[House Report 108-728]
[From the U.S. Government Publishing Office]



108th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     108-728
======================================================================

 
  NATIONAL ALL SCHEDULES PRESCRIPTION ELECTRONIC REPORTING ACT OF 2004

                                _______
                                

October 5, 2004.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

    Mr. Barton of Texas, from the Committee on Energy and Commerce, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 3015]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Energy and Commerce, to whom was referred 
the bill (H.R. 3015) to amend the Public Health Service Act to 
establish an electronic system for practitioner monitoring of 
the dispensing of any schedule II, III, or IV controlled 
substance, and for other purposes, having considered the same, 
report favorably thereon with amendments and recommend that the 
bill as amended do pass.

                                CONTENTS

                                                                   Page
Amendment........................................................     2
Purpose and Summary..............................................     5
Background and Need for Legislation..............................     5
Hearings.........................................................     5
Committee Consideration..........................................     6
Committee Votes..................................................     6
Committee Oversight Findings.....................................     6
Statement of General Performance Goals and Objectives............     6
New Budget Authority, Entitlement Authority, and Tax Expenditures     6
Committee Cost Estimate..........................................     6
Congressional Budget Office Estimate.............................     6
Federal Mandates Statement.......................................     7
Advisory Committee Statement.....................................     7
Constitutional Authority Statement...............................     8
Applicability to Legislative Branch..............................     8
Section-by-Section Analysis of the Legislation...................     8
Changes in Existing Law Made by the Bill, as Reported............    10

                               Amendment

  The amendments are as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``National All Schedules Prescription 
Electronic Reporting Act of 2004''.

SEC. 2. CONTROLLED SUBSTANCE MONITORING PROGRAM.

  Part P of title III of the Public Health Service Act (42 U.S.C. 280g 
et seq.) is amended by adding after section 399N the following:

``SEC. 399O. CONTROLLED SUBSTANCE MONITORING PROGRAM.

