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[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2196 Introduced in House (IH)]

108th CONGRESS
  1st Session
                                H. R. 2196

To improve the quality, availability, diversity, personal privacy, and 
            innovation of health care in the United States.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                              May 21, 2003

 Mr. Rohrabacher introduced the following bill; which was referred to 
 the Committee on Ways and Means, and in addition to the Committees on 
    Government Reform, and Energy and Commerce, for a period to be 
subsequently determined by the Speaker, in each case for consideration 
  of such provisions as fall within the jurisdiction of the committee 
                               concerned

_______________________________________________________________________

                                 A BILL

 
To improve the quality, availability, diversity, personal privacy, and 
            innovation of health care in the United States.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Medical 
Independence, Privacy, and Innovation Act of 2003''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
                    TITLE I--TAX-RELATED PROVISIONS

Sec. 101. Findings.
Sec. 102. Deduction of medical expenses for individuals.
Sec. 103. Medical checking accounts.
Sec. 104. Decrease in minimum annual deductibles under a high 
                            deductible health plan for purposes of 
                            Archer MSAs.
                       TITLE II--MEDICAL PRIVACY

Sec. 201. Findings.
Sec. 202. Modification of regulations on privacy of individually 
                            identifiable health information.
Sec. 203. Restrictions on the use of the social security account 
                            number.
Sec. 204. Prohibition of governmentwide uniform identifying numbers.
Sec. 205. Prohibition of government-established identifiers.
 TITLE III--MODIFICATIONS REGARDING REGULATION OF DRUGS UNDER FEDERAL 
                      FOOD, DRUG, AND COSMETIC ACT

Sec. 301. Definition of drug.
Sec. 302. Striking of effectiveness requirement; modifications 
                            regarding patent listings, patent 
                            certifications, and thirty-month rule.
Sec. 303. Importation of certain drugs.

                    TITLE I--TAX-RELATED PROVISIONS

SEC. 101. FINDINGS.

    The Congress finds the following:
            (1) Current law confers tax benefits for health insurance 
        provided as an employee fringe benefit, but no similar tax 
        benefit for health insurance purchased by individuals thus 
        creating an unfair bias toward employer provided medical 
        insurance plans and an unfair discrimination against 
        individuals who seek marketplace alternatives to health 
        insurance.
            (2) Current law confers a tax benefits for third party 
        payment of medical expenses but no similar tax benefits for 
        direct individual payment of medical expenses. This has 
        promoted employer-provided third party payment systems and 
        discouraged direct doctor-patient relationships.
            (3) The current tax treatment of medical expenses has 
        resulted in a greatly distorted marketplace in medical 
        insurance where decreased opportunities for private personal 
        health insurance has reduced competition both for medical 
        insurance and health care services. This has resulted in an 
        increased cost of both health insurance and health care 
        services and fostered overuse of low high premium health 
        insurance plans.
            (4) The current tax treatment of medical expenses has 
        restricted the freedom of individuals to exercise direct 
        control over their health care dollars. The exclusion from 
        gross income for employer-provided health care with no 
        corresponding tax benefit for health insurance and health care 
        costs borne by individuals represents a strong incentive toward 
        employers group plans.
            (5) The tax codes preferment of employer-provided group 
        plans has triggered a marketplace response reflected in the 
        significant increases in large health care delivery, and the 
        creation of a relative few health care conglomerates in lieu of 
        thousands of competitive providers of medical insurance and 
        services. This has increasingly placed medical decisions in the 
        hands of health care bureaucracies and has eroded doctor-
        patient relationships.
            (6) The role of the marketplace in both medical insurance 
        and medical services should be strengthened. The discriminatory 
        tax policies in the area of health insurance and health care 
        should be ended. Private individuals should be able to contract 
        for their health insurance and health care delivery in an 
        atmosphere free of discriminatory tax pressures. High 
        deductible low premium as well as catastrophic alternatives in 
        health insurance should be viable options for all Americans.
            (7) Consumers should have the freedom to purchase the 
        health insurance types of their own choice, to choose their own 
        doctors and to make their own decisions about their health 
        care. Elimination of the discriminatory tax codes regarding 
        health choices will encourage greater choice and competition, 
        thereby reducing the cost of necessary insurance for 
all Americans. This will enable millions more Americans to obtain 
needed health coverage.

