To amend chapter V of the Federal Food, Drug, and Cosmetic Act to enhance the requirements for pharmacies that compound drug products.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Supporting Access to Formulated and 
Effective Compounded Drugs Act of 2012'' or the ``S.A.F.E. Compounded 
Drugs Act of 2012''.

SEC. 2. ENHANCED REQUIREMENTS FOR COMPOUNDED DRUGS.

    (a) In General.--Section 503A of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 353a) is amended--
            (1) in subsection (a)(1)(A), by inserting ``that is 
        registered with the Secretary under subsection (b)(6) (or is 
        subject to the exception under subsection (b)(6)(C))'' after 
        ``State licensed pharmacy'';
            (2) in subsection (b)--
                    (A) in paragraph (1)(D), by striking ``regularly or 
                in inordinate amounts (as defined by the Secretary)''; 
                and
                    (B) by adding at the end the following:
            ``(4) Notification.--
                    ``(A) Prescriber notification.--Before providing a 
                prescription order for a drug to be compounded under 
                subsection (a), the physician or other licensed 
                practitioner who will write such order shall--
                            ``(i) inform the individual patient for 
                        whom such order is being written that a 
                        compounded drug is being prescribed; and
                            ``(ii) provide such patient with a written 
                        document containing information concerning the 
                        availability, safety, and production of 
                        compounded drugs.
                    ``(B) Confirmation by pharmacist.--Except in the 
                case of a compounded drug product used in a procedure 
                described in subparagraph (C), a licensed pharmacist or 
                licensed physician who dispenses a compounded drug 
                under subsection (a) shall, at the time such drug is 
                dispensed--
                            ``(i) confirm that the patient (or the 
                        individual to whom the drug is delivered on 
                        behalf of the patient) understands that the 
                        drug is a compounded drug; and
                            ``(ii) provide a written document 
                        containing the information described in 
                        subparagraph (A)(ii).
                    ``(C) Provider notification.--Prior to providing a 
                health care service that will be conducted by a health 
                care provider in a health care setting (such as a 
                hospital or a physician's office) and during which 
                service a drug compounded under subsection (a) will be 
                administered to a patient for purposes of treating such 
                patient, the health care provider shall--
                            ``(i) inform the patient that a compounded 
                        drug will be used during the procedure; and
                            ``(ii) provide such patient with a written 
                        document containing the information described 
                        in subparagraph (A)(ii).
            ``(5) Labeling.--
                    ``(A) In general.--A drug product compounded under 
                subsection (a) shall be clearly labeled as a `non-FDA 
                approved compounded drug product'.
                    ``(B) Development of requirements.--In determining 
                the requirements for the label under subparagraph (A), 
                the Secretary--
                            ``(i) shall establish, and consult with, a 
                        temporary advisory committee on compounded drug 
                        product labeling requirements; and
                            ``(ii) may establish different labeling 
                        requirements for--
                                    ``(I) a compounded drug product 
                                intended for use by a health care 
                                provider in an office or treatment 
                                setting; and
                                    ``(II) a compounded drug product 
                                intended for any use not described in 
                                subclause (I).
            ``(6) Registration.--
                    ``(A) Establishment of process.--The Secretary, in 
                consultation with experts and representatives of 
                stakeholders including pharmacies, compounding 
                pharmacies, State regulators, and health care 
                providers, shall establish a process for pharmacies 
                described in subsection (a)(1)(A) to register as a 
                compounding pharmacy. Such registration shall be 
                conducted through an electronic method.
                    ``(B) Registration requirement.--Except as provided 
                in subparagraph (C), in order to be registered with the 
                Secretary for purposes of subsection (a)(1)(A), every 
                person who owns or operates a pharmacy shall submit to 
                the Secretary, in such time and manner as the Secretary 
                may require--
                            ``(i) contact information for the pharmacy;
                            ``(ii) the State or States that the 
                        pharmacy is licensed in;
                            ``(iii) the methods used by the facility in 
                        compounding; and
                            ``(iv) any additional information required 
                        by the Secretary, which may include the 
                        quantity of product compounded at such pharmacy 
                        for the purpose of determining if a drug 
                        manufacturing facility is inappropriately 
                        registering as a compounding pharmacy.
                    ``(C) Exception.--A pharmacy shall be exempt from 
                the requirement to register under subsection (a)(1)(A) 
                if the pharmacy--
                            ``(i) employs fewer than 20 full-time 
                        employees (or 20 full-time equivalents); and
                            ``(ii) performs traditional compounding of 
                        drug products for use in a single State.''; and
            (3) by adding at the end the following:
    ``(g) Database.--
            ``(1) In general.--The Secretary shall establish and 
        maintain a database of information on pharmacies compounding 
        drug products under subsection (a) that are licensed in more 
        than one State, including--
                    ``(A) the minimum standards for a compounding 
                pharmacy license in each State;
                    ``(B) relevant information provided to the 
                Secretary by State agencies that regulate pharmacies; 
                and
                    ``(C) other information determined relevant by the 
                Secretary.
            ``(2) Design.--The database under paragraph (1)--
                    ``(A) shall be accessible, as determined 
                appropriate by the Secretary, to State agencies that 
                regulate pharmacies that compound drug products;
                    ``(B) shall enable States and the Secretary to 
                share information to ensure appropriate oversight of 
                pharmacies that compound drug products; and
                    ``(C) shall be used by the Secretary to inform the 
                Federal inspection and oversight of pharmacies that 
                compound drug products to ensure that issues and 
                pharmacies identified in the database receive 
                appropriate oversight.
    ``(h) Minimum Standards.--
            ``(1) The Secretary shall establish minimum standards for 
        the safe production of compounded drug products.
            ``(2) The Secretary shall determine these minimum standards 
        and shall determine the drug products that must meet the 
        minimum standards.
            ``(3) The standards may include but is not limited to the 
        intended route of administration and if the drug is sterile or 
        non-sterile. If appropriate, the Secretary may consider the 
        different types of drug products and set appropriate minimum 
        standards for specific drug types or drug uses.
    ``(i) Training.--The Secretary shall conduct a series of regional 
training opportunities for State agencies that regulate pharmacies that 
compound drug products. These training opportunities should include 
information on the minimum standards discussed in (h), sample 
inspection protocol, and recordkeeping to facilitate the inclusion of 
State findings and inspections into the database discussed in (g).''.
    (b) Deadlines and Advisory Committees.--
            (1) Deadline for issuance of regulations.--Not later than 
        18 months after the date of enactment of this Act, the 
        Secretary of Health and Human Services shall issue regulations 
        to implement--
                    (A) paragraphs (4) and (5) of section 503A(b) of 
                the Federal Food, Drug, and Cosmetic Act, as added by 
                subsection (a); and
                    (B) subsection (g) of section 503A of such Act.
            (2) Labeling advisory committee.--
                    (A) Establishment.--The Secretary of Health and 
                Human Services shall establish an advisory committee on 
                labeling (as defined in section 201 of the Federal 
                Food, Drug, and Cosmetic Act (21 U.S.C. 321)) of 
                compounded drug products and shall consult such 
                committee in the development of the regulations under 
                paragraph (1)(A).
                    (B) Membership.--The advisory committee shall 
                include representatives of patients or consumers, 
                health care providers, compounding pharmacies, State 
                agencies that regulate compounding pharmacies, and at 
                least one member with expertise on clearly 
                communicating information in such labeling of drugs.
                    (C) Meetings.--The advisory committee shall hold an 
                initial meeting not later than 6 months after the date 
                of enactment of this Act.
                    (D) Recommendations.--Not later than 12 months 
                after the date of enactment of this Act, the advisory 
                committee shall submit to the Secretary of Health and 
                Human Services recommendations on the regulations under 
                paragraph (1)(A), including recommendations on the type 
                of information and language that should be included on 
                the labels of drug products that are compounded 
                pursuant to section 503A of the Federal Food, Drug, and 
                Cosmetic Act.
                    (E) Termination.--The advisory committee under this 
                subparagraph shall terminate upon the submission of the 
                recommendations under subparagraph (D).
            (3) Database advisory committee.--
                    (A) Establishment.--The Secretary of Health and 
                Human Services shall establish an advisory committee on 
                the database described in section 503A(g) of the 
                Federal Food, Drug, and Cosmetic Act, as added by 
                subsection (a), and shall consult such committee in the 
                development of the regulations under paragraph (1)(B).
                    (B) Membership.--The advisory committee shall 
                include representatives of patients or consumers, 
                health care providers, compounding pharmacies, State 
                agencies that regulate compounding pharmacies, and 
                information technology experts.
                    (C) Meetings.--The advisory committee shall hold an 
                initial meeting not later than 6 months after the date 
                of enactment of this Act.
                    (D) Recommendations.--Not later than 12 months 
                after the date of enactment of this Act, the advisory 
                committee shall submit to the Secretary of Health and 
                Human Services recommendations on the regulations under 
                paragraph (1)(B).
                    (E) Termination.--The advisory committee under this 
                subparagraph shall terminate upon the submission of the 
                recommendations under subparagraph (D).
            (4) Permanent advisory committee on pharmacy compounding.--
        The Secretary shall convene the Advisory Committee on Pharmacy 
        Compounding as appropriate to consider issues related to the 
        safety and availability of compounded drug products.