  ``(a) Formula Grants.--
          ``(1) In general.--Each fiscal year, the Secretary shall make 
        a payment to each State with an application approved under this 
        section for the purpose of establishing and implementing a 
        controlled substance monitoring program under this section.
          ``(2) Determination of amount.--In making payments under 
        paragraph (1) for a fiscal year, the Secretary shall allocate 
        to each State with an application approved under this section 
        an amount which bears the same ratio to the amount appropriated 
        to carry out this section for that fiscal year as the number of 
        pharmacies of the State bears to the number of pharmacies of 
        all States with applications approved under this section (as 
        determined by the Secretary), except that the Secretary may 
        adjust the amount allocated to a State under this paragraph 
        after taking into consideration the budget cost estimate for 
        the State's controlled substance monitoring program.
  ``(b) Application Approval Process.--
          ``(1) In general.--To seek a grant under this section, a 
        State shall submit an application at such time, in such manner, 
        and containing such assurances and information as the Secretary 
        may reasonably require. Each such application shall include--
                  ``(A) a budget cost estimate for the State's 
                controlled substance monitoring program; and
                  ``(B) assurances of compliance with the requirements 
                of this section.
          ``(2) Approval or disapproval.--Not later than 90 days after 
        the submission by a State of an application under paragraph 
        (1), the Secretary shall approve or disapprove the application. 
        The Secretary shall approve the application if the State 
        demonstrates to the Secretary that the State will establish and 
        implement a controlled substance monitoring program in 
        accordance with this section.
          ``(3) Withdrawal of authorization.--If a State fails to 
        implement a controlled substance monitoring program in 
        accordance with this section--
                  ``(A) the Secretary shall give notice of the failure 
                to the State; and
                  ``(B) if the State fails to take corrective action 
                within a reasonable period of time, the Secretary shall 
                withdraw any approval of the State's application under 
                this section.
          ``(4) Voluntary discontinuance.--A funding agreement for the 
        receipt of a payment under this section is that the State 
        involved will give a reasonable period of notice to the 
        Secretary before ceasing to implement a controlled substance 
        monitoring program under this section. The Secretary shall 
        determine the period of notice that is reasonable for purposes 
        of this paragraph.
          ``(5) Return of funds.--If the Secretary withdraws approval 
        of a State's application under this section, or the State 
        chooses to cease to implement a controlled substance monitoring 
        program under this section, a funding agreement for the receipt 
        of a payment under this section is that the State will return 
        to the Secretary an amount which bears the same ratio to the 
        overall payment as the remaining time period for expending the 
        payment bears to the overall time period for expending the 
        payment (as specified by the Secretary at the time of the 
        payment).
  ``(c) Reporting Requirements.--In implementing a controlled substance 
monitoring program under this section, a State shall comply with the 
following:
          ``(1) The State shall require dispensers to report to such 
        State each dispensing in the State of a controlled substance to 
        an ultimate user or research subject not later than 1 week 
        after the date of such dispensing.
          ``(2) The State may exclude from the reporting requirement of 
        this subsection--
                  ``(A) the direct application of a controlled 
                substance to the body of an ultimate user or research 
                subject;
                  ``(B) the dispensing of a controlled substance in a 
                quantity limited to an amount adequate to treat the 
                ultimate user or research subject involved for 48 hours 
                or less; or
                  ``(C) the application or dispensing of a controlled 
                substance in accordance with any other exclusion 
                identified by the Secretary for purposes of this 
                paragraph.
          ``(3) The information to be reported under this subsection 
        with respect to the dispensing of a controlled substance shall 
        include the following:
                  ``(A) Drug Enforcement Administration Registration 
                Number of the dispenser.
                  ``(B) Drug Enforcement Administration Registration 
                Number and name of the practitioner who prescribed the 
                drug.
                  ``(C) Name, address, and telephone number of the 
                ultimate user or research subject.
                  ``(D) Identification of the drug by a national drug 
                code number.
                  ``(E) Quantity dispensed.
                  ``(F) Estimated number of days for which such 
                quantity should last.
                  ``(G) Number of refills ordered.
                  ``(H) Whether the drug was dispensed as a refill of a 
                prescription or as a first-time request.
                  ``(I) Date of the dispensing.
                  ``(J) Date of origin of the prescription.
          ``(4) The State shall specify an electronic format for the 
        reporting of information under this subsection and may waive 
        the requirement of such format with respect to an individual 
        dispenser.
          ``(5) The State shall automatically share information 
        reported under this subsection with another State with an 
        application approved under this section if the information 
        concerns--
                  ``(A) the dispensing of a controlled substance to an 
                ultimate consumer or research subject who resides in 
                such other State; or
                  ``(B) the dispensing of a controlled substance 
                prescribed by a practitioner whose principal place of 
                business is located in such other State.
          ``(6) The State shall notify the appropriate authorities 
        responsible for drug diversion investigation if information in 
        the database maintained by the State under subsection (d) 
        indicates a potential unlawful diversion or misuse of a 
        controlled substance.
  ``(d) Database.--In implementing a controlled substance monitoring 
program under this section, a State shall comply with the following:
          ``(1) The State shall establish and maintain an electronic 
        database containing the information reported to the State under 
        subsection (c).
          ``(2) The database must be searchable by any field or 
