[Congressional Record (Bound Edition), Volume 158 (2012), Part 7]
[House]
[Pages 9963-9966]
[From the U.S. Government Publishing Office, www.gpo.gov]




STRENGTHENING AND FOCUSING ENFORCEMENT TO DETER ORGANIZED STEALING AND 
                       ENHANCE SAFETY ACT OF 2012

  Mr. SMITH of Texas. Madam Speaker, I move to suspend the rules and 
pass the bill (H.R. 4223) to amend title 18, United States Code, to 
prohibit theft of medical products, and for other purposes, as amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 4223

       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 ``Strengthening and Focusing 
     Enforcement to Deter Organized Stealing and Enhance Safety 
     Act of 2012'' or the ``SAFE DOSES Act''.

     SEC. 2. THEFT OF MEDICAL PRODUCTS.

       (a) Prohibited Conduct and Penalties.--Chapter 31 of title 
     18, United States Code, is amended by adding at the end the 
     following:

     ``Sec. 670. Theft of medical products

       ``(a) Prohibited Conduct.--Whoever, in, or using any means 
     or facility of, interstate or foreign commerce--
       ``(1) embezzles, steals, or by fraud or deception obtains, 
     or knowingly and unlawfully takes, carries away, or conceals 
     a pre-retail medical product;
       ``(2) knowingly and falsely makes, alters, forges, or 
     counterfeits the labeling or documentation (including 
     documentation relating to origination or shipping) of a pre-
     retail medical product;
       ``(3) knowingly possesses, transports, or traffics in a 
     pre-retail medical product that was involved in a violation 
     of paragraph (1) or (2);
       ``(4) with intent to defraud, buys, or otherwise obtains, a 
     pre-retail medical product that has expired or been stolen;
       ``(5) with intent to defraud, sells, or distributes, a pre-
     retail medical product that is expired or stolen; or
       ``(6) attempts or conspires to violate any of paragraphs 
     (1) through (5);
     shall be punished as provided in subsection (c) and subject 
     to the other sanctions provided in this section.
       ``(b) Aggravated Offenses.--An offense under this section 
     is an aggravated offense if--
       ``(1) the defendant is employed by, or is an agent of, an 
     organization in the supply chain for the pre-retail medical 
     product; or
       ``(2) the violation--
       ``(A) involves the use of violence, force, or a threat of 
     violence or force;
       ``(B) involves the use of a deadly weapon;
       ``(C) results in serious bodily injury or death, including 
     serious bodily injury or death resulting from the use of the 
     medical product involved; or
       ``(D) is subsequent to a prior conviction for an offense 
     under this section.
       ``(c) Criminal Penalties.--Whoever violates subsection 
     (a)--
       ``(1) if the offense is an aggravated offense under 
     subsection (b)(2)(C), shall be fined under this title or 
     imprisoned not more than 30 years, or both;
       ``(2) if the value of the medical products involved in the 
     offense is $5,000 or greater, shall be fined under this 
     title, imprisoned for not more than 15 years, or both, but if 
     the offense is an aggravated offense other than one under 
     subsection (b)(2)(C), the maximum term of imprisonment is 20 
     years; and
       ``(3) in any other case, shall be fined under this title, 
     imprisoned for not more than 3 years, or both, but if the 
     offense is an aggravated offense other than one under 
     subsection (b)(2)(C), the maximum term of imprisonment is 5 
     years.
       ``(d) Civil Penalties.--Whoever violates subsection (a) is 
     subject to a civil penalty in an amount not more than the 
     greater of--
       ``(1) three times the economic loss attributable to the 
     violation; or
       ``(2) $1,000,000.
       ``(e) Definitions.--In this section--
       ``(1) the term `pre-retail medical product' means a medical 
     product that has not yet been made available for retail 
     purchase by a consumer;
       ``(2) the term `medical product' means a drug, biological 
     product, device, medical food, or infant formula;
       ``(3) the terms `device', `drug', `infant formula', and 
     `labeling' have, respectively, the meanings given those terms 
     in section 201 of the Federal Food, Drug, and Cosmetic Act;
       ``(4) the term `biological product' has the meaning given 
     the term in section 351 of the Public Health Service Act;
       ``(5) the term `medical food' has the meaning given the 
     term in section 5(b) of the Orphan Drug Act; and
       ``(6) the term `supply chain' includes manufacturer, 
     wholesaler, repacker, own-labeled distributor, private-label 
     distributor, jobber, broker, drug trader, transportation 
     company, hospital, pharmacy, or security company.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of chapter 31 of title 18, United States Code, is 
     amended by adding after the item relating to section 669 the 
     following:

``670. Theft of medical products.''.

