[House Report 109-191]
[From the U.S. Government Publishing Office]



109th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    109-191

======================================================================



 
  NATIONAL ALL SCHEDULES PRESCRIPTION ELECTRONIC REPORTING ACT OF 2005

                                _______
                                

 July 27, 2005.--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. 1132]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Energy and Commerce, to whom was referred 
the bill (H.R. 1132) to provide for the establishment of a 
controlled substance monitoring program in each State, having 
considered the same, report favorably thereon with an amendment 
and recommend that the bill as amended do pass.

                                CONTENTS

                                                                   Page
Amendment........................................................     1
Purpose and Summary..............................................     7
Background and Need for Legislation..............................     7
Hearings.........................................................     8
Committee Consideration..........................................     8
Committee Votes..................................................     8
Committee Oversight Findings.....................................    10
Statement of General Performance Goals and Objectives............    10
New Budget Authority, Entitlement Authority, and Tax Expenditures    10
Committee Cost Estimate..........................................    10
Congressional Budget Office Estimate.............................    10
Federal Mandates Statement.......................................    11
Advisory Committee Statement.....................................    11
Constitutional Authority Statement...............................    11
Applicability to Legislative Branch..............................    11
Section-by-Section Analysis of the Legislation...................    12
Changes in Existing Law Made by the Bill, as Reported............    15

                               Amendment

  The amendment is 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 2005''.

SEC. 2. PURPOSE.

  It is the purpose of this Act to--
          (1) foster the establishment of State-administered controlled 
        substance monitoring systems in order to ensure that health 
        care providers have access to the accurate, timely prescription 
        history information that they may use as a tool for the early 
        identification of patients at risk for addiction in order to 
        initiate appropriate medical interventions and avert the tragic 
        personal, family, and community consequences of untreated 
        addiction; and
          (2) establish, based on the experiences of existing State 
        controlled substance monitoring programs, a set of best 
        practices to guide the establishment of new State programs and 
        the improvement of existing programs.

