speaker, I move to suspend the rules and pass the bill
(H.R. 3204) to amend the Federal Food, Drug, and Cosmetic Act with
respect to human drug compounding and drug supply chain security, and
for other purposes.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 3204
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 ``Drug Quality and Security
Act''.
SEC. 2. REFERENCES IN ACT; TABLE OF CONTENTS.
(a) References in Act.--Except as otherwise specified,
amendments made by this Act to a section or other provision
of law are amendments to such section or other provision of
the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et
seq.).
(b) Table of Contents.--The table of contents of this Act
is as follows:
Sec. 1. Short title.
Sec. 2. References in Act; table of contents.
TITLE I--DRUG COMPOUNDING
Sec. 101. Short title.
Sec. 102. Voluntary outsourcing facilities.
Sec. 103. Penalties.
Sec. 104. Regulations.
Sec. 105. Enhanced communication.
Sec. 106. Severability.
Sec. 107. GAO study.
TITLE II--DRUG SUPPLY CHAIN SECURITY
Sec. 201. Short title.
Sec. 202. Pharmaceutical distribution supply chain.
Sec. 203. Enhanced drug distribution security.
Sec. 204. National standards for prescription drug wholesale
distributors.
Sec. 205. National standards for third-party logistics providers;
uniform national policy.
Sec. 206. Penalties.
Sec. 207. Conforming amendment.
Sec. 208. Savings clause.
TITLE I--DRUG COMPOUNDING
SEC. 101. SHORT TITLE.
This Act may be cited as the ``Compounding Quality Act''.
SEC. 102. VOLUNTARY OUTSOURCING FACILITIES.
(a) In General.--Subchapter A of chapter V (21 U.S.C. 351
et seq.) is amended--
(1) by redesignating section 503B as section 503C; and
(2) by inserting after section 503A the following new
section:
``SEC. 503B. OUTSOURCING FACILITIES.
``(a) In General.--Sections 502(f)(1), 505, and 582 shall
not apply to a drug compounded by or under the direct
supervision of a licensed pharmacist in a facility that
elects to register as an outsourcing facility if each of the
following conditions is met:
``(1) Registration and reporting.--The drug is compounded
in an outsourcing facility that is in compliance with the
requirements of subsection (b).
``(2) Bulk drug substances.--The drug is compounded in an
outsourcing facility that does not compound using bulk drug
substances (as defined in section 207.3(a)(4) of title 21,
Code of Federal Regulations (or any successor regulation)),
unless--
``(A)(i) the bulk drug substance appears on a list
established by the Secretary identifying bulk drug substances
for which there is a clinical need, by--
``(I) publishing a notice in the Federal Register proposing
bulk drug substances to be included on the list, including
the rationale for such proposal;
``(II) providing a period of not less than 60 calendar days
for comment on the notice; and
``(III) publishing a notice in the Federal Register
designating bulk drug substances for inclusion on the list;
or
``(ii) the drug compounded from such bulk drug substance
appears on the drug shortage list in effect under section
506E at the time of compounding, distribution, and
dispensing;
``(B) if an applicable monograph exists under the United
States Pharmacopeia, the National Formulary, or another
compendium or pharmacopeia recognized by the Secretary for
purposes of this paragraph, the bulk drug substances each
comply with the monograph;
``(C) the bulk drug substances are each manufactured by an
establishment that is registered under section 510 (including
a foreign establishment that is registered under section
510(i)); and
``(D) the bulk drug substances are each accompanied by a
valid certificate of analysis.
``(3) Ingredients (other than bulk drug substances).--If
any ingredients (other than bulk drug substances) are used in
compounding the drug, such ingredients comply with the
standards of the applicable United States Pharmacopeia or
National Formulary monograph, if such monograph exists, or of
another compendium or pharmacopeia recognized by the
Secretary for purposes of this paragraph if any.
``(4) Drugs withdrawn or removed because unsafe or not
effective.--The drug does not appear on a list published by
the Secretary of drugs that have been withdrawn or removed
from the market because such drugs or components of such
drugs have been found to be unsafe or not effective.
``(5) Essentially a copy of an approved drug.--The drug is
not essentially a copy of one or more approved drugs.
``(6) Drugs presenting demonstrable difficulties for
compounding.--The drug--
``(A) is not identified (directly or as part of a category
of drugs) on a list published by the Secretary, through the
process described in subsection (c), of drugs or categories
of drugs that present demonstrable difficulties for
compounding that are reasonably likely to lead to an adverse
effect on the safety or effectiveness of the drug or category
of drugs, taking into account the risks and benefits to
patients; or
``(B) is compounded in accordance with all applicable
conditions identified on the list described in subparagraph
(A) as conditions that are necessary to prevent the drug or
category of drugs from presenting the demonstrable
difficulties described in subparagraph (A).
``(7) Elements to assure safe use.--In the case of a drug
that is compounded from a drug that is the subject of a risk
evaluation and mitigation strategy approved with elements to
assure safe use pursuant to section 505-1, or from a bulk
drug substance that is a component of such drug, the
outsourcing facility demonstrates to the Secretary prior to
beginning compounding that such facility will utilize
controls comparable to the controls applicable under the
relevant risk evaluation and mitigation strategy.
``(8) Prohibition on wholesaling.--The drug will not be
sold or transferred by an entity other than the outsourcing
facility that compounded such drug. This paragraph does not
prohibit administration of a drug in a health care setting or
dispensing a drug pursuant to a prescription executed in
accordance with section 503(b)(1).
``(9) Fees.--The drug is compounded in an outsourcing
facility that has paid all fees owed by such facility
pursuant to section 744K.
``(10) Labeling of drugs.--
``(A) Label.--The label of the drug includes--
``(i) the statement `This is a compounded drug.' or a
reasonable comparable alternative statement (as specified by
the Secretary) that prominently identifies the drug as a
compounded drug;
``(ii) the name, address, and phone number of the
applicable outsourcing facility; and
``(iii) with respect to the drug--
``(I) the lot or batch number;
``(II) the established name of the drug;
``(III) the dosage form and strength;
``(IV) the statement of quantity or volume, as appropriate;
``(V) the date that the drug was compounded;
``(VI) the expiration date;
``(VII) storage and handling instructions;
``(VIII) the National Drug Code number, if available;
``(IX) the statement `Not for resale', and, if the drug is
dispensed or distributed other than pursuant to a
prescription for an individual identified patient, the
statement `Office Use Only'; and
``(X) subject to subparagraph (B)(i), a list of active and
inactive ingredients, identified by established name and the
quantity or proportion of each ingredient.
``(B) Container.--The container from which the individual
units of the drug are removed for dispensing or for
administration (such as a plastic bag containing individual
product syringes) shall include--
``(i) the information described under subparagraph
(A)(iii)(X), if there is not space on the label for such
information;
``(ii) the following information to facilitate adverse
event reporting: www.fda.gov/medwatch and 1-800-FDA-1088 (or
any successor Internet Web site or phone number); and
``(iii) directions for use, including, as appropriate,
dosage and administration.
``(C) Additional information.--The label and labeling of
the drug shall include any other information as determined
necessary and specified in regulations promulgated by the
Secretary.
``(11) Outsourcing facility requirement.--The drug is
compounded in an outsourcing facility in which the
compounding of drugs occurs only in accordance with this
section.
[[Page H5947]]
``(b) Registration of Outsourcing Facilities and Reporting
of Drugs.--
``(1) Registration of outsourcing facilities.--
``(A) Annual registration.--Upon electing and in order to
become an outsourcing facility, and during the period
beginning on October 1 and ending on December 31 of each year
thereafter, a facility--
``(i) shall register with the Secretary its name, place of
business, and unique facility identifier (which shall conform
to the requirements for the unique facility identifier
established under section 510), and a point of contact email
address; and
``(ii) shall indicate whether the outsourcing facility
intends to compound a drug that appears on the list in effect
under section 506E during the subsequent calendar year.
``(B) Availability of registration for inspection; list.--
``(i) Registrations.--The Secretary shall make available
for inspection, to any person so requesting, any registration
filed pursuant to this paragraph.
``(ii) List.--The Secretary shall make available on the
public Internet Web site of the Food and Drug Administration
a list of the name of each facility registered under this
subsection as an outsourcing facility, the State in which
each such facility is located, whether the facility compounds
from bulk drug substances, and whether any such compounding
from bulk drug substances is for sterile or nonsterile drugs.
``(2) Drug reporting by outsourcing facilities.--
``(A) In general.--Upon initially registering as an
outsourcing facility, once during the month of June of each
year, and once during the month of December of each year,
each outsourcing facility that registers with the Secretary
under paragraph (1) shall submit to the Secretary a report--
``(i) identifying the drugs compounded by such outsourcing
facility during the previous 6-month period; and
``(ii) with respect to each drug identified under clause
(i), providing the active ingredient, the source of such
active ingredient, the National Drug Code number of the
source drug or bulk active ingredient, if available, the
strength of the active ingredient per unit, the dosage form
and route of administration, the package description, the
number of individual units produced, and the National Drug
Code number of the final product, if assigned.
``(B) Form.--Each report under subparagraph (A) shall be
prepared in such form and manner as the Secretary may
prescribe by regulation or guidance.
``(C) Confidentiality.--Reports submitted under this
paragraph shall be exempt from inspection under paragraph
(1)(B)(i), unless the Secretary finds that such an exemption
would be inconsistent with the protection of the public
health.
``(3) Electronic registration and reporting.--Registrations
and drug reporting under this subsection (including the
submission of updated information) shall be submitted to the
Secretary by electronic means unless the Secretary grants a
request for waiver of such requirement because use of
electronic means is not reasonable for the person requesting
waiver.
``(4) Risk-based inspection frequency.--
``(A) In general.--Outsourcing facilities--
``(i) shall be subject to inspection pursuant to section
704; and
``(ii) shall not be eligible for the exemption under
section 704(a)(2)(A).
``(B) Risk-based schedule.--The Secretary, acting through
one or more officers or employees duly designated by the
Secretary, shall inspect outsourcing facilities in accordance
with a risk-based schedule established by the Secretary.
``(C) Risk factors.--In establishing the risk-based
schedule, the Secretary shall inspect outsourcing facilities
according to the known safety risks of such outsourcing
facilities, which shall be based on the following factors:
``(i) The compliance history of the outsourcing facility.
``(ii) The record, history, and nature of recalls linked to
the outsourcing facility.
``(iii) The inherent risk of the drugs compounded at the
outsourcing facility.
``(iv) The inspection frequency and history of the
outsourcing facility, including whether the outsourcing
facility has been inspected pursuant to section 704 within
the last 4 years.
``(v) Whether the outsourcing facility has registered under
this paragraph as an entity that intends to compound a drug
that appears on the list in effect under section 506E.
``(vi) Any other criteria deemed necessary and appropriate
by the Secretary for purposes of allocating inspection
resources.
``(5) Adverse event reporting.--Outsourcing facilities
shall submit adverse event reports to the Secretary in
accordance with the content and format requirements
established through guidance or regulation under section
310.305 of title 21, Code of Federal Regulations (or any
successor regulations).
``(c) Regulations.--
``(1) In general.--The Secretary shall implement the list
described in subsection (a)(6) through regulations.
``(2) Advisory committee on compounding.--Before issuing
regulations to implement subsection (a)(6), the Secretary
shall convene and consult an advisory committee on
compounding. The advisory committee shall include
representatives from the National Association of Boards of
Pharmacy, the United States Pharmacopeia, pharmacists with
current experience and expertise in compounding, physicians
with background and knowledge in compounding, and patient and
public health advocacy organizations.
``(3) Interim list.--
``(A) In general.--Before the effective date of the
regulations finalized to implement subsection (a)(6), the
Secretary may designate drugs, categories of drugs, or
conditions as described such subsection by--
``(i) publishing a notice of such substances, drugs,
categories of drugs, or conditions proposed for designation,
including the rationale for such designation, in the Federal
Register;
``(ii) providing a period of not less than 60 calendar days
for comment on the notice; and
``(iii) publishing a notice in the Federal Register
designating such drugs, categories of drugs, or conditions.
``(B) Sunset of notice.--Any notice provided under
subparagraph (A) shall not be effective after the earlier
of--
``(i) the date that is 5 years after the date of enactment
of the Compounding Quality Act; or
``(ii) the effective date of the final regulations issued
to implement subsection (a)(6).
``(4) Updates.--The Secretary shall review, and update as
necessary, the regulations containing the lists of drugs,
categories of drugs, or conditions described in subsection
(a)(6) regularly, but not less than once every 4 years.
Nothing in the previous sentence prohibits submissions to the
Secretary, before or during any 4-year period described in
such sentence, requesting updates to such lists.
``(d) Definitions.--In this section:
``(1) The term `compounding' includes the combining,
admixing, mixing, diluting, pooling, reconstituting, or
otherwise altering of a drug or bulk drug substance to create
a drug.
``(2) The term `essentially a copy of an approved drug'
means--
``(A) a drug that is identical or nearly identical to an
approved drug, or a marketed drug not subject to section
503(b) and not subject to approval in an application
submitted under section 505, unless, in the case of an
approved drug, the drug appears on the drug shortage list in
effect under section 506E at the time of compounding,
distribution, and dispensing; or
``(B) a drug, a component of which is a bulk drug substance
that is a component of an approved drug or a marketed drug
that is not subject to section 503(b) and not subject to
approval in an application submitted under section 505,
unless there is a change that produces for an individual
patient a clinical difference, as determined by the
prescribing practitioner, between the compounded drug and the
comparable approved drug.
``(3) The term `approved drug' means a drug that is
approved under section 505 and does not appear on the list
described in subsection (a)(4) of drugs that have been
withdrawn or removed from the market because such drugs or
components of such drugs have been found to be unsafe or not
effective.
``(4)(A) The term `outsourcing facility' means a facility
at one geographic location or address that--
``(i) is engaged in the compounding of sterile drugs;
``(ii) has elected to register as an outsourcing facility;
and
``(iii) complies with all of the requirements of this
section.
``(B) An outsourcing facility is not required to be a
licensed pharmacy.
``(C) An outsourcing facility may or may not obtain
prescriptions for identified individual patients.
``(5) The term `sterile drug' means a drug that is intended
for parenteral administration, an ophthalmic or oral
inhalation drug in aqueous format, or a drug that is required
to be sterile under Federal or State law.''.
``(d) Obligation to Pay Fees.--Payment of the fee under
section 744K, as described in subsection (a)(9), shall not
relieve an outsourcing facility that is licensed as a
pharmacy in any State that requires pharmacy licensing fees
of its obligation to pay such State fees.''.
(b) Fees.--Subchapter C of chapter VII (21 U.S.C. 379f et
seq.) is amended by adding at the end the following:
``PART 9--FEES RELATING TO OUTSOURCING FACILITIES
``SEC. 744J. DEFINITIONS.
``In this part:
``(1) The term `affiliate' has the meaning given such term
in section 735(11).
``(2) The term `gross annual sales' means the total
worldwide gross annual sales, in United States dollars, for
an outsourcing facility, including the sales of all the
affiliates of the outsourcing facility.
``(3) The term `outsourcing facility' has the meaning given
to such term in section 503B(d)(4).
``(4) The term `reinspection' means, with respect to an
outsourcing facility, 1 or more inspections conducted under
section 704 subsequent to an inspection conducted under such
provision which identified noncompliance materially related
to an applicable requirement of this Act, specifically to
determine whether compliance has been achieved to the
Secretary's satisfaction.
``SEC. 744K. AUTHORITY TO ASSESS AND USE OUTSOURCING FACILITY
FEES.
``(a) Establishment and Reinspection Fees.--
[[Page H5948]]
``(1) In general.--For fiscal year 2015 and each subsequent
fiscal year, the Secretary shall, in accordance with this
subsection, assess and collect--
``(A) an annual establishment fee from each outsourcing
facility; and
``(B) a reinspection fee from each outsourcing facility
subject to a reinspection in such fiscal year.
``(2) Multiple reinspections.--An outsourcing facility
subject to multiple reinspections in a fiscal year shall be
subject to a reinspection fee for each reinspection.
``(b) Establishment and Reinspection Fee Setting.--The
Secretary shall--
``(1) establish the amount of the establishment fee and
reinspection fee to be collected under this section for each
fiscal year based on the methodology described in subsection
(c); and
``(2) publish such fee amounts in a Federal Register notice
not later than 60 calendar days before the start of each such
year.
``(c) Amount of Establishment Fee and Reinspection Fee.--
``(1) In general.--For each outsourcing facility in a
fiscal year--
``(A) except as provided in paragraph (4), the amount of
the annual establishment fee under subsection (b) shall be
equal to the sum of--
``(i) $15,000, multiplied by the inflation adjustment
factor described in paragraph (2); plus
``(ii) the small business adjustment factor described in
paragraph (3); and
``(B) the amount of any reinspection fee (if applicable)
under subsection (b) shall be equal to $15,000, multiplied by
the inflation adjustment factor described in paragraph (2).
``(2) Inflation adjustment factor.--
``(A) In general.--For fiscal year 2015 and subsequent
fiscal years, the fee amounts established in paragraph (1)
shall be adjusted by the Secretary by notice, published in
the Federal Register, for a fiscal year by the amount equal
to the sum of--
``(i) 1;
``(ii) the average annual percent change in the cost, per
full-time equivalent position of the Food and Drug
Administration, of all personnel compensation and benefits
paid with respect to such positions for the first 3 years of
the preceding 4 fiscal years, multiplied by the proportion of
personnel compensation and benefits costs to total costs of
an average full-time equivalent position of the Food and Drug
Administration for the first 3 years of the preceding 4
fiscal years; plus
``(iii) the average annual percent change that occurred in
the Consumer Price Index for urban consumers (U.S. City
Average; Not Seasonally Adjusted; All items; Annual Index)
for the first 3 years of the preceding 4 years of available
data multiplied by the proportion of all costs other than
personnel compensation and benefits costs to total costs of
an average full-time equivalent position of the Food and Drug
Administration for the first 3 years of the preceding 4
fiscal years.
``(B) Compounded basis.--The adjustment made each fiscal
year under subparagraph (A) shall be added on a compounded
basis to the sum of all adjustments made each fiscal year
after fiscal year 2014 under subparagraph (A).
``(3) Small business adjustment factor.--The small business
adjustment factor described in this paragraph shall be an
amount established by the Secretary for each fiscal year
based on the Secretary's estimate of--
``(A) the number of small businesses that will pay a
reduced establishment fee for such fiscal year; and
``(B) the adjustment to the establishment fee necessary to
achieve total fees equaling the total fees that the Secretary
would have collected if no entity qualified for the small
business exception in paragraph (4).
``(4) Exception for small businesses.--
``(A) In general.--In the case of an outsourcing facility
with gross annual sales of $1,000,000 or less in the 12
months ending April 1 of the fiscal year immediately
preceding the fiscal year in which the fees under this
section are assessed, the amount of the establishment fee
under subsection (b) for a fiscal year shall be equal to \1/
3\ of the amount calculated under paragraph (1)(A)(i) for
such fiscal year.
``(B) Application.--To qualify for the exception under this
paragraph, a small business shall submit to the Secretary a
written request for such exception, in a format specified by
the Secretary in guidance, certifying its gross annual sales
for the 12 months ending April 1 of the fiscal year
immediately preceding the fiscal year in which fees under
this subsection are assessed. Any such application shall be
submitted to the Secretary not later than April 30 of such
immediately preceding fiscal year.