SEC. 102. DEDUCTION OF MEDICAL EXPENSES FOR INDIVIDUALS.

    (a) In General.--Subsection (a) of section 213 of the Internal 
Revenue Code of 1986 (relating to treatment of medical, dental, etc., 
expenses) is amended to read as follows:
    ``(a) Allowance of Deduction.--There shall be allowed as a 
deduction the expenses paid during the taxable year, not compensated 
for by insurance or otherwise, for medical care of the taxpayer, his 
spouse, or a dependent (as defined by section 152).''.
    (b) Deduction Allowed in Computing Adjusted Gross Income.--
Subsection (a) of section 62 of such Code is amended by inserting after 
paragraph (18) the following new paragraph:
            ``(19) Medical Care.--The deduction allowed by section 
        213.''.
    (c) Conforming Amendments.--
            (1) Section 56(b)(1) of such Code is amended by striking 
        subparagraph (B).
            (2) Section 67(b) is amended by striking paragraph (5).
            (3) Section 72(t)(B) of such Code is amended by striking 
        ``to the extent such distributions do not exceed the amount'' 
        and inserting ``which are''.
            (4) Sections 104(a) and 105(b) of such Code are both 
        amended by striking ``(and not in excess of)''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2003.

SEC. 103. MEDICAL CHECKING ACCOUNTS.

    (a) In General.--Subchapter F of chapter 1 of the Internal Revenue 
Code of 1986 (relating to exempt organizations) is amended by adding at 
the end the following:

                  ``PART IX--MEDICAL CHECKING ACCOUNTS

                              ``Sec. 530A. Medical checking accounts.

``SEC. 530A. MEDICAL CHECKING ACCOUNTS.