SEC. 3. 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) Grants.--
          ``(1) In general.--Each fiscal year, the Secretary shall 
        award a grant to each State with an application approved under 
        this section to enable the State--
                  ``(A) to establish and implement a State controlled 
                substance monitoring program; or
                  ``(B) to make improvements to an existing State 
                controlled substance monitoring program.
          ``(2) Determination of amount.--
                  ``(A) Minimum amount.--In making payments under a 
                grant under paragraph (1) for a fiscal year, the 
                Secretary shall allocate to each State with an 
                application approved under this section an amount that 
                equals 1.0 percent of the amount appropriated to carry 
                out this section for that fiscal year.
                  ``(B) Additional amounts.--In making payments under a 
                grant under paragraph (1) for a fiscal year, the 
                Secretary shall allocate to each State with an 
                application approved under this section an additional 
                amount which bears the same ratio to the amount 
                appropriated to carry out this section for that fiscal 
                year and remaining after amounts are made available 
                under subparagraph (A) 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 subparagraph after taking into consideration 
                the budget cost estimate for the State's controlled 
                substance monitoring program.
          ``(3) Term of grants.--Grants awarded under this section 
        shall be obligated in the year in which funds are allotted.
  ``(b) Development of Minimum Requirements.--Prior to awarding a grant 
under this section, and not later than 6 months after the date on which 
funds are first appropriated to carry out this section, the Secretary 
shall, after publishing in the Federal Register proposed minimum 
requirements and receiving public comments, establish minimum 
requirements for criteria to be used by States for purposes of clauses 
(ii), (v), (vi), and (vii) of subsection (c)(1)(A).
  ``(c) Application Approval Process.--
          ``(1) In general.--To be eligible to receive a grant under 
        this section, a State shall submit an application to the 
        Secretary at such time, in such manner, and containing such 
        assurances and information as the Secretary may reasonably 
        require. Each such application shall include--
                  ``(A) with respect to a State that intends to use 
                funds under the grant as provided for in subsection 
                (a)(1)(A)--
                          ``(i) a budget cost estimate for the 
                        controlled substance monitoring program to be 
                        implemented under the grant;
                          ``(ii) criteria for security for information 
                        handling and for the database maintained by the 
                        State under subsection (e) generally including 
                        efforts to use appropriate encryption 
                        technology or other appropriate technology to 
                        protect the security of such information;
                          ``(iii) an agreement to adopt health 
                        information interoperability standards, 
                        including health vocabulary and messaging 
                        standards, that are consistent with any such 
                        standards generated or identified by the 
                        Secretary or his or her designee;
                          ``(iv) criteria for meeting the uniform 
                        electronic format requirement of subsection 
                        (h);
                          ``(v) criteria for availability of 
                        information and limitation on access to program 
                        personnel;
                          ``(vi) criteria for access to the database, 
                        and procedures to ensure that information in 
                        the database is accurate;
                          ``(vii) criteria for the use and disclosure 
                        of information, including a description of the 
                        certification process to be applied to requests 
                        for information under subsection (f);
                          ``(viii) penalties for the unauthorized use 
                        and disclosure of information maintained in the 
                        State controlled substance monitoring program 
                        in violation of applicable State law or 
                        regulation;
                          ``(ix) information on the relevant State 
                        laws, policies, and procedures, if any, 
                        regarding purging of information from the 
                        database; and
                          ``(x) assurances of compliance with all other 
                        requirements of this section; or
                  ``(B) with respect to a State that intends to use 
                funds under the grant as provided for in subsection 
                (a)(1)(B)--
                          ``(i) a budget cost estimate for the 
                        controlled substance monitoring program to be 
                        improved under the grant;
                          ``(ii) a plan for ensuring that the State 
                        controlled substance monitoring program is in 
                        compliance with the criteria and penalty 
                        requirements described in clauses (ii) through 
                        (viii) of subparagraph (A);
                          ``(iii) a plan to enable the State controlled 
                        substance monitoring program to achieve 
                        interoperability with at least one other State 
                        controlled substance monitoring program; and
                          ``(iv) assurances of compliance with all 
                        other requirements of this section or a 
                        statement describing why such compliance is not 
                        feasible or is contrary to the best interests 
                        of public health in such State.
          ``(2) State legislation.--As part of an application under 
        paragraph (1), the Secretary shall require a State to 
        demonstrate that the State has enacted legislation or 
        regulations to permit the implementation of the State 
        controlled substance monitoring program and the imposition of 
        appropriate penalties for the unauthorized use and disclosure 
        of information maintained in such program.
          ``(3) Interoperability.--If a State that submits an 
        application under this subsection geographically borders 
        another State that is operating a controlled substance 
        monitoring program under subsection (a)(1) on the date of 
        submission of such application, and such applicant State has 
        not achieved interoperability for purposes of information 
        sharing between its monitoring program and the monitoring 
        program of such border State, such applicant State shall, as 
        part of the plan under paragraph (1)(B)(iii), describe the 
        manner in which the applicant State will achieve 
        interoperability between the monitoring programs of such 
        States.
          ``(4) Approval.--If a State submits an application in 
        accordance with this subsection, the Secretary shall approve 
        such application.
          ``(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 or improve a controlled substance 
        monitoring program under this section, a funding agreement for 
        the receipt of a grant under this section is that the State 
        will return to the Secretary an amount which bears the same 
        ratio to the overall grant as the remaining time period for 
        expending the grant funds bears to the overall time period for 
        expending the grant (as specified by the Secretary at the time 
        of the grant).
  ``(d) Reporting Requirements.--In implementing or improving a 
controlled substance monitoring program under this section, a State 
shall comply, or with respect to a State that applies for a grant under 
subsection (a)(1)(B) submit to the Secretary for approval a statement 
of why such compliance is not feasible or is contrary to the best 
interests of public health in such State, 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 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 administration of a controlled 
                substance to the body of an ultimate user;
                  ``(B) the dispensing of a controlled substance in a 
                quantity limited to an amount adequate to treat the 
                ultimate user involved for 48 hours or less; or
                  ``(C) the administration 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 (or other identifying number used in lieu of 
                such Registration Number) of the dispenser.
                  ``(B) Drug Enforcement Administration Registration 
                Number (or other identifying number used in lieu of 
                such Registration Number) and name of the practitioner 
                who prescribed the drug.
                  ``(C) Name, address, and telephone number of the 
                ultimate user or such contact information of the 
                ultimate user as the Secretary determines appropriate.
                  ``(D) Identification of the drug by a national drug 
                code number.
                  ``(E) Quantity dispensed.
                  ``(F) Number of refills ordered.
                  ``(G) Whether the drug was dispensed as a refill of a 
                prescription or as a first-time request.
                  ``(H) Date of the dispensing.
                  ``(I) Date of origin of the prescription.
                  ``(J) Such other information as may be required by 
                State law to be reported under this subsection.
          ``(4) The State shall require dispensers to report 
        information under this section in accordance with the 
        electronic format specified by the Secretary under subsection 
        (h), except that the State may waive the requirement of such 
        format with respect to an individual dispenser that is unable 
        to submit such information by electronic means.
  ``(e) Database.--In implementing or improving 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 (d).
          ``(2) The database must be searchable by any field or 
        combination of fields.
          ``(3) The State shall include reported information in the 
        database in a manner consistent with criteria established by 
        the Secretary, 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.
  ``(f) Use and Disclosure of Information.--
          ``(1) In general.--Subject to subsection (g), in implementing 
        or improving a controlled substance monitoring program under 
        this section, a State may disclose information from the 
        database established under subsection (e) and, in the case of a 
        request under subparagraph (D), summary statistics of such 
        information, only in response to a request by--
                  ``(A) a practitioner (or the agent thereof) who 
                certifies, under the procedures determined by the 
                State, 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;