``(5) Crediting of fees.--In establishing the small
business adjustment factor under paragraph (3) for a fiscal
year, the Secretary shall--
``(A) provide for the crediting of fees from the previous
year to the next year if the Secretary overestimated the
amount of the small business adjustment factor for such
previous fiscal year; and
``(B) consider the need to account for any adjustment of
fees and such other factors as the Secretary determines
appropriate.
``(d) Use of Fees.--The Secretary shall make all of the
fees collected pursuant to subparagraphs (A) and (B) of
subsection (a)(1) available solely to pay for the costs of
oversight of outsourcing facilities.
``(e) Supplement Not Supplant.--Funds received by the
Secretary pursuant to this section shall be used to
supplement and not supplant any other Federal funds available
to carry out the activities described in this section.
``(f) Crediting and Availability of Fees.--Fees authorized
under this section shall be collected and available for
obligation only to the extent and in the amount provided in
advance in appropriations Acts. Such fees are authorized to
remain available until expended. Such sums as may be
necessary may be transferred from the Food and Drug
Administration salaries and expenses appropriation account
without fiscal year limitation to such appropriation account
for salaries and expenses with such fiscal year limitation.
The sums transferred shall be available solely for the
purpose of paying the costs of oversight of outsourcing
facilities.
``(g) Collection of Fees.--
``(1) Establishment fee.--An outsourcing facility shall
remit the establishment fee due under this section in a
fiscal year when submitting a registration pursuant to
section 503B(b) for such fiscal year.
``(2) Reinspection fee.--The Secretary shall specify in the
Federal Register notice described in subsection (b)(2) the
manner in which reinspection fees assessed under this section
shall be collected and the timeline for payment of such fees.
Such a fee shall be collected after the Secretary has
conducted a reinspection of the outsourcing facility
involved.
``(3) Effect of failure to pay fees.--
``(A) Registration.--An outsourcing facility shall not be
considered registered under section 503B(b) in a fiscal year
until the date that the outsourcing facility remits the
establishment fee under this subsection for such fiscal year.
``(B) Misbranding.--All drugs manufactured, prepared,
propagated, compounded, or processed by an outsourcing
facility for which any establishment fee or reinspection fee
has not been paid, as required by this section, shall be
deemed misbranded under section 502 until the fees owed for
such outsourcing facility under this section have been paid.
``(4) Collection of unpaid fees.--In any case where the
Secretary does not receive payment of a fee assessed under
this section within 30 calendar days after it is due, such
fee shall be treated as a claim of the United States
Government subject to provisions of subchapter II of chapter
37 of title 31, United States Code.
``(h) Annual Report to Congress.--Not later than 120
calendar days after each fiscal year in which fees are
assessed and collected under this section, the Secretary
shall submit a report to the Committee on Health, Education,
Labor, and Pensions of the Senate and the Committee on Energy
and Commerce of the House of Representatives, to include a
description of fees assessed and collected for such year, a
summary description of entities paying the fees, a
description of the hiring and placement of new staff, a
description of the use of fee resources to support inspecting
outsourcing facilities, and the number of inspections and
reinspections of such facilities performed each year.
``(i) Authorization of Appropriations.--For fiscal year
2014 and each subsequent fiscal year, there is authorized to
be appropriated for fees under this section an amount
equivalent to the total amount of fees assessed for such
fiscal year under this section.''.
SEC. 103. PENALTIES.
(a) Prohibited Acts.--Section 301 (21 U.S.C. 331) is
amended by adding at the end the following:
``(ccc)(1) The resale of a compounded drug that is labeled
`not for resale' in accordance with section 503B.
``(2) With respect to a drug to be compounded pursuant to
section 503A or 503B, the intentional falsification of a
prescription, as applicable.
``(3) The failure to report drugs or adverse events by an
entity that is registered in accordance with subsection (b)
of section 503B.''.
(b) Misbranded Drugs.--Section 502 (21 U.S.C. 352) is
amended by adding at the end the following:
``(bb) If the advertising or promotion of a compounded drug
is false or misleading in any particular.''.
SEC. 104. REGULATIONS.
In promulgating any regulations to implement this title
(and the amendments made by this title), the Secretary of
Health and Human Services shall--
(1) issue a notice of proposed rulemaking that includes the
proposed regulation;
(2) provide a period of not less than 60 calendar days for
comments on the proposed regulation; and
(3) publish the final regulation not more than 18 months
following publication of the proposed rule and not less than
30 calendar days before the effective date of such final
regulation.
SEC. 105. ENHANCED COMMUNICATION.
(a) Submissions From State Boards of Pharmacy.--In a manner
specified by the Secretary of Health and Human Services
(referred to in this section as the ``Secretary''), the
Secretary shall receive submissions from State boards of
pharmacy--
(1) describing actions taken against compounding
pharmacies, as described in subsection (b); or
(2) expressing concerns that a compounding pharmacy may be
acting contrary to section 503A of the Federal Food, Drug,
and Cosmetic Act (21 U.S.C. 353a).
[[Page H5949]]
(b) Content of Submissions From State Boards of Pharmacy.--
An action referred to in subsection (a)(1) is, with respect
to a pharmacy that compounds drugs, any of the following:
(1) The issuance of a warning letter, or the imposition of
sanctions or penalties, by a State for violations of a
State's pharmacy regulations pertaining to compounding.
(2) The suspension or revocation of a State-issued pharmacy
license or registration for violations of a State's pharmacy
regulations pertaining to compounding.
(3) The recall of a compounded drug due to concerns
relating to the quality or purity of such drug.
(c) Consultation.--The Secretary shall implement subsection
(a) in consultation with the National Association of Boards
of Pharmacy.
(d) Notifying State Boards of Pharmacy.--The Secretary
shall immediately notify State boards of pharmacy when--
(1) the Secretary receives a submission under subsection
(a)(1); or
(2) the Secretary makes a determination that a pharmacy is
acting contrary to section 503A of the Federal Food, Drug,
and Cosmetic Act.
SEC. 106. SEVERABILITY.
(a) In General.--Section 503A (21 U.S.C. 353a) is amended
--
(1) in subsection (a), in the matter preceding paragraph
(1), by striking ``unsolicited'';
(2) by striking subsection (c);
(3) by redesignating subsections (d) through (f) as
subsections (c) through (e), respectively; and
(4) in subsection (b)(1)(A)(i)(III), by striking
``subsection (d)'' and inserting ``subsection (c)''.
(b) Severability.--If any provision of this Act (including
the amendments made by this Act) is declared
unconstitutional, or the applicability of this Act (including
the amendments made by this Act) to any person or
circumstance is held invalid, the constitutionality of the
remainder of this Act (including the amendments made by this
Act) and the applicability thereof to other persons and
circumstances shall not be affected.
SEC. 107. GAO STUDY.
(a) Study.--Not later than 36 months after the date of the
enactment of this Act, the Comptroller General of the United
States shall submit to Congress a report on pharmacy
compounding and the adequacy of State and Federal efforts to
assure the safety of compounded drugs.
(b) Contents.--The report required under this section shall
include--
(1) a review of pharmacy compounding in each State, and the
settings in which such compounding occurs;
(2) a review of the State laws and policies governing
pharmacy compounding, including enforcement of State laws and
policies;
(3) an assessment of the available tools to permit
purchasers of compounded drugs to determine the safety and
quality of such drugs;
(4) an evaluation of the effectiveness of the communication
among States and between States and the Food and Drug
Administration regarding compounding; and
(5) an evaluation of the Food and Drug Administration's
implementation of sections 503A and 503B of the Federal Food,
Drug, and Cosmetic Act.
TITLE II--DRUG SUPPLY CHAIN SECURITY
SEC. 201. SHORT TITLE.
This title may be cited as the ``Drug Supply Chain Security
Act''.
SEC. 202. PHARMACEUTICAL DISTRIBUTION SUPPLY CHAIN.
Chapter V (21 U.S.C. 351 et seq.) is amended by adding at
the end the following:
``Subchapter H--Pharmaceutical Distribution Supply Chain
``SEC. 581. DEFINITIONS.
``In this subchapter:
``(1) Affiliate.--The term `affiliate' means a business
entity that has a relationship with a second business entity
if, directly or indirectly--
``(A) one business entity controls, or has the power to
control, the other business entity; or
``(B) a third party controls, or has the power to control,
both of the business entities.
``(2) Authorized.--The term `authorized' means--
``(A) in the case of a manufacturer or repackager, having a
valid registration in accordance with section 510;
``(B) in the case of a wholesale distributor, having a
valid license under State law or section 583, in accordance
with section 582(a)(6), and complying with the licensure
reporting requirements under section 503(e), as amended by
the Drug Supply Chain Security Act;
``(C) in the case of a third-party logistics provider,
having a valid license under State law or section 584(a)(1),
in accordance with section 582(a)(7), and complying with the
licensure reporting requirements under section 584(b); and
``(D) in the case of a dispenser, having a valid license
under State law.
``(3) Dispenser.--The term `dispenser'--
``(A) means a retail pharmacy, hospital pharmacy, a group
of chain pharmacies under common ownership and control that
do not act as a wholesale distributor, or any other person
authorized by law to dispense or administer prescription
drugs, and the affiliated warehouses or distribution centers
of such entities under common ownership and control that do
not act as a wholesale distributor; and
``(B) does not include a person who dispenses only products
to be used in animals in accordance with section 512(a)(5).
``(4) Disposition.--The term `disposition', with respect to
a product within the possession or control of an entity,
means the removal of such product from the pharmaceutical
distribution supply chain, which may include disposal or
return of the product for disposal or other appropriate
handling and other actions, such as retaining a sample of the
product for further additional physical examination or
laboratory analysis of the product by a manufacturer or
regulatory or law enforcement agency.
``(5) Distribute or distribution.--The term `distribute' or
`distribution' means the sale, purchase, trade, delivery,
handling, storage, or receipt of a product, and does not
include the dispensing of a product pursuant to a
prescription executed in accordance with section 503(b)(1) or
the dispensing of a product approved under section 512(b).
``(6) Exclusive distributor.--The term `exclusive
distributor' means the wholesale distributor that directly
purchased the product from the manufacturer and is the sole
distributor of that manufacturer's product to a subsequent
repackager, wholesale distributor, or dispenser.
``(7) Homogeneous case.--The term `homogeneous case' means
a sealed case containing only product that has a single
National Drug Code number belonging to a single lot.
``(8) Illegitimate product.--The term `illegitimate
product' means a product for which credible evidence shows
that the product--
``(A) is counterfeit, diverted, or stolen;
``(B) is intentionally adulterated such that the product
would result in serious adverse health consequences or death
to humans;
``(C) is the subject of a fraudulent transaction; or
``(D) appears otherwise unfit for distribution such that
the product would be reasonably likely to result in serious
adverse health consequences or death to humans.
``(9) Licensed.--The term `licensed' means--
``(A) in the case of a wholesale distributor, having a
valid license in accordance with section 503(e) or section
582(a)(6), as applicable;
``(B) in the case of a third-party logistics provider,
having a valid license in accordance with section 584(a) or
section 582(a)(7), as applicable; and
``(C) in the case of a dispenser, having a valid license
under State law.
``(10) Manufacturer.--The term `manufacturer' means, with
respect to a product--
``(A) a person that holds an application approved under
section 505 or a license issued under section 351 of the
Public Health Service Act for such product, or if such
product is not the subject of an approved application or
license, the person who manufactured the product;
``(B) a co-licensed partner of the person described in
subparagraph (A) that obtains the product directly from a
person described in this subparagraph or subparagraph (A) or
(C); or
``(C) an affiliate of a person described in subparagraph
(A) or (B) that receives the product directly from a person
described in this subparagraph or subparagraph (A) or (B).
``(11) Package.--
``(A) In general.--The term `package' means the smallest
individual saleable unit of product for distribution by a
manufacturer or repackager that is intended by the
manufacturer for ultimate sale to the dispenser of such
product.
``(B) Individual saleable unit.--For purposes of this
paragraph, an `individual saleable unit' is the smallest
container of product introduced into commerce by the
manufacturer or repackager that is intended by the
manufacturer or repackager for individual sale to a
dispenser.
``(12) Prescription drug.--The term `prescription drug'
means a drug for human use subject to section 503(b)(1).
``(13) Product.--The term `product' means a prescription
drug in a finished dosage form for administration to a
patient without substantial further manufacturing (such as
capsules, tablets, and lyophilized products before
reconstitution), but for purposes of section 582, does not
include blood or blood components intended for transfusion,
radioactive drugs or radioactive biological products (as
defined in section 600.3(ee) of title 21, Code of Federal
Regulations) that are regulated by the Nuclear Regulatory
Commission or by a State pursuant to an agreement with such
Commission under section 274 of the Atomic Energy Act of 1954
(42 U.S.C. 2021), imaging drugs, an intravenous product
described in clause (xiv), (xv), or (xvi) of paragraph
(24)(B), any medical gas (as defined in section 575),
homeopathic drugs marketed in accordance with applicable
guidance under this Act, or a drug compounded in compliance
with section 503A or 503B.
``(14) Product identifier.--The term `product identifier'
means a standardized graphic that includes, in both human-
readable form and on a machine-readable data carrier that
conforms to the standards developed by a widely recognized
international standards development organization, the
standardized numerical identifier, lot number, and expiration
date of the product.
``(15) Quarantine.--The term `quarantine' means the storage
or identification of a product, to prevent distribution or
transfer of the product, in a physically separate area
[[Page H5950]]
clearly identified for such use or through other procedures.
``(16) Repackager.--The term `repackager' means a person
who owns or operates an establishment that repacks and
relabels a product or package for--
``(A) further sale; or
``(B) distribution without a further transaction.
``(17) Return.--The term `return' means providing product
to the authorized immediate trading partner from which such
product was purchased or received, or to a returns processor
or reverse logistics provider for handling of such product.
``(18) Returns processor or reverse logistics provider.--
The term `returns processor' or `reverse logistics provider'
means a person who owns or operates an establishment that
dispositions or otherwise processes saleable or nonsaleable
product received from an authorized trading partner such that
the product may be processed for credit to the purchaser,
manufacturer, or seller or disposed of for no further
distribution.
``(19) Specific patient need.--The term `specific patient
need' refers to the transfer of a product from one pharmacy
to another to fill a prescription for an identified patient.
Such term does not include the transfer of a product from one
pharmacy to another for the purpose of increasing or
replenishing stock in anticipation of a potential need.
``(20) Standardized numerical identifier.--The term
`standardized numerical identifier' means a set of numbers or
characters used to uniquely identify each package or
homogenous case that is composed of the National Drug Code
that corresponds to the specific product (including the
particular package configuration) combined with a unique
alphanumeric serial number of up to 20 characters.
``(21) Suspect product.--The term `suspect product' means a
product for which there is reason to believe that such
product--
``(A) is potentially counterfeit, diverted, or stolen;
``(B) is potentially intentionally adulterated such that
the product would result in serious adverse health
consequences or death to humans;
``(C) is potentially the subject of a fraudulent
transaction; or
``(D) appears otherwise unfit for distribution such that
the product would result in serious adverse health
consequences or death to humans.
``(22) Third-party logistics provider.--The term `third-
party logistics provider' means an entity that provides or
coordinates warehousing, or other logistics services of a
product in interstate commerce on behalf of a manufacturer,
wholesale distributor, or dispenser of a product, but does
not take ownership of the product, nor have responsibility to
direct the sale or disposition of the product.
``(23) Trading partner.--The term `trading partner' means--
``(A) a manufacturer, repackager, wholesale distributor, or
dispenser from whom a manufacturer, repackager, wholesale
distributor, or dispenser accepts direct ownership of a
product or to whom a manufacturer, repackager, wholesale
distributor, or dispenser transfers direct ownership of a
product; or
``(B) a third-party logistics provider from whom a
manufacturer, repackager, wholesale distributor, or dispenser
accepts direct possession of a product or to whom a
manufacturer, repackager, wholesale distributor, or dispenser
transfers direct possession of a product.
``(24) Transaction.--
``(A) In general.--The term `transaction' means the
transfer of product between persons in which a change of
ownership occurs.
``(B) Exemptions.--The term `transaction' does not
include--
``(i) intracompany distribution of any product between
members of an affiliate or within a manufacturer;
``(ii) the distribution of a product among hospitals or
other health care entities that are under common control;
``(iii) the distribution of a product for emergency medical
reasons including a public health emergency declaration
pursuant to section 319 of the Public Health Service Act,
except that a drug shortage not caused by a public health
emergency shall not constitute an emergency medical reason;
``(iv) the dispensing of a product pursuant to a
prescription executed in accordance with section 503(b)(1);
``(v) the distribution of product samples by a manufacturer
or a licensed wholesale distributor in accordance with
section 503(d);
``(vi) the distribution of blood or blood components
intended for transfusion;
``(vii) the distribution of minimal quantities of product
by a licensed retail pharmacy to a licensed practitioner for
office use;
``(viii) the sale, purchase, or trade of a drug or an offer
to sell, purchase, or trade a drug by a charitable
organization described in section 501(c)(3) of the Internal
Revenue Code of 1986 to a nonprofit affiliate of the
organization to the extent otherwise permitted by law;
``(ix) the distribution of a product pursuant to the sale
or merger of a pharmacy or pharmacies or a wholesale
distributor or wholesale distributors, except that any
records required to be maintained for the product shall be
transferred to the new owner of the pharmacy or pharmacies or
wholesale distributor or wholesale distributors;
``(x) the dispensing of a product approved under section
512(c);
``(xi) products transferred to or from any facility that is
licensed by the Nuclear Regulatory Commission or by a State
pursuant to an agreement with such Commission under section
274 of the Atomic Energy Act of 1954 (42 U.S.C. 2021);
``(xii) a combination product that is not subject to
approval under section 505 or licensure under section 351 of
the Public Health Service Act, and that is--
``(I) a product comprised of a device and 1 or more other
regulated components (such as a drug/device, biologic/device,
or drug/device/biologic) that are physically, chemically, or
otherwise combined or mixed and produced as a single entity;
``(II) 2 or more separate products packaged together in a
single package or as a unit and comprised of a drug and
device or device and biological product; or
``(III) 2 or more finished medical devices plus one or more
drug or biological products that are packaged together in
what is referred to as a `medical convenience kit' as
described in clause (xiii);
``(xiii) the distribution of a collection of finished
medical devices, which may include a product or biological
product, assembled in kit form strictly for the convenience
of the purchaser or user (referred to in this clause as a
`medical convenience kit') if--
``(I) the medical convenience kit is assembled in an
establishment that is registered with the Food and Drug
Administration as a device manufacturer in accordance with
section 510(b)(2);
``(II) the medical convenience kit does not contain a
controlled substance that appears in a schedule contained in
the Comprehensive Drug Abuse Prevention and Control Act of
1970;
``(III) in the case of a medical convenience kit that
includes a product, the person that manufacturers the kit--
``(aa) purchased such product directly from the
pharmaceutical manufacturer or from a wholesale distributor
that purchased the product directly from the pharmaceutical
manufacturer; and
``(bb) does not alter the primary container or label of the
product as purchased from the manufacturer or wholesale
distributor; and
``(IV) in the case of a medical convenience kit that
includes a product, the product is--
``(aa) an intravenous solution intended for the
replenishment of fluids and electrolytes;
``(bb) a product intended to maintain the equilibrium of
water and minerals in the body;
``(cc) a product intended for irrigation or reconstitution;
``(dd) an anesthetic;
``(ee) an anticoagulant;
``(ff) a vasopressor; or
``(gg) a sympathomimetic;
``(xiv) the distribution of an intravenous product that, by
its formulation, is intended for the replenishment of fluids
and electrolytes (such as sodium, chloride, and potassium) or
calories (such as dextrose and amino acids);
``(xv) the distribution of an intravenous product used to
maintain the equilibrium of water and minerals in the body,
such as dialysis solutions;
``(xvi) the distribution of a product that is intended for
irrigation, or sterile water, whether intended for such
purposes or for injection;
``(xvii) the distribution of a medical gas (as defined in
section 575); or
``(xviii) the distribution or sale of any licensed product
under section 351 of the Public Health Service Act that meets
the definition of a device under section 201(h).