        combination of fields.
          ``(3) The State shall include reported information in the 
        database at such time and in such manner as the Secretary 
        determines appropriate, with appropriate safeguards for 
        ensuring the accuracy and completeness of the database.
          ``(4) The State shall take appropriate security measures to 
        protect the integrity of, and access to, the database.
  ``(e) Provision of Information.--Subject to subsection (f), in 
implementing a controlled substance monitoring program under this 
section, a State may provide information from the database established 
under subsection (d) and, in the case of a request under paragraph (2) 
or (3), compilations of such information, in response to a request by--
          ``(1) a practitioner (or the agent thereof) who certifies 
        that the requested information is for the purpose of providing 
        medical or pharmaceutical treatment or evaluating the need for 
        such treatment to a bona fide current patient;
          ``(2) any local, State, or Federal law enforcement, narcotics 
        control, licensure, disciplinary, or program authority, who 
        certifies that the requested information is related to an 
        individual investigation or proceeding involving the unlawful 
        diversion or misuse of a schedule II, III, or IV substance, and 
        such information will further the purpose of the investigation 
        or assist in the proceeding; or
          ``(3) any agent of the Department of Health and Human 
        Services, a State medicaid program, a State health department, 
        or the Drug Enforcement Administration who certifies that the 
        requested information is necessary for research to be conducted 
        by such department, program, or administration, respectively, 
        and the intended purpose of the research is related to a 
        function committed to such department, program, or 
        administration by law that is not investigative in nature.
  ``(f) Limitations.--In implementing a controlled substance monitoring 
program under this section, a State--
          ``(1) shall make reasonable efforts to limit the information 
        provided pursuant to a valid request under subsection (e) to 
        the minimum necessary to accomplish the intended purpose of the 
        request; and
          ``(2) shall not provide any individually identifiable 
        information in response to a request under subsection (e)(3).
  ``(g) Rules of Construction.--
          ``(1) Functions otherwise authorized by law.--Nothing in this 
        section shall be construed to restrict the ability of any 
        authority, including any local, State, or Federal law 
        enforcement, narcotics control, licensure, disciplinary, or 
        program authority, to perform functions otherwise authorized by 
        law.
          ``(2) No preemption.--Nothing in this section shall be 
        construed as preempting any State law, except that no such law 
        may relieve any person of a requirement otherwise applicable 
        under this Act.
          ``(3) No federal private cause of action.--Nothing in this 
        section shall be construed to create a Federal private cause of 
        action.
  ``(h) Relation to HIPAA.--Except to the extent inconsistent with this 
section, the provision of information pursuant to subsection (c)(5), 
(c)(6), or (e) and the subsequent transfer of such information are 
subject to any requirement that would otherwise apply under the 
regulations promulgated pursuant to section 264(c) of the Health 
Insurance Portability and Accountability Act of 1996.
  ``(i) Preference.--The Secretary, in awarding any competitive grant 
that is related to drug abuse (as determined by the Secretary) to a 
State, shall give preference to any State with an application approved 
under this section.
  ``(j) Study.--Not later than 1 year after the date of the enactment 
of this section, the Secretary shall--
          ``(1) complete a study on--
                  ``(A) the progress of States in establishing and 
                implementing controlled substance monitoring programs 
                under this section; and
                  ``(B) the feasibility of implementing a real-time 
                electronic controlled substance monitoring program, 
                including the costs associated with establishing such a 
                program; and
          ``(2) submit a report to the Congress on the results of the 
        study.
  ``(k) Advisory Council.--
          ``(1) Establishment.--A State may establish an advisory 
        council to assist in the establishment and implementation of a 
        controlled substance monitoring program under this section.
          ``(2) Sense of congress.--It is the sense of the Congress 
        that, in establishing an advisory council under this 
        subsection, a State should consult with State boards of 
        pharmacy, State boards of medicine, and other interested 
        parties.
  ``(l) Definitions.--For purposes of this section:
          ``(1) The term `bona fide patient' means an individual who is 
        a patient of the dispenser or practitioner involved.
          ``(2) The term `controlled substance' means a drug that is--
                  ``(A) included in schedule II, III, or IV of section 
                202(c) of the Controlled Substance Act; or
                  ``(B) identified by the State involved as a drug 
                subject to the monitoring program of the State under 
                this section.
          ``(3) The term `dispense' means to deliver a controlled 
        substance to an ultimate user or research subject by, or 
        pursuant to the lawful order of, a practitioner, irrespective 
        of whether the dispenser uses the Internet or other means to 
        effect such delivery.
          ``(4) The term `dispenser' means a physician, pharmacist, or 
        other individual who dispenses a controlled substance to an 
        ultimate user or research subject.
          ``(5) The term `practitioner' means a physician, dentist, 
        veterinarian, scientific investigator, pharmacy, hospital, or 
        other person licensed, registered, or otherwise permitted, by 
        the United States or the jurisdiction in which he or she 
        practices or does research, to distribute, dispense, conduct 
        research with respect to, administer, or use in teaching or 
        chemical analysis, a controlled substance in the course of 
        professional practice or research.
          ``(6) The term `State' means each of the 50 States and the 
        District of Columbia.
          ``(7) The term `ultimate user' means a person who has 
        lawfully obtained, and who possesses, a controlled substance 
        for his or her own use, for the use of a member of his or her 
        household, or for the use of an animal owned by him or her or 
        by a member of his or her household.
  ``(m) Authorization of Appropriations.--To carry out this section, 
there are authorized to be appropriated--
          ``(1) $25,000,000 for each of fiscal years 2006 and 2007; and
          ``(2) $15,000,000 for each of fiscal years 2008, 2009, and 
        2010.''.
  Amend the title so as to read:
     