                  ``(B) any local, State, or Federal law enforcement, 
                narcotics control, licensure, disciplinary, or program 
                authority, who certifies, under the procedures 
                determined by the State, 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;
                  ``(C) the controlled substance monitoring program of 
                another State or group of States with whom the State 
                has established an interoperability agreement;
                  ``(D) 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; or
                  ``(E) an agent of the State agency or entity of 
                another State that is responsible for the establishment 
                and maintenance of that State's controlled substance 
                monitoring program, who certifies that--
                          ``(i) the State has an application approved 
                        under this section; and
                          ``(ii) the requested information is for the 
                        purpose of implementing the State's controlled 
                        substance monitoring program under this 
                        section.
          ``(2) Drug diversion.--In consultation with practitioners, 
        dispensers, and other relevant and interested stakeholders, a 
        State receiving a grant under subsection (a)--
                  ``(A) shall establish a program to notify 
                practitioners and dispensers of information that will 
                help identify and prevent the unlawful diversion or 
                misuse of controlled substances; and
                  ``(B) may, to the extent permitted under State law, 
                notify the appropriate authorities responsible for 
                carrying out drug diversion investigations if the State 
                determines that information in the database maintained 
                by the State under subsection (e) indicates an unlawful 
                diversion or abuse of a controlled substance.
  ``(g) Limitations.--In implementing or improving a controlled 
substance monitoring program under this section, a State--
          ``(1) shall limit the information provided pursuant to a 
        valid request under subsection (f)(1) to the minimum necessary 
        to accomplish the intended purpose of the request; and
          ``(2) shall limit information provided in response to a 
        request under subsection (f)(1)(D) to nonidentifiable 
        information.
  ``(h) Electronic Format.--The Secretary shall specify a uniform 
electronic format for the reporting, sharing, and disclosure of 
information under this section.
  ``(i) 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) Additional privacy protections.--Nothing in this 
        section shall be construed as preempting any State from 
        imposing any additional privacy protections.
          ``(4) Federal privacy requirements.--Nothing in this section 
        shall be construed to supersede any Federal privacy or 
        confidentiality requirement, including the regulations 
        promulgated under section 264(c) of the Health Insurance 
        Portability and Accountability Act of 1996 (Public Law 104-191; 
        110 Stat. 2033) and section 543 of the Public Health Service 
        Act.
          ``(5) No federal private cause of action.--Nothing in this 
        section shall be construed to create a Federal private cause of 
        action.
  ``(j) Studies and Reports.--
          ``(1) Implementation report.--
                  ``(A) In general.--Not later than 180 days after the 
                date of enactment of this section, the Secretary, based 
                on a review of existing State controlled substance 
                monitoring programs and other relevant information, 
                shall determine whether the implementation of such 
                programs has had a substantial negative impact on--
                          ``(i) patient access to treatment, including 
                        therapy for pain or controlled substance abuse;
                          ``(ii) pediatric patient access to treatment; 
                        or
                          ``(iii) patient enrollment in research or 
                        clinical trials in which, following the 
                        protocol that has been approved by the relevant 
                        institutional review board for the research or 
                        clinical trial, the patient has obtained a 
                        controlled substance from either the scientific 
                        investigator conducting such research or 
                        clinical trial or the agent thereof.
                  ``(B) Additional categories of exclusion.--If the 
                Secretary determines under subparagraph (A) that a 
                substantial negative impact has been demonstrated with 
                regard to one or more of the categories of patients 
                described in such subparagraph, the Secretary shall 
                identify additional appropriate categories of exclusion 
                from reporting as authorized under subsection 
                (d)(2)(C).
          ``(2) Progress report.--Not later than 3 years after the date 
        on which funds are first appropriated under this section, the 
        Secretary shall--
                  ``(A) complete a study that--
                          ``(i) determines the progress of States in 
                        establishing and implementing controlled 
                        substance monitoring programs under this 
                        section;
                          ``(ii) provides an analysis of the extent to 
                        which the operation of controlled substance 
                        monitoring programs have reduced inappropriate 
                        use, abuse, or diversion of controlled 
                        substances or affected patient access to 
                        appropriate pain care in States operating such 
                        programs;
                          ``(iii) determines the progress of States in 
                        achieving interoperability between controlled 
                        substance monitoring programs, including an 
                        assessment of technical and legal barriers to 
                        such activities and recommendations for 
                        addressing these barriers;
                          ``(iv) determines the feasibility of 
                        implementing a real-time electronic controlled 
                        substance monitoring program, including the 
                        costs associated with establishing such a 
                        program;
                          ``(v) provides an analysis of the privacy 
                        protections in place for the information 
                        reported to the controlled substance monitoring 
                        program in each State receiving a grant for the 
                        establishment or operation of such program, and 
                        any recommendations for additional requirements 
                        for protection of this information;
                          ``(vi) determines the feasibility of 
                        implementing technological alternatives to 
                        centralized data storage, such as peer-to-peer 
                        file sharing or data pointer systems, in 
                        controlled substance monitoring programs and 
                        the potential for such alternatives to enhance 
                        the privacy and security of individually 
                        identifiable data; and
                          ``(vii) evaluates the penalties that States 
                        have enacted for the unauthorized use and 
                        disclosure of information maintained in the 
                        controlled substance monitoring program, and 
                        reports on the criteria used by the Secretary 
                        to determine whether such penalties qualify as 
                        appropriate pursuant to this section; and
                  ``(B) submit a report to the Congress on the results 
                of the study.
  ``(k) Preference.--Beginning 3 years after the date on which funds 
are first appropriated to carry out this section, the Secretary, in 
awarding any competitive grant that is related to drug abuse (as 
determined by the Secretary) and for which only States are eligible to 
apply, shall give preference to any State with an application approved 
under this section. The Secretary shall have the discretion to apply 
such preference to States with existing controlled substance monitoring 
programs that meet minimum requirements under this section or to States 
that put forth a good faith effort to meet those requirements (as 
determined by the Secretary).
  ``(l) Advisory Council.--
          ``(1) Establishment.--A State may establish an advisory 
        council to assist in the establishment, implementation, or 
        improvement of a controlled substance monitoring program under 
        this section.
          ``(2) Limitation.--A State may not use amounts received under 
        a grant under this section for the operations of an advisory 
        council established under paragraph (1).
          ``(3) Sense of congress.--It is the sense of the Congress 
        that, in establishing an advisory council under this 
        subsection, a State should consult with appropriate 
        professional boards and other interested parties.
  ``(m) Definitions.--For purposes of this section:
          ``(1) The term `bona fide patient' means an individual who is 
        a patient of the practitioner involved.
          ``(2) The term `controlled substance' means a drug that is 
        included in schedule II, III, or IV of section 202(c) of the 
        Controlled Substance Act.
          ``(3) The term `dispense' means to deliver a controlled 
        substance to an ultimate user 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 person that dispenses a controlled substance to an 
        ultimate user.
          ``(5) The term `interoperability' with respect to a State 
        controlled substance monitoring program means the ability of 
        the program to electronically share reported information, 
        including each of the required report components described in 
        subsection (d), with another State if the information concerns 
        either the dispensing of a controlled substance to an ultimate 
        user who resides in such other State, or the dispensing of a 
        controlled substance prescribed by a practitioner whose 
        principal place of business is located in such other State.
          ``(6) The term `nonidentifiable information' means 
        information that does not identify a practitioner, dispenser, 
        or an ultimate user and with respect to which there is no 
        reasonable basis to believe that the information can be used to 
        identify a practitioner, dispenser, or an ultimate user.
          ``(7) 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.
          ``(8) The term `State' means each of the 50 States and the 
        District of Columbia.
          ``(9) The term `ultimate user' means a person who has 
        obtained from a dispenser, 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.
  ``(n) Authorization of Appropriations.--To carry out this section, 
there are authorized to be appropriated--
          ``(1) $15,000,000 for each of fiscal years 2006 and 2007; and
          ``(2) $10,000,000 for each of fiscal years 2008, 2009, and 
        2010.''.