``(25) Transaction history.--The term `transaction history'
means a statement in paper or electronic form, including the
transaction information for each prior transaction going back
to the manufacturer of the product.
``(26) Transaction information.--The term `transaction
information' means--
``(A) the proprietary or established name or names of the
product;
``(B) the strength and dosage form of the product;
``(C) the National Drug Code number of the product;
``(D) the container size;
``(E) the number of containers;
``(F) the lot number of the product;
``(G) the date of the transaction;
``(H) the date of the shipment, if more than 24 hours after
the date of the transaction;
``(I) the business name and address of the person from whom
ownership is being transferred; and
``(J) the business name and address of the person to whom
ownership is being transferred.
``(27) Transaction statement.--The `transaction statement'
is a statement, in paper or electronic form, that the entity
transferring ownership in a transaction--
``(A) is authorized as required under the Drug Supply Chain
Security Act;
``(B) received the product from a person that is authorized
as required under the Drug Supply Chain Security Act;
``(C) received transaction information and a transaction
statement from the prior owner of the product, as required
under section 582;
``(D) did not knowingly ship a suspect or illegitimate
product;
``(E) had systems and processes in place to comply with
verification requirements under section 582;
[[Page H5951]]
``(F) did not knowingly provide false transaction
information; and
``(G) did not knowingly alter the transaction history.
``(28) Verification or verify.--The term `verification' or
`verify' means determining whether the product identifier
affixed to, or imprinted upon, a package or homogeneous case
corresponds to the standardized numerical identifier or lot
number and expiration date assigned to the product by the
manufacturer or the repackager, as applicable in accordance
with section 582.
``(29) Wholesale distributor.--The term `wholesale
distributor' means a person (other than a manufacturer, a
manufacturer's co-licensed partner, a third-party logistics
provider, or repackager) engaged in wholesale distribution
(as defined in section 503(e)(4), as amended by the Drug
Supply Chain Security Act).
``SEC. 582. REQUIREMENTS.
``(a) In General.--
``(1) Other activities.--Each manufacturer, repackager,
wholesale distributor, and dispenser shall comply with the
requirements set forth in this section with respect to the
role of such manufacturer, repackager, wholesale distributor,
or dispenser in a transaction involving product. If an entity
meets the definition of more than one of the entities listed
in the preceding sentence, such entity shall comply with all
applicable requirements in this section, but shall not be
required to duplicate requirements.
``(2) Initial standards.--
``(A) In general.--The Secretary shall, in consultation
with other appropriate Federal officials, manufacturers,
repackagers, wholesale distributors, dispensers, and other
pharmaceutical distribution supply chain stakeholders, issue
a draft guidance document that establishes standards for the
interoperable exchange of transaction information,
transaction history, and transaction statements, in paper or
electronic format, for compliance with this subsection and
subsections (b), (c), (d), and (e). In establishing such
standards, the Secretary shall consider the feasibility of
establishing standardized documentation to be used by members
of the pharmaceutical distribution supply chain to convey the
transaction information, transaction history, and transaction
statement to the subsequent purchaser of a product and to
facilitate the exchange of lot level data. The standards
established under this paragraph shall take into
consideration the standards established under section 505D
and shall comply with a form and format developed by a widely
recognized international standards development organization.
``(B) Public input.--Prior to issuing the draft guidance
under subparagraph (A), the Secretary shall gather comments
and information from stakeholders and maintain such comments
and information in a public docket for at least 60 days prior
to issuing such guidance.
``(C) Publication.--The Secretary shall publish the
standards established under subparagraph (A) not later than 1
year after the date of enactment of the Drug Supply Chain
Security Act.
``(3) Waivers, exceptions, and exemptions.--
``(A) In general.--Not later than 2 years after the date of
enactment of the Drug Supply Chain Security Act, the
Secretary shall, by guidance--
``(i) establish a process by which an authorized
manufacturer, repackager, wholesale distributor, or dispenser
may request a waiver from any of the requirements set forth
in this section, which the Secretary may grant if the
Secretary determines that such requirements would result in
an undue economic hardship or for emergency medical reasons,
including a public health emergency declaration pursuant to
section 319 of the Public Health Service Act;
``(ii) establish a process by which the Secretary
determines exceptions, and a process through which a
manufacturer or repackager may request such an exception, to
the requirements relating to product identifiers if a product
is packaged in a container too small or otherwise unable to
accommodate a label with sufficient space to bear the
information required for compliance with this section; and
``(iii) establish a process by which the Secretary may
determine other products or transactions that shall be exempt
from the requirements of this section.
``(B) Content.--The guidance issued under subparagraph (A)
shall include a process for the biennial review and renewal
of such waivers, exceptions, and exemptions, as applicable.
``(C) Process.--In issuing the guidance under this
paragraph, the Secretary shall provide an effective date that
is not later than 180 days prior to the date on which
manufacturers are required to affix or imprint a product
identifier to each package and homogenous case of product
intended to be introduced in a transaction into commerce
consistent with this section.
``(4) Self-executing requirements.--Except where otherwise
specified, the requirements of this section may be enforced
without further regulations or guidance from the Secretary.
``(5) Grandfathering product.--
``(A) Product identifier.--Not later than 2 years after the
date of enactment of the Drug Supply Chain Security Act, the
Secretary shall finalize guidance specifying whether and
under what circumstances product that is not labeled with a
product identifier and that is in the pharmaceutical
distribution supply chain at the time of the effective date
of the requirements of this section shall be exempted from
the requirements of this section.
``(B) Tracing.--For a product that entered the
pharmaceutical distribution supply chain prior to January 1,
2015--
``(i) authorized trading partners shall be exempt from
providing transaction information as required under
subsections (b)(1)(A)(i), (c)(1)(A)(ii), (d)(1)(A)(ii), and
(e)(1)(A)(ii);
``(ii) transaction history required under this section
shall begin with the owner of such product on such date; and
``(iii) the owners of such product on such date shall be
exempt from asserting receipt of transaction information and
transaction statement from the prior owner as required under
this section.
``(6) Wholesale distributor licenses.--Notwithstanding
section 581(9)(A), until the effective date of the wholesale
distributor licensing regulations under section 583, the term
`licensed' or `authorized', as it relates to a wholesale
distributor with respect to prescription drugs, shall mean a
wholesale distributor with a valid license under State law.
``(7) Third-party logistics provider licenses.--Until the
effective date of the third-party logistics provider
licensing regulations under section 584, a third-party
logistics provider shall be considered `licensed' under
section 581(9)(B) unless the Secretary has made a finding
that the third-party logistics provider does not utilize good
handling and distribution practices and publishes notice
thereof.
``(8) Label changes.--Changes made to package labels solely
to incorporate the product identifier may be submitted to the
Secretary in the annual report of an establishment, in
accordance with section 314.70(d) of chapter 21, Code of
Federal Regulations (or any successor regulation).
``(9) Product identifiers.--With respect to any requirement
relating to product identifiers under this subchapter--
``(A) unless the Secretary allows, through guidance, the
use of other technologies for data instead of or in addition
to the technologies described in clauses (i) and (ii), the
applicable data--
``(i) shall be included in a 2-dimensional data matrix
barcode when affixed to, or imprinted upon, a package; and
``(ii) shall be included in a linear or 2-dimensional data
matrix barcode when affixed to, or imprinted upon, a
homogeneous case; and
``(B) verification of the product identifier may occur by
using human-readable or machine-readable methods.
``(b) Manufacturer Requirements.--
``(1) Product tracing.--
``(A) In general.--Beginning not later than January 1,
2015, a manufacturer shall--
``(i) prior to, or at the time of, each transaction in
which such manufacturer transfers ownership of a product,
provide the subsequent owner with transaction history,
transaction information, and a transaction statement, in a
single document in an paper or electronic format; and
``(ii) capture the transaction information (including lot
level information), transaction history, and transaction
statement for each transaction and maintain such information,
history, and statement for not less than 6 years after the
date of the transaction.
``(B) Requests for information.--Upon a request by the
Secretary or other appropriate Federal or State official, in
the event of a recall or for the purpose of investigating a
suspect product or an illegitimate product, a manufacturer
shall, not later than 1 business day, and not to exceed 48
hours, after receiving the request, or in other such
reasonable time as determined by the Secretary, based on the
circumstances of the request, provide the applicable
transaction information, transaction history, and transaction
statement for the product.
``(C) Electronic format.--
``(i) In general.--Beginning not later than 4 years after
the date of enactment of the Drug Supply Chain Security Act,
except as provided under clause (ii), a manufacturer shall
provide the transaction information, transaction history, and
transaction statement required under subparagraph (A)(i) in
electronic format.
``(ii) Exception.--A manufacturer may continue to provide
the transaction information, transaction history, and
transaction statement required under subparagraph (A)(i) in a
paper format to a licensed health care practitioner
authorized to prescribe medication under State law or other
licensed individual under the supervision or direction of
such a practitioner who dispenses product in the usual course
of professional practice.
``(2) Product identifier.--
``(A) In general.--Beginning not later than 4 years after
the date of enactment of the Drug Supply Chain Security Act,
a manufacturer shall affix or imprint a product identifier to
each package and homogenous case of a product intended to be
introduced in a transaction into commerce. Such manufacturer
shall maintain the product identifier information for such
product for not less than 6 years after the date of the
transaction.
``(B) Exception.--A package that is required to have a
standardized numerical identifier is not required to have a
unique device identifier.
``(3) Authorized trading partners.--Beginning not later
than January 1, 2015, the
[[Page H5952]]
trading partners of a manufacturer may be only authorized
trading partners.
``(4) Verification.--Beginning not later than January 1,
2015, a manufacturer shall have systems in place to enable
the manufacturer to comply with the following requirements:
``(A) Suspect product.--
``(i) In general.--Upon making a determination that a
product in the possession or control of the manufacturer is a
suspect product, or upon receiving a request for verification
from the Secretary that has made a determination that a
product within the possession or control of a manufacturer is
a suspect product, a manufacturer shall--
``(I) quarantine such product within the possession or
control of the manufacturer from product intended for
distribution until such product is cleared or dispositioned;
and
``(II) promptly conduct an investigation in coordination
with trading partners, as applicable, to determine whether
the product is an illegitimate product, which shall include
validating any applicable transaction history and transaction
information in the possession of the manufacturer and
otherwise investigating to determine whether the product is
an illegitimate product, and, beginning 4 years after the
date of enactment of the Drug Supply Chain Security Act,
verifying the product at the package level, including the
standardized numerical identifier.
``(ii) Cleared product.--If the manufacturer makes the
determination that a suspect product is not an illegitimate
product, the manufacturer shall promptly notify the
Secretary, if applicable, of such determination and such
product may be further distributed.
``(iii) Records.--A manufacturer shall keep records of the
investigation of a suspect product for not less than 6 years
after the conclusion of the investigation.
``(B) Illegitimate product.--
``(i) In general.--Upon determining that a product in the
possession or control of a manufacturer is an illegitimate
product, the manufacturer shall, in a manner consistent with
the systems and processes of such manufacturer--
``(I) quarantine such product within the possession or
control of the manufacturer from product intended for
distribution until such product is dispositioned;
``(II) disposition the illegitimate product within the
possession or control of the manufacturer;
``(III) take reasonable and appropriate steps to assist a
trading partner to disposition an illegitimate product not in
the possession or control of the manufacturer; and
``(IV) retain a sample of the product for further physical
examination or laboratory analysis of the product by the
manufacturer or Secretary (or other appropriate Federal or
State official) upon request by the Secretary (or other
appropriate Federal or State official), as necessary and
appropriate.
``(ii) Making a notification.--
``(I) Illegitimate product.--Upon determining that a
product in the possession or control of the manufacturer is
an illegitimate product, the manufacturer shall notify the
Secretary and all immediate trading partners that the
manufacturer has reason to believe may have received such
illegitimate product of such determination not later than 24
hours after making such determination.
``(II) High risk of illegitimacy.--A manufacturer shall
notify the Secretary and immediate trading partners that the
manufacturer has reason to believe may have in the trading
partner's possession a product manufactured by, or purported
to be a product manufactured by, the manufacturer not later
than 24 hours after determining or being notified by the
Secretary or a trading partner that there is a high risk that
such product is an illegitimate product. For purposes of this
subclause, a `high risk' may include a specific high risk
that could increase the likelihood that illegitimate product
will enter the pharmaceutical distribution supply chain and
other high risks as determined by the Secretary in guidance
pursuant to subsection (h).
``(iii) Responding to a notification.--Upon the receipt of
a notification from the Secretary or a trading partner that a
determination has been made that a product is an illegitimate
product, a manufacturer shall identify all illegitimate
product subject to such notification that is in the
possession or control of the manufacturer, including any
product that is subsequently received, and shall perform the
activities described in subparagraph (A).
``(iv) Terminating a notification.--Upon making a
determination, in consultation with the Secretary, that a
notification is no longer necessary, a manufacturer shall
promptly notify immediate trading partners that the
manufacturer notified pursuant to clause (ii) that such
notification has been terminated.
``(v) Records.--A manufacturer shall keep records of the
disposition of an illegitimate product for not less than 6
years after the conclusion of the disposition.
``(C) Requests for verification.--Beginning 4 years after
the date of enactment of the Drug Supply Chain Security Act,
upon receiving a request for verification from an authorized
repackager, wholesale distributor, or dispenser that is in
possession or control of a product such person believes to be
manufactured by such manufacturer, a manufacturer shall, not
later than 24 hours after receiving the request for
verification or in other such reasonable time as determined
by the Secretary, based on the circumstances of the request,
notify the person making the request whether the product
identifier, including the standardized numerical identifier,
that is the subject of the request corresponds to the product
identifier affixed or imprinted by the manufacturer. If a
manufacturer responding to a request for verification
identifies a product identifier that does not correspond to
that affixed or imprinted by the manufacturer, the
manufacturer shall treat such product as suspect product and
conduct an investigation as described in subparagraph (A). If
the manufacturer has reason to believe the product is an
illegitimate product, the manufacturer shall advise the
person making the request of such belief at the time such
manufacturer responds to the request for verification.
``(D) Electronic database.--A manufacturer may satisfy the
requirements of this paragraph by developing a secure
electronic database or utilizing a secure electronic database
developed or operated by another entity. The owner of such
database shall establish the requirements and processes to
respond to requests and may provide for data access to other
members of the pharmaceutical distribution supply chain, as
appropriate. The development and operation of such a database
shall not relieve a manufacturer of the requirement under
this paragraph to respond to a request for verification
submitted by means other than a secure electronic database.
``(E) Saleable returned product.--Beginning 4 years after
the date of enactment of the Drug Supply Chain Security Act
(except as provided pursuant to subsection (a)(5)), upon
receipt of a returned product that the manufacturer intends
to further distribute, before further distributing such
product, the manufacturer shall verify the product
identifier, including the standardized numerical identifier,
for each sealed homogeneous case of such product or, if such
product is not in a sealed homogeneous case, verify the
product identifier, including the standardized numerical
identifier, on each package.
``(F) Nonsaleable returned product.--A manufacturer may
return a nonsaleable product to the manufacturer or
repackager, to the wholesale distributor from whom such
product was purchased, or to a person acting on behalf of
such a person, including a returns processor, without
providing the information described in paragraph (1)(A)(i).
``(c) Wholesale Distributor Requirements.--
``(1) Product tracing.--
``(A) In general.--Beginning not later than January 1,
2015, the following requirements shall apply to wholesale
distributors:
``(i) A wholesale distributor shall not accept ownership of
a product unless the previous owner prior to, or at the time
of, the transaction provides the transaction history,
transaction information, and a transaction statement for the
product, as applicable under this subparagraph.
``(ii)(I)(aa) If the wholesale distributor purchased a
product directly from the manufacturer, the exclusive
distributor of the manufacturer, or a repackager that
purchased directly from the manufacturer, then prior to, or
at the time of, each transaction in which the wholesale
distributor transfers ownership of a product, the wholesale
distributor shall provide to the subsequent purchaser--
``(AA) a transaction statement, which shall state that such
wholesale distributor, or a member of the affiliate of such
wholesale distributor, purchased the product directly from
the manufacturer, exclusive distributor of the manufacturer,
or repackager that purchased the product directly from the
manufacturer; and
``(BB) subject to subclause (II), the transaction history
and transaction information.
``(bb) The wholesale distributor shall provide the
transaction history, transaction information, and transaction
statement under item (aa)--
``(AA) if provided to a dispenser, on a single document in
a paper or electronic format; and
``(BB) if provided to a wholesale distributor, through any
combination of self-generated paper, electronic data, or
manufacturer-provided information on the product package.
``(II) For purposes of transactions described in subclause
(I), transaction history and transaction information shall
not be required to include the lot number of the product, the
initial transaction date, or the initial shipment date from
the manufacturer (as defined in subparagraphs (F), (G), and
(H) of section 581(26)).
``(iii) If the wholesale distributor did not purchase a
product directly from the manufacturer, the exclusive
distributor of the manufacturer, or a repackager that
purchased directly from the manufacturer, as described in
clause (ii), then prior to, or at the time of, each
transaction or subsequent transaction, the wholesale
distributor shall provide to the subsequent purchaser a
transaction statement, transaction history, and transaction
information, in a paper or electronic format that complies
with the guidance document issued under subsection (a)(2).
``(iv) For the purposes of clause (iii), the transaction
history supplied shall begin only with the wholesale
distributor described in clause (ii)(I), but the wholesale
distributor
[[Page H5953]]
described in clause (iii) shall inform the subsequent
purchaser that such wholesale distributor received a direct
purchase statement from a wholesale distributor described in
clause (ii)(I).
``(v) A wholesale distributor shall--
``(I) capture the transaction information (including lot
level information) consistent with the requirements of this
section, transaction history, and transaction statement for
each transaction described in clauses (i), (ii), and (iii)
and maintain such information, history, and statement for not
less than 6 years after the date of the transaction; and
``(II) maintain the confidentiality of the transaction
information (including any lot level information consistent
with the requirements of this section), transaction history,
and transaction statement for a product in a manner that
prohibits disclosure to any person other than the Secretary
or other appropriate Federal or State official, except to
comply with clauses (ii) and (iii), and, as applicable,
pursuant to an agreement under subparagraph (D).