    A bill to provide for the establishment of a controlled substance 
monitoring program in each State.

                          Purpose and Summary

    The purpose of H.R. 3015 is to address the issue of illegal 
diversion and misuse of prescription drugs. This legislation 
would provide grants through the Health and Human Services 
Department to states to establish and operate prescription drug 
monitoring programs (PDMP). Each state operating an authorized 
monitoring program would be required to cover Schedule II, III, 
and IV drugs.
    H.R. 3015 will provide the resources to states to implement 
and operate the individual program that best addresses the 
needs of the individual state. The bill will also facilitate 
the interoperability of state systems so drug diversion and 
abuse that crosses state lines can also be detected.

                  Background and Need for Legislation

    The diversion and abuse of legally manufactured 
prescription drugs continues to be a pressing national issue. 
The Office of National Drug Control Policy (ONDCP) cites that 
in 2002 (the most recent data year), 6.2 million Americans 
abused prescription drugs.
    Twenty-one states currently operate some form of 
prescription drug monitoring programs. Each state program is 
unique, often varying by which state agency operates the 
program, the controlled substances that are covered, and how 
patient information is collected and monitored. Most 
prescription drug monitoring programs function as electronic 
monitoring systems through which pharmacies transmit 
prescription data for covered controlled substances to a 
designated state agency or a private contractor. In addition to 
providing information about existing prescriptions for a 
patient to a health care provider, these programs provide real 
information to drug enforcement agencies to identify illegal 
activities.
    Proponents of state prescription drug-monitoring programs 
highlight the success of several states in reducing the 
availability of abused drugs and improving state drug control 
investigation timing. They claim that the increased number of 
physician prescription drug history requests help serve as an 
initial deterrent for doctor shopping. They also argue that the 
presence of a prescription drug-monitoring program may also 
affect the type of drugs that are being diverted. The 
Government Accountability Office reports that the existence of 
a prescription drug-monitoring program within one state appears 
to have increased drug diversion activities in contiguous 
states without prescription drug-monitoring programs.

                                Hearings

    The Subcommittee on Health held a hearing on Prescription 
Drug Monitoring: Strategies to Promote Treatment and Deter 
Prescription Drug Abuse on Thursday, March 4, 2004. The 
Subcommittee received testimony from: The Honorable Harold 
Rogers, Member, U.S. House of Representatives; Dr. Marcia 
Crosse, U.S. General Accounting Office; Danna E. Droz, RPh, JD, 
Boards of Pharmacy & Nursing Home Administrators; Mr. James W. 
Holsinger Jr., MD, PhD, Secretary, Kentucky Cabinet for Health 
and Family Services; and Laximaiah Manchikanti, MD, American 
Society of Interventional Pain Physicians.

                        Committee Consideration

    On Thursday, September 30, 2004 the Full Committee met in 
open markup session and ordered H.R. 3015 favorably reported to 
the House, as amended, by a voice vote, a quorum being present.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. 
There were no record votes taken in connection with ordering 
H.R. 3015 reported. A motion by Mr. Barton to order H.R. 3015 
reported to the House, as amended, was agreed to by a voice 
vote.

                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee held an oversight 
hearing and made findings that are reflected in this report.

         Statement of General Performance Goals and Objectives

    The goal of H.R. 3015 is to provide incentives to states so 
each will operate a drug-monitoring program and that these 
programs can communicate between programs to address the public 
health problem of prescription drug abuse.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee finds that H.R. 
3015, the National All Schedules Prescription Electronic 
Reporting Act of 2004, would result in no new or increased 
budget authority, entitlement authority, or tax expenditures or 
revenues.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974.

                  Congressional Budget Office Estimate

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                   Washington, DC, October 4, 2004.
Hon. Joe Barton,
Chairman, Committee on Energy and Commerce,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 3015, a bill to 
provide for the establishment of a controlled substance 
monitoring program in each state.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Margaret 
Nowak.
            Sincerely,
                                       Douglas Holtz-Eakin,
                                                          Director.
    Enclosure.

H.R. 3015--A bill to provide for the establishment of a controlled 
        substance monitoring program in each state

    H.R. 3015 would authorize the Secretary of Health and Human 
Services to make grants to states to establish electronic 
database systems for monitoring the dispensing of controlled 
substances. The database would be used to identify, and report 
to appropriate authorities, the potential unlawful diversion or 
misuse of a controlled substance. Beginning in 2007, the 
Secretary would be responsible for such monitoring and 
reporting in states that do not establish such an electronic 
database system.
    The bill would authorize appropriation of $25 million in 
each of fiscal years 2006 and 2007, and $15 million for each 
fiscal year 2008 through 2010. Assuming appropriation of those 
amounts, and based on spending patterns for similar programs, 
CBO estimates that implementing H.R. 3015 would cost $68 
million over the 2005-2009 period. H.R. 3015 would have no 
effect on direct spending or revenues.
    H.R. 3015 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act. It 
would establish a grant program for states to monitor 
controlled substances and to notify authorities when they 
suspect that controlled substances are being improperly 
dispensed or used.
    The CBO staff contact for this estimate is Margaret Nowak. 
This estimate was approved by Peter H. Fontaine, Deputy 
Assistant Director for Budget Analysis.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds that the 
Constitutional authority for this legislation is provided in 
Article I, section 8, clause 3, which grants Congress the power 
to regulate commerce with foreign nations, among the several 
States, and with the Indian tribes.