     SEC. 3. CIVIL FORFEITURE.

       Section 981(a)(1)(C) of title 18, United States Code, is 
     amended by inserting ``670,'' after ``657,''.

     SEC. 4. PENALTIES FOR THEFT-RELATED OFFENSES.

       (a) Interstate or Foreign Shipments by Carrier.--Section 
     659 of title 18, United States Code, is amended by adding at 
     the end of the fifth undesignated paragraph the following: 
     ``If the offense involves a pre-retail medical product (as 
     defined in section 670), it shall be punished under section 
     670 unless the penalties provided for under this section are 
     greater.''.
       (b) Racketeering.--
       (1) Travel act violations.--Section 1952 of title 18, 
     United States Code, is amended by adding at the end the 
     following:
       ``(d) If the offense under this section involves an act 
     described in paragraph (1) or (3) of subsection (a) and also 
     involves a pre-retail medical product (as defined in section 
     670), the punishment for the offense shall be the same as the 
     punishment for an offense under section 670 unless the 
     punishment under subsection (a) is greater.''.
       (2) Money laundering.--Section 1957(b)(1) of title 18, 
     United States Code, is amended by adding at the end the 
     following: ``If the offense involves a pre-retail medical 
     product (as defined

[[Page 9964]]

     in section 670) the punishment for the offense shall be the 
     same as the punishment for an offense under section 670 
     unless the punishment under this subsection is greater.''
       (c) Breaking or Entering Carrier Facilities.--Section 2117 
     of title 18, United States Code, is amended by adding at the 
     end of the first undesignated paragraph the following: ``If 
     the offense involves a pre-retail medical product (as defined 
     in section 670) the punishment for the offense shall be the 
     same as the punishment for an offense under section 670 
     unless the punishment under this section is greater.''.
       (d) Stolen Property.--
       (1) Transportation of stolen goods and related offenses.--
     Section 2314 of title 18, United States Code, is amended by 
     adding at the end of the sixth undesignated paragraph the 
     following: ``If the offense involves a pre-retail medical 
     product (as defined in section 670) the punishment for the 
     offense shall be the same as the punishment for an offense 
     under section 670 unless the punishment under this section is 
     greater.''.
       (2) Sale or receipt of stolen goods and related offenses.--
     Section 2315 of title 18, United States Code, is amended by 
     adding at the end of the fourth undesignated paragraph the 
     following: ``If the offense involves a pre-retail medical 
     product (as defined in section 670) the punishment for the 
     offense shall be the same as the punishment for an offense 
     under section 670 unless the punishment under this section is 
     greater.''.
       (e) Priority Given to Certain Investigations and 
     Prosecutions.--The Attorney General shall give increased 
     priority to efforts to investigate and prosecute offenses 
     under section 670 of title 18, United States Code, that 
     involve pre-retail medical products.

     SEC. 5. AMENDMENT TO EXTEND WIRETAPPING AUTHORITY TO NEW 
                   OFFENSE.

       Section 2516(1) of title 18, United States Code, is 
     amended--
       (1) by redesignating paragraph (s) as paragraph (t);
       (2) by striking ``or'' at the end of paragraph (r); and
       (3) by inserting after paragraph (r) the following:
       ``(s) any violation of section 670 (relating to theft of 
     medical products); or''.

     SEC. 6. REQUIRED RESTITUTION.

       Section 3663A(c)(1)(A) of title 18, United States Code, is 
     amended--
       (1) in clause (ii), by striking ``or'' at the end;
       (2) in clause (iii), by striking ``and'' at the end and 
     inserting ``or''; and
       (3) by adding at the end the following:
       ``(iv) an offense under section 670 (relating to theft of 
     medical products); and''.