``(B) Returns.--
``(i) Saleable returns.--Notwithstanding subparagraph
(A)(i), the following shall apply:
``(I) Requirements.--Until the date that is 6 years after
the date of enactment of the Drug Supply Chain Security Act
(except as provided pursuant to subsection (a)(5)), a
wholesale distributor may accept returned product from a
dispenser or repackager pursuant to the terms and conditions
of any agreement between the parties, and, notwithstanding
subparagraph (A)(ii), may distribute such returned product
without providing the transaction history. For transactions
subsequent to the return, the transaction history of such
product shall begin with the wholesale distributor that
accepted the returned product, consistent with the
requirements of this subsection.
``(II) Enhanced requirements.--Beginning 6 years after the
date of enactment of the Drug Supply Chain Security Act
(except as provided pursuant to subsection (a)(5)), a
wholesale distributor may accept returned product from a
dispenser or repackager only if the wholesale distributor can
associate returned product with the transaction information
and transaction statement associated with that product. For
all transactions after such date, the transaction history, as
applicable, of such product shall begin with the wholesale
distributor that accepted and verified the returned product.
For purposes of this subparagraph, the transaction
information and transaction history, as applicable, need not
include transaction dates if it is not reasonably practicable
to obtain such dates.
``(ii) Nonsaleable returns.--A wholesale distributor may
return a nonsaleable product to the manufacturer or
repackager, to the wholesale distributor from whom such
product was purchased, or to a person acting on behalf of
such a person, including a returns processor, without
providing the information required under subparagraph (A)(i).
``(C) Requests for information.--Upon a request by the
Secretary or other appropriate Federal or State official, in
the event of a recall or for the purpose of investigating a
suspect product or an illegitimate product, a wholesale
distributor shall, not later than 1 business day, and not to
exceed 48 hours, after receiving the request or in other such
reasonable time as determined by the Secretary, based on the
circumstances of the request, provide the applicable
transaction information, transaction history, and transaction
statement for the product.
``(D) Trading partner agreements.--Beginning 6 years after
the date of enactment of the Drug Supply Chain Security Act,
a wholesale distributor may disclose the transaction
information, including lot level information, transaction
history, or transaction statement of a product to the
subsequent purchaser of the product, pursuant to a written
agreement between such wholesale distributor and such
subsequent purchaser. Nothing in this subparagraph shall be
construed to limit the applicability of subparagraphs (A)
through (C).
``(2) Product identifier.--Beginning 6 years after the date
of enactment of the Drug Supply Chain Security Act, a
wholesale distributor may engage in transactions involving a
product only if such product is encoded with a product
identifier (except as provided pursuant to subsection
(a)(5)).
``(3) Authorized trading partners.--Beginning not later
than January 1, 2015, the trading partners of a wholesale
distributor may be only authorized trading partners.
``(4) Verification.--Beginning not later than January 1,
2015, a wholesale distributor shall have systems in place to
enable the wholesale distributor to comply with the following
requirements:
``(A) Suspect product.--
``(i) In general.--Upon making a determination that a
product in the possession or control of a wholesale
distributor is a suspect product, or upon receiving a request
for verification from the Secretary that has made a
determination that a product within the possession or control
of a wholesale distributor is a suspect product, a wholesale
distributor shall--
``(I) quarantine such product within the possession or
control of the wholesale distributor from product intended
for distribution until such product is cleared or
dispositioned; and
``(II) promptly conduct an investigation in coordination
with trading partners, as applicable, to determine whether
the product is an illegitimate product, which shall include
validating any applicable transaction history and transaction
information in the possession of the wholesale distributor
and otherwise investigating to determine whether the product
is an illegitimate product, and, beginning 6 years after the
date of enactment of the Drug Supply Chain Security Act
(except as provided pursuant to subsection (a)(5)), verifying
the product at the package level, including the standardized
numerical identifier.
``(ii) Cleared product.--If the wholesale distributor
determines that a suspect product is not an illegitimate
product, the wholesale distributor shall promptly notify the
Secretary, if applicable, of such determination and such
product may be further distributed.
``(iii) Records.--A wholesale distributor shall keep
records of the investigation of a suspect product for not
less than 6 years after the conclusion of the investigation.
``(B) Illegitimate product.--
``(i) In general.--Upon determining, in coordination with
the manufacturer, that a product in the possession or control
of a wholesale distributor is an illegitimate product, the
wholesale distributor shall, in a manner that is consistent
with the systems and processes of such wholesale
distributor--
``(I) quarantine such product within the possession or
control of the wholesale distributor from product intended
for distribution until such product is dispositioned;
``(II) disposition the illegitimate product within the
possession or control of the wholesale distributor;
``(III) take reasonable and appropriate steps to assist a
trading partner to disposition an illegitimate product not in
the possession or control of the wholesale distributor; and
``(IV) retain a sample of the product for further physical
examination or laboratory analysis of the product by the
manufacturer or Secretary (or other appropriate Federal or
State official) upon request by the manufacturer or Secretary
(or other appropriate Federal or State official), as
necessary and appropriate.
``(ii) Making a notification.--Upon determining that a
product in the possession or control of the wholesale
distributor is an illegitimate product, the wholesale
distributor shall notify the Secretary and all immediate
trading partners that the wholesale distributor has reason to
believe may have received such illegitimate product of such
determination not later than 24 hours after making such
determination.
``(iii) Responding to a notification.--Upon the receipt of
a notification from the Secretary or a trading partner that a
determination has been made that a product is an illegitimate
product, a wholesale distributor shall identify all
illegitimate product subject to such notification that is in
the possession or control of the wholesale distributor,
including any product that is subsequently received, and
shall perform the activities described in subparagraph (A).
``(iv) Terminating a notification.--Upon making a
determination, in consultation with the Secretary, that a
notification is no longer necessary, a wholesale distributor
shall promptly notify immediate trading partners that the
wholesale distributor notified pursuant to clause (ii) that
such notification has been terminated.
``(v) Records.--A wholesale distributor shall keep records
of the disposition of an illegitimate product for not less
than 6 years after the conclusion of the disposition.
``(C) Electronic database.--A wholesale distributor may
satisfy the requirements of this paragraph by developing a
secure electronic database or utilizing a secure electronic
database developed or operated by another entity. The owner
of such database shall establish the requirements and
processes to respond to requests and may provide for data
access to other members of the pharmaceutical distribution
supply chain, as appropriate. The development and operation
of such a database shall not relieve a wholesale distributor
of the requirement under this paragraph to respond to a
verification request submitted by means other than a secure
electronic database.
``(D) Verification of saleable returned product.--Beginning
6 years after the date of enactment of the Drug Supply Chain
Security Act, upon receipt of a returned product that the
wholesale distributor intends to further distribute, before
further distributing such product, the wholesale distributor
shall verify the product identifier, including the
standardized numerical identifier, for each sealed
homogeneous case of such product or, if such product is not
in a sealed homogeneous case, verify the product identifier,
including the standardized numerical identifier, on each
package.
``(d) Dispenser Requirements.--
``(1) Product tracing.--
``(A) In general.--Beginning July 1, 2015, a dispenser--
``(i) shall not accept ownership of a product, unless the
previous owner prior to, or at the time of, the transaction,
provides transaction history, transaction information, and a
transaction statement;
``(ii) prior to, or at the time of, each transaction in
which the dispenser transfers ownership of a product (but not
including dispensing to a patient or returns) shall provide
the subsequent owner with transaction history, transaction
information, and a transaction statement for the product,
except that the requirements of this clause shall
[[Page H5954]]
not apply to sales by a dispenser to another dispenser to
fulfill a specific patient need; and
``(iii) shall capture transaction information (including
lot level information, if provided), transaction history, and
transaction statements, as necessary to investigate a suspect
product, and maintain such information, history, and
statements for not less than 6 years after the transaction.
``(B) Agreements with third parties.--A dispenser may enter
into a written agreement with a third party, including an
authorized wholesale distributor, under which the third party
confidentially maintains the transaction information,
transaction history, and transaction statements required to
be maintained under this subsection on behalf of the
dispenser. If a dispenser enters into such an agreement, the
dispenser shall maintain a copy of the written agreement and
shall not be relieved of the obligations of the dispenser
under this subsection.
``(C) Returns.--
``(i) Saleable returns.--A dispenser may return product to
the trading partner from which the dispenser obtained the
product without providing the information required under
subparagraph (A).
``(ii) Nonsaleable returns.--A dispenser may return a
nonsaleable product to the manufacturer or repackager, to the
wholesale distributor from whom such product was purchased,
to a returns processor, or to a person acting on behalf of
such a person without providing the information required
under subparagraph (A).
``(D) Requests for information.--Upon a request by the
Secretary or other appropriate Federal or State official, in
the event of a recall or for the purpose of investigating a
suspect or an illegitimate product, a dispenser shall, not
later than 2 business days after receiving the request or in
another such reasonable time as determined by the Secretary,
based on the circumstances of the request, provide the
applicable transaction information, transaction statement,
and transaction history which the dispenser received from the
previous owner, which shall not include the lot number of the
product, the initial transaction date, or the initial
shipment date from the manufacturer unless such information
was included in the transaction information, transaction
statement, and transaction history provided by the
manufacturer or wholesale distributor to the dispenser. The
dispenser may respond to the request by providing the
applicable information in either paper or electronic format.
Until the date that is 4 years after the date of enactment of
the Drug Supply Chain Security Act, the Secretary or other
appropriate Federal or State official shall grant a dispenser
additional time, as necessary, only with respect to a request
to provide lot level information described in subparagraph
(F) of section 581(26) that was provided to the dispenser in
paper format, limit the request time period to the 6 months
preceding the request or other relevant date, and, in the
event of a recall, the Secretary, or other appropriate
Federal or State official may request information only if
such recall involves a serious adverse health consequence or
death to humans.
``(2) Product identifier.--Beginning not later than 7 years
after the date of enactment of the Drug Supply Chain Security
Act, a dispenser may engage in transactions involving a
product only if such product is encoded with a product
identifier (except as provided pursuant to subsection
(a)(5)).
``(3) Authorized trading partners.--Beginning not later
than January 1, 2015, the trading partners of a dispenser may
be only authorized trading partners.
``(4) Verification.--Beginning not later than January 1,
2015, a dispenser shall have systems in place to enable the
dispenser to comply with the following requirements:
``(A) Suspect product.--
``(i) In general.--Upon making a determination that a
product in the possession or control of the dispenser is a
suspect product, or upon receiving a request for verification
from the Secretary that has made a determination that a
product within the possession or control of a dispenser is a
suspect product, a dispenser shall--
``(I) quarantine such product within the possession or
control of the dispenser from product intended for
distribution until such product is cleared or dispositioned;
and
``(II) promptly conduct an investigation in coordination
with trading partners, as applicable, to determine whether
the product is an illegitimate product.
``(ii) Investigation.--An investigation conducted under
clause (i)(II) shall include--
``(I) beginning 7 years after the date of enactment of the
Drug Supply Chain Security Act, verifying whether the lot
number of a suspect product corresponds with the lot number
for such product;
``(II) beginning 7 years after the date of enactment of
such Act, verifying that the product identifier, including
the standardized numerical identifier, of at least 3 packages
or 10 percent of such suspect product, whichever is greater,
or all packages, if there are fewer than 3, corresponds with
the product identifier for such product;
``(III) validating any applicable transaction history and
transaction information in the possession of the dispenser;
and
``(IV) otherwise investigating to determine whether the
product is an illegitimate product.
``(iii) Cleared product.--If the dispenser makes the
determination that a suspect product is not an illegitimate
product, the dispenser shall promptly notify the Secretary,
if applicable, of such determination and such product may be
further distributed or dispensed.
``(iv) Records.--A dispenser shall keep records of the
investigation of a suspect product for not less than 6 years
after the conclusion of the investigation.
``(B) Illegitimate product.--
``(i) In general.--Upon determining, in coordination with
the manufacturer, that a product in the possession or control
of a dispenser is an illegitimate product, the dispenser
shall--
``(I) disposition the illegitimate product within the
possession or control of the dispenser;
``(II) take reasonable and appropriate steps to assist a
trading partner to disposition an illegitimate product not in
the possession or control of the dispenser; and
``(III) retain a sample of the product for further physical
examination or laboratory analysis of the product by the
manufacturer or Secretary (or other appropriate Federal or
State official) upon request by the manufacturer or Secretary
(or other appropriate Federal or State official), as
necessary and appropriate.
``(ii) Making a notification.--Upon determining that a
product in the possession or control of the dispenser is an
illegitimate product, the dispenser shall notify the
Secretary and all immediate trading partners that the
dispenser has reason to believe may have received such
illegitimate product of such determination not later than 24
hours after making such determination.
``(iii) Responding to a notification.--Upon the receipt of
a notification from the Secretary or a trading partner that a
determination has been made that a product is an illegitimate
product, a dispenser shall identify all illegitimate product
subject to such notification that is in the possession or
control of the dispenser, including any product that is
subsequently received, and shall perform the activities
described in subparagraph (A).
``(iv) Terminating a notification.--Upon making a
determination, in consultation with the Secretary, that a
notification is no longer necessary, a dispenser shall
promptly notify immediate trading partners that the dispenser
notified pursuant to clause (ii) that such notification has
been terminated.
``(v) Records.--A dispenser shall keep records of the
disposition of an illegitimate product for not less than 6
years after the conclusion of the disposition.
``(C) Electronic database.--A dispenser may satisfy the
requirements of this paragraph by developing a secure
electronic database or utilizing a secure electronic database
developed or operated by another entity.
``(5) Exception.--Notwithstanding any other provision of
law, the requirements under paragraphs (1) and (4) shall not
apply to licensed health care practitioners authorized to
prescribe or administer medication under State law or other
licensed individuals under the supervision or direction of
such practitioners who dispense or administer product in the
usual course of professional practice.
``(e) Repackager Requirements.--
``(1) Product tracing.--
``(A) In general.--Beginning not later than January 1,
2015, a repackager described in section 581(16)(A) shall--
``(i) not accept ownership of a product unless the previous
owner, prior to, or at the time of, the transaction, provides
transaction history, transaction information, and a
transaction statement for the product;
``(ii) prior to, or at the time of, each transaction in
which the repackager transfers ownership of a product,
provide the subsequent owner with transaction history,
transaction information, and a transaction statement for the
product; and
``(iii) capture the transaction information (including lot
level information), transaction history, and transaction
statement for each transaction described in clauses (i) and
(ii) and maintain such information, history, and statement
for not less than 6 years after the transaction.
``(B) Returns.--
``(i) Nonsaleable product.--A repackager described in
section 581(16)(A) may return a nonsaleable product to the
manufacturer or repackager, or to the wholesale distributor
from whom such product was purchased, or to a person acting
on behalf of such a person, including a returns processor,
without providing the information required under subparagraph
(A)(ii).
``(ii) Saleable or nonsaleable product.--A repackager
described in section 581(16)(B) may return a saleable or
nonsaleable product to the manufacturer, repackager, or to
the wholesale distributor from whom such product was received
without providing the information required under subparagraph
(A)(ii) on behalf of the hospital or other health care entity
that took ownership of such product pursuant to the terms and
conditions of any agreement between such repackager and the
entity that owns the product.
``(C) Requests for information.--Upon a request by the
Secretary or other appropriate Federal or State official, in
the event of a recall or for the purpose of investigating a
suspect product or an illegitimate product, a repackager
described in section 581(16)(A) shall, not later than 1
business day, and not to exceed 48 hours, after receiving the
request or in other such reasonable time as determined by the
Secretary, provide the applicable transaction information,
transaction
[[Page H5955]]
history, and transaction statement for the product.
``(2) Product identifier.--
``(A) In general.--Beginning not later than 5 years after
the date of enactment of the Drug Supply Chain Security Act,
a repackager described in section 581(16)(A)--
``(i) shall affix or imprint a product identifier to each
package and homogenous case of product intended to be
introduced in a transaction in commerce;
``(ii) shall maintain the product identifier information
for such product for not less than 6 years after the date of
the transaction;
``(iii) may engage in transactions involving a product only
if such product is encoded with a product identifier (except
as provided pursuant to subsection (a)(5)); and
``(iv) shall maintain records for not less than 6 years to
allow the repackager to associate the product identifier the
repackager affixes or imprints with the product identifier
assigned by the original manufacturer of the product.
``(B) Exception.--A package that is required to have a
standardized numerical identifier is not required to have a
unique device identifier.
``(3) Authorized trading partners.--Beginning January 1,
2015, the trading partners of a repackager described in
section 581(16) may be only authorized trading partners.
``(4) Verification.--Beginning not later than January 1,
2015, a repackager described in section 581(16)(A) shall have
systems in place to enable the repackager to comply with the
following requirements:
``(A) Suspect product.--
``(i) In general.--Upon making a determination that a
product in the possession or control of the repackager is a
suspect product, or upon receiving a request for verification
from the Secretary that has made a determination that a
product within the possession or control of a repackager is a
suspect product, a repackager shall--
``(I) quarantine such product within the possession or
control of the repackager from product intended for
distribution until such product is cleared or dispositioned;
and
``(II) promptly conduct an investigation in coordination
with trading partners, as applicable, to determine whether
the product is an illegitimate product, which shall include
validating any applicable transaction history and transaction
information in the possession of the repackager and otherwise
investigating to determine whether the product is an
illegitimate product, and, beginning 5 years after the date
of enactment of the Drug Supply Chain Security Act (except as
provided pursuant to subsection (a)(5)), verifying the
product at the package level, including the standardized
numerical identifier.
``(ii) Cleared product.--If the repackager makes the
determination that a suspect product is not an illegitimate
product, the repackager shall promptly notify the Secretary,
if applicable, of such determination and such product may be
further distributed.
``(iii) Records.--A repackager shall keep records of the
investigation of a suspect product for not less than 6 years
after the conclusion of the investigation.
``(B) Illegitimate product.--
``(i) In general.--Upon determining, in coordination with
the manufacturer, that a product in the possession or control
of a repackager is an illegitimate product, the repackager
shall, in a manner that is consistent with the systems and
processes of such repackager--
``(I) quarantine such product within the possession or
control of the repackager from product intended for
distribution until such product is dispositioned;
``(II) disposition the illegitimate product within the
possession or control of the repackager;
``(III) take reasonable and appropriate steps to assist a
trading partner to disposition an illegitimate product not in
the possession or control of the repackager; and
``(IV) retain a sample of the product for further physical
examination or laboratory analysis of the product by the
manufacturer or Secretary (or other appropriate Federal or
State official) upon request by the manufacturer or Secretary
(or other appropriate Federal or State official), as
necessary and appropriate.
``(ii) Making a notification.--Upon determining that a
product in the possession or control of the repackager is an
illegitimate product, the repackager shall notify the
Secretary and all immediate trading partners that the
repackager has reason to believe may have received the
illegitimate product of such determination not later than 24
hours after making such determination.
``(iii) Responding to a notification.--Upon the receipt of
a notification from the Secretary or a trading partner, a
repackager shall identify all illegitimate product subject to
such notification that is in the possession or control of the
repackager, including any product that is subsequently
received, and shall perform the activities described in
subparagraph (A).
``(iv) Terminating a notification.--Upon making a
determination, in consultation with the Secretary, that a
notification is no longer necessary, a repackager shall
promptly notify immediate trading partners that the
repackager notified pursuant to clause (ii) that such
notification has been terminated.