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

             Section-by-Section Analysis of the Legislation


Section 1. Short title

    Section 1 designates the title of the bill, the ``National 
All Schedules Prescription Electronic Reporting Act of 2004.''

Section 2: Controlled Substance Monitoring Program

    Section 2 amends Part P of title III of the Public Service 
Act by adding new section 399O, Controlled Substance Monitoring 
Program. Under this program, the Secretary of Health and Human 
Services would award grants to states to establish and operate 
controlled substance monitoring programs. The amount allocated 
to each state will be based on a ratio of the number of 
pharmacies within a state to the number of all pharmacies in 
states that have approved monitoring programs under this 
section. The Committee recommends that in determining the 
number of pharmacies in each state the Secretary consult with 
the National Association of Boards of Pharmacy. The Secretary 
may adjust each state's allocation based on cost estimates 
provided by the state.
    To receive a grant under this section, a state must submit 
an application in a time, manner, and containing such 
assurances and information that the Secretary may require. The 
Secretary, within 90 days after the submission, shall approve 
or disapprove the grant application. If a state has an 
authorized monitoring program and chooses to end this program, 
it shall give the Secretary a reasonable period of notice 
before the cessation of the program. If the Secretary withdraws 
authorization, or if the state ceases to operate its monitoring 
program, then the state must return a prorated portion of its 
grant funding to the Secretary.
    In implementing a PDMP under this section, a state shall 
require all dispensers to report each dispensing in the state 
not later than one week after the dispensing. For the purposes 
of this section, controlled substance means any schedule II, 
III, IV drug or any other drug identified by the state to be 
subject to the monitoring program. The state may exclude from 
this reporting requirement the direct application of a 
controlled substance to an ultimate user. It is the Committee's 
intention not to require the reporting of a dispensing when the 
drug is directly applied. Because the possibility for diversion 
is small, to require this reporting would present a significant 
burden on the monitoring programs without a resulting benefit.
    The state may also exclude reporting for the dispensing of 
a controlled substance in an amount adequate to treat the 
ultimate user for 48 hours or less. The Secretary may also 
identify other exclusions from reporting requirements.
    The information that must be reported by the dispenser 
includes: (1) the Drug Enforcement Administration Number of the 
dispenser; (2) the Drug Enforcement Administration Registration 
Number and name of the practitioner who prescribed the drug; 
the name, address, and telephone number of the ultimate user or 
research subject; (3) identification of the drug by a national 
drug code number; (4) the quantity dispensed; (5) the estimated 
number of days the quantity should last; number of refills 
ordered or as a first time request; whether the drug was 
dispensed as a refill; (6) the date of dispensing; and, (7) the 
date of origin of the prescription.
    The state shall specify an electronic format for the 
reporting of the information. It is the Committee's intention 
that the Secretary coordinate with the states to develop an 
electronic format that will be interoperable between the 
states. The Committee notes that states currently operating a 
prescription drug monitoring program use the May 1995 version 
of the Telecommunications Format for Controlled Substances of 
the American Society for Automation in Pharmacy.
    Under this section the state shall automatically share 
information with another state with an approved application if 
the information concerns the dispensing of a controlled 
substance to an ultimate user or research subject who resides 
in the other state or the dispensing of a controlled substance 
prescribed by a practitioner whose principal place of business 
is in the other state. The state shall also notify the 
appropriate authorities responsible for drug diversion 
investigations if the information indicates an unlawful 
diversion or misuse of a controlled substance. It is the 
Committee's intention that such determination of unlawful 
diversion should be based on a determination made by the 
monitoring authority itself, and that the monitoring authority 
have discretion making any such determination.
    In implementing a controlled substance database, a state 
shall establish and maintain an electronic database that is 
searchable by any field or combination of fields. The state 
shall take appropriate safeguards to ensure the accuracy and 
completeness of the database, and shall take appropriate 
measures to protect the integrity of, and access to, the 
database.
    A state may provide the information from the database upon 
request from a practitioner, or agent thereof, who certifies 
that the information is to be used to treat a patient. The 
state may also provide the information to local, state, or 
Federal law enforcement, narcotics control, licensure, 
disciplinary, or program authority that certifies the 
information is for an individual investigation. It is the 
Committee's intention that the term program authority should be 
interpreted to include State Medicaid authorities, or other 
state or Federal authorities responsible for investigating 
health care fraud and abuse.
    In addition, the state may provide information to any agent 
of the Department of Health and Human Services, a State 
Medicaid program, a state health department, or the Drug 
Enforcement Administration who certifies that the requested 
information is for research purposes. When providing 
information for research purposes, it shall not provide any 
individually identifiable information.
    This section should not be construed to restrict the 
ability of any authority to perform functions otherwise 
authorized by law. This section should also not be construed to 
preempt any other state law. Furthermore, nothing in this 
section shall be construed to create a Federal private right of 
action.
    The Secretary, in awarding any competitive grant that is 
related to drug abuse, shall give preference to those states 
that have established an approved drug monitoring authority. 
The abuse of prescription drugs is escalating, and any attempt 
to address the issue of drug abuse in this country must also 
address prescription drug abuse. Preference for drug abuse 
grants should go to states that have attempted to implement a 
comprehensive approach to addresses all types of drug abuse. 
This provision is designed to provide an incentive for states 
to create these programs. The effectiveness of a state's 
program is undermined when a person involved in unlawful 
diversion or abuse can circumvent the system when contiguous 
states do not have similar programs.
    Not later than one year after the date of enactment, the 
Secretary shall conduct a study on the progress of states in 
establishing and implementing controlled substance monitoring 
programs. The study shall also examine the feasibility of 
implementing a real time electronic monitoring program. The 
Secretary shall submit a report to Congress on the results of 
this study.
    States may establish an advisory council to assist in the 
establishment and implementation of the monitoring program. In 
establishing an advisory council the state should consult with 
state boards of pharmacy, state boards of medicine, and other 
interested parties. An advisory council can provide needed 
expertise to a drug monitoring authority, including assisting 
in developing standards for indicating unlawful diversion or 
abuse.
    To carry out this section, there is to be authorized 
$25,000,000 in each of Fiscal Years 2006 and 2007. There is to 
be authorized $15,000,000 in each of Fiscal Years 2008, 2009, 
2010.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italic and existing law in which no change is 
proposed is shown in roman):

