A bill to amend the Federal Food, Drug, and Cosmetic Act to increase criminal penalties for the sale or trade of prescription drugs knowingly caused to be adulterated or misbranded, to modify requirements for maintaining records of the chain-of-custody of prescription drugs, and for other purposes.

Summary: Tim Fagan's Law or the Counterfeit Drug Enforcement Act of 2005 - Amends the Federal Food, Drug, and Cosmetic Act to establish a criminal fine and/or imprisonment for a person who: (1) knowingly causes a prescription drug to be adulterated, misbranded, or misrepresented as an approved prescription drug and sells or trades the drug; or (2) purchases or trades for such drug knowing or having reason to know that the drug was knowingly adulterated, misbranded, or misrepresented. Requires a manufacturer of a drug to notify the Secretary of Health and Human Services within 48 hours after first receiving or becoming aware of information that reasonably suggests that such a violation may have occurred.

Deems a drug to be misbranded if it is not manufactured in accordance with the use of technologies that the Secretary determines are technically feasible and will assist in preventing such violations.

Requires the Secretary to establish alternative requirements to the extent that such requirements provide greater certainty on the chain of custody and are economically and technically feasible.

Increases funding for Food and Drug Administration (FDA) inspections, examinations, and investigations.

Requires the Secretary to educate the public and health care professionals on counterfeit drugs.

Directs the Secretary: (1) upon a finding of reasonable probability that a drug intended for human use would cause serious health consequences or death, to issue an order requiring the appropriate person (including the manufacturers, importers, distributors, or retailers of the drug) to cease distribution of the drug and to notify and instruct health professionals to cease administering or prescribing the drug; and (2) amend the order to include a recall if necessary.

SECTION 1. SHORT TITLE.

    This Act may be cited as ``Tim Fagan's Law'' or the ``Counterfeit 
Drug Enforcement Act of 2005''.

SEC. 2. SALE OR TRADE OF PRESCRIPTION DRUGS KNOWINGLY CAUSED TO BE 
              ADULTERATED OR MISBRANDED; MISREPRESENTATION AS APPROVED 
              DRUGS.

    (a) Criminal Penalty.--Section 303(a) of the Federal Food, Drug, 
and Cosmetic Act (21 U.S.C. 333(a)) is amended by adding at the end the 
following paragraphs:
            ``(3) Notwithstanding paragraph (1) or (2), in the case of 
        a person who violates section 301(a), 301(b), or 301(c) with 
        respect to a drug that is subject to section 503(b)(1)(B), if 
        the person knowingly caused the drug to be adulterated or 
        misbranded and sells or trades the drug, or the person 
        purchases or trades for the drug knowing or having reason to 
        know that the drug was knowingly caused to be adulterated or 
        misbranded, the person shall be fined in accordance with title 
        18, United States Code, or imprisoned for any term of years or 
        for life, or both.
            ``(4) Notwithstanding paragraph (1) or (2), in the case of 
        a person who violates section 301(d) with respect to a drug, if 
        the person caused the drug to be misrepresented as a drug that 
        is subject to section 503(b)(1)(B) and for which an approved 
        application is in effect under section 505 and the person sells 
        or trades the drug, or the person purchases or trades for the 
        drug knowing or having reason to know that the drug was 
        knowingly caused to be so misrepresented, the person shall be 
        fined in accordance with title 18, United States Code, or 
        imprisoned for any term of years or for life, or both.''.
    (b) Notification of Food and Drug Administration by 
Manufacturers.--Section 505(k) of the Federal Food, Drug, and Cosmetic 
Act (21 U.S.C. 355(k)) is amended by adding at the end the following 
paragraph:
            ``(3) A manufacturer of a drug that receives or otherwise 
        becomes aware of information that reasonably suggests that a 
        violation described in paragraph (3) or (4) of section 303(a) 
        may have occurred with respect to the drug shall report such 
        information to the Secretary not later than 48 hours after 
        first receiving or otherwise becoming aware of the 
        information.''.

SEC. 3. USE OF TECHNOLOGIES FOR PREVENTING COUNTERFEITING OF DRUGS.