``(v) Records.--A repackager shall keep records of the
disposition of an illegitimate product for not less than 6
years after the conclusion of the disposition.
``(C) Requests for verification.--Beginning 5 years after
the date of enactment of the Drug Supply Chain Security Act,
upon receiving a request for verification from an authorized
manufacturer, wholesale distributor, or dispenser that is in
possession or control of a product they believe to be
repackaged by such repackager, a repackager shall, not later
than 24 hours after receiving the verification request or in
other such reasonable time as determined by the Secretary,
based on the circumstances of the request, notify the person
making the request whether the product identifier, including
the standardized numerical identifier, that is the subject of
the request corresponds to the product identifier affixed or
imprinted by the repackager. If a repackager responding to a
verification request identifies a product identifier that
does not correspond to that affixed or imprinted by the
repackager, the repackager shall treat such product as
suspect product and conduct an investigation as described in
subparagraph (A). If the repackager has reason to believe the
product is an illegitimate product, the repackager shall
advise the person making the request of such belief at the
time such repackager responds to the verification request.
``(D) Electronic database.--A repackager may satisfy the
requirements of paragraph (4) by developing a secure
electronic database or utilizing a secure electronic database
developed or operated by another entity. The owner of such
database shall establish the requirements and processes to
respond to requests and may provide for data access to other
members of the pharmaceutical distribution supply chain, as
appropriate. The development and operation of such a database
shall not relieve a repackager of the requirement under
subparagraph (C) to respond to a verification request
submitted by means other than a secure electronic database.
``(E) Verification of saleable returned product.--Beginning
5 years after the date of enactment of the Drug Supply Chain
Security Act, upon receipt of a returned product that the
repackager intends to further distribute, before further
distributing such product, the repackager shall verify the
product identifier for each sealed homogeneous case of such
product or, if such product is not in a sealed homogeneous
case, verify the product identifier on each package.
``(f) Drop Shipments.--
``(1) In general.--A wholesale distributor that does not
physically handle or store product shall be exempt from the
provisions of this section, except the notification
requirements under clauses (ii), (iii), and (iv) of
subsection (c)(4)(B), provided that the manufacturer,
repackager, or other wholesale distributor that distributes
the product to the dispenser by means of a drop shipment for
such wholesale distributor includes on the transaction
information and transaction history to the dispenser the
contact information of such wholesale distributor and
provides the transaction information, transaction history,
and transaction statement directly to the dispenser.
``(2) Clarification.--For purposes of this subsection,
providing administrative services, including processing of
orders and payments, shall not by itself, be construed as
being involved in the handling, distribution, or storage of a
product.''.
SEC. 203. ENHANCED DRUG DISTRIBUTION SECURITY.
Section 582, as added by section 202, is amended by adding
at the end the following:
``(g) Enhanced Drug Distribution Security.--
``(1) In general.--On the date that is 10 years after the
date of enactment of the Drug Supply Chain Security Act, the
following interoperable, electronic tracing of product at the
package level requirements shall go into effect:
``(A) The transaction information and the transaction
statements as required under this section shall be exchanged
in a secure, interoperable, electronic manner in accordance
with the standards established under the guidance issued
pursuant to paragraphs (3) and (4) of subsection (h),
including any revision of such guidance issued in accordance
with paragraph (5) of such subsection.
``(B) The transaction information required under this
section shall include the product identifier at the package
level for each package included in the transaction.
``(C) Systems and processes for verification of product at
the package level, including the standardized numerical
identifier, shall be required in accordance with the
standards established under the guidance issued pursuant to
subsection (a)(2) and the guidances issued pursuant to
paragraphs (2), (3), and (4) of subsection (h), including any
revision of such guidances issued in accordance with
paragraph (5) of such subsection, which may include the use
of aggregation and inference as necessary.
``(D) The systems and processes necessary to promptly
respond with the transaction information and transaction
statement for a product upon a request by the Secretary (or
other appropriate Federal or State official) in the event of
a recall or for the purposes of investigating a suspect
product or an illegitimate product shall be required.
``(E) The systems and processes necessary to promptly
facilitate gathering the information necessary to produce the
transaction information for each transaction going back to
the manufacturer, as applicable, shall be required--
[[Page H5956]]
``(i) in the event of a request by the Secretary (or other
appropriate Federal or State official), on account of a
recall or for the purposes of investigating a suspect product
or an illegitimate product; or
``(ii) in the event of a request by an authorized trading
partner, in a secure manner that ensures the protection of
confidential commercial information and trade secrets, for
purposes of investigating a suspect product or assisting the
Secretary (or other appropriate Federal or State official)
with a request described in clause (i).
``(F) Each person accepting a saleable return shall have
systems and processes in place to allow acceptance of such
product and may accept saleable returns only if such person
can associate the saleable return product with the
transaction information and transaction statement associated
with that product.
``(2) Compliance.--
``(A) Information maintenance agreement.--A dispenser may
enter into a written agreement with a third party, including
an authorized wholesale distributor, under which the third
party shall confidentially maintain any information and
statements required to be maintained under this section. If a
dispenser enters into such an agreement, the dispenser shall
maintain a copy of the written agreement and shall not be
relieved of the obligations of the dispenser under this
subsection.
``(B) Alternative methods.--The Secretary, taking into
consideration the assessment conducted under paragraph (3),
shall provide for alternative methods of compliance with any
of the requirements set forth in paragraph (1), including--
``(i) establishing timelines for compliance by small
businesses (including small business dispensers with 25 or
fewer full-time employees) with such requirements, in order
to ensure that such requirements do not impose undue economic
hardship for small businesses, including small business
dispensers for whom the criteria set forth in the assessment
under paragraph (3) is not met, if the Secretary determines
that such requirements under paragraph (1) would result in
undue economic hardship; and
``(ii) establishing a process by which a dispenser may
request a waiver from any of the requirements set forth in
paragraph (1) if the Secretary determines that such
requirements would result in an undue economic hardship,
which shall include a process for the biennial review and
renewal of any such waiver.
``(3) Assessment.--
``(A) In general.--Not later than the date that is 18
months after the Secretary issues the final guidance required
under subsection (h), the Secretary shall enter into a
contract with a private, independent consulting firm with
expertise to conduct a technology and software assessment
that looks at the feasibility of dispensers with 25 or fewer
full-time employees conducting interoperable, electronic
tracing of products at the package level. Such assessment
shall be completed not later than 8\1/2\ years after the date
of enactment of the Drug Supply Chain Security Act.
``(B) Condition.--As a condition of the award of the
contract under subparagraph (A), the private, independent
consulting firm shall agree to consult with dispensers with
25 or fewer full-time employees when conducting the
assessment under such subparagraph.
``(C) Content.--The assessment under subparagraph (A) shall
assess whether--
``(i) the necessary software and hardware is readily
accessible to such dispensers;
``(ii) the necessary software and hardware is prohibitively
expensive to obtain, install, and maintain for such
dispensers; and
``(iii) the necessary hardware and software can be
integrated into business practices, such as interoperability
with wholesale distributors, for such dispensers.
``(D) Publication.--The Secretary shall--
``(i) publish the statement of work for the assessment
under subparagraph (A) for public comment prior to beginning
the assessment;
``(ii) publish the final assessment for public comment not
later than 30 calendar days after receiving such assessment;
and
``(iii) hold a public meeting not later than 180 calendar
days after receiving the final assessment at which public
stakeholders may present their views on the assessment.
``(4) Procedure.--Notwithstanding section 553 of title 5,
United States Code, the Secretary, in promulgating any
regulation pursuant to this section, shall--
``(A) provide appropriate flexibility by--
``(i) not requiring the adoption of specific business
systems for the maintenance and transmission of data;
``(ii) prescribing alternative methods of compliance for
any of the requirements set forth in paragraph (1) or set
forth in regulations implementing such requirements,
including--
``(I) timelines for small businesses to comply with the
requirements set forth in the regulations in order to ensure
that such requirements do not impose undue economic hardship
for small businesses (including small business dispensers for
whom the criteria set forth in the assessment under paragraph
(3) is not met), if the Secretary determines that such
requirements would result in undue economic hardship; and
``(II) the establishment of a process by which a dispenser
may request a waiver from any of the requirements set forth
in such regulations if the Secretary determines that such
requirements would result in an undue economic hardship; and
``(iii) taking into consideration--
``(I) the results of pilot projects, including pilot
projects pursuant to this section and private sector pilot
projects, including those involving the use of aggregation
and inference;
``(II) the public meetings held and related guidance
documents issued under this section;
``(III) the public health benefits of any additional
regulations in comparison to the cost of compliance with such
requirements, including on entities of varying sizes and
capabilities;
``(IV) the diversity of the pharmaceutical distribution
supply chain by providing appropriate flexibility for each
sector, including both large and small businesses; and
``(V) the assessment pursuant to paragraph (3) with respect
to small business dispensers, including related public
comment and the public meeting, and requirements under this
section;
``(B) issue a notice of proposed rulemaking that includes a
copy of the proposed regulation;
``(C) provide a period of not less than 60 days for
comments on the proposed regulation; and
``(D) publish in the Federal Register the final regulation
not less than 2 years prior to the effective date of the
regulation.
``(h) Guidance Documents.--
``(1) In general.--For the purposes of facilitating the
successful and efficient adoption of secure, interoperable
product tracing at the package level in order to enhance drug
distribution security and further protect the public health,
the Secretary shall issue the guidance documents as provided
for in this subsection.
``(2) Suspect and illegitimate product.--
``(A) In general.--Not later than 180 days after the date
of enactment of the Drug Supply Chain Security Act, the
Secretary shall issue a guidance document to aid trading
partners in the identification of a suspect product and
notification termination. Such guidance document shall--
``(i) identify specific scenarios that could significantly
increase the risk of a suspect product entering the
pharmaceutical distribution supply chain;
``(ii) provide recommendation on how trading partners may
identify such product and make a determination on whether the
product is a suspect product as soon as practicable; and
``(iii) set forth the process by which manufacturers,
repackagers, wholesale distributors, and dispensers shall
terminate notifications in consultation with the Secretary
regarding illegitimate product pursuant to subsections
(b)(4)(B), (c)(4)(B), (d)(4)(B), and (e)(4)(B).
``(B) Revised guidance.--If the Secretary revises the
guidance issued under subparagraph (A), the Secretary shall
follow the procedure set forth in paragraph (5).
``(3) Unit level tracing.--
``(A) In general.--In order to enhance drug distribution
security at the package level, not later than 18 months after
conducting a public meeting on the system attributes
necessary to enable secure tracing of product at the package
level, including allowing for the use of verification,
inference, and aggregation, as necessary, the Secretary shall
issue a final guidance document that outlines and makes
recommendations with respect to the system attributes
necessary to enable secure tracing at the package level as
required under the requirements established under subsection
(g). Such guidance document shall--
``(i) define the circumstances under which the sectors
within the pharmaceutical distribution supply chain may, in
the most efficient manner practicable, infer the contents of
a case, pallet, tote, or other aggregate of individual
packages or containers of product, from a product identifier
associated with the case, pallet, tote, or other aggregate,
without opening each case, pallet, tote, or other aggregate
or otherwise individually scanning each package;
``(ii) identify methods and processes to enhance secure
tracing of product at the package level, such as secure
processes to facilitate the use of inference, enhanced
verification activities, the use of aggregation and
inference, processes that utilize the product identifiers to
enhance tracing of product at the package level, including
the standardized numerical identifier, or package security
features; and
``(iii) ensure the protection of confidential commercial
information and trade secrets.
``(B) Procedure.--In issuing the guidance under
subparagraph (A), and in revising such guidance, if
applicable, the Secretary shall follow the procedure set
forth in paragraph (5).
``(4) Standards for interoperable data exchange.--
``(A) In general.--In order to enhance secure tracing of a
product at the package level, the Secretary, not later than
18 months after conducting a public meeting on the
interoperable standards necessary to enhance the security of
the pharmaceutical distribution supply chain, shall update
the guidance issued pursuant to subsection (a)(2), as
necessary and appropriate, and finalize such guidance
document so that the guidance document--
[[Page H5957]]
``(i) identifies and makes recommendations with respect to
the standards necessary for adoption in order to support the
secure, interoperable electronic data exchange among the
pharmaceutical distribution supply chain that comply with a
form and format developed by a widely recognized
international standards development organization;
``(ii) takes into consideration standards established
pursuant to subsection (a)(2) and section 505D;
``(iii) facilitates the creation of a uniform process or
methodology for product tracing; and
``(iv) ensures the protection of confidential commercial
information and trade secrets.
``(B) Procedure.--In issuing the guidance under
subparagraph (A), and in revising such guidance, if
applicable, the Secretary shall follow the procedure set
forth in paragraph (5).
``(5) Procedure.--In issuing or revising any guidance
issued pursuant to this subsection or subsection (g), except
the initial guidance issued under paragraph (2)(A), the
Secretary shall--
``(A) publish a notice in the Federal Register for a period
not less than 30 days announcing that the draft or revised
draft guidance is available;
``(B) post the draft guidance document on the Internet Web
site of the Food and Drug Administration and make such draft
guidance document available in hard copy;
``(C) provide an opportunity for comment and review and
take into consideration any comments received;
``(D) revise the draft guidance, as appropriate;
``(E) publish a notice in the Federal Register for a period
not less than 30 days announcing that the final guidance or
final revised guidance is available;
``(F) post the final guidance document on the Internet Web
site of the Food and Drug Administration and make such final
guidance document available in hard copy; and
``(G) provide for an effective date of not earlier than 1
year after such guidance becomes final.
``(i) Public Meetings.--
``(1) In general.--The Secretary shall hold not less than 5
public meetings to enhance the safety and security of the
pharmaceutical distribution supply chain and provide for
comment. The Secretary may hold the first such public meeting
not earlier than 1 year after the date of enactment of the
Drug Supply Chain Security Act. In carrying out the public
meetings described in this paragraph, the Secretary shall--
``(A) prioritize topics necessary to inform the issuance of
the guidance described in paragraphs (3) and (4) of
subsection (h); and
``(B) take all measures reasonable and practicable to
ensure the protection of confidential commercial information
and trade secrets.
``(2) Content.--Each of the following topics shall be
addressed in at least one of the public meetings described in
paragraph (1):
``(A) An assessment of the steps taken under subsections
(b) through (e) to build capacity for a unit-level system,
including the impact of the requirements of such subsections
on--
``(i) the ability of the health care system collectively to
maintain patient access to medicines;
``(ii) the scalability of such requirements, including as
it relates to product lines; and
``(iii) the capability of different sectors and subsectors,
including both large and small businesses, to affix and
utilize the product identifier.
``(B) The system attributes necessary to support the
requirements set forth under subsection (g), including the
standards necessary for adoption in order to support the
secure, interoperable electronic data exchange among sectors
within the pharmaceutical distribution supply chain.
``(C) Best practices in each of the different sectors
within the pharmaceutical distribution supply chain to
implement the requirements of this section.
``(D) The costs and benefits of the implementation of this
section, including the impact on each pharmaceutical
distribution supply chain sector and on public health.
``(E) Whether electronic tracing requirements, including
tracing of product at the package level, are feasible, cost
effective, and needed to protect the public health.
``(F) The systems and processes needed to utilize the
product identifiers to enhance tracing of product at the
package level, including allowing for verification,
aggregation, and inference, as necessary.
``(G) The technical capabilities and legal authorities, if
any, needed to establish an interoperable, electronic system
that provides for tracing of product at the package level.
``(H) The impact that such additional requirements would
have on patient safety, the drug supply, cost and regulatory
burden, and timely patient access to prescription drugs.
``(I) Other topics, as determined appropriate by the
Secretary.
``(j) Pilot Projects.--
``(1) In general.--The Secretary shall establish 1 or more
pilot projects, in coordination with authorized
manufacturers, repackagers, wholesale distributors, and
dispensers, to explore and evaluate methods to enhance the
safety and security of the pharmaceutical distribution supply
chain. Such projects shall build upon efforts, in existence
as of the date of enactment of the Drug Supply Chain Security
Act, to enhance the safety and security of the pharmaceutical
distribution supply chain, take into consideration any pilot
projects conducted prior to such date of enactment, including
any pilot projects that use aggregation and inference, and
inform the draft and final guidance under paragraphs (3) and
(4) of subsection (h).
``(2) Content.--
``(A) In general.--The Secretary shall ensure that the
pilot projects under paragraph (1) reflect the diversity of
the pharmaceutical distribution supply chain and that the
pilot projects, when taken as a whole, include participants
representative of every sector, including both large and
small businesses.
``(B) Project design.--The pilot projects under paragraph
(1) shall be designed to--
``(i) utilize the product identifier for tracing of a
product, which may include verification of the product
identifier of a product, including the use of aggregation and
inference;
``(ii) improve the technical capabilities of each sector
and subsector to comply with systems and processes needed to
utilize the product identifiers to enhance tracing of a
product;
``(iii) identify system attributes that are necessary to
implement the requirements established under this section;
and
``(iv) complete other activities as determined by the
Secretary.
``(k) Sunset.--The following requirements shall have no
force or effect beginning on the date that is 10 years after
the date of enactment of the Drug Supply Chain Security Act:
``(1) The provision and receipt of transaction history
under this section.
``(2) The requirements set forth for returns under
subsections (b)(4)(E), (c)(1)(B)(i), (d)(1)(C)(i), and
(e)(4)(E).
``(3) The requirements set forth under subparagraphs
(A)(v)(II) and (D) of subsection (c)(1), as applied to lot
level information only.
``(l) Rule of Construction.--The requirements set forth in
subsections (g)(4), (i), and (j) shall not be construed as a
condition, prohibition, or precedent for precluding or
delaying the provisions becoming effective pursuant to
subsection (g).
``(m) Requests for Information.--On the date that is 10
years after the date of enactment of the Drug Supply Chain
Security Act, the timeline for responses to requests for
information from the Secretary, or other appropriate Federal
or State official, as applicable, under subsections
(b)(1)(B), (c)(1)(C), and (e)(1)(C) shall be not later than
24 hours after receiving the request from the Secretary or
other appropriate Federal or State official, as applicable,
or in such other reasonable time as determined by the
Secretary based on the circumstances of the request.''.
SEC. 204. NATIONAL STANDARDS FOR PRESCRIPTION DRUG WHOLESALE
DISTRIBUTORS.
(a) Amendments.--
(1) Requirement.--Section 503(e) (21 U.S.C. 353(e)) is
amended by striking paragraphs (1), (2), and (3) and
inserting the following:
``(1) Requirement.--Subject to section 583:
``(A) In general.--No person may engage in wholesale
distribution of a drug subject to subsection (b)(1) in any
State unless such person--
``(i)(I) is licensed by the State from which the drug is
distributed; or
``(II) if the State from which the drug is distributed has
not established a licensure requirement, is licensed by the
Secretary; and
``(ii) if the drug is distributed interstate, is licensed
by the State into which the drug is distributed if the State
into which the drug is distributed requires the licensure of
a person that distributes drugs into the State.
``(B) Standards.--Each Federal and State license described
in subparagraph (A) shall meet the standards, terms, and
conditions established by the Secretary under section 583.