PUBLIC HEALTH SERVICE ACT

           *       *       *       *       *       *       *



TITLE III--GENERAL POWERS AND DUTIES OF PUBLIC HEALTH SERVICE

           *       *       *       *       *       *       *



PART P--ADDITIONAL PROGRAMS

           *       *       *       *       *       *       *


SEC. 399O. CONTROLLED SUBSTANCE MONITORING PROGRAM.

  (a) Formula Grants.--
          (1) In general.--Each fiscal year, the Secretary 
        shall make a payment to each State with an application 
        approved under this section for the purpose of 
        establishing and implementing a controlled substance 
        monitoring program under this section.
          (2) Determination of amount.--In making payments 
        under paragraph (1) for a fiscal year, the Secretary 
        shall allocate to each State with an application 
        approved under this section an amount which bears the 
        same ratio to the amount appropriated to carry out this 
        section for that fiscal year as the number of 
        pharmacies of the State bears to the number of 
        pharmacies of all States with applications approved 
        under this section (as determined by the Secretary), 
        except that the Secretary may adjust the amount 
        allocated to a State under this paragraph after taking 
        into consideration the budget cost estimate for the 
        State's controlled substance monitoring program.
  (b) Application Approval Process.--
          (1) In general.--To seek a grant under this section, 
        a State shall submit an application at such time, in 
        such manner, and containing such assurances and 
        information as the Secretary may reasonably require. 
        Each such application shall include--
                  (A) a budget cost estimate for the State's 
                controlled substance monitoring program; and
                  (B) assurances of compliance with the 
                requirements of this section.
          (2) Approval or disapproval.--Not later than 90 days 
        after the submission by a State of an application under 
        paragraph (1), the Secretary shall approve or 
        disapprove the application. The Secretary shall approve 
        the application if the State demonstrates to the 
        Secretary that the State will establish and implement a 
        controlled substance monitoring program in accordance 
        with this section.
          (3) Withdrawal of authorization.--If a State fails to 
        implement a controlled substance monitoring program in 
        accordance with this section--
                  (A) the Secretary shall give notice of the 
                failure to the State; and
                  (B) if the State fails to take corrective 
                action within a reasonable period of time, the 
                Secretary shall withdraw any approval of the 
                State's application under this section.
          (4) Voluntary discontinuance.--A funding agreement 
        for the receipt of a payment under this section is that 
        the State involved will give a reasonable period of 
        notice to the Secretary before ceasing to implement a 
        controlled substance monitoring program under this 
        section. The Secretary shall determine the period of 
        notice that is reasonable for purposes of this 
        paragraph.
          (5) Return of funds.--If the Secretary withdraws 
        approval of a State's application under this section, 
        or the State chooses to cease to implement a controlled 
        substance monitoring program under this section, a 
        funding agreement for the receipt of a payment under 
        this section is that the State will return to the 
        Secretary an amount which bears the same ratio to the 
        overall payment as the remaining time period for 
        expending the payment bears to the overall time period 
        for expending the payment (as specified by the 
        Secretary at the time of the payment).
  (c) Reporting Requirements.--In implementing a controlled 
substance monitoring program under this section, a State shall 
comply with the following:
          (1) The State shall require dispensers to report to 
        such State each dispensing in the State of a controlled 
        substance to an ultimate user or research subject not 
        later than 1 week after the date of such dispensing.
          (2) The State may exclude from the reporting 
        requirement of this subsection--
                  (A) the direct application of a controlled 
                substance to the body of an ultimate user or 
                research subject;
                  (B) the dispensing of a controlled substance 
                in a quantity limited to an amount adequate to 
                treat the ultimate user or research subject 
                involved for 48 hours or less; or
                  (C) the application or dispensing of a 
                controlled substance in accordance with any 