     SEC. 7. DIRECTIVE TO UNITED STATES SENTENCING COMMISSION.

       (a) In General.--Pursuant to its authority under section 
     994 of title 28, United States Code, and in accordance with 
     this section, the United States Sentencing Commission shall 
     review and, if appropriate, amend the Federal sentencing 
     guidelines and policy statements applicable to persons 
     convicted of offenses under section 670 of title 18, United 
     States Code, as added by this Act, section 2118 of title 18, 
     United States Code, or any another section of title 18, 
     United States Code, amended by this Act, to reflect the 
     intent of Congress that penalties for such offenses be 
     sufficient to deter and punish such offenses, and 
     appropriately account for the actual harm to the public from 
     these offenses.
       (b) Requirements.--In carrying out this section, the United 
     States Sentencing Commission shall--
       (1) consider the extent to which the Federal sentencing 
     guidelines and policy statements appropriately reflect--
       (A) the serious nature of such offenses;
       (B) the incidence of such offenses; and
       (C) the need for an effective deterrent and appropriate 
     punishment to prevent such offenses;
       (2) consider establishing a minimum offense level under the 
     Federal sentencing guidelines and policy statements for 
     offenses covered by this Act;
       (3) account for any additional aggravating or mitigating 
     circumstances that might justify exceptions to the generally 
     applicable sentencing ranges;
       (4) ensure reasonable consistency with other relevant 
     directives, Federal sentencing guidelines and policy 
     statements;
       (5) make any necessary conforming changes to the Federal 
     sentencing guidelines and policy statements; and
       (6) ensure that the Federal sentencing guidelines and 
     policy statements adequately meet the purposes of sentencing 
     set forth in section 3553(a)(2) of title 18, United States 
     Code.

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


                             General Leave

  Mr. SMITH of Texas. Madam Speaker, I ask unanimous consent that all 
Members may have 5 legislative days within which to revise and extend 
their remarks and include extraneous materials on H.R. 4223, as 
amended, currently under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Texas?
  There was no objection.
  Mr. SMITH of Texas. Madam Speaker, I yield myself such time as I may 
consume.
  Large-scale medical product theft is a significant problem in today's 
society. Medical products require special care and maintenance. When 
medical products are stolen, thieves resell them. When these drugs are 
not stored or handled properly, they can lose their effectiveness and 
cause further injury to medical patients.
  Current law does not recognize the added importance of medical 
products. These products are often essential to a person's health and 
can be lifesaving.
  Under federal law, those who steal a truck full of insulin intended 
for diabetics would be sentenced to the same extent as those who steal 
a truck full of car tires.
  In 2009, an organized ring of criminals stole 129,000 vials of 
insulin worth approximately $11 million in North Carolina. A few months 
later, the FDA received a report that some of the vials had been 
reintroduced into the supply chain when a diabetic patient reported to 
a medical center in Houston, Texas, with an adverse reaction after use 
of insulin from the stolen lot.
  The FDA issued a warning that the insulin had likely not been kept 
refrigerated correctly and could still be in the market. The spoiled 
product was ultimately found in pharmacies in 17 states. At least 2 
additional patients experienced adverse reactions. While some arrests 
have been made, over 125,000 vials of insulin still remain unaccounted 
for.
  Shipments of drugs that treat kidney failure, ADHD, schizophrenia, 
rheumatoid arthritis and ovarian cancer were stolen in three separate 
incidents between 2008 and 2009.
  The prescription drugs, worth over $3 million, were taken during a 
distribution center break-in and in two separate trailer break-ins. The 
FBI made an arrest in only one of the three incidents, and the criminal 
was convicted.
  H.R. 4223, the SAFE DOSES Act, modernizes and strengthens the 
criminal code in order to deter and punish those who steal pre-retail 
medical products. Enhanced penalties not only make people think twice 
before they steal medical shipments, but also provide law enforcement 
agencies with the tools they need to obtain cooperation to bring down 
criminal organizations.
  The SAFE DOSES Act enables authorities to better target the multi-
dimensional criminal enterprises that carry out these thefts and 
recognizes the health risks created by the improper care and handling 
of sensitive medical products.
  This bipartisan bill helps to ensure that life-saving drugs remain in 
the hands of those trained to handle them, and do not continue to pose 
a threat to public safety. I commend Crime Subcommittee Chairman 
Sensenbrenner for his work on this legislation and urge my colleagues 
to join me in support of this bill.
  Madam Speaker, I yield such time as he may consume to the gentleman 
from Wisconsin (Mr. Sensenbrenner), who is the chairman of the Crime 
Subcommittee of the Judiciary Committee and a former chairman of the 
Judiciary Committee, and also the sponsor of this legislation.
  Mr. SENSENBRENNER. I thank the gentleman from Texas for yielding me 
this time.
  I introduced H.R. 4223, the SAFE DOSES Act, to address the problem of 
medical cargo theft across the United States. Medical cargo theft poses 
significant health risks to patients who have no reason to know that 
their medicines have been stolen and improperly cared for before being 
sold back into the legitimate supply chain.
  Stolen medical cargo can kill or injure those patients that need 
reliable, safe medicines.