``(2) Reporting and database.--
``(A) Reporting.--Beginning January 1, 2015, any person who
owns or operates an establishment that engages in wholesale
distribution shall--
``(i) report to the Secretary, on an annual basis pursuant
to a schedule determined by the Secretary--
``(I) each State by which the person is licensed and the
appropriate identification number of each such license; and
``(II) the name, address, and contact information of each
facility at which, and all trade names under which, the
person conducts business; and
``(ii) report to the Secretary within a reasonable period
of time and in a reasonable manner, as determined by the
Secretary, any significant disciplinary actions, such as the
revocation or suspension of a wholesale distributor license,
taken by a State or the Federal Government during the
reporting period against the wholesale distributor.
``(B) Database.--Not later than January 1, 2015, the
Secretary shall establish a database of authorized wholesale
distributors. Such database shall--
``(i) identify each authorized wholesale distributor by
name, contact information, and each State where such
wholesale distributor is appropriately licensed to engage in
wholesale distribution;
``(ii) be available to the public on the Internet Web site
of the Food and Drug Administration; and
``(iii) be regularly updated on a schedule determined by
the Secretary.
[[Page H5958]]
``(C) Coordination.--The Secretary shall establish a format
and procedure for appropriate State officials to access the
information provided pursuant to subparagraph (A) in a prompt
and secure manner.
``(D) Confidentiality.--Nothing in this paragraph shall be
construed as authorizing the Secretary to disclose any
information that is a trade secret or confidential
information subject to section 552(b)(4) of title 5, United
States Code, or section 1905 of title 18, United States Code.
``(3) Costs.--
``(A) Authorized fees of secretary.--If a State does not
establish a licensing program for persons engaged in the
wholesale distribution of a drug subject to subsection (b),
the Secretary shall license a person engaged in wholesale
distribution located in such State and may collect a
reasonable fee in such amount necessary to reimburse the
Secretary for costs associated with establishing and
administering the licensure program and conducting periodic
inspections under this section. The Secretary shall adjust
fee rates as needed on an annual basis to generate only the
amount of revenue needed to perform this service. Fees
authorized under this paragraph shall be collected and
available for obligation only to the extent and in the amount
provided in advance in appropriations Acts. Such fees are
authorized to remain available until expended. Such sums as
may be necessary may be transferred from the Food and Drug
Administration salaries and expenses appropriation account
without fiscal year limitation to such appropriation account
for salaries and expenses with such fiscal year limitation.
``(B) State licensing fees.--Nothing in this Act shall
prohibit States from collecting fees from wholesale
distributors in connection with State licensing of such
distributors.''.
(2) Wholesale distribution.--Section 503(e) (21 U.S.C.
353(e)), as amended by paragraph (1), is further amended by
adding at the end the following:
``(4) For the purposes of this subsection and subsection
(d), the term `wholesale distribution' means the distribution
of a drug subject to subsection (b) to a person other than a
consumer or patient, or receipt of a drug subject to
subsection (b) by a person other than the consumer or
patient, but does not include--
``(A) intracompany distribution of any drug between members
of an affiliate or within a manufacturer;
``(B) the distribution of a drug, or an offer to distribute
a drug among hospitals or other health care entities which
are under common control;
``(C) the distribution of a drug or an offer to distribute
a drug for emergency medical reasons, including a public
health emergency declaration pursuant to section 319 of the
Public Health Service Act, except that, for purposes of this
paragraph, a drug shortage not caused by a public health
emergency shall not constitute an emergency medical reason;
``(D) the dispensing of a drug pursuant to a prescription
executed in accordance with subsection (b)(1);
``(E) the distribution of minimal quantities of drug by a
licensed retail pharmacy to a licensed practitioner for
office use;
``(F) the distribution of a drug or an offer to distribute
a drug by a charitable organization to a nonprofit affiliate
of the organization to the extent otherwise permitted by law;
``(G) the purchase or other acquisition by a dispenser,
hospital, or other health care entity of a drug for use by
such dispenser, hospital, or other health care entity;
``(H) the distribution of a drug by the manufacturer of
such drug;
``(I) the receipt or transfer of a drug by an authorized
third-party logistics provider provided that such third-party
logistics provider does not take ownership of the drug;
``(J) a common carrier that transports a drug, provided
that the common carrier does not take ownership of the drug;
``(K) the distribution of a drug, or an offer to distribute
a drug by an authorized repackager that has taken ownership
or possession of the drug and repacks it in accordance with
section 582(e);
``(L) salable drug returns when conducted by a dispenser;
``(M) the distribution of a collection of finished medical
devices, which may include a product or biological product,
assembled in kit form strictly for the convenience of the
purchaser or user (referred to in this subparagraph as a
`medical convenience kit') if--
``(i) the medical convenience kit is assembled in an
establishment that is registered with the Food and Drug
Administration as a device manufacturer in accordance with
section 510(b)(2);
``(ii) the medical convenience kit does not contain a
controlled substance that appears in a schedule contained in
the Comprehensive Drug Abuse Prevention and Control Act of
1970;
``(iii) in the case of a medical convenience kit that
includes a product, the person that manufacturers the kit--
``(I) purchased such product directly from the
pharmaceutical manufacturer or from a wholesale distributor
that purchased the product directly from the pharmaceutical
manufacturer; and
``(II) does not alter the primary container or label of the
product as purchased from the manufacturer or wholesale
distributor; and
``(iv) in the case of a medical convenience kit that
includes a product, the product is--
``(I) an intravenous solution intended for the
replenishment of fluids and electrolytes;
``(II) a product intended to maintain the equilibrium of
water and minerals in the body;
``(III) a product intended for irrigation or
reconstitution;
``(IV) an anesthetic;
``(V) an anticoagulant;
``(VI) a vasopressor; or
``(VII) a sympathomimetic;
``(N) the distribution of an intravenous drug that, by its
formulation, is intended for the replenishment of fluids and
electrolytes (such as sodium, chloride, and potassium) or
calories (such as dextrose and amino acids);
``(O) the distribution of an intravenous drug used to
maintain the equilibrium of water and minerals in the body,
such as dialysis solutions;
``(P) the distribution of a drug that is intended for
irrigation, or sterile water, whether intended for such
purposes or for injection;
``(Q) the distribution of medical gas, as defined in
section 575;
``(R) facilitating the distribution of a product by
providing solely administrative services, including
processing of orders and payments; or
``(S) the transfer of a product by a hospital or other
health care entity, or by a wholesale distributor or
manufacturer operating at the direction of the hospital or
other health care entity, to a repackager described in
section 581(16)(B) and registered under section 510 for the
purpose of repackaging the drug for use by that hospital, or
other health care entity and other health care entities that
are under common control, if ownership of the drug remains
with the hospital or other health care entity at all
times.''.
(3) Third-party logistics providers.--Section 503(e) (21
U.S.C. 353(e)), as amended by paragraph (2), is further
amended by adding at the end the following:
``(5) Third-party logistics providers.--Notwithstanding
paragraphs (1) through (4), each entity that meets the
definition of a third-party logistics provider under section
581(22) shall obtain a license as a third-party logistics
provider as described in section 584(a) and is not required
to obtain a license as a wholesale distributor if the entity
never assumes an ownership interest in the product it
handles.''.
(4) Affiliate.--Section 503(e) (21 U.S.C. 353(e)), as
amended by paragraph (3), is further amended by adding at the
end the following:
``(6) Affiliate.--For purposes of this subsection, the term
`affiliate' means a business entity that has a relationship
with a second business entity if, directly or indirectly--
``(A) one business entity controls, or has the power to
control, the other business entity; or
``(B) a third party controls, or has the power to control,
both of the business entities.''.
(5) Standards.--Subchapter H of chapter V, as added by
section 202, is amended by adding at the end the following:
``SEC. 583. NATIONAL STANDARDS FOR PRESCRIPTION DRUG
WHOLESALE DISTRIBUTORS.
``(a) In General.--The Secretary shall, not later than 2
years after the date of enactment of the Drug Supply Chain
Security Act, establish by regulation standards for the
licensing of persons under section 503(e)(1) (as amended by
the Drug Supply Chain Security Act), including the
revocation, reissuance, and renewal of such license.
``(b) Content.--For the purpose of ensuring uniformity with
respect to standards set forth in this section, the standards
established under subsection (a) shall apply to all State and
Federal licenses described under section 503(e)(1) (as
amended by the Drug Supply Chain Security Act) and shall
include standards for the following:
``(1) The storage and handling of prescription drugs,
including facility requirements.
``(2) The establishment and maintenance of records of the
distributions of such drugs.
``(3) The furnishing of a bond or other equivalent means of
security, as follows:
``(A)(i) For the issuance or renewal of a wholesale
distributor license, an applicant that is not a government
owned and operated wholesale distributor shall submit a
surety bond of $100,000 or other equivalent means of security
acceptable to the State.
``(ii) For purposes of clause (i), the State or other
applicable authority may accept a surety bond in the amount
of $25,000 if the annual gross receipts of the previous tax
year for the wholesaler is $10,000,000 or less.
``(B) If a wholesale distributor can provide evidence that
it possesses the required bond in a State, the requirement
for a bond in another State shall be waived.
``(4) Mandatory background checks and fingerprinting of
facility managers or designated representatives.
``(5) The establishment and implementation of
qualifications for key personnel.
``(6) The mandatory physical inspection of any facility to
be used in wholesale distribution within a reasonable time
frame from the initial application of the facility and to be
conducted by the licensing authority or by the State,
consistent with subsection (c).
``(7) In accordance with subsection (d), the prohibition of
certain persons from receiving or maintaining licensure for
wholesale distribution.
``(c) Inspections.--To satisfy the inspection requirement
under subsection (b)(6), the
[[Page H5959]]
Federal or State licensing authority may conduct the
inspection or may accept an inspection by the State in which
the facility is located, or by a third-party accreditation or
inspection service approved by the Secretary or the State
licensing such wholesale distributor.
``(d) Prohibited Persons.--The standards established under
subsection (a) shall include requirements to prohibit a
person from receiving or maintaining licensure for wholesale
distribution if the person--
``(1) has been convicted of any felony for conduct relating
to wholesale distribution, any felony violation of subsection
(i) or (k) of section 301, or any felony violation of section
1365 of title 18, United States Code, relating to product
tampering; or
``(2) has engaged in a pattern of violating the
requirements of this section, or State requirements for
licensure, that presents a threat of serious adverse health
consequences or death to humans.
``(e) Requirements.--The Secretary, in promulgating any
regulation pursuant to this section, shall, notwithstanding
section 553 of title 5, United States Code--
``(1) issue a notice of proposed rulemaking that includes a
copy of the proposed regulation;
``(2) provide a period of not less than 60 days for
comments on the proposed regulation; and
``(3) provide that the final regulation take effect on the
date that is 2 years after the date such final regulation is
published.''.
(b) Authorized Distributors of Record.--Section 503(d) (21
U.S.C. 353(d)) is amended by adding at the end the following:
``(4) In 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.--The amendments made by subsections (a)
and (b) shall take effect on January 1, 2015.
SEC. 205. NATIONAL STANDARDS FOR THIRD-PARTY LOGISTICS
PROVIDERS; UNIFORM NATIONAL POLICY.
Subchapter H of chapter V, as amended by section 204, is
further amended by adding at the end the following:
``SEC. 584. NATIONAL STANDARDS FOR THIRD-PARTY LOGISTICS
PROVIDERS.
``(a) Requirements.--No third-party logistics provider in
any State may conduct activities in any State unless each
facility of such third-party logistics provider--
``(1)(A) is licensed by the State from which the drug is
distributed by the third-party logistics provider, in
accordance with the regulations promulgated under subsection
(d); or
``(B) if the State from which the drug distributed by the
third-party logistics provider has not established a
licensure requirement, is licensed by the Secretary, in
accordance with the regulations promulgated under subsection
(d); and
``(2) if the drug is distributed interstate, is licensed by
the State into which the drug is distributed by the third-
party logistics provider if such State licenses third-party
logistics providers that distribute drugs into the State and
the third-party logistics provider is not licensed by the
Secretary as described in paragraph (1)(B).
``(b) Reporting.--Beginning 1 year after the date of
enactment of the Drug Supply Chain Security Act, a facility
of a third-party logistics provider shall report to the
Secretary, on an annual basis pursuant to a schedule
determined by the Secretary--
``(1) the State by which the facility is licensed and the
appropriate identification number of such license; and
``(2) the name and address of the facility and all trade
names under which such facility conducts business.
``(c) Costs.--
``(1) Authorized fees of secretary.--If a State does not
establish a licensing program for a third-party logistics
provider, the Secretary shall license the third-party
logistics provider located in such State and may collect a
reasonable fee in such amount necessary to reimburse the
Secretary for costs associated with establishing and
administering the licensure program and conducting periodic
inspections under this section. The Secretary shall adjust
fee rates as needed on an annual basis to generate only the
amount of revenue needed to perform this service. Fees
authorized under this paragraph shall be collected and
available for obligation only to the extent and in the amount
provided in advance in appropriations Acts. Such fees are
authorized to remain available until expended. Such sums as
may be necessary may be transferred from the Food and Drug
Administration salaries and expenses appropriation account
without fiscal year limitation to such appropriation account
for salaries and expenses with such fiscal year limitation.
``(2) State licensing fees.--
``(A) State established program.--Nothing in this Act shall
prohibit a State that has established a program to license a
third-party logistics provider from collecting fees from a
third-party logistics provider for such a license.
``(B) No state established program.--A State that does not
establish a program to license a third-party logistics
provider in accordance with this section shall be prohibited
from collecting a State licensing fee from a third-party
logistics provider.
``(d) Regulations.--
``(1) In general.--Not later than 2 years after the date of
enactment of the Drug Supply Chain Security Act, the
Secretary shall issue regulations regarding the standards for
licensing under subsection (a), including the revocation and
reissuance of such license, to third-party logistics
providers under this section.
``(2) Content.--Such regulations shall--
``(A) establish a process by which a third-party
accreditation program approved by the Secretary shall, upon
request by a third-party logistics provider, issue a license
to each third-party logistics provider that meets the
requirements set forth in this section;
``(B) establish a process by which the Secretary shall
issue a license to each third-party logistics provider that
meets the requirements set forth in this section if the
Secretary is not able to approve a third-party accreditation
program because no such program meets the Secretary's
requirements necessary for approval of such a third-party
accreditation program;
``(C) require that the entity complies with storage
practices, as determined by the Secretary for such facility,
including--
``(i) maintaining access to warehouse space of suitable
size to facilitate safe operations, including a suitable area
to quarantine suspect product;
``(ii) maintaining adequate security; and
``(iii) having written policies and procedures to--
``(I) address receipt, security, storage, inventory,
shipment, and distribution of a product;
``(II) identify, record, and report confirmed losses or
thefts in the United States;
``(III) correct errors and inaccuracies in inventories;
``(IV) provide support for manufacturer recalls;
``(V) prepare for, protect against, and address any
reasonably foreseeable crisis that affects security or
operation at the facility, such as a strike, fire, or flood;
``(VI) ensure that any expired product is segregated from
other products and returned to the manufacturer or repackager
or destroyed;
``(VII) maintain the capability to trace the receipt and
outbound distribution of a product, and supplies and records
of inventory; and
``(VIII) quarantine or destroy a suspect product if
directed to do so by the respective manufacturer, wholesale
distributor, dispenser, or an authorized government agency;
``(D) provide for periodic inspection by the licensing
authority, as determined by the Secretary, of such facility
warehouse space to ensure compliance with this section;
``(E) prohibit a facility from having as a manager or
designated representative anyone convicted of any felony
violation of subsection (i) or (k) of section 301 or any
violation of section 1365 of title 18, United States Code
relating to product tampering;
``(F) provide for mandatory background checks of a facility
manager or a designated representative of such manager;
``(G) require a third-party logistics provider to provide
the applicable licensing authority, upon a request by such
authority, a list of all product manufacturers, wholesale
distributors, and dispensers for whom the third-party
logistics provider provides services at such facility; and
``(H) include procedures under which any third-party
logistics provider license--
``(i) expires on the date that is 3 years after issuance of
the license; and
``(ii) may be renewed for additional 3-year periods.
``(3) Procedure.--In promulgating the regulations under
this subsection, the Secretary shall, notwithstanding section
553 of title 5, United States Code--
``(A) issue a notice of proposed rulemaking that includes a
copy of the proposed regulation;
``(B) provide a period of not less than 60 days for
comments on the proposed regulation; and
``(C) provide that the final regulation takes effect upon
the expiration of 1 year after the date that such final
regulation is issued.
``(e) Validity.--A license issued under this section shall
remain valid as long as such third-party logistics provider
remains licensed consistent with this section. If the
Secretary finds that the third-party accreditation program
demonstrates that all applicable requirements for licensure
under this section are met, the Secretary shall issue a
license under this section to a third-party logistics
provider receiving accreditation, pursuant to subsection
(d)(2)(A).
``SEC. 585. UNIFORM NATIONAL POLICY.
``(a) Product Tracing and Other Requirements.--Beginning on
the date of enactment of the Drug Supply Chain Security Act,
no State or political subdivision of a State may establish or
continue in effect any requirements for tracing products
through the distribution system (including any requirements
with respect to statements of distribution history,
transaction history, transaction information, or transaction
statement of a product as such product changes ownership in
the supply chain, or verification, investigation,
disposition, notification, or recordkeeping relating to such
systems, including paper or electronic pedigree systems or
for tracking and tracing drugs throughout the distribution
system) which are inconsistent with, more stringent than, or
in addition to, any requirements applicable under section
503(e) (as amended by such Act) or this subchapter (or
regulations issued thereunder), or which are inconsistent
with--
``(1) any waiver, exception, or exemption pursuant to
section 581 or 582; or
[[Page H5960]]
``(2) any restrictions specified in section 582.
``(b) Wholesale Distributor and Third-Party Logistics
Provider Standards.--
``(1) In general.--Beginning on the date of enactment of
the Drug Supply Chain Security Act, no State or political
subdivision of a State may establish or continue any
standards, requirements, or regulations with respect to
wholesale prescription drug distributor or third-party
logistics provider licensure that are inconsistent with, less
stringent than, directly related to, or covered by the
standards and requirements applicable under section 503(e)
(as amended by such Act), in the case of a wholesale
distributor, or section 584, in the case of a third-party
logistics provider.
``(2) State regulation of third-party logistics
providers.--No State shall regulate third-party logistics
providers as wholesale distributors.
``(3) Administration fees.--Notwithstanding paragraph (1),
a State may administer fee collections for effectuating the
wholesale drug distributor and third-party logistics provider
licensure requirements under sections 503(e) (as amended by
the Drug Supply Chain Security Act), 583, and 584.
``(4) Enforcement, suspension, and revocation.--
Notwithstanding paragraph (1), a State--
``(A) may take administrative action, including fines, to
enforce a requirement promulgated by the State in accordance
with section 503(e) (as amended by the Drug Supply Chain
Security Act) or this subchapter;
``(B) may provide for the suspension or revocation of
licenses issued by the State for violations of the laws of
such State;
``(C) upon conviction of violations of Federal, State, or
local drug laws or regulations, may provide for fines,
imprisonment, or civil penalties; and
``(D) may regulate activities of licensed entities in a
manner that is consistent with product tracing requirements
under section 582.