    ``(a) General Rule.--A medical checking account shall be exempt 
from taxation under this subtitle. Notwithstanding the preceding 
sentence, any medical checking account shall be subject to the taxes 
imposed by section 511 (relating to imposition of tax on unrelated 
business income of charitable, etc., organizations). Rules similar to 
the rules of paragraphs (2) and (4) of section 408(e) shall apply to 
medical checking accounts, and any amount treated as distributed under 
such rules shall be treated as not used to pay qualified medical 
expenses.
    ``(b) Deduction for Contributions.--
            ``(1) In general.--In the case of an individual, there 
        shall be allowed as a deduction an amount equal to the 
        aggregate amount paid in cash during the taxable year to a 
        medical checking account of the taxpayer.
            ``(2) Limitations.--
                    ``(A) Maximum annual contribution.--The deduction 
                under paragraph (1) for a taxable year shall not exceed 
                $1,000 ($2,000 in the case of a joint return).
                    ``(B) Maximum allowable deduction based on balance 
                in account.--No deduction shall be allowed for a 
                taxable year for any amount contributed to a medical 
                checking account if the sum of such amount plus the 
                balance in the account determined as the end of the 
                taxable year would exceed $2,000 ($4,000 in the case of 
                married individuals filing a joint return, a surviving 
                spouse, and a head of household).
    ``(c) Credit for Contributions.--
            ``(1) In general.--In the case of an individual, there 
        shall be allowed as a credit against the tax imposed by this 
        chapter for the taxable year an amount equal to the credit 
        amount with respect to contributions made during the taxable 
        year to the medical checking account of the taxpayer.
            ``(2) Credit amount.--For purposes of paragraph (1), the 
        credit amount is the lesser of--
                    ``(A) the total amount of contributions to the 
                medical checking account for the taxable year reduced 
                by the amount of contributions allowed as a deduction 
                under subsection (b), and
                    ``(B) $1,000.
    ``(d) Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Medical checking account.--The term `medical checking 
        account' means a trust created or organized in the United 
        States for the exclusive benefit of a qualified individual or 
        his beneficiaries, but only if the written governing instrument 
        creating the trust meets the following requirements:
                    ``(A) Except in the case of a rollover contribution 
                described in paragraph (4)(C), no contribution will be 
                accepted unless it is in cash, or it exceeds $1,000 
                ($2,000 in the case of married individuals filing a 
                joint return, a surviving spouse, and a head of 
                household).
                    ``(B) The trustee is a bank (as defined in section 
                408(n)), an insurance company (as defined in section 
                816), or another person who demonstrates to the 
                satisfaction of the Secretary that the manner in which 
                such person will administer the trust will be 
                consistent with the requirements of this section.
                    ``(C) No part of the trust assets will be invested 
                in life insurance contracts.
                    ``(D) The assets of the trust will not be 
                commingled with other property except in a common trust 
                fund or common investment fund.
                    ``(E) The interest of an individual in the balance 
                in his account is nonforfeitable.
            ``(2) Qualified medical expenses.--The term `qualified 
        medical expenses' means, with respect to an account holder, 
        amounts paid by such holder for medical care (as defined in 
        section 213(d)) for such individual, the spouse of such 
        individual, and any dependent (as defined in section 152) of 
        such individual, but only to the extent such amounts are not 
        compensated for by insurance or otherwise (including 
distributions from an Archer MSA which are not includible in gross 
income by reason of section 220(f)(1)).
            ``(3) Change in filing status.--In the case of a taxpayer 
        whose filing status changes during the taxable year, the 
        limitation under subparagraph (B) shall be apportioned among 
        the filing statuses of the taxpayer in accordance with 
        regulations prescribed by the Secretary.
            ``(4) Certain rules to apply.--Rules similar to the 
        following rules shall apply for purposes of this section:
                    ``(A) Section 219(d)(2) (relating to no deduction 
                for rollovers).
                    ``(B) Section 219(f)(3) (relating to time when 
                contributions deemed made).
                    ``(C) Section 219(f)(5) (relating to employer 
                payments).
                    ``(D) Section 220(f)(5) (relating to rollover 
                contributions).
                    ``(E) Section 220(f)(7) (relating to transfer of 
                account incident to divorce).
                    ``(F) Section 220(f)(8) (relating to treatment 
                after death of account holder).
                    ``(G) Section 408(g) (relating to community 
                property laws).
                    ``(H) Section 408(h) (relating to custodial 
                accounts).
    ``(e) Tax Treatment of Distributions.--
            ``(1) Amounts used for qualified medical expenses.--Any 
        amount paid or distributed out of a medical checking account 
        which is used exclusively to pay qualified medical expenses of 
        any account holder shall not be includible in gross income.
            ``(2) Inclusion of amounts not used for qualified medical 
        expenses.--Any amount paid or distributed out of a medical 
        checking account which is not used exclusively to pay the 
        qualified medical expenses of the account holder shall be 
        included in the gross income of such holder.
            ``(3) Additional tax on distributions not used for 
        qualified medical expenses.--For purposes of this section, 
        rules similar to the rules of section 220(f)(4) shall apply.
            ``(4) Coordination with medical expense deduction.--For 
        purposes of determining the amount of the deduction under 
        section 213, any payment or distribution out of a medical 
        checking account for qualified medical expenses shall not be 
        treated as an expense paid for medical care.
    ``(f) Reports.--The Secretary may require the trustee of a medical 
checking account to make such reports regarding such account to the 
Secretary and to the account holder with respect to contributions, 
distributions, and such other matters as the Secretary determines 
appropriate. The reports required by this subsection shall be filed at 
such time and in such manner and furnished to such individuals at such 
time and in such manner as may be required by the Secretary.''.
    (b) Tax on Excess Contributions.--Section 4973 of such Code 
(relating to tax on excess contributions to individual retirement 
accounts, certain section 403(b) contracts, and certain individual 
retirement annuities) is amended--
            (1) in subsection (a) by striking ``or'' at the end of 
        paragraph (3), by inserting ``or'' at the end of paragraph (4), 
        and by inserting after paragraph (4) the following:
            ``(5) a medical checking account (within the meaning of 
        section 530A(d)),'', and
            (2) by adding at the end the following new subsection:
    ``(g) Excess Contributions to Medical Checking Accounts.--For 
purposes of this section, in the case of medical checking accounts 
(within the meaning of section 530A(d)), the term `excess 
contributions' means the sum of--
            ``(1) the aggregate amount contributed for the taxable year 
        to the accounts (other than rollover contributions referred to 
        in section 530A(d)(4)(C)) which is neither excludable from 
        gross income under section 106(b) nor allowable as a deduction 
        or credit under section 530A for such year, and
            ``(2) the amount determined under this subsection for the 
        preceding taxable year, reduced by the sum of--
                    ``(A) the distributions out of the accounts which 
                were included in gross income under section 530A(e)(2), 
                and
                    ``(B) the excess (if any) of--
                            ``(i) the sum of the maximum amount 
                        allowable as a deduction or credit under 
                        section 530A (determined without regard to 
                        section 106(b)) for the taxable year, over
                            ``(ii) the amount contributed to the 
                        accounts for the taxable year.
For purposes of this subsection, any contribution which is distributed 
out of the medical savings account in a distribution to which section 
530A(d)(4)(B) applies shall be treated as an amount not contributed.''.
    (c) Tax on Prohibited Transactions.--
            (1) Section 4975 of such Code (relating to tax on 
        prohibited transactions) is amended by adding at the end of 
        subsection (c) the following new paragraph:
            ``(6) Special rule for medical checking accounts.--An 
        individual for whose benefit a medical checking account (within 
        the meaning of section 530A(d)) is established shall be exempt 
        from the tax imposed by this section with respect to any 
        transaction concerning such account (which would otherwise be 
        taxable under this section) if, with respect to such 
        transaction, the account ceases to be a medical checking 
        account by reason of the application of section 530A(e)(2) to 
        such account.''.
            (2) Paragraph (1) of section 4975(e) of such Code is 
        amended by striking ``or'' at the end of subparagraph (E), by 
        redesignating subparagraph (F) as subparagraph (G), and by 
        inserting after subparagraph (E) the following new 
        subparagraph:
                    ``(F) a medical checking account described in 
                section 530A(d), or''.
    (d) Failure To Provide Reports on Medical Checking Accounts.--
Paragraph (2) of section 6693(a) (relating to general rule on reports) 
is amended by striking ``and'' at the end of subparagraph (C), by 
striking the period at the end of subparagraph (D) and inserting
``, and'', and by inserting after subparagraph (D) the following new 
subparagraph:
                    ``(E) section 530A(g) (relating to medical savings 
                accounts).''.
    (e) Clerical Amendment.--The table of parts for subchapter F of 
chapter 1 of such Code is amended by adding at the end the following 
new item:

                ``Part IX. Medical Checking Accounts.''.

    (f) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2003.

SEC. 104. DECREASE IN MINIMUM ANNUAL DEDUCTIBLES UNDER A HIGH 
              DEDUCTIBLE HEALTH PLAN FOR PURPOSES OF ARCHER MSAS.

    (a) In General.--Subparagraph (A) of section 220(c)(2) of the 
Internal Revenue Code of 1986 (defining high deductible health plan) is 
amended--
            (1) in clause (i) by striking ``$1,500'' and inserting 
        ``$1,000'', and
            (2) in clause (ii) by striking ``$3,000'' and inserting 
        ``$2,000''.
    (b) Minimum Not Increased by Inflation.--Section 220(g) of such 
Code is amended by inserting ``(other than the $1,000 amount in 
subparagraph (A)(i) and the $2,000 amount in subparagraph (A)(ii) 
thereof)'' after ``subsection (c)(2)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2003.

                       TITLE II--MEDICAL PRIVACY

SEC. 201. FINDINGS.

    The Congress finds the following:
            (1) Medical privacy is an issue that concerns a growing 
        number of people in the United States. The culture of the 
        United States has always strongly favored a close physician-
        patient relationship. One of the key elements of this 
        relationship is the trust that a patient has that their 
        personal information will be treated as confidential by medical 
        personnel and will not be made public or accessible to other 
        persons without their permission.
            (2) In our increasingly complex times, two trends are 
        combining to exert pressure on maintaining the confidentiality 
        of health care information. First, public policy favors an 
        increased ability to provide protection against harmful 
        prescription interactions and for the reporting of medications' 
        serious side effects. Second, health care insurers desire to 
        take advantage of economies of scale in controlling health care 
        costs. These trends have greatly reduced expectations for the 
        privacy of health care information.
            (3) For the first time in our Nation's history, serious 
        loopholes have been written into privacy protections that were 
        created to protect the right of individuals. Positive changes 
        in privacy law have been made in recent years to guarantee that 
        patients are notified regarding the use of their health 
        information, have access to their own medical records, and are 
        able to request corrections of such records. These protections 
        must be maintained and strengthened.
            (4) One of the greatest needs in the area of health privacy 
        is to protect individuals against the use of their confidential 
        health information for profit-generating consumer marketing. 
        Patients justifiably have objections to this use of their 
        information without their consent.
            (5) There recently have been implemented a series of 
        alarming modifications to the standards previously finalized to 
        protect the privacy of individually identifiable health 
        information. These include changes in important definitions, 
        additions to the category of health care operations for which 
        patient consent for the use of their information is not 
        required, and changes in permitted use of patient information 
        without consent for public health purposes.
            (6) Recent rollbacks in health privacy need to be reversed, 
        and the individuals' confidence that their private 
        conversations with medical personnel will remain private needs 
        to be strengthened.
            (7) There is also a need to protect the integrity and 
        confidentiality of social security account numbers and to 
        prohibit Federal agencies from imposing national standards for 
        identification of individuals.