                other exclusion identified by the Secretary for 
                purposes of this paragraph.
          (3) The information to be reported under this 
        subsection with respect to the dispensing of a 
        controlled substance shall include the following:
                  (A) Drug Enforcement Administration 
                Registration Number of the dispenser.
                  (B) Drug Enforcement Administration 
                Registration Number and name of the 
                practitioner who prescribed the drug.
                  (C) Name, address, and telephone number of 
                the ultimate user or research subject
                  (D) Identification of the drug by a national 
                drug code number.
                  (E) Quantity dispensed.
                  (F) Estimated number of days for which such 
                quantity should last.
                  (G) Number of refills ordered.
                  (H) Whether the drug was dispensed as a 
                refill of a prescription or as a first-time 
                request.
                  (I) Date of the dispensing.
                  (J) Date of origin of the prescription.
          (4) The State shall specify an electronic format for 
        the reporting of information under this subsection and 
        may waive the requirement of such format with respect 
        to an individual dispenser.
          (5) The State shall automatically share information 
        reported under this subsection with another State with 
        an application approved under this section if the 
        information concerns--
                  (A) the dispensing of a controlled substance 
                to an ultimate consumer or research subject who 
                resides in such other State; or
                  (B) the dispensing of a controlled substance 
                prescribed by a practitioner whose principal 
                place of business is located in such other 
                State.
          (6) The State shall notify the appropriate 
        authorities responsible for drug diversion 
        investigation if information in the database maintained 
        by the State under subsection (d) indicates a potential 
        unlawful diversion or misuse of a controlled substance.
  (d) Database.--In implementing a controlled substance 
monitoring program under this section, a State shall comply 
with the following:
          (1) The State shall establish and maintain an 
        electronic database containing the information reported 
        to the State under subsection (c).
          (2) The database must be searchable by any field or 
        combination of fields.
          (3) The State shall include reported information in 
        the database at such time and in such manner as the 
        Secretary determines appropriate, with appropriate 
        safeguards for ensuring the accuracy and completeness 
        of the database.
          (4) The State shall take appropriate security 
        measures to protect the integrity of, and access to, 
        the database.
  (e) Provision of Information.--Subject to subsection (f), in 
implementing a controlled substance monitoring program under 
this section, a State may provide information from the database 
established under subsection (d) and, in the case of a request 
under paragraph (2) or (3), compilations of such information, 
in response to a request by--
          (1) a practitioner (or the agent thereof) who 
        certifies that the requested information is for the 
        purpose of providing medical or pharmaceutical 
        treatment or evaluating the need for such treatment to 
        a bona fide current patient;
          (2) any local, State, or Federal law enforcement, 
        narcotics control, licensure, disciplinary, or program 
        authority, who certifies that the requested information 
        is related to an individual investigation or proceeding 
        involving the unlawful diversion or misuse of a 
        schedule II, III, or IV substance, and such information 
        will further the purpose of the investigation or assist 
        in the proceeding; or
          (3) any agent of the Department of Health and Human 
        Services, a State medicaid program, a State health 
        department, or the Drug Enforcement Administration who 
        certifies that the requested information is necessary 
        for research to be conducted by such department, 
        program, or administration, respectively, and the 
        intended purpose of the research is related to a 
        function committed to such department, program, or 
        administration by law that is not investigative in 
        nature.
  (f) Limitations.--In implementing a controlled substance 
monitoring program under this section, a State--
          (1) shall make reasonable efforts to limit the 
        information provided pursuant to a valid request under 
        subsection (e) to the minimum necessary to accomplish 