                              {time}  1510

  Sophisticated and enterprising criminal organizations are stealing 
large quantities of medical products and selling them via the wholesale 
market into legitimate pharmacies and hospitals. They are putting 
patient safety at risk because improperly cared-for medical products 
can be ineffective or harmful, and such damaged products are often 
impossible for health care professionals to identify.
  High-value pharmaceuticals, including treatments for serious 
diseases, are frequent targets. Unfortunately, these high-value items 
are the very type of sensitive products that need the most careful 
handling and temperature control. Many medical products can become 
ineffective if stored at the wrong

[[Page 9965]]

temperature, even for a brief time. Yet, under current law, the theft 
of lifesaving medical supplies is treated the same as the theft of 
perfume or stereo equipment.
  The criminal organizations hijack tractor-trailers at truck stops, 
break into warehouses and evade alarm systems, forge shipping 
documents, produce high-quality counterfeit labels with altered 
expiration dates and lot numbers, and otherwise thwart the intense 
security measures used by the industry. Some employ sophisticated 
surveillance equipment and techniques in order to learn exactly when 
and where they can steal the particular shipments they want.
  For example, in March 2010, over $75 million of prescription drugs, 
including treatments for cancer, heart disease, and neurological 
disorders such as depression, ADHD, and schizophrenia, were stolen from 
a warehouse in Enfield, Connecticut. The burglary was one of the 
largest pharmaceutical heists in history. The criminals broke into the 
secure facility on the weekend by cutting a hole in the roof, then 
rappelling into the storage area. They disabled the alarm system and 
loaded dozens of crates onto a tractor-trailer.
  Experts have said that this heist shared many traits with warehouse 
thefts of pharmaceuticals last year in Richmond, Virginia; Memphis, 
Tennessee; and Olive Branch, Mississippi. Those thieves also cut 
through ceilings and sometimes used trapeze-style rigging to get inside 
and to disable the main and backup alarms. In some cases, they sprayed 
dark paint on the lenses of security cameras; in others, they removed 
disks from the security recording devices.
  This bill increases sentences for theft, transportation, and storage 
of medical product cargo; enhances penalties for the ``fences'' who 
knowingly obtain stolen medical products for resale into the supply 
chain; increases sentences when injury or death results from the 
ingestion of a stolen substance or when the defendant is employed by an 
organization in the supply chain; provides law enforcement with such 
tools as wiretaps; and provides restitution to victims injured by 
stolen medical products.
  The legislation is supported by the Coalition for Patient Safety and 
Medicine Integrity, a group of pharmaceutical, medical device, and 
medical products companies whose purpose is to protect patients from 
the risks posed by stolen and improperly handled medical products 
reentering the legitimate supply chain. Members of the Coalition 
include Abbott and Eli Lilly, GlaxoSmithKline, Johnson & Johnson, 
Novartis, Novo Nordisk, Sanofi, and PhRMA. The bill is also supported 
by the Association of Community Cancer Centers, the Healthcare 
Distribution Management Association, the National Council for Community 
Behavioral Healthcare, and the National Fraternal Order of Police.
  The companion bill in the other body, Senate 1002, was reported by 
voice vote from the Senate Judiciary Committee in March.
  I urge my colleagues to support this commonsense, bipartisan 
legislation to give law enforcement agencies and prosecutors the 
additional tools they need to confront this growing problem.
  Mr. JOHNSON of Georgia. Madam Speaker, I yield myself such time as I 