``(c) Exception.--Nothing in this section shall be
construed to preempt State requirements related to the
distribution of prescription drugs if such requirements are
not related to product tracing as described in subsection (a)
or wholesale distributor and third-party logistics provider
licensure as described in subsection (b) applicable under
section 503(e) (as amended by the Drug Supply Chain Security
Act) or this subchapter (or regulations issued
thereunder).''.
SEC. 206. PENALTIES.
(a) Prohibited Act.--Section 301(t) (21 U.S.C. 331(t)), is
amended--
(1) by striking ``or'' after ``the requirements of section
503(d),''; and
(2) by inserting ``, failure to comply with the
requirements under section 582, the failure to comply with
the requirements under section 584, as applicable,'' after
``in violation of section 503(e)''.
(b) Misbranding.--Section 502 (21 U.S.C. 352), as amended
by section 103, is further amended by adding at the end the
following:
``(cc) If it is a drug and it fails to bear the product
identifier as required by section 582.''.
SEC. 207. CONFORMING AMENDMENT.
(a) In General.--Section 303(b)(1)(D) (21 U.S.C.
333(b)(1)(D)) is amended by striking ``503(e)(2)(A)'' and
inserting ``503(e)(1)''.
(b) Effective Date.--The amendment made by subsection (a)
shall take effect on January 1, 2015.
SEC. 208. SAVINGS CLAUSE.
Except as provided in the amendments made by paragraphs
(1), (2), and (3) of section 204(a) and by section 206(a),
nothing in this title (including the amendments made by this
title) shall be construed as altering any authority of the
Secretary of Health and Human Services with respect to a drug
subject to section 503(b)(1) of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 353(b)(1)) under any other provision
of such Act or the Public Health Service Act (42 U.S.C. 201
et seq.).
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Michigan (Mr. Upton) and the gentleman from California (Mr. Waxman)
each will control 20 minutes.
The Chair recognizes the gentleman from Michigan.
General Leave
Mr. UPTON. Mr. Speaker, I ask unanimous consent that all Members may
have 5 legislative days in which to revise and extend their remarks and
insert extraneous material into the Record on the bill.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Michigan?
There was no objection.
Mr. UPTON. Mr. Speaker, I yield myself 3 minutes.
I rise today in strong support of H.R. 3204, the Drug Quality and
Security Act.
I am so proud to say that this piece of legislation is a product of
true bipartisan and bicameral work. The Senate and the House,
Republicans and Democrats, came together to produce a bill that will
protect American patients by ensuring that they receive safe drugs.
This legislation will strengthen the prescription drug supply chain
in order to protect American families against counterfeit drugs. The
bill also eliminates and prevents increases in drug prices; it avoids
additional drug shortages; and it eliminates hundreds of millions of
dollars worth of duplicative government red tape on American
businesses, which is harming job growth.
The supply chain provisions of the Drug Quality and Security Act are
the product of many years of tireless work. We know from stakeholders
like Pfizer and Perrigo in Michigan that this is not just a patient
safety issue; it's a jobs issue. This bill will bring certainty to the
drug supply chain and ensure that patients will continue to receive the
medicine that they need without interruption. This bill also addresses
drug compounding.
H.R. 3204 is the result of the Energy and Commerce Committee's
thorough investigation of the NECC meningitis outbreak, which began its
devastating spread almost a year ago today. To date, the CDC has linked
64 deaths and nearly 750 cases in 20 States to contaminated drugs from
the NECC. My home State of Michigan has been the hardest hit by the
outbreak, with 19 lives needlessly lost--three in my district. The sad
truth is that, yes, they could have been prevented.
This legislation is an important step in helping to prevent any such
tragedy from ever occurring again. By reviewing countless documents,
holding four committee hearings, and reviewing various legislative
proposals, we better understand what is needed to help prevent a future
NECC, and we have built that into this legislation.
Mr. Speaker, this bill upholds the current section 503(a) of the law,
and provides it with the clarity that FDA needs by eliminating the
unconstitutional provisions. The bill also requires FDA to engage in
meaningful communication with State boards of pharmacy. Further, under
this bill, entities engaged in sterile drug compounding can voluntarily
register with FDA and operate under FDA regulation. Finally and
importantly, this bill protects traditional pharmacy compounding that
occurs in community pharmacies across the country. That's why the bill
has the support of the National Community Pharmacists Association, and
I would like to thank them for working with us so closely.
I also want to thank Chairman Pitts, Chairman Murphy, Vice Chair
Blackburn, Mr. Latta, and particularly Mr. Griffith for their
outstanding leadership on these issues. I want to commend Mr. Waxman,
Mr. Pallone, Mr. Dingell, Ms. DeGette, Mr. Green, and Mr. Matheson for
their work as well.
The SPEAKER pro tempore. The time of the gentleman has expired.
Mr. UPTON. I yield myself an additional 1 minute.
I also want to thank Chairman Harkin and Senator Alexander for their
leadership, and I've talked with them a number of times over the last
number of weeks.
I want to thank our staffs on both sides, particularly on our side:
Clay Alspach, Paul Edattel, John Stone, and Carly McWilliams. It is
because of their collaborative and tireless efforts that we are near
the resolution of last year's deadly outbreak, and their work is to be
applauded.
To all of the families who have lost loved ones and to those who are
still suffering today--and I talked to someone just within the last
hour whose relative is still suffering--we are near the resolution of
last year's deadly outbreak.
To those families who have lost loved ones and to those who are still
suffering today, with this bill, we say: never again.
I urge my colleagues to support the bill, and I reserve the balance
of my time.
Mr. WAXMAN. Mr. Speaker, I yield myself 3 minutes.
I rise to support the passage of the Drug Quality and Security Act.
It has been a year now since the tragic fungal meningitis outbreak
caused by the New England Compounding Center in Massachusetts. At least
64 people died, and over 750 people were sickened. More than 14,000
others are still waiting--and must live in fear for years--to see
whether they, too, will get meningitis. This was the largest outbreak
of health care-associated infections in U.S. history and one of the
Nation's worst public health disasters in recent memory.
[[Page H5961]]
In recognizing the need to act in the face of this tragedy, Members
on both sides of the aisle in both Houses of Congress came together in
the months following the outbreak to try to figure out how to solve
this problem.
One thing was clear: FDA's authorities over compounding pharmacies
were not up to the task. Divergent court decisions on the underlying
statute had forced the agency to cobble together a piecemeal approach
to regulating compounding pharmacies that was different in some parts
of the country than in others. That untenable legal situation created
loopholes that companies like NECC were able to exploit.
FDA was also facing a pharmacy compounding industry that had
dramatically changed since 1997, the last time Congress passed
legislation on this issue. Since that time, hospitals have grown
dependent on so-called ``outsourcers,'' very large compounding
pharmacies that mix batches of customized drugs for hospitals.
The legislation we are considering today will take a major step
toward addressing these issues.
First, it will correct the constitutional defect in the underlying
law that has wreaked havoc on FDA's ability to regulate compounders.
Second, it will give hospitals and doctors the ability to access a
source of compounded medicines that are made in a facility that is
subject to stringent FDA quality standards and oversight. All other
compounding pharmacies will continue to be subject to current law.
Third, the bill will remedy one of the major problems that surfaced
in the NECC situation--a lack of effective communication between State
boards of pharmacy and the FDA. Specifically, it will create a system
in which State boards of pharmacy and FDA can notify each other when
there are concerns about violations occurring at a particular
compounding pharmacy.
These authorities represent a significant improvement over current
law, and they will go a long way toward better protecting public
health.
The SPEAKER pro tempore (Mr. Holding). The time of the gentleman has
expired.
Mr. WAXMAN. I yield myself an additional 30 seconds.
Mr. Speaker, in addition to these important compounding authorities,
this legislation will establish an electronic, interoperable system at
the Federal level that tracks each package of drugs at the unit level
and that involves the entire supply chain. This will help prevent
Americans from being harmed by counterfeit and substandard medicines.
There is no question in my mind that this bill represents a step
forward, and I urge all of my colleagues to support it.
I reserve the balance of my time.
Mr. UPTON. At this time, I yield 3 minutes to the gentleman from
Pennsylvania (Mr. Pitts), the chairman of the Health Subcommittee.
Mr. PITTS. Mr. Speaker, I am very pleased that the House is
considering today H.R. 3204, the Drug Quality and Security Act. This
legislation would address two important issues affecting the quality
and security of America's drug supply.
First, the bill would protect traditional pharmacies and clarify laws
related to human drug compounding in response to last year's nationwide
meningitis outbreak--one of the largest public health crises in recent
memory.
Second, the bill would strengthen the prescription drug supply chain
in order to protect American families against counterfeit drugs.
As we all remember, in the summer and fall of 2012, a Massachusetts
company, the New England Compounding Center, the NECC, shipped over
17,000 vials of an injectable steroid solution from three contaminated
lots to health care facilities across the country. After receiving
injections of NECC's contaminated steroid, over 64 people died from
complications associated with fungal meningitis, and 750 others were
stricken with meningitis or other persistent fungal infections.
Title I of H.R. 3204 is based off of Representative Morgan Griffith's
Compounding Clarity Act and is the culmination of a nearly yearlong
House Energy and Commerce Committee investigation. It clarifies FDA's
authority over the practice of compounding drugs, and it requires FDA
to engage in dialogue with State regulators to prevent against another
tragedy like NECC's while protecting the role of traditional pharmacies
in compounding.
{time} 1400
Title II, based on Representative Bob Latta's Safeguarding America's
Pharmaceuticals Act, addresses the safety of the Nation's prescription
drug supply chain, as drugs travel from the manufacturer to the
pharmacy. It creates a uniform national standard for drug supply chain
security to protect Americans against counterfeit drugs while
eliminating needless levels of bureaucracy.
The Drug Quality and Security Act is the result of months of
bipartisan, bicameral negotiation, and I would like to thank Chairman
Upton, Ranking Member Waxman, Chairman Emeritus Dingell,
Representatives Griffith, Latta, Pallone, DeGette, and Gene Green for
their work on this important legislation, and also Senators Harkin and
Alexander in the Senate.
Finally, I would like to thank the staff of the Energy and Commerce
Health Subcommittee, especially Clay Alspach, Paul Edattel, Carly
McWilliams, Heidi Stirrup, and Monica Volante.
This bill is supported by PhRMA, the Generic Pharmaceutical
Association, the National Community Pharmacists Association, the
Healthcare Supply Chain Association, and the Pharmaceutical
Distribution Security Alliance, among others.
I would urge all of my colleagues to support this commonsense,
bipartisan legislation.
Mr. WAXMAN. Mr. Speaker, I yield 3 minutes to the gentleman from New
Jersey (Mr. Pallone), the ranking member on the Health Subcommittee.
Mr. PALLONE. Thank you, Mr. Waxman.
Mr. Speaker, I rise in support of the Drug Quality and Security Act.
This bill represents a bipartisan, bicameral effort to clarify current
pharmaceutical compounding laws and secure our Nation's pharmaceutical
drug supply chain. It's the culmination of several months of hard work
and tireless negotiations between our committee and the Senate Health
Committee.
As a result of the terrible tragedy in Massachusetts, the House
Energy and Commerce Committee held hearings and engaged with
stakeholders and the FDA in order to understand the existing problems
and the best options for addressing them. What became clear was a need
for patients and providers to have access to safe compounded drugs.
This legislation helps ensure that quality compounded drugs are
available to patients who need them.
This effort also makes clear that FDA's authorities over compounding
pharmacies needed to be fixed. A court split decision over the statute
had hampered FDA's ability to effectively enforce their authority over
compounding pharmacies and ensure the safety and effectiveness of
compounded medications. The bill before us will fix this constitutional
flaw by deleting the provisions that were deemed unconstitutional by
the courts.
The bill will permit compounders who wish to practice outside the
scope of traditional pharmacy to register as outsourcing facilities,
but those who choose to remain traditional pharmacies will continue to
be regulated as they are under current law. This gives doctors and
hospitals the ability to purchase compounded drugs for their patients
made in a facility that is subject to stringent FDA quality standards
and oversight.
In addition, the legislation offers providers and patients better
information about compounded drugs by directing FDA to make a list of
FDA-regulated outsourcing facilities available and requiring detailed
labeling on compounded drugs. It will also improve communications and
coordination with FDA and State authorities.
The second title of the bill establishes a uniform, national drug-
tracing framework to track prescription drugs from the manufacturer to
the pharmacy, and raises the standards for prescription drug
wholesalers and third-party logistic providers across the U.S. This is
the result of several years of work to address the growing problems of
pharmaceutical theft, counterfeiting, and diversion.
The bill before us today makes significant improvements from the bill
that passed the House earlier this year.
[[Page H5962]]
Most notably, it develops a workable pathway to unit-level,
interoperable tracing in a decade.
I think we should all be proud of the work our staffs have done. I
would like to thank again Mr. Waxman, Mr. Upton, as well as Chairman
Pitts, Mr. Dingell, Ms. DeGette, Mr. Green, Mr. Matheson, Mr. Latta,
and Mr. Griffith for their work on this bill.
Mr. Speaker, the American people deserve the peace of mind to know
that the medicines they take are safe and effective. The Drug Quality
and Security Act is a critically important step in protecting the
public's health, and I urge Members to support this bipartisan,
bicameral legislation.
Mr. UPTON. Mr. Speaker, I yield 2 minutes to the gentleman from Ohio
(Mr. Latta), a member of the committee.
Mr. LATTA. I thank the chairman for yielding.
Mr. Speaker, I rise today in support of the Drug Quality and Security
Act of 2013.
Title II of this legislation, Drug Supply Chain Security, is based on
H.R. 1919, the Safeguarding America's Pharmaceuticals Act of 2013,
which I introduced along with Congressman Matheson. H.R. 1919 was
passed on the floor by a voice vote on June 3 of this year.
Title II of this bill relates to the drug supply chain, and I am
pleased that a bipartisan, bicameral agreement was reached to secure
our drug supply chain and protect patients. Securing our Nation's
pharmaceutical supply chain is extremely important, and passage of this
bill is an important step forward in protecting America's families.
Pharmaceutical distribution occurs nationwide, and it is estimated
that within the United States there are more than 4 billion
prescriptions filled each year. By replacing the current patchwork of
multiple State laws with a uniform national standard, we're improving
safety, eliminating duplicative regulations, and creating certainty for
all members of the pharmaceutical supply chain. When anyone takes a
prescribed medication, he or she should have full confidence that the
medication is as prescribed and that no counterfeit or adulterated
drug has entered the supply chain.
To protect patient safety, the bill creates a uniform national
standard for securing the drug distribution supply chain, thereby
preventing duplicative State and Federal requirements relating to
tracing. No State can impose additional or inconsistent regulations
related to tracing products on supply chain members. The bill increases
security of the supply chain by establishing tracing requirements for
manufacturers, wholesale distributors, pharmacies, and repackagers
based on the changes in ownership. The bill also establishes a
collaborative, transparent process between the FDA and stakeholders to
study ways to even further secure the drug supply chain through public
meetings and pilot projects.
I was successful in including language in the FDA user fee law to
allow hospital systems to repackage drugs within a hospital system in
the instance of a drug shortage.
The SPEAKER pro tempore. The time of the gentleman has expired.
Mr. UPTON. I yield the gentleman an additional 30 seconds.
Mr. LATTA. I will continue working with hospital systems on the issue
of permitting these systems to prepare batches of compounded drugs in
advance of a specific physician prescription or order.
Mr. Speaker, I want to especially thank Chairman Upton and
Subcommittee Chairman Pitts for all their assistance in advancing this
legislation. I want to thank the Health Subcommittee staff, especially
my legislative director, Allison Witt, for all their hard work.
Mr. Speaker, I urge full support of H.R. 3204.
Announcement by the Speaker Pro Tempore
The SPEAKER pro tempore. Members are advised not to traffic the well
while another Member is under recognition.
Mr. WAXMAN. Mr. Speaker, I yield 2 minutes to the gentleman from
Michigan (Mr. Dingell), the chairman emeritus of our committee.
(Mr. DINGELL asked and was given permission to revise and extend his
remarks.)
Mr. DINGELL. Mr. Speaker, this is a good bill. It's not perfect, but
it is a huge stride forward.
It represents a major step in securing our pharmaceutical supply
chain and improving FDA's authority to oversee compounding pharmacies.
It also is done under a bipartisan, bicameral, cooperative, and
enthusiastic effort by Members on both sides of the aisle and of the
Capitol working together.
It addresses the problems of the deadly fungal meningitis outbreak of
several years ago, which were traced to lots of supposedly sterile
steroid injections made at the New England Compounding Center. There
were 264 cases of fungal meningitis in my home State and 19 deaths.
This will address that concern in a very excellent way.
It also sees to it that FDA and the States are able to cooperate
together, have better funding and more authority over compounding
pharmacies. It also does something else, which is very important: it
sees to it that now we can track and trace pharmaceuticals through the
channels of trade, a very important need. And it is for the first time
going to see to it that Americans are able to address their concerns
about the safety of pharmaceuticals in these important areas.
I want to thank Chairman Upton for his leadership, Ranking Member
Waxman, Representatives Pallone, Matheson, DeGette, Latta, Pitts, and
Griffith, and my good friend, Mr. Green, for their hard work on this
legislation. I hope that we can quickly send this legislation to the
President's desk for signature.
Now just one thought: why is it that on legislation of this kind,
this body can work together, and we are not capable of dealing with
massive problems like government shutdowns and dealing with continuing
resolutions? Perhaps maybe a little bit of informed, intelligent
behavior by this House on other matters would be in order.
Announcement by the Speaker Pro Tempore
The SPEAKER pro tempore. The Chair will remind all persons in the
gallery that they are here as guests of the House and that any
manifestation of approval or disapproval of proceedings or other
audible conversation is in violation of the rules of the House.
Mr. UPTON. Mr. Speaker, I yield 3 minutes to the gentleman from
Virginia (Mr. Griffith), who played a very large part on the
compounding side of this legislation.
Mr. GRIFFITH of Virginia. Mr. Speaker, I thank Subcommittee Chairman
Pitts for giving me the freedom to work on this. I appreciate it very
much.
It has been a year since last fall's fungal meningitis outbreak
associated with the tainted sterile compounded drugs from the New
England Compounding Center. In my district and in our area in Virginia,
we had several deaths, we had 50 confirmed cases, and we had
approximately 1,400 patients who were notified that they could have
been exposed to fungal meningitis because they received tainted steroid
injections.
In working on this bill, I appreciated the bipartisan manner that we
used to address this and to work on this matter, particularly with my
colleagues across the aisle, Representatives Gene Green and Diana
DeGette, for whom I am very grateful for all of their time and effort
by both them and their staffs. I should also thank my staff member who
worked on this most, which was Adam Harbison.
Having said that, I agree with Mr. Dingell that it is a good bill and
not a perfect bill, but I am glad to see that language from the
Griffith-Green-DeGette effort was adopted and the FDA will be required
to engage in meaningful communication with all of the States when
potential problems are identified, as this has always been my priority.
In my opinion, this was the biggest failure of the FDA in handling
the NECC case, as they were warned about problems by at least two
States prior to this problem coming to the forefront with all of these
deaths and with this horrible situation. Two States had sent out a
warning signal. The State of Colorado had said, Wait a minute, we're
not going to let these folks operate here. The State of Ohio had
notified the FDA that they had concerns about NECC being a
manufacturer, yet there was not any swift action taken on NECC or even
an attempt to alert other States, including the State of Massachusetts,
to the problems that were happening.