                          Purpose and Summary

    The purpose of H.R. 1132 is to address the issue of illegal 
diversion and misuse of prescription drugs. This legislation 
would provide grants to states, through the Department of 
Health and Human Services, 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. 1132 will provide the resources to states to implement 
and operate an individual program that best address the needs 
of the particular state. The bill will also facilitate the 
interoperability of state systems so drug diversion and abuse 
that crosses states 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. 
According to the Office of National Drug Control Policy 
(ONDCP), in 2002 6.2 million Americans abused prescription 
drugs. Since this Committee passed similar legislation last 
year, the National Center on Addiction and Substance Abuse at 
Columbia University released a report indicating the growing 
nature of this problem. According to this report, the number of 
Americans who admit abusing prescription drugs nearly doubled 
to more than 15 million from 1992 to 2003, while the number of 
teens abusing prescription drugs has tripled in that time.
    More than 20 states currently operate some form of a 
prescription drug monitoring program. Each state program is 
unique, with states varying the state agency that 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. In addition to providing information 
about existing prescriptions for a patient to a health care 
provider, these programs also provide information to drug 
enforcement agencies to identify illegal activities.
    Proponents of state prescription drug monitoring programs 
have highlighted the success of several states in reducing the 
availability of abused drugs and improving states' ability to 
investigate and prosecute illegal prescription drug diversion. 
They claim that the physicians' increased access to drug 
history information has helped to 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 Committee on Energy and Commerce has not held hearings 
on this legislation.

                        Committee Consideration

    On Wednesday, June 22, 2005, the Subcommittee on Health met 
in open markup session and approved H.R. 1132 for full 
Committee consideration, amended, by a voice vote, a quorum 
being present. On Wednesday, July 20, 2005, the full Committee 
met in open markup session and ordered H.R. 1132 favorably 
reported to the House, 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. The 
following is the recorded vote taken on H.R. 1132. A motion by 
Mr. Barton to order H.R. 1132 reported to the House, 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 has not held oversight 
or legislative hearings on this legislation.

         Statement of General Performance Goals and Objectives

    The goal of H.R. 1132 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. 
1132, the National All Schedules Prescription Electronic 
Reporting Act of 2005, 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, July 26, 2005.
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. 1132, the National 
All Schedules Prescription Electronic Reporting Act of 2005.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Julia 
Christensen.
            Sincerely,
                                         Robert A. Sunshine
                               (For Douglas Holtz-Eakin, Director).
    Enclosure.

H.R. 1132--National All Schedules Prescription Electronic Reporting Act 
        of 2005

    H.R. 1132 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 controlled substances. The bill also would require 
the Secretary to conduct several studies related to monitoring 
programs for controlled substances.
    The bill would authorize the appropriation of $15 million 
in each of fiscal years 2006 and 2007, and $10 million a year 
for fiscal years 2008 through 2010. Assuming appropriation of 
those amounts, and based on spending patterns for similar 
programs, CBO estimates that implementing H.R. 1132 would cost 
$52 million over the 2006-2010 period. Enacting H.R. 1132 would 
have no effect on direct spending or revenues.
    H.R. 1132 contains no intergovernmental or private-sector 
mandates as defined by the Unfunded Mandates Reform Act. The 
bill would benefit state, local, and tribal governments; any 
costs they incur would result from complying with conditions of 
receiving federal assistance.
    On June 6, 2005, CBO transmitted a cost estimate for S. 
518, the National All Schedules Prescription electronic 
Reporting Act of 2005, as ordered reported by the Senate 
Committee on Health, Education, Labor, and Pensions on May 25, 
2005. The authorizations of appropriations in that bill are 
equal to those in H.R. 1132; the programs established under 
both bills are almost identical. Neither bill would impose any 
mandates on state, local, or tribal governments or on the 
private sector.
    The CBO staff contact for this estimate is Julia 
Christensen. 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 2005.''