    Section 502 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
352) is amended by adding at the end the following:
    ``(x) If it is a drug and it is not manufactured in accordance with 
any regulations of the Secretary requiring the use of technologies that 
the Secretary has determined are technically feasible and will assist 
in preventing violations of this Act to which paragraphs (3) and (4) of 
section 303(a) apply (relating to the knowing adulteration or 
misbranding of drugs and the knowing misrepresentation of drugs).''.

SEC. 4. WHOLESALE DISTRIBUTION OF DRUGS; STATEMENTS REGARDING PRIOR 
              SALE, PURCHASE, OR TRADE.

    (a) Striking of Exemptions for Manufacturers and Authorized 
Distributors of Record.--Section 503(e) of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 353(e)) is amended--
            (1) in paragraph (1)--
                    (A) by striking ``and who is not the manufacturer 
                or an authorized distributor of record of such drug'';
                    (B) by striking ``to an authorized distributor of 
                record or''; and
                    (C) by striking subparagraph (B) and inserting the 
                following:
                    ``(B) The Secretary shall by regulation establish 
                requirements that supersede subparagraph (A) (referred 
                to in this subparagraph as `alternative requirements') 
                to identify the chain of custody of a drug subject to 
                subsection (b) from the manufacturer of the drug 
                throughout the wholesale distribution of the drug to a 
                pharmacist who intends to sell the drug at retail if 
                the Secretary determines that--
                            ``(i) the alternative requirements, which 
                        may include standardized anti-counterfeiting or 
                        track-and-trace technologies, will identify 
                        such chain of custody or the identity of the 
                        discrete package of the drug from which the 
                        drug is dispensed with equal or greater 
                        certainty to the requirements of subparagraph 
                        (A); and
                            ``(ii) the alternative requirements are 
                        economically and technically feasible.''; and
            (2) in paragraph (3), by striking ``and subsection (d)--'' 
        in the matter preceding subparagraph (A) and all that follows 
        through ``the term `wholesale distribution' means'' in 
        subparagraph (B) and inserting the following: ``and subsection 
        (d), the term `wholesale distribution' means''.
    (b) Conforming Amendment.--Section 503(d) of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 353(d)) is amended by adding at the 
end the following:
            ``(4) Each manufacturer of a drug subject to subsection (b) 
        shall maintain at its corporate offices a current list of the 
        authorized distributors of record of such drug.
            ``(5) For purposes of this subsection, the term `authorized 
        distributors of record' means any distributor that a 
        manufacturer designates as an authorized distributor of record 
        and whose name the manufacturer makes publicly available.''.
    (c) Effective Date.--
            (1) In general.--The amendments made by subsections (a) and 
        (b) shall take effect on January 1, 2010.
            (2) High-risk drugs.--
                    (A) In general.--Notwithstanding paragraph (1), the 
                Secretary of Health and Human Services (referred to in 
                this section as the ``Secretary'') may apply the 
                amendments made by subsections (a) and (b) before 
                January 1, 2010, with respect to a prescription drug if 
                the Secretary--
                            (i) determines that the drug is at high 
                        risk for being counterfeited; and
                            (ii) publishes the determination and the 
                        basis for the determination in the Federal 
                        Register.
                    (B) Pedigree not required.--Notwithstanding a 
                determination under subparagraph (A) with respect to a 
                prescription drug, the amendments described in such 
                subparagraph shall not apply with respect to a 
                wholesale distribution of such drug if the drug is 
                distributed by the manufacturer of the drug to a person 
                that distributes the drug to a retail pharmacy for 
                distribution to the consumer or patient, with no other 
                intervening transactions.
                    (C) Limitation.--The Secretary may make the 
                determination under subparagraph (A) with respect to 
                not more than 50 drugs before January 1, 2010.
            (3) Alternative requirements.--The Secretary shall issue 
        regulations to establish the alternative requirements, referred 
        to in the amendment made by subsection (a)(1), that take effect 
        not later than--
                    (A) January 1, 2008, with respect to a prescription 
                drug determined under paragraph (2)(A) to be at high 
                risk for being counterfeited; and
                    (B) January 1, 2010, with respect to all other 
                prescription drugs.
            (4) Intermediate requirements.--With respect to the 
        prescription drugs described under paragraph (3)(B), the 
        Secretary shall by regulation require the use of standardized 
        anti-counterfeiting or track-and-trace technologies on such 
        prescription drugs at the case and pallet level effective not 
        later than January 1, 2008.

