[Senate Report 109-117]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 187
109th Congress                                                   Report
                                 SENATE
 1st Session                                                    109-117

======================================================================
 
  NATIONAL ALL SCHEDULES PRESCRIPTION ELECTRONIC REPORTING ACT OF 2005


                                _______
                                

                 July 29, 2005.--Ordered to be printed

                                _______
                                

Mr. Enzi, from the Committee on Health, Education, Labor, and Pensions, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 518]

    The Committee on Health, Education, Labor, and Pensions, to 
which was referred the bill (S. 518) to provide for 
establishment of a controlled substance monitoring program in 
each State, having considered the same, reports favorably 
thereon with an amendment in the nature of a substitute and 
recommends that the bill (as amended) do pass.

                                CONTENTS

                                                                   Page
  I. Purpose and summary..............................................1
 II. Background and need for legislation..............................2
III. Legislative history and committee action.........................2
 IV. Explanation of bill and committee views..........................2
  V. Cost estimate....................................................6
 VI. Application of law to the legislative branch.....................7
VII. Regulatory impact statement......................................7
VIII.Section-by-section analysis......................................7

 IX. Changes in existing law.........................................10

                         I. Purpose and Summary

    The purpose of S. 518 is to combat the abuse and diversion 
of prescription drugs by establishing a grant program, to be 
administered by the Department of Health and Human Services, 
that would support the expansion, in number and effectiveness, 
of State prescription drug monitoring programs (PMPs). Each 
State operating an authorized monitoring program would be 
required to cover Schedule II, III, and IV drugs.
    S. 518 will provide resources to States to establish PMPs 
or to States improving existing programs. The bill will also 
facilitate the interoperability of State systems to detect more 
rapidly drug diversion and abuse that crosses State lines.

                II. 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, 6.2 million Americans abused prescription drugs.
    In the approximately 20 States currently operating some 
form of a PMP, abuse and diversion have been reduced directly, 
through the identification of high-risk patient behavior or 
inappropriate provider practices; and indirectly, as growing 
awareness of these programs serves as a deterrent for potential 
wrongdoers. In general, PMPs operate by collecting from 
dispensers a basic set of information on prescriptions that are 
issued for controlled substances. In the most effective 
programs, providers, including physicians and pharmacists, may 
request the prescription histories of patients, permitting them 
to avoid providing controlled substances to ``doctor shoppers'' 
seeking multiple prescriptions to feed addiction or for 
diversion to the black market. Physicians are also provided 
with an important tool for early detection of patterns of 
addiction, presenting a new opportunity for early intervention 
and treatment. Other appropriate authorities, including public 
health entities, professional regulatory bodies, and law 
enforcement, may also access the PMP data under certain 
circumstances.
    However, several issues have emerged as clear barriers to 
the full realization of these programs' potential. It is clear 
that effective programs push illicit activity across State 
borders. At present, even in regions where the abuse and 
diversion problem is rampant, many States do not yet operate 
programs, and none have the ability to effectively share 
information across State lines. In addition, many States are 
finding their programs hampered by outdated design and need 
both the technical and the financial assistance that this 
legislation would provide in order to undertake essential 
upgrades.

             III. Legislative History and Committee Action

    Senator Sessions introduced S. 518 on March 3, 2005, with 
Senators Durbin, Kennedy, and Dodd. Additional cosponsors were 
added after introduction: Senators Alexander, Burr, Talent, and 
Vitter.
    On May 25, 2005, the Senate Committee on Health, Education, 
Labor, and Pensions met in Executive Session. After accepting a 
substitute amendment offered by Senators Sessions, Kennedy, 
Enzi and Dodd by unanimous voice vote, the committee approved 
S. 518, as amended, by unanimous voice vote.