Section 2. Purpose

    Section 2 states that the purpose of the legislation is to 
foster the establishment of state administered prescription 
drug monitoring systems in order to ensure that health care 
providers have access to accurate, timely prescription history 
information. This information may be used as a tool for the 
early identification of patients at risk for addiction in order 
to initiate appropriate medical intervention and avert the 
tragic personal, family, and community consequences of 
untreated addiction. This legislation will also establish, 
based on the experiences of existing state controlled substance 
monitoring programs, a set of best practices to guide the 
establishment of new state programs and the improvement of 
existing programs.

Section 3. Controlled Substance Monitoring Program

    Section 3 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. Each state with an 
approved application will be guaranteed a minimum amount of 1% 
of the amount appropriated for that fiscal year. The remainder 
of funds 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 monitoring programs approved 
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.
    Prior to awarding any grant, and not later than six months 
after the date funds are first appropriated for this program, 
the Secretary shall develop minimum requirements for states to 
use in their applications. It is the intent of the Committee 
that the agency consult widely with interested parties in 
preparing its proposed minimum requirements. The Committee 
believes interested parties should include other federal 
government agencies and departments with interests or expertise 
on the issue of drug abuse and drug diversion. Then, after 
opportunity for public comment on those requirements, the 
Secretary shall identify the minimum requirements for the 
criteria to be used by the states in their grant applications. 
These requirements apply to states whether applying for an 
initial grant or support of an existing system.
    To receive a grant under this section, a state must submit 
an application in a time, manner, and form that the Secretary 
may require. States planning to establish a drug monitoring 
program must include a cost estimate, and proposed criteria for 
information security, criteria for meeting uniform electronic 
formatting, criteria for the availability of information and 
limitation on access to program personnel, criteria for the use 
and disclosure of information, and criteria for access to the 
database and procedures to ensure the information in the 
database is accurate. The Committee recognizes that persons 
should be able to have accurate information in the database, 
and to be able to have any inaccurate information removed or 
corrected. In existing programs, the physician is normally the 
responsible party to seek the correction on behalf of the 
affected individual. It is the intent of the Committee that 
states would address the issue of how incorrect information 
would be corrected as part of their responsibility to ensure 
that the information in the database is accurate.
    A state must also include in its application a listing of 
penalties for misuse of information in their application, and 
disclose information regarding its state law, policies, and 
procedures, if any, regarding the purging of information from 
the database. A state will also have to demonstrate in its 
application that it has enacted legislation or regulations to 
permit the implementation of a controlled substance monitoring 
program. States requesting funds for improving existing systems 
must include all information required of states applying for a 
grant to establish a new program. In addition, a state 
requesting a grant for an existing program must describe its 
plan to enable the state program to achieve interoperability 
with border states drug monitoring programs.
    In implementing a program 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 administration 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 an equivalent 
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) number of 
refills ordered or as a first time request; (6) whether the 
drug was dispensed as a refill; (7) the date of dispensing; (8) 
the date of origin of the prescription; and, (9) such other 
information as may be required by state law to be reported 
under this subsection.
    The state shall require manufacturers to report information 
in accordance with the electronic format specified by the 
Secretary. 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.
    In implementing a controlled substance monitoring program, 
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, which 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 authorities that certify that 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. Under this section, the 
state shall share information with another state with an 
approved application if the information is for the purpose of 
implementing the state's controlled substance monitoring 
program. This includes 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.
    In consultation with practitioners, dispensers, and other 
relevant stakeholders, a state receiving a grant under this 
program shall establish a program to notify practitioners and 
dispensers of information that will help identify and prevent 
unlawful drug diversion. A state may 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 determinations of unlawful 
diversion should be based on a decision made by the monitoring 
authority itself, and that the monitoring authority have 
discretion to make any such decision.
    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. In addition, nothing in this 
section shall be construed to supercede any Federal privacy 
right or confidentiality requirement. The Committee 
specifically notes that this section should not be read to 
supercede the confidentiality requirements set forth in 42 CFR 
part 2 and part 2A. Furthermore, nothing in this section shall 
be construed to create a Federal private right of action.
    Not later than 180 days after enactment the Secretary, 
based on a review of existing state controlled substance 
monitoring programs, shall determine whether the implementation 
of existing state monitoring programs has had a substantial 
negative impact on patient access to treatment, pediatric 
access to treatment, or patient enrollment in research or 
clinical trials. If the Secretary determines that a substantial 
negative impact has been demonstrated with regard to one or 
more of these categories, the Secretary shall identify 
additional appropriate categories of exclusion from reporting.
    Not later than three years after the date on which funds 
are first appropriated, the Secretary shall conduct a study on 
the progress of states in establishing and implementing 
controlled substance monitoring programs. The study shall 
provide an analysis of the extent to which drug-monitoring 
programs have reduced inappropriate use, abuse, and diversion 
of controlled substances. The study shall also examine the 
feasibility of implementing a real time electronic monitoring 
program and the progress of States in achieving 
interoperability. In addition, the study shall examine the 
privacy protections in place by states with drug monitoring 
programs and evaluate the penalties that states have enacted 
for the unauthorized use and disclosure of information. The 
Secretary shall submit a report to Congress on the results of 
this study.
    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 program or 
have made a good faith effort to meet the requirements of the 
program. This provision shall take effect three years after the 
date funds are first appropriated for this program. The 
Secretary will have discretion to determine which competitive 
grants should be subject to the preference requirement, and 
such preference shall only apply to grants that are solely 
awarded to states. 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.
    States may establish an advisory council to assist in the 
establishment and implementation of the monitoring program. In 
establishing an advisory council, states 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 