SEC. 5. COUNTERFEIT DRUGS; INCREASED FUNDING FOR INSPECTIONS, 
              EXAMINATIONS, AND INVESTIGATIONS.

    For the purpose of increasing the capacity of the Food and Drug 
Administration to conduct inspections, examinations, and investigations 
under the Federal Food, Drug, and Cosmetic Act with respect to 
violations described in paragraphs (3) and (4) of section 303(a) of 
such Act (as added by this Act), there is authorized to be appropriated 
$60,000,000 for each of the fiscal years 2006 through 2010, in addition 
to other authorizations of appropriations that are available for such 
purpose.

SEC. 6. PUBLIC EDUCATION REGARDING COUNTERFEIT DRUGS.

    (a) In General.--The Secretary of Health and Human Services shall 
carry out a program to educate the public and health care professionals 
on counterfeit drugs, including techniques to identify drugs as 
counterfeit.
    (b) Authorization of Appropriations.--For the purpose of carrying 
out subsection (a), there is authorized to be appropriated $5,000,000 
for each of the fiscal years 2006 through 2010, in addition to other 
authorizations of appropriations that are available for such purpose.

SEC. 7. RECALL AUTHORITY REGARDING DRUGS.

    Subchapter A of chapter V of the Federal Food, Drug, and Cosmetic 
Act (21 U.S.C. 351 et seq.) is amended by inserting after section 506C 
the following:

``SEC. 506D. RECALL AUTHORITY.

    ``(a) Order To Cease Distribution of Drug; Notification of Health 
Professionals.--
            ``(1) In general.--If the Secretary finds that there is a 
        reasonable probability that a drug intended for human use would 
        cause serious, adverse health consequences or death, the 
        Secretary shall issue an order requiring the appropriate person 
        (including the manufacturers, importers, distributors, or 
        retailers of the drug)--
                    ``(A) to immediately cease distribution of the 
                drug; and
                    ``(B) to immediately notify health professionals of 
                the order and to instruct such professionals to cease 
                administering or prescribing the drug.
            ``(2) Informal hearing.--An order under paragraph (1) shall 
        provide the person subject to the order with an opportunity for 
        an informal hearing, to be held not later than 10 days after 
        the date of the issuance of the order, on the actions required 
        by the order and on whether the order should be amended to 
        require a recall of the drug involved. If, after providing an 
        opportunity for such a hearing, the Secretary determines that 
        inadequate grounds exist to support the actions required by the 
        order, the Secretary shall vacate the order.
    ``(b) Order To Recall Drug.--
            ``(1) In general.--If, after providing an opportunity for 
        an informal hearing under subsection (a)(2), the Secretary 
        determines that the order should be amended to include a recall 
        of the drug with respect to which the order was issued, the 
        Secretary shall, except as provided in paragraphs (2) and (3), 
        amend the order to require a recall. The Secretary shall 
        specify a timetable in which the drug recall will occur and 
        shall require periodic reports to the Secretary describing the 
        progress of the recall.
            ``(2) Certain actions.--An amended order under paragraph 
        (1)--
                    ``(A) shall not include recall of a drug from 
                individuals; and
                    ``(B) shall provide for notice to individuals 
                subject to the risks associated with the use of the 
                drug.
            ``(3) Assistance of health professionals.--In providing the 
        notice required by paragraph (2)(B), the Secretary may use the 
        assistance of health professionals who administered the drug 
        involved to individuals or prescribed the drug for individuals. 
        If a significant number of such individuals cannot be 
        identified, the Secretary shall notify such individuals 
        pursuant to section 705(b).''.

SEC. 8. AUTHORITY TO ISSUE SUBPOENAS WITH RESPECT TO PREVENTING THREATS 
              TO THE PUBLIC HEALTH.

    Section 303 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
333) is amended by adding at the end the following subsection:
    ``(g) The Secretary and the Attorney General shall develop and 
implement a procedure through which the Chief Counsel in the Food and 
Drug Administration is authorized to issue subpoenas regarding 
investigations under this Act of acts or omissions that may constitute 
a threat to the public health, including investigations of alleged 
violations to which paragraph (3) or (4) of subsection (a) apply and 
alleged violations with respect to which the Secretary is considering 
the use of authorities under section 304.''.