              IV. Explanation of Bill and Committee Views

    The committee believes the diversion and abuse of legally 
manufactured prescription drugs is a pressing national issue. 
The purpose of the legislation is to foster the establishment 
of State-administered prescription drug monitoring systems to 
ensure that health care providers have access to accurate, 
timely prescription history information that they may use as a 
tool for the early identification of patients at risk for 
addiction. With the knowledge gained, health care providers 
will be able 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.
    The bill amends Part P of title III of the Public Health 
Service Act and adds a 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 implement controlled substance monitoring programs or to 
improve existing programs.
    Each State receiving grant approval from the Secretary will 
be awarded a minimum grant of 1.0 percent of that fiscal year's 
appropriation for the program. Additional fundingallocated to 
each State will be based on a ratio of the number of pharmacies within 
a State to the total number of pharmacies in States that have approved 
monitoring programs under this section. The committee recommends that 
the Secretary consult with the National Association of Boards of 
Pharmacy to determine the number of pharmacies in each State. The 
Secretary may adjust each State's allocation after considering cost 
estimates provided by the State.
    Prior to awarding a grant under this section, but not later 
than 6 months after the appropriation of funds, the Secretary 
will develop minimum standards for grant submissions by States 
and recommended penalties for the unlawful provision or use of 
any information found in the monitoring programs. Within 2 
years from the date the funds are first appropriated under this 
section, the Secretary will report to Congress on the 
recommended penalties and the extent to which existing 
penalties are meeting these recommendations.
    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. 
States planning to establish or implement a program must 
include a cost estimate, and proposed criteria for information 
security, electronic formatting, program access, and penalties 
for misuse of information in their application. States 
requesting funds for improving existing systems must include a 
cost estimate, a plan to ensure the program is in compliance 
with the standards and penalties in this section, and a plan to 
enable the State program to achieve interoperability with other 
State programs. States establishing, implementing, or improving 
a controlled substance monitoring program must have enacted 
legislation or regulations to permit the implementation of the 
program and the imposition of appropriate penalties for the 
unauthorized use and disclosure of information maintained by 
the program.
    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.
    The committee recognizes the concerns surrounding the 
potential for unauthorized access to the database and that 
patients will want to be notified if the privacy of their 
records is compromised. This legislation allows States to 
exceed the minimum privacy and penalty standards as outlined in 
the application criteria to protect the integrity of their 
electronic database.
    In order to increase the effectiveness of these programs, 
the legislation requires a State submitting an application that 
geographically borders another State that is operating a 
controlled substances monitoring program to describe how it 
will achieve interoperability between monitoring programs of 
these States.
    Sharing of information among neighboring States may help 
prevent diversion across State lines. In response to a request 
from a practitioner, law enforcement official, or PMP from a 
neighboring State, the PMP will prepare and provide a report 
summarizing the relevant information from the database to fully 
respond to the request. Further, in establishing 
interoperability agreements, the committee feels that PMPs can 
choose not to establish and/or cancel an agreement if they are 
concerned about the other State's privacy protections.
    In implementing or improving a PMP under this section, a 
State shall require all dispensers to report each dispensing in 
the State not later than 1 week after dispensing. The 
legislation defines a controlled substance as any schedule II, 
III, IV drug or any other drug identified by the State to be 
subject to the monitoring program.
    The direct administration of a controlled substance to an 
ultimate user is excluded from this reporting requirement. 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. Because the possibility for 
diversion is small in both of these instances, to require this 
reporting would present a significant burden on the monitoring 
programs without a resulting benefit. For this reason, 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 (or 
other identifying number used in lieu of such Registration 
Number) of the dispenser; (2) the 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; (3) the name, address, 
and telephone number of the ultimate user; (4) identification 
of the drug by a national drug code number; (5) the quantity 
dispensed; (6) number of refills ordered or as a first time 
request; (7) whether the drug was dispensed as a refill; (8) 
the date of dispensing; and (9) the date of origin of the 
prescription.
    The committee intends that States require dispensers to 
report this information in a uniform electronic format in 
accordance with the Secretary's criteria. In implementing or 
improving 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 disclose the information from the database upon 
request from a practitioner or local, State, or Federal law 
enforcement, narcotics control, licensure, disciplinary, or 
program authority that certifies that the information is for an 
individual investigation. The committee intends 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.
    The bill directs each State to establish a notification 
program to improve collaboration between practitioners and 
dispensers to identify and prevent the unlawful diversion or 
misuse of controlled substances. This notification program will 
be established in consultation with practitioners, dispensers, 
and other relevant and interested stakeholders. States may, to 
the extent permitted under State law, notify the appropriate 
authorities responsible for drug diversion investigations if 
the information in the monitoring database suggests an unlawful 
diversion or abuse of a controlled substance.
    The bill specifies that nothing in the legislation should 
be construed to restrict the ability of any authority to 
perform functions otherwise authorized by law; preempt any 
State law; preempt any State from imposing additional privacy 
protections; supersede Federal confidentiality requirements; or 
create a Federal private right of action.
    The bill directs the Secretary to study 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.
    The legislation also directs the Secretary to complete a 
study on the progress of States in establishing and 
implementing controlled substance monitoring programs. The 
study shall also determine the progress of States in achieving 
interoperability between monitoring programs, the feasibility 
of implementing a real-time electronic monitoring program, and 
an analysis of the privacy protections in place, and the 
feasibility of implementing technological alternatives to 
centralized data storage, such as peer-to-peer file sharing or 
data pointer systems, in monitoring programs and the potential 
for these alternatives to enhance privacy and security of 
individually identifiable data. Additionally, the study shall 
evaluate the penalties that States have enacted for the 
unauthorized use and disclosure of information maintained in 
monitoring programs. The Secretary shall submit a report to 
Congress on the results of this study.
    The bill authorizes States to establish an advisory council 
to assist in the establishment, implementation, or improvement 
of the monitoring program, however, no funds from this grant 
may be used to operate such council. In establishing an 
advisory council, the State should consult with appropriate 
professional boards and other interested parties. An advisory 
council can provide needed expertise to a drug monitoring 
authority, including assistance in developing standards for 
indicating unlawful diversion or abuse.
    The bill authorizes to be appropriated $15 million in each 
of fiscal years 2006 and 2007 and $10 million in each of fiscal 
years 2008 through 2010.
    The committee views this bill as an important step in 
reducing substance abuse across the Nation.
    According to the National Survey on Drug Use and Health 
(NSDUH), there was a significant increase in lifetime 
nonmedical use of pain relievers between 2002 and 2003 among 
person aged 12 years and older--from 29.6 million to 31.2 
million. The NSDUH also found that while 3 million americans 
receive treatment in a year, another 19 million remain without 
the services they need. As a result, the committee believes an 
important component of any strategy relating to prescription 
drug monitoring programs is a strong link with each State's 
single State Authority (SSA) for Substance Abuse--the office 
responsible for planning and managing the publicly funded 
substance abuse prevention and treatment service delivery 
system. This important link with the SSA will help provide 
access to clinically appropriate treatment services for persons 
addicted to prescription drugs and enhance opportunities to 
build a strong and comprehensive prevention portfolio related 
to the misuse of prescription drugs.