$15,000,000 in each of Fiscal Years 2006 and 2007. There is to 
be authorized $10,000,000 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) Grants.--
          (1) In general.--Each fiscal year, the Secretary 
        shall award a grant to each State with an application 
        approved under this section to enable the State--
                  (A) to establish and implement a State 
                controlled substance monitoring program; or
                  (B) to make improvements to an existing State 
                controlled substance monitoring program.
          (2) Determination of amount.--
                  (A) Minimum amount.--In making payments under 
                a grant under paragraph (1) for a fiscal year, 
                the Secretary shall allocate to each State with 
                an application approved under this section an 
                amount that equals 1.0 percent of the amount 
                appropriated to carry out this section for that 
                fiscal year.
                  (B) Additional amounts.--In making payments 
                under a grant under paragraph (1) for a fiscal 
                year, the Secretary shall allocate to each 
                State with an application approved under this 
                section an additional amount which bears the 
                same ratio to the amount appropriated to carry 
                out this section for that fiscal year and 
                remaining after amounts are made available 
                under subparagraph (A) 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 subparagraph after taking into 
                consideration the budget cost estimate for the 
                State's controlled substance monitoring 
                program.
          (3) Term of grants.--Grants awarded under this 
        section shall be obligated in the year in which funds 
        are allotted.
  (b) Development of Minimum Requirements.--Prior to awarding a 
grant under this section, and not later than 6 months after the 
date on which funds are first appropriated to carry out this 
section, the Secretary shall, after publishing in the Federal 
Register proposed minimum requirements and receiving public 
comments, establish minimum requirements for criteria to be 
used by States for purposes of clauses (ii), (v), (vi), and 
(vii) of subsection (c)(1)(A).
  (c) Application Approval Process.--
          (1) In general.--To be eligible to receive a grant 
        under this section, a State shall submit an application 
        to the Secretary at such time, in such manner, and 
        containing such assurances and information as the 
        Secretary may reasonably require. Each such application 
        shall include--
                  (A) with respect to a State that intends to 
                use funds under the grant as provided for in 
                subsection (a)(1)(A)--
                          (i) a budget cost estimate for the 
                        controlled substance monitoring program 
                        to be implemented under the grant;
                          (ii) criteria for security for 
                        information handling and for the 
                        database maintained by the State under 
                        subsection (e) generally including 
                        efforts to use appropriate encryption 
                        technology or other appropriate 
                        technology to protect the security of 
                        such information;
                          (iii) an agreement to adopt health 
                        information interoperability standards, 
                        including health vocabulary and 
                        messaging standards, that are 
                        consistent with any such standards 
                        generated or identified by the 
                        Secretary or his or her designee;
                          (iv) criteria for meeting the uniform 
                        electronic format requirement of 
                        subsection (h);
                          (v) criteria for availability of 
                        information and limitation on access to 
                        program personnel;
                          (vi) criteria for access to the 
                        database, and procedures to ensure that 
                        information in the database is 
                        accurate;
                          (vii) criteria for the use and 
                        disclosure of information, including a 
                        description of the certification 
                        process to be applied to requests for 
                        information under subsection (f);
                          (viii) penalties for the unauthorized 
                        use and disclosure of information 
                        maintained in the State controlled 
                        substance monitoring program in 
                        violation of applicable State law or 
                        regulation;
                          (ix) information on the relevant 
                        State laws, policies, and procedures, 
                        if any, regarding purging of 
                        information from the database; and
                          (x) assurances of compliance with all 
                        other requirements of this section; or
                  (B) with respect to a State that intends to 
                use funds under the grant as provided for in 
                subsection (a)(1)(B)--
                          (i) a budget cost estimate for the 
                        controlled substance monitoring program 
                        to be improved under the grant;
                          (ii) a plan for ensuring that the 
                        State controlled substance monitoring 
                        program is in compliance with the 
                        criteria and penalty requirements 
                        described in clauses (ii) through 
                        (viii) of subparagraph (A);
                          (iii) a plan to enable the State 
                        controlled substance monitoring program 
                        to achieve interoperability with at 
                        least one other State controlled 
                        substance monitoring program; and
                          (iv) assurances of compliance with 
                        all other requirements of this section 
                        or a statement describing why such 
                        compliance is not feasible or is 
                        contrary to the best interests of 
                        public health in such State.
          (2) State legislation.--As part of an application 
        under paragraph (1), the Secretary shall require a 
        State to demonstrate that the State has enacted 
        legislation or regulations to permit the implementation 
        of the State controlled substance monitoring program 
        and the imposition of appropriate penalties for the 
        unauthorized use and disclosure of information 
        maintained in such program.
          (3) Interoperability.--If a State that submits an 
        application under this subsection geographically 
        borders another State that is operating a controlled 
        substance monitoring program under subsection (a)(1) on 
        the date of submission of such application, and such 
        applicant State has not achieved interoperability for 
        purposes of information sharing between its monitoring 
        program and the monitoring program of such border 
        State, such applicant State shall, as part of the plan 
        under paragraph (1)(B)(iii), describe the manner in 
        which the applicant State will achieve interoperability 
        between the monitoring programs of such States.
          (4) Approval.--If a State submits an application in 
        accordance with this subsection, the Secretary shall 
        approve such application.