may consume.
  H.R. 4223 is intended to address the problem of large-scale medical 
product theft. I think we will all agree that this crime poses 
substantial risks to the public.
  For instance, in North Carolina, in 2009, over 120,000 vials of 
insulin were stolen and subsequently reintroduced back into the supply 
chain to be used by unsuspecting patients.
  Patients should be able to rely on their medications to be safe, 
effective, and unadulterated, and we certainly need to treat it as a 
significant crime when criminals steal shipments of drugs. Large-scale 
medical product theft is a serious problem that merits a serious 
solution.
  I commend my colleagues on the House Judiciary Committee for making 
important changes to this bill. The manager's amendment adopted at 
markup clarified that the mens rea applies only to conduct in which the 
perpetrator knows that the product involved is a medical product that 
is stolen, expired, or not yet released to the public.
  I also believe that the correct reading of this bill, consistent with 
the general presumption that the mens rea element in a statute applies 
to all other nonjurisdictional elements, is that a defendant would have 
to know that the product is a pre-retail medical product in order to be 
convicted.
  While I note these important issues, I want to raise a note of 
concern about the approach of increasing penalties as a way of 
addressing crime. Stealing cargo from a warehouse is already illegal, 
of course. The penalty is a fine and up to 10 years in prison.
  H.R. 4223 creates a new crime for theft of preretail medical products 
and a new code section, 18 U.S.C. Section 670. Section 670 would 
increase the penalties to up to 30 years in prison in some cases if the 
stolen goods are preretail medical products.
  However, I'm heartened that this bill does not include mandatory 
minimum sentences, and there will be an intelligent, deliberative 
process to set sentencing guidelines by the U.S. Sentencing Commission.
  As the House moves to adopt this bill today, I want to emphasize that 
it is also important that we do what we know works best to deter crime, 
and that is to increase the likelihood that perpetrators will be caught 
and convicted.
  We heard from a witness at the hearing on this bill that increased 
investigation and enforcement would have a greater deterrent effect 
than increased penalties. I agree, and this bill was amended at markup 
to include a provision directing the Attorney General to give increased 
priority to efforts to investigate and prosecute preretail medical 
theft offenses.
  Finally, we want to encourage the industry to exhaust all reasonable 
means of preventing these thefts from their properties and other 
facilities along the transit route.
  The April 2011 edition of Fortune Magazine included an article 
entitled, ``Drug Theft Goes Big.'' The article reports that the thieves 
who committed the largest prescription drug theft in history did so by 
cutting through the tar roof of Eli Lilly's Connecticut warehouse and 
sliding down ropes. Security was so lax that the thieves were able to 
pull their own tractor-trailer up to the loading dock and spend a 
couple of hours loading the stolen goods.
  In a similar event several months ago, thieves broke into a 
GlaxoSmithKline warehouse by coming through the roof. While none of 
this in any way shields or excuses the perpetrators of these crimes, 
clearly, these examples point to the need for more security.
  Government and industry should work together at all points along the 
factory-to-retail chain to prevent and detect such thefts. I'm aware 
that industry and government regulatory authorities are working toward 
these ends, and I would hope that work will continue so that we will 
have a comprehensive effort to address this type of crime.
  Madam Speaker, I yield back the balance of my time.