                            V. Cost Estimate

                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, June 6, 2005.
Hon. Mike Enzi,
Chairman, Committee on Health, Education, Labor, and Pensions,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 518, 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 Shinobu 
Suzuki.
            Sincerely,
                                      Elizabeth M. Robinson
                               (For Douglas Holtz-Eakin, Director).
    Enclosure.

S. 518--National All Schedules Prescription Electronic Reporting Act of 
        2005

    S. 518 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.
    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 S. 518 would cost $52 
million over the 2005-2010 period. Enacting S. 518 would have 
no effect on direct spending or revenues.
    S. 518 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 Shinobu Suzuki. 
This estimate was approved by Peter H. Fontaine, Deputy 
Assistance Director for Budget Analysis.

            VI. Application of Law to the Legislative Branch

    Section 102(b)(3) of Public Law 104-1, the Congressional 
Accountability Act (CAA) requires a description of the 
application of this bill to the legislative branch. This bill 
does not amend any act that applies to the legislative branch.

                    VII. Regulatory Impact Statement

    The committee has determined that the bill will not have a 
significant regulatory impact.

                   VIII. Section-by-Section Analysis


Section 1. Short title

    National All Schedules Prescription Electronic Reporting 
Act of 2005.

Section 2. Purpose

    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

    Amends Part P of title III of the Public Health Service Act 
by adding a new section 399O, Controlled Substance Monitoring 
Program.
    Subsection (a) tasks the Secretary of Health and Human 
Services with awarding grants to States to establish and 
implement controlled substance monitoring programs or to 
improve existing programs. Each State receiving grant approval 
from the Secretary will be awarded a minimum grant of 1.0 
percent of that fiscal year's appropriation for the program. 
Additional funding will be allocated to each State based on a 
ratio of the number of pharmacies within the State to the total 
number of pharmacies in all States that have approved 
monitoring programs.
    Subsection (b) tasks the Secretary with developing minimum 
standards for grant submissions by prior to awarding a grant.
    Subsection (c) outlines the application approval office. To 
receive a grant under this section, a State must submit an 
application in a time, manner, and containing suchassurances 
and information that the Secretary may require. States planning to 
establish or implement a program must include a cost estimate, and 
proposed criteria for information security, electronic formatting, 
program access, and penalties for misuse of information in their 
application. States requesting funds for improving existing systems 
must include a cost estimate, a plan to ensure the program is in 
compliance with the standards and penalties in this section, a plan to 
enable the State program to achieve interoperability with other State 
programs, and must have enacted legislation or regulations to permit 
the implementation of the program.
    A State submitting an application that geographically 
borders another State that is operating a controlled substances 
monitoring program under this section on the date of such 
application must describe how it will achieve interoperability 
between monitoring programs of these States.
    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.
    Subsection (d) specifies reporting requirements. This 
section requires States implementing or improving a PMP, to 
report each dispensing of a controlled substance in the State 
not later than one week after 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 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; 
(3) the name, address, and telephone number of the ultimate 
user; (4) identification of the drug by a national drug code 
number; (5) the quantity dispensed; (6) number of refills 
ordered or as a first time request; (7) whether the drug was 
dispensed as a refill; (8) the date of dispensing; and (9) the 
date of origin of the prescription.
    Subsection (e) requires dispensers to report this 
information in a uniform electronic format in accordance with 
the Secretary's criteria. In implementing or improving 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.
    Subsection (f) specifies that a State may disclose 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 disclose the 
information to local, State, or Federal law enforcement, 
narcotics control, licensure, disciplinary, or program 
authority that certifies that the information is for an 
individual investigation. In addition, the State may disclose 
information to another State or group of States with whom the 
State has an interoperability agreement. The State may also 
disclose 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.
    Subsection (g) is a limitation stating that in implementing 
or improving a controlled substance monitoring program, a State 
shall limit the information provided to the minimum necessary 
to accomplish the intended request and shall not disclose any 
individually identifiable information.
    Subsection (h) tasks the Secretary with specifying a 
uniform electronic format for the reporting, sharing, and 
disclosure of information.