          (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 or improve a 
        controlled substance monitoring program under this 
        section, a funding agreement for the receipt of a grant 
        under this section is that the State will return to the 
        Secretary an amount which bears the same ratio to the 
        overall grant as the remaining time period for 
        expending the grant funds bears to the overall time 
        period for expending the grant (as specified by the 
        Secretary at the time of the grant).
  (d) Reporting Requirements.--In implementing or improving a 
controlled substance monitoring program under this section, a 
State shall comply, or with respect to a State that applies for 
a grant under subsection (a)(1)(B) submit to the Secretary for 
approval a statement of why such compliance is not feasible or 
is contrary to the best interests of public health in such 
State, 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 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 administration of a controlled 
                substance to the body of an ultimate user;
                  (B) the dispensing of a controlled substance 
                in a quantity limited to an amount adequate to 
                treat the ultimate user involved for 48 hours 
                or less; or
                  (C) the administration 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 (or other identifying 
                number used in lieu of such Registration 
                Number) of the dispenser.
                  (B) Drug Enforcement Administration 
                Registration Number (or other identifying 
                number used in lieu of such Registration 
                Number) and name of the practitioner who 
                prescribed the drug.
                  (C) Name, address, and telephone number of 
                the ultimate user or such contact information 
                of the ultimate user as the Secretary 
                determines appropriate.
                  (D) Identification of the drug by a national 
                drug code number.
                  (E) Quantity dispensed.
                  (F) Number of refills ordered.
                  (G) Whether the drug was dispensed as a 
                refill of a prescription or as a first-time 
                request.
                  (H) Date of the dispensing.
                  (I) Date of origin of the prescription.
                  (J) Such other information as may be required 
                by State law to be reported under this 
                subsection.
          (4) The State shall require dispensers to report 
        information under this section in accordance with the 
        electronic format specified by the Secretary under 
        subsection (h), except that the State may waive the 
        requirement of such format with respect to an 
        individual dispenser that is unable to submit such 
        information by electronic means.
  (e) Database.--In implementing or improving 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 (d).
          (2) The database must be searchable by any field or 
        combination of fields.
          (3) The State shall include reported information in 
        the database in a manner consistent with criteria 
        established by the Secretary, 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.
  (f) Use and Disclosure of Information.--
          (1) In general.--Subject to subsection (g), in 
        implementing or improving a controlled substance 
        monitoring program under this section, a State may 
        disclose information from the database established 
        under subsection (e) and, in the case of a request 
        under subparagraph (D), summary statistics of such 
        information, only in response to a request by--
                  (A) a practitioner (or the agent thereof) who 
                certifies, under the procedures determined by 
                the State, 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;
                  (B) any local, State, or Federal law 
                enforcement, narcotics control, licensure, 
                disciplinary, or program authority, who 
                certifies, under the procedures determined by 
                the State, 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;
                  (C) the controlled substance monitoring 
                program of another State or group of States 
                with whom the State has established an 
                interoperability agreement;
                  (D) 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; or
                  (E) an agent of the State agency or entity of 
                another State that is responsible for the 
                establishment and maintenance of that State's 
                controlled substance monitoring program, who 
                certifies that--
                          (i) the State has an application 
                        approved under this section; and
                          (ii) the requested information is for 
                        the purpose of implementing the State's 
                        controlled substance monitoring program 
                        under this section.
          (2) Drug diversion.--In consultation with 
        practitioners, dispensers, and other relevant and 
        interested stakeholders, a State receiving a grant 
        under subsection (a)--
                  (A) shall establish a program to notify 
                practitioners and dispensers of information 
                that will help identify and prevent the 
                unlawful diversion or misuse of controlled 
                substances; and
                  (B) may, to the extent permitted under State 
                law, notify the appropriate authorities 
                responsible for carrying out drug diversion 
                investigations if the State determines that 
                information in the database maintained by the 
                State under subsection (e) indicates an 
                unlawful diversion or abuse of a controlled 
                substance.
  (g) Limitations.--In implementing or improving a controlled 
substance monitoring program under this section, a State--
          (1) shall limit the information provided pursuant to 
        a valid request under subsection (f)(1) to the minimum 
        necessary to accomplish the intended purpose of the 
        request; and
          (2) shall limit information provided in response to a 
        request under subsection (f)(1)(D) to nonidentifiable 
        information.
  (h) Electronic Format.--The Secretary shall specify a uniform 
electronic format for the reporting, sharing, and disclosure of 
information under this section.
  (i) 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) Additional privacy protections.--Nothing in this 
        section shall be construed as preempting any State from 
        imposing any additional privacy protections.
          (4) Federal privacy requirements.--Nothing in this 
        section shall be construed to supersede any Federal 
        privacy or confidentiality requirement, including the 
        regulations promulgated under section 264(c) of the 
        Health Insurance Portability and Accountability Act of 
        1996 (Public Law 104-191; 110 Stat. 2033) and section 
        543 of the Public Health Service Act.
          (5) No federal private cause of action.--Nothing in 
        this section shall be construed to create a Federal 
        private cause of action.
  (j) Studies and Reports.--
          (1) Implementation report.--
                  (A) In general.--Not later than 180 days 
                after the date of enactment of this section, 
                the Secretary, based on a review of existing 
                State controlled substance monitoring programs 
                and other relevant information, shall determine 
                whether the implementation of such programs has 
                had a substantial negative impact on--