SEC. 3. REPORTS AND STUDIES.

    (a) Biannual Reports.--Not later than 6 months after the date of 
enactment of this Act, and at the end of each succeeding 6-month period 
that ends before the 25th month after the date of enactment of this 
Act, the Secretary of Health and Human Services shall submit to the 
Congress a report on the status of the implementation of the 
requirements of this Act, and the amendments made by this Act.
    (b) Third-Party Accreditation.--Not later than 12 months after the 
date of enactment of this Act, the Secretary shall submit to the 
Congress a report that contains--
            (1) a review of the standards used by organizations that 
        provide accreditation to compounding pharmacies; and
            (2) an evaluation of the effectiveness of such standards in 
        ensuring the production of safe and effective compounded drug 
        products.
    (c) Structure of State Oversight.--Not later than 18 months after 
the date of enactment of this Act, the Secretary shall submit to the 
Congress a report that contains--
            (1) a review of the models used by States to structure 
        their oversight of pharmacies that compound drug products, 
        including the structure of the agency or office responsible for 
        oversight and its relationship with the industry that it 
        regulates; and
            (2) consideration of how the structure and relationship of 
        State regulators may impact the development and enforcement of 
        regulations to ensure safe compounded drug products.
    (d) GAO Report.--The Comptroller General of the United States shall 
review--
            (1) the extent to which Federal health care programs (as 
        such term is defined in section 1128B(f) of the Social Security 
        Act (42 U.S.C. 1320a-7b)) ensure that compounded drug products 
        which are paid for by such programs are compounded in 
        facilities that comply with the requirements of the Federal 
        Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.);
            (2) whether the reimbursement rates for compounded drug 
        products under such Federal health care programs are 
        appropriate, taking into consideration the cost of production 
        of such compounded drug products; and
            (3) whether such Federal health care programs encourage the 
        use of compounded drug products in place of otherwise available 
        lawfully marketed drug products.

SEC. 4. PROHIBITIONS AND PENALTIES.

    (a) Prohibition of Violations of Section 503A.--Section 301(d) of 
the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 331(d)) is amended 
by inserting ``503A,'' before ``505,''.
    (b) Penalties.--Section 303(b) of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 333(b)) is amended by adding at the end the 
following:
            ``(8) Notwithstanding subsection (a), any person who 
        violates section 301(d) with respect to any compounded drug 
        product--
                    ``(A) knowingly and intentionally to defraud or 
                mislead; or
                    ``(B) with conscious or reckless disregard of a 
                risk of death or serious bodily injury,
        shall be fined under title 18, United States Code, imprisoned 
        for not more than 10 years, or both.''.

Summary: Supporting Access to Formulated and Effective Compounded Drugs Act of 2012 or S. A. F. E. Compounded Drugs Act of 2012 - Amends the Federal Food, Drug, and Cosmetic Act (FFDCA) with respect to the regulation of compounded drugs. Eliminates authority for compounding pharmacies to compound any drug product that is a copy of a commercially available drug. Establishes notification requirements before a patient is prescribed, dispensed, or administered a compounded drug, which must include providing the patient a document concerning the availability, safety, and production of such drugs. Requires a drug product compounded under the FFDCA to be clearly labeled as a “non-FDA approved compounded drug product.” Authorizes the Secretary of Health and Human Services (HHS) to establish different labeling requirements for compounded drugs. Requires the Secretary to establish a process for pharmacies to register as compounding pharmacies. Exempts pharmacies that employ fewer than 20 full-time employees and perform traditional compounding of drug products for use in a single state. Requires the Secretary to: (1) establish a database of information on compounding pharmacies licensed in more than one state for oversight purposes, (2) establish minimum standards for the safe production of compounded drugs as well as for which drugs must meet those standards, and (3) conduct regional training for state agencies that regulate compounding pharmacies. Directs the Secretary to establish advisory committees on labeling of compounded drugs and on the database under this Act. Requires the Secretary to convene an Advisory Committee on Pharmacy Compounding as appropriate to consider issues related to the safety and availability of compounded drugs.