    Subsection (i) lists rules of construction stating this 
legislation should not be construed to restrict the ability of 
any authority to perform functions otherwise authorized by law. 
This legislation should also not be construed to preempt any 
other State law. Additionally, this legislation should not be 
construed to preempt any State from imposing additional privacy 
protections. This bill should not be construed to supersede 
Federal confidentiality requirements. Furthermore, nothing in 
this bill shall be construed to create a Federal private right 
of action.
    Subsection (j) tasks the Secretary with conducting studies 
and reports and specifies not later than 180 days after the 
date of enactment, the Secretary 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 3 years after the date on which funds 
are first appropriated, the Secretary shall complete a study on 
the progress of States in establishing and implementing 
controlled substance monitoring programs. The study shall also 
determine the progress of States in achieving interoperability 
between monitoring programs, the feasibility of implementing a 
real-time electronic monitoring program, and an analysis of the 
privacy protections in place. Additionally, the study shall 
evaluate the penalties that States have enacted for the 
unauthorized use and disclosure of information maintained in 
monitoring programs. The Secretary shall submit a report to 
Congress on the results of this study.
    Subsection (k) gives States the authority to establish and 
advisory council to assist in the establishment, 
implementation, or improvement of the monitoring programs.
    Subsection (l) defines ``bona fide patient'', ``controlled 
substance'', ``dispense'', ``dispenser'', ``interoperability'', 
``nonidentifiable information'', ``practitioner'', ``State'', 
and ``ultimate user''.
    Subsection (m) authorizes to be appropriated $15 million in 
each of fiscal years 2006 and 2007 and $10 million in each of 
fiscal years 2008 through 2010.

                      IX. Changes in Existing Law

    In compliance with rule XXVI paragraph 12 of the Standing 
Rules of the Senate, the following provides a print of the 
statute or the part or section thereof to be amended or 
replaced existing law proposed to be omitted is enclosed in 
black brackets, new matter is printed in italic, existing law 
in which no change is proposed is shown in roman):

PUBLIC HEALTH SERVICE ACT

           *       *       *       *       *       *       *



                      PART P--ADDITIONAL PROGRAMS


SEC. 399L. CHILDREN'S ASTHMA TREATMENT GRANTS PROGRAM.

    (a) Authority To Make Grants.--
          (1) In general.--* * *

           *       *       *       *       *       *       *


SEC. 399N CHILDHOOD MALIGNANCIES.

    (a) In General.--* * *

           *       *       *       *       *       *       *

    (e) Authorization of Appropriations.--*  *  *

           *       *       *       *       *       *       *


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 paragraph (1) 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 certain 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, but not later than 6 months after 
the date on which funds are first appropriated under this 
section, the Secretary shall identify minimum requirements for 
use by States in submitting their proposed criteria under 
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 informationas 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 
                        database accuracy;
                          (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 in 
                        violation of applicable State law or 
                        regulation; and
                          (ix) 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 the 
        State to have 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 
        substances monitoring program under subsection (a)(1) 
        on the date of such application, andsuch 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) 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.
          (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 subsection (f)(1)(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) Certain confidentiality requirements.--Nothing in 
        this section shall be construed as preempting the 
        confidentiality requirements of part 2 and part 2a of 
        title 42, Code of Federal Regulations.
          (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) 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;
                          (iii) determines the feasibility of 
                        implementing a real-time electronic 
                        controlled substance monitoring 
                        program, including the costs associated 
                        with establishing such a program;
                          (iv) 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;
                          (v) 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
                          (vi) 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) 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.
    (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 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 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 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.
    (m) 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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