                              {time}  1520

  Mr. SMITH of Texas. Madam Speaker, I yield back the balance of my 
time.
  Ms. JACKSON LEE of Texas. Madam Speaker, I rise today in support of 
H.R. 4223, the ``Safe Doses Act of 2012'' which amends Title 18, United 
States Code, to prohibit theft of medical products, and for other 
purposes.
  More specifically, this bill will prohibit theft of pre-retail 
products such as drugs, medical devices and infant formula. Likewise, 
it forbids one from alternating labels of pre-retail medical products, 
transporting stolen or counterfeit medical products and purchasing or 
distributing expired medical products with the intent to deceive others 
and passing such products off as authentic.
  Due to the increased activity in counterfeit drugs it is critical 
that Congress lay down harsher parameters so that potential criminals 
are faced with more deterrents should they consider participating in 
such behavior.
  As a Representative from Houston, Texas, it is of grave concern that 
consumers and law

[[Page 9966]]

enforcement officials are protected given the proximity of Texas to the 
Mexican border. It is not inconceivable that crime syndicates operating 
on both sides could cause significant problems by stealing drugs and 
selling them in Mexico.
  The theft of large scale medical products has become a growing 
concern; thus, this legislation aims to toughen the penalties for 
individuals who place thousands of lives in danger by stealing large 
quantities of medical products and re-introducing such products in the 
legitimate supply chain including pharmacies and hospitals.
  This bill is encouraged by pharmaceutical companies after instances 
of fraud appeared within the industry. According to an FDA affidavit, 
in 2009, a truck containing over 120,000 vials of insulin was stolen in 
North Carolina. After being improperly stored the product was illegally 
resold into distribution by wholesalers reaching medical centers in 
many other states including my state of Texas.
  While some diabetic patients reported the drugs after usage and 
noticing poor blood sugar control, the actual amount of innocent people 
who received the spoiled product in pharmacies in 17 states is unknown. 
It was determined that the insulin was purchased from a national 
distribution company only one day after the medication was reported 
stolen. While some arrests were made in relation to this incident, over 
125,000 vials of insulin were never located.
  Incidents such as these are ones which this bill is intended to 
prevent. Serious public health and safety implications arise based on 
the improper care of medical products which may be both ineffective and 
harmful to unsuspecting patients.
  Currently, title 18 of the United States Code sets forth penalties of 
a fine and/or imprisonment of no more than 10 years for involvement in 
such crimes. While I am not quick to increase sentences, keeping one 
imprisoned after they have served their time, I am of the belief that 
consumers purchasing medicine should be able to do so with the 
confidence that what they are paying for is real and safe. Thus those 
criminals that take actions to threaten the life of another by engaging 
in the transportation of counterfeit drugs should be locked up.
  Despite the lack of evidence supporting the contention that offenders 
are less likely to engage in such deviant behavior once they are aware 
of Federal laws increasing fines and longer penalties, I support this 
bipartisan measure to help ensure that our everyday Americans in need 
of medication are not falling prey to criminals intending to defraud 
them of necessary medical products.
  Ms. LINDA T. SANCHEZ of California. Madam Speaker, I rise in support 
of H.R. 4223, the Safe Doses Act. I am proud to join my colleagues on 
both sides of the aisle in supporting this important legislation.
  H.R. 4223 addresses a difficult issue in the pharmaceutical supply 
chain: the theft of medical products. While this body last week passed 
important legislation to protect consumers from counterfeit drugs, 
there remains a real risk from stolen medical goods.
  This is a not a hypothetical exercise, it is a real problem. Criminal 
organizations who steal medical products are not concerned with storing 
these materials properly, or ensuring that they are only sold with a 
doctor's prescription.
  Let me give one brief, but telling example: In 2009, 128,000 vials of 
insulin were stolen in North Carolina. Beyond the $11 million monetary 
cost of this theft, there was a human cost as well.
  These vials were reintroduced into the supply chain after being 
improperly stored. The vials found their way to pharmacies in 17 
diferent states, and at least two individuals suffered potentially 
fatal blood sugar levels before the FDA was able to alert the public to 
this danger.
  H.R. 4223 is a simple and sensible way to give law enforcement and 
prosecutors a stronger set of tools to go after criminal organizations 
that are brazenly stealing vital medication and devices. I further note 
that, beyond bipartisan support this measure has received, the Safe 
Doses Act passed both the House Judiciary and Senate Judiciary 
Committees unanimously.
  I encourage all of my colleagues to support this legislation, clean 
up the pharmaceutical supply chain, and protect their constituents.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Texas (Mr. Smith) that the House suspend the rules and 
pass the bill, H.R. 4223, as amended.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

                          ____________________