        the intended purpose of the request; and
          (2) shall not provide any individually identifiable 
        information in response to a request under subsection 
        (e)(3).
  (g) Rules of Construction.--
          (1) Functions otherwise authorized by law.--Nothing 
        in this section shall be construed to restrict the 
        ability of any authority, including any local, State, 
        or Federal law enforcement, narcotics control, 
        licensure, disciplinary, or program authority, to 
        perform functions otherwise authorized by law.
          (2) No preemption.--Nothing in this section shall be 
        construed as preempting any State law, except that no 
        such law may relieve any person of a requirement 
        otherwise applicable under this Act.
          (3) No federal private cause of action.--Nothing in 
        this section shall be construed to create a Federal 
        private cause of action.
  (h) Relation to HIPAA.--Except to the extent inconsistent 
with this section, the provision of information pursuant to 
subsection (c)(5), (c)(6), or (e) and the subsequent transfer 
of such information are subject to any requirement that would 
otherwise apply under the regulations promulgated pursuant to 
section 264(c) of the Health Insurance Portability and 
Accountability Act of 1996.
  (i) Preference.--The Secretary, in awarding any competitive 
grant that is related to drug abuse (as determined by the 
Secretary) to a State, shall give preference to any State with 
an application approved under this section.
  (j) Study.--Not later than 1 year after the date of the 
enactment of this section, the Secretary shall--
          (1) complete a study on--
                  (A) the progress of States in establishing 
                and implementing controlled substance 
                monitoring programs under this section; and
                  (B) the feasibility of implementing a real-
                time electronic controlled substance monitoring 
                program, including the costs associated with 
                establishing such a program; and
          (2) submit a report to the Congress on the results of 
        the study.
  (k) Advisory Council.--
          (1) Establishment.--A State may establish an advisory 
        council to assist in the establishment and 
        implementation of a controlled substance monitoring 
        program under this section.
          (2) Sense of congress.--It is the sense of the 
        Congress that, in establishing an advisory council 
        under this subsection, a State should consult with 
        State boards of pharmacy, State boards of medicine, and 
        other interested parties.
  (l) Definitions.--For purposes of this section:
          (1) The term ``bona fide patient'' means an 
        individual who is a patient of the dispenser or 
        practitioner involved.
          (2) The term ``controlled substance'' means a drug 
        that is--
                  (A) included in schedule II, III, or IV of 
                section 202(c) of the Controlled Substance Act; 
                or
                  (B) identified by the State involved as a 
                drug subject to the monitoring program of the 
                State under this section.
          (3) The term ``dispense'' means to deliver a 
        controlled substance to an ultimate user or research 
        subject by, or pursuant to the lawful order of, a 
        practitioner, irrespective of whether the dispenser 
        uses the Internet or other means to effect such 
        delivery.
          (4) The term ``dispenser'' means a physician, 
        pharmacist, or other individual who dispenses a 
        controlled substance to an ultimate user or research 
        subject.
          (5) The term ``practitioner'' means a physician, 
        dentist, veterinarian, scientific investigator, 
        pharmacy, hospital, or other person licensed, 
        registered, or otherwise permitted, by the United 
        States or the jurisdiction in which he or she practices 
        or does research, to distribute, dispense, conduct 
        research with respect to, administer, or use in 
        teaching or chemical analysis, a controlled substance 
        in the course of professional practice or research.
          (6) The term ``State'' means each of the 50 States 
        and the District of Columbia.
          (7) The term ``ultimate user'' means a person who has 
        lawfully obtained, and who possesses, a controlled 
        substance for his or her own use, for the use of a 
        member of his or her household, or for the use of an 
        animal owned by him or her or by a member of his or her 
        household.
  (m) Authorization of Appropriations.--To carry out this 
section, there are authorized to be appropriated--
          (1) $25,000,000 for each of fiscal years 2006 and 
        2007; and
          (2) $15,000,000 for each of fiscal years 2008, 2009, 
        and 2010.

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