[[Page H5963]]
I know there's a lot of concern out there by some in the medical
community, particularly the doctors and some others, but this does not
change the existing law on office use, and it does not change the
existing law on repackaging.
There were legal questions that evolved with this situation
surrounding the advertising requirements of the original bill. I was a
little surprised that the FDA had waited 10 years to bring that up, but
this bill fixes that problem and takes away that cloud of uncertainty
as to whether or not the whole bill was not constitutional because the
advertising sections were not constitutional.
This is a good bill. I'm just talking about the compounding sections,
but also the track-and-trace sections are very good. I think we are
drawing a clear line defining so that the FDA can better determine who
are the traditional compounding pharmacies and who are really
outsourcers or manufacturers. I think that is great that this bill has
that in here.
I would be remiss if I didn't tell a story that struck me last week
as we are on that 1-year anniversary.
The SPEAKER pro tempore. The time of the gentleman has expired.
Mr. UPTON. I yield the gentleman an additional 1 minute.
Mr. GRIFFITH of Virginia. Last week, I went to have lunch with my
sons at their elementary school. As I was going in, the elementary
school secretary said to me, ``I know I probably shouldn't say
anything, but I want to thank you for working on this compounding
bill.''
Doug Wingate, who died a year ago, was my family's best friend, and
he and his wife were supposed to be on a cruise for their 25th
anniversary and instead we were attending his funeral. His wife last
week was on that cruise with her son, but we can never bring her
husband back. This bill will make sure that we don't have that problem
again, and the other Doug Wingates of the world will not have to die in
order for us to change the law to make a better protected system for
the American people.
{time} 1415
Mr. WAXMAN. Mr. Speaker, I yield 2 minutes to the gentlelady from the
State of Colorado (Ms. DeGette).
Ms. DeGETTE. Mr. Speaker, almost exactly 1 year ago, as you've heard,
there was a tragic meningitis outbreak in Massachusetts; 64 people lost
their lives, and 750 people were sickened.
In the investigation of NECC, the compounding pharmacy, there was
found black specks floating in the vials. There was found fungal
material. The factory, itself, had greenish yellow residue on
supposedly sterile equipment and surfaces that tested positive for mold
and bacteria.
In a series of hearings in our committee, we learned that the Food
and Drug Administration Modernization Act of 1997 left a loophole large
enough to allow large drug compounders to escape oversight by the FDA.
The wording of the act also led to litigation and confusing court
decisions about the FDA's authority over those manufacturers.
This bill takes the first, albeit important, step to address these
issues. It incorporates important pieces of bipartisan legislation, as
you've heard, that I have introduced with the gentleman from Virginia
(Mr. Griffith) and the gentleman from Texas (Mr. Gene Green). It
deletes the provisions from existing law that were deemed
unconstitutional by the courts. It also enhances cooperation between
State boards of pharmacy and the FDA; and it gives doctors and
hospitals the ability to purchase compounded drugs for their patients
made in a facility that is subject to stringent FDA quality standards
and oversight. Importantly, all other compounding pharmacies would
continue to be subject to current law. Finally, the Drug Quality and
Security Act will require within a decade the implementation of a
nationwide system for the tracking and tracing of drugs as they move
through the supply chain from manufacturer to pharmacy.
I believe this will go a long way toward preventing dangerous
counterfeit and substandard medicines from entering our drug supply. We
still have work to do. We all agree with that. And I am committed to
strengthening the law.
The SPEAKER pro tempore. The time of the gentlewoman has expired.
Mr. WAXMAN. I yield the gentlelady an additional 30 seconds.
Ms. DeGETTE. I am committed to strengthening this law so that we
never have any other tragedy such as what Mr. Griffith discussed, where
we have a Doug Wingate who right now is missing his 25th anniversary
cruise because he was killed by these tainted drugs.
I'm proud to have worked with my colleagues from both sides of the
aisle. I associate myself with the chairman emeritus' remarks that we
should be able to do this on the continuing resolution and on the debt
limit.
I also want to thank all of our staff; and, in particular, my chief
of staff, Lisa Cohen, who spent the entire August recess working on
this. And I thank the chairman.
Mr. UPTON. Mr. Speaker, I yield 2 minutes to the gentleman from
Texas, Dr. Burgess, vice chair of both the Health and the O and I
Subcommittees.
Mr. BURGESS. I thank the chairman for yielding.
Mr. Speaker, as an original cosponsor and as a negotiator of the
House legislation, I rise in the strongest support of the track-and-
trace provisions which would protect the public and give confidence to
doctors in practice that the drugs they are dispensing, in fact, came
from the manufacturer.
In regard to the language over compounding, there is, in fact, much
to like. There was additional work that could have been done; but,
unfortunately, due to the intransigent insistence of the Senate, we are
considering these two issues together.
Sixty American lives were lost a year ago. Excellent investigative
work was done by our Subcommittee on Oversight and Investigations. And
it is disturbing to me personally that not one person at the Food and
Drug Administration has been held accountable for their failure to use
existing authority or informing the State of what they knew.
My test for consideration of new categories of regulation is that it
must not impact the traditional practice of medicine, pharmacy, or
compounding.
Mr. Speaker, no bill is perfect. There's always the risk of
unintended consequences. I sincerely hope that this language will pass
this test; but if it does not, I hope that our committee and this body
will stand ready to do the necessary oversight and correct any
unintended consequences.
Mr. WAXMAN. Mr. Speaker, I am pleased at this time to yield 2 minutes
to the gentleman from Texas, (Mr. Green).
Mr. GENE GREEN of Texas. Mr. Speaker, I rise in strong support of the
Drug Quality and Security Act. This important bill is the result of
weeks of bipartisan and bicameral negotiations.
I want to thank my colleagues, Representatives Morgan Griffith and
Diana DeGette, for joining me in our efforts over many months. I also
want to thank Chairman Upton, Ranking Member Waxman, Chairman Pitts,
Ranking Member Pallone, Chairman Emeritus Dingell, and my good friend
Congressman Matheson for all their leadership through this process and
their commitment to getting this final product to the floor. It was a
group effort, which is how this body should function all the time.
This bill is not perfect. We heard those concerns, and we have tried
to address them, but the nature of compromise is not getting
everything. The Energy and Commerce Committee investigated last year's
outbreak and found there were breakdowns in the regulations at the
State and, most concerning, at the Federal level.
Large operators were able to sell products interstate in an
unregulated gray area. In the case of the NECC, their sterile
facilities were far from sterile. They operated without fear of
penalties for far too long, and people died because of that.
I'm proud to say that this bill fixes the problems that led to the
fungal meningitis outbreak, and it requires the FDA to succeed where it
failed in the past. Bad actors concerned more with profit than with
public health ought not to be able to operate with impunity again.
I hope that the FDA uses their enforcement discretion to maintain
patient access to important drugs from nuclear pharmacies, certain
repackaged drugs, and drugs for ``office use.''
[[Page H5964]]
While I acknowledge there are problems, it is most important that we
act to protect the public health. Our constituents, when they seek
care, will now have the confidence that a sterile compounded product
really is sterile.
We must make sure another fungal meningitis outbreak is never allowed
to occur again. This bill succeeds in that goal, and I am proud to
support it.
Mr. UPTON. Mr. Speaker, at this time I yield 2 minutes to the
gentleman from Pennsylvania, Dr. Murphy, the chairman of the Oversight
and Investigations Subcommittee.
Mr. MURPHY of Pennsylvania. I thank the chairman.
Mr. Speaker, we are here today in part to deal with the issue of the
compounding pharmacies which allows the FDA to have greater oversight
over interstate sales.
How we got here is a tragedy. In our Oversight and Investigation
Subcommittee, we found that some 64 people died from this pain
medication manufactured by the New England Compounding Center. These
patients trusted that the steroids injected into their spine or their
joints to relieve chronic pain was perfectly safe because of the
confidence our Nation's health care providers place in the Food and
Drug Administration.
That drug was contaminated with fungus and hurt people dramatically.
More than 700 people received these lethal injections. Today, most are
living with the unbearable horror of not knowing whether they will
survive and must spend weeks in the hospital, missing work, holidays,
and time with family, and must take large doses of morphine to ease the
pain. Each day is lived under the deadly threat of an infection that
could reach their brains and perhaps kill them.
This outbreak is one of the worst public health disasters in our
country's history and a terrible tragedy and an epic failure.
Sadly, during our hearings, it was pointed out that while the FDA was
still having multiple visits to compounding pharmacies, they still told
us they did not have the authority. Unfortunately, several years had
dragged on where the FDA heard numerous complaints about the problems
with NECC. They told us it was too complex to act on it; but, clearly,
it was not complex nor was it a surprise. Neither NECC nor its sister
company, Ameridose, were operating in the shadows. They were under the
nose of the FDA for a decade. The field staff were aware of it. There
were warning signs, alarm bells, flashing red lights, complaints from
patients, nurses, pharmacists, doctors, pain clinics, hospitals, and
drug companies. So the FDA told us they need more authority. This bill
will grant it to them.
But I must say, in the context of this, when Dr. Hamburg told us it
was too complex, I applaud Dr. Woodcock who told us they need to think
more like physicians and less like attorneys. That is the right
attitude.
So with the passage of this bill, the FDA will have the authority it
needs, will have to also make sure that they have the fortitude to take
action on any compounding pharmacy that they see not up to the high
level of standards the FDA sets, that all citizens expect.
The Drug Quality and Security Act will end these problems, we hope,
and these inspection holidays and reassure the American public that
these medications--wherever they are manufactured--and most by
compounding pharmacies do a superb job of maintaining sterile
conditions. But in all cases, the FDA will have the authority to make
sure they have the inspections and they have the team that can go in
there and take solid action when these centers do not adhere to those
high standards.
Mr. WAXMAN. Mr. Speaker, I yield 2 minutes to the gentleman from Utah
(Mr. Matheson).
Mr. MATHESON. Mr. Speaker, the bill before us today has two main
components. We talk about the drug compounding issue and also the issue
of the drug supply chain, how we can track medications through the
pharmaceutical supply chain to make sure that the materials are safe
and have not been subject to counterfeit medications entering that
supply chain.
I would like to speak primarily about the supply chain component of
the bill. That component of the bill is a product of several years of
work and collaboration between a number of Members on both sides of the
aisle, working with, beyond Members, a lot of stakeholders--the
pharmaceutical supply chain stakeholders, the Food and Drug
Administration, and others. And this act, in part, is going to provide
immediate steps to help strengthen our drug supply chain from
counterfeiters and other bad actors. It also establishes a clear and
defined path toward full electronic product-level traceability.
You know, we've seen this in recent press reports. Counterfeit meds
can slip into our drug supply, and it's so tempting to the
counterfeiters. When you think of last year alone, the prescription
drug market in the United States, Americans spent $325 billion on
prescription meds. So this is a lucrative market, and it's very
tempting for counterfeiters. And that's why it's so important we ensure
the integrity of the drug supply chain, and this bill is going to work
to do just that.
The other thing that bill does is it provides some much-needed
regulatory certainty for everyone in the supply chain, establishing a
national uniform standard for strengthening the integrity of the supply
chain. And that's important, as opposed to having each State do their
own thing. Then the participants in the supply chain are going to have
to do 50 different sets of rules, and that doesn't make sense.
And, finally, the bill establishes a collaborative process between
the FDA and the industry to establish protocols for taking this
traceability where you can track the meds all the way down to the unit
level. That is going to provide the ultimate level of security and
certainty for consumers across America and the integrity of the drug
supply chain.
I want to thank so many people, but I particularly want to thank
Chairman Upton and Ranking Member Waxman for their work on this. I also
would like to thank a couple of colleagues who worked on this issue
before who are no longer Members of Congress, Mr. Buyer and Mr.
Bilbray, who spent a lot of time; in the current Congress, Congressman
Latta and Mr. Dingell as well.
Mr. UPTON. Mr. Speaker, I have no further requests for time on our
side, so I'm ready to close.
Mr. WAXMAN. Mr. Speaker, at this time I yield 2 minutes to a good
friend from the State of Connecticut (Ms. DeLauro).
Ms. DeLAURO. Mr. Speaker, I rise in opposition to the act before us.
I support the track-and-trace provisions to prevent fake medication
from entering the drug supply, and I commend the ranking member for his
efforts.
But the voluntary approach to regulating large-scale compounding
pharmacies in this bill is not strong enough to ensure the public's
safety in this arena.
This is a life-and-death issue. Last year, one single compounding
pharmacy in Massachusetts caused a fungal meningitis outbreak that
sickened over 700 people and caused over 60 deaths, which is why I
introduced legislation to draw a clear line between whether a business
is a traditional compounding pharmacy or a drug manufacturer, like the
one in New England, and to ensure the proper mandatory FDA regulation
of compounding drug manufacturers shipping mass amounts of drugs across
State lines.
Under this bill, large-scale, high-risk compounding manufacturers
would voluntarily register with the Food and Drug Administration
without meaningful enough penalties for failing to comply. That New
England Compounding Center, responsible for over 60 deaths, would not
have to register. This voluntary approach will continue to expose
patients to potentially unsafe mass-produced compounded drugs that are
not approved or evaluated by the FDA for safety, efficacy, and adequate
directions for use. It is an approach that can do real harm, and it is
time for the FDA to be the regulatory agency it was intended to be.
At the very least, given that lives are at stake, the House should
consider this issue as a stand-alone bill, through regular order, with
the opportunity for amendments.
{time} 1430
It should not be on a suspension calendar; and as it is on the
suspension calendar, I must oppose this bill.
Mr. UPTON. Mr. Speaker, we have no further speakers, and I reserve
the balance of my time.
[[Page H5965]]
Mr. WAXMAN. Mr. Speaker, I yield 1 minute to the gentleman from New
York (Mr. Engel).
Mr. ENGEL. I thank the gentleman for yielding to me, and I rise in
support of this compromise legislation before us today. I believe that
H.R. 3204 will enable our country to further secure our pharmaceutical
distribution chain and help keep patients who depend on compounding
pharmacies safe.
I am proud of the Energy and Commerce Committee because concerns that
many of us had about the previous version of this track-and-trace
legislation have been taken care of in this bill. They have been
addressed in this bill. The previous bill was H.R. 1919, and we had
difficulty with it. So I look forward to supporting this bill. We held
hearings, and we are compromising on both sides. I wish Congress would
take our lead on other issues and compromise, but I am happy to support
this bill. I urge my colleagues to vote ``aye.''
Mr. UPTON. I continue to reserve the balance of my time.
Mr. WAXMAN. Mr. Speaker, I yield myself the balance of my time.
I want to thank Chairman Upton, Chairman Pitts, and Ranking Member
Pallone. On the Democratic staff, Tiffany Guarascio for Mr. Pallone;
Greg Sunstrum for Mr. Dingell; Rachel Stauffer and Lisa Cohen for Ms.
DeGette; Nate Tipton from Mr. Green's office; Joel Bailey for Mr.
Matheson; Karen Nelson, Eric Flamm, and Rachel Sher--all of these
people played an essential role in getting this bill through.
I want to single out Mr. Griffith who introduced the bill in the
House, along with Ms. DeGette and Mr. Green, that served as a
foundation for the compounding debate. Mr. Matheson and Mr. Latta
introduced the House track-and-trace bill.
Everybody didn't get what they wanted. This bill is a compromise.
This institution has to reach compromises to get things done. We cannot
have every issue litigated and relitigated. Once the law is settled, we
must go on. And I am chagrinned that we are likely to close the
government because, on the other side of the aisle, the leadership in
this House wants to keep the fight going on the Affordable Care Act. It
is the law. It has been affirmed by the courts. It is about to be put
in place. We should work together to solve our country's problems, not
make them worse by failing to compromise and work with each other.
I yield back the balance of my time.
Mr. UPTON. Mr. Speaker, I yield myself the balance of my time.
Mr. Speaker, this legislation that we hopefully will pass in the next
few minutes is very important. It clearly, I think, would have saved
the lives of those folks that were taken, and it reflects the hard work
of our committee on a bipartisan basis.
From the very start, the Oversight and Investigation Subcommittee
went to work. It got to the bottom of a very tragic situation that
impacted some 20 States, hundreds and hundreds of people, and we've
changed that system now. Because of their work and their investigation,
we came back and moved legislation through the proper channels, regular
order, through the Health Subcommittee and through our committee. We
worked very closely with Republicans and Democrats in the Senate to
craft this bill that would have stopped this awful thing that happened
a year ago.
Congress does work and can work when we work together, and I am proud
of this product. I am proud of this legislation. I urge the Senate to
take it up in the next day or two so we can, in fact, get it to the
President's desk, and I thank every Member who worked so hard.
We saw today certainly the personal impact on all of our districts
and on the Members themselves. Many of us, in fact, did know folks
directly impacted not only through death, but also those who were
impacted because of the impact on their own lives as they still try to
recuperate and survive. I urge all of my colleagues to vote ``yes.''
I yield back the balance of my time.
Mr. POLIS. Mr. Speaker, I rise in support of H.R. 3204, the Drug
Quality Security Act.
The merits of this legislation are clear: it provides additional
oversight of the preparation of compound medications. It institutes new
labeling requirements and clarifies existing ones. And it helps us
track products from manufacturer to consumer. Coloradans in my district
will be safer when this bill is signed into law.
But Mr. Speaker, this bill also serves as a reminder that despite the
differences between Republicans and Democrats on so many issues, we
still can come together to do the work of the American people.
Last year, we saw the tragic results of unregulated and unsafe
compounding. This year, we're seeing Congress respond by passing a bill
supported by patient advocates, the public health community, and
stakeholders at all parts of the pharmaceutical supply chain.
No, this legislation isn't perfect. But it represents a significant
step forward in protecting public health and safety, and it shows that
we can join together to get things done.
That's how this chamber should work, Mr. Speaker, and I'm hopeful
that the my colleagues on both sides will continue to legislate by
seeking common ground, rather than focusing on the issues that divide
us.
Mr. SESSIONS. Mr. Speaker, I rise concerning certain provisions of
H.R. 3204, legislation addressing human drug compounding and drug
supply chain security.
This legislation confirms that Section 503(A), originally passed in
1997, allows the U.S. Food and Drug Administration (FDA) to enter into
memorandums of understanding with the states to address ``the
distribution of inordinate amounts of compounded products interstate,''
and to make sure that there are procedures that provide ``for
appropriate investigation by a State agency of complaints relating to
compounded drug products distributed outside such State.''
It is my understanding that this authority is to be used by the FDA
to make sure that systems and procedures are set up so that consumers
have available redress for any potential problem with compounded
prescriptions that are shipped across state lines. I am aware of
concerns that the FDA may use this authority to try to restrict
interstate commerce rather than following the letter of the law, which
seeks to guarantee ``appropriate investigation'' on complaints and
other issues that may arise.
Mr. Speaker, I will continue to monitor the implementation of Section
503(A) in consultation with compounding pharmacies in Texas, and call
on the FDA to ensure that these provisions are not used to restrict
interstate sales of compounded pharmaceuticals within all applicable
laws and regulations.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Michigan (Mr. Upton) that the House suspend the rules
and pass the bill, H.R. 3204.
The question was taken; and (two-thirds being in the affirmative) the
rules were suspended and the bill was passed.
A motion to reconsider was laid on the table.
____________________