                          (i) patient access to treatment, 
                        including therapy for pain or 
                        controlled substance abuse;
                          (ii) pediatric patient access to 
                        treatment; or
                          (iii) patient enrollment in research 
                        or clinical trials in which, following 
                        the protocol that has been approved by 
                        the relevant institutional review board 
                        for the research or clinical trial, the 
                        patient has obtained a controlled 
                        substance from either the scientific 
                        investigator conducting such research 
                        or clinical trial or the agent thereof.
                  (B) Additional categories of exclusion.--If 
                the Secretary determines under subparagraph (A) 
                that a substantial negative impact has been 
                demonstrated with regard to one or more of the 
                categories of patients described in such 
                subparagraph, the Secretary shall identify 
                additional appropriate categories of exclusion 
                from reporting as authorized under subsection 
                (d)(2)(C).
          (2) Progress report.--Not later than 3 years after 
        the date on which funds are first appropriated under 
        this section, the Secretary shall--
                  (A) complete a study that--
                          (i) determines the progress of States 
                        in establishing and implementing 
                        controlled substance monitoring 
                        programs under this section;
                          (ii) provides an analysis of the 
                        extent to which the operation of 
                        controlled substance monitoring 
                        programs have reduced inappropriate 
                        use, abuse, or diversion of controlled 
                        substances or affected patient access 
                        to appropriate pain care in States 
                        operating such programs;
                          (iii) determines the progress of 
                        States in achieving interoperability 
                        between controlled substance monitoring 
                        programs, including an assessment of 
                        technical and legal barriers to such 
                        activities and recommendations for 
                        addressing these barriers;
                          (iv) determines the feasibility of 
                        implementing a real-time electronic 
                        controlled substance monitoring 
                        program, including the costs associated 
                        with establishing such a program;
                          (v) provides an analysis of the 
                        privacy protections in place for the 
                        information reported to the controlled 
                        substance monitoring program in each 
                        State receiving a grant for the 
                        establishment or operation of such 
                        program, and any recommendations for 
                        additional requirements for protection 
                        of this information;
                          (vi) determines the feasibility of 
                        implementing technological alternatives 
                        to centralized data storage, such as 
                        peer-to-peer file sharing or data 
                        pointer systems, in controlled 
                        substance monitoring programs and the 
                        potential for such alternatives to 
                        enhance the privacy and security of 
                        individually identifiable data; and
                          (vii) evaluates the penalties that 
                        States have enacted for the 
                        unauthorized use and disclosure of 
                        information maintained in the 
                        controlled substance monitoring 
                        program, and reports on the criteria 
                        used by the Secretary to determine 
                        whether such penalties qualify as 
                        appropriate pursuant to this section; 
                        and
                  (B) submit a report to the Congress on the 
                results of the study.
  (k) Preference.--Beginning 3 years after the date on which 
funds are first appropriated to carry out this section, the 
Secretary, in awarding any competitive grant that is related to 
drug abuse (as determined by the Secretary) and for which only 
States are eligible to apply, shall give preference to any 
State with an application approved under this section. The 
Secretary shall have the discretion to apply such preference to 
States with existing controlled substance monitoring programs 
that meet minimum requirements under this section or to States 
that put forth a good faith effort to meet those requirements 
(as determined by the Secretary).
  (l) Advisory Council.--
          (1) Establishment.--A State may establish an advisory 
        council to assist in the establishment, implementation, 
        or improvement of a controlled substance monitoring 
        program under this section.
          (2) Limitation.--A State may not use amounts received 
        under a grant under this section for the operations of 
        an advisory council established under paragraph (1).
          (3) Sense of congress.--It is the sense of the 
        Congress that, in establishing an advisory council 
        under this subsection, a State should consult with 
        appropriate professional boards and other interested 
        parties.
  (m) Definitions.--For purposes of this section:
          (1) The term ``bona fide patient'' means an 
        individual who is a patient of the practitioner 
        involved.
          (2) The term ``controlled substance'' means a drug 
        that is included in schedule II, III, or IV of section 
        202(c) of the Controlled Substance Act.
          (3) The term ``dispense'' means to deliver a 
        controlled substance to an ultimate user 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 person that dispenses a controlled 
        substance to an ultimate user.
          (5) The term ``interoperability'' with respect to a 
        State controlled substance monitoring program means the 
        ability of the program to electronically share reported 
        information, including each of the required report 
        components described in subsection (d), with another 
        State if the information concerns either the dispensing 
        of a controlled substance to an ultimate user who 
        resides in such other State, or the dispensing of a 
        controlled substance prescribed by a practitioner whose 
        principal place of business is located in such other 
        State.
          (6) The term ``nonidentifiable information'' means 
        information that does not identify a practitioner, 
        dispenser, or an ultimate user and with respect to 
        which there is no reasonable basis to believe that the 
        information can be used to identify a practitioner, 
        dispenser, or an ultimate user.
          (7) 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.
          (8) The term ``State'' means each of the 50 States 
        and the District of Columbia.
          (9) The term ``ultimate user'' means a person who has 
        obtained from a dispenser, 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.
  (n) Authorization of Appropriations.--To carry out this 
section, there are authorized to be appropriated--
          (1) $15,000,000 for each of fiscal years 2006 and 
        2007; and
          (2) $10,000,000 for each of fiscal years 2008, 2009, 
        and 2010.

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