SEC. 202. MODIFICATION OF REGULATIONS ON PRIVACY OF INDIVIDUALLY 
              IDENTIFIABLE HEALTH INFORMATION.

    (a) Marketing.--
            (1) In general.--The modifications made by the August 2002 
        medical privacy rule to the definition of the term 
        ``marketing'' in section 164.501 of title 45, Code of Federal 
        Regulations, shall have no force or effect.
            (2) Authorizations for marketing.--Section 164.508 of title 
        45, Code of Federal Regulations, shall be construed and applied 
        so as to require that, if an authorization is required for a 
        use or disclosure of protected health information for 
        marketing, the authorization shall be considered invalid unless 
        it--
                    (A) uses the term ``marketing'';
                    (B) states that the purpose of the use or 
                disclosure involved is marketing; and
                    (C) describes the specific marketing uses and 
                disclosures authorized.
    (b) Consent for Uses or Disclosures To Carry Out Treatment, 
Payment, or Health Care Operations.--
            (1) In general.--The modifications made to section 164.506 
        of title 45, Code of Federal Regulations, by the August 2002 
        medical privacy rule shall have no force or effect.
            (2) Use or disclosure without consent.--
                    (A) In general.--Section 164.506 of title 45, Code 
                of Federal Regulations, insofar as it permits any use 
                or disclosure of protected health information without 
                consent, shall have no force or effect.
                    (B) Circumstances where consent not required.--A 
                health care provider may use or disclose an 
                individual's protected health information without 
                obtaining the prior consent of the individual only in 
                the following circumstances:
                            (i) To fill or dispense a prescription, and 
                        to search for drug interactions related to that 
                        prescription, if the health care provider 
                        obtains written consent from the individual as 
                        soon as practicable.
                            (ii) To carry out treatment of that 
                        individual if--
                                    (I) the individual has not executed 
                                a Universal Health Privacy Declaration 
                                promulgated under subparagraph (C);
                                    (II) the individual and the health 
                                care provider have not had in-person 
                                communication regarding such treatment; 
                                and
                                    (III) obtaining consent would be 
                                impracticable.
                    (C) Universal health privacy declaration.--
                            (i) In general.--The Secretary of Health 
                        and Human Services shall promulgate a document 
                        which shall be known as the ``Universal Health 
                        Privacy Declaration''.
                            (ii) Eligibility.--A Universal Health 
                        Privacy Declaration may be executed by any 
                        individual who is a citizen of the United 
                        States or an alien lawfully admitted to the 
                        United States for permanent residence.
                            (iii) Purpose.--A Universal Health Privacy 
                        Declaration, once executed by an individual 
                        described in clause (ii) and not revoked, shall 
                        be considered to prohibit, as provided under 
                        subparagraph (B), a health care provider from 
                        using or disclosing the individual's protected 
                        health information for treatment without 
                        obtaining the prior consent of the individual.
                            (iv) Enforcement.--There is established in 
                        the Department of Health and Human Services an 
                        Office of the Health Privacy Ombudsman, which 
                        shall be headed by an individual known as the 
                        ``Health Privacy Ombudsman''. The Health 
                        Privacy Ombudsman shall be charged with 
                        investigating complaints submitted by 
                        individuals described in clause (ii) regarding 
                        a use or disclosure of protected health 
                        information in violation of their Universal 
                        Health Privacy Declaration.
    (c) Disclosures for Law Enforcement Purposes.--Subparagraph (C) of 
section 164.506(f)(1)(ii) of title 45, Code of Federal Regulations 
shall have no force or effect.
    (d) Definitions.--
            (1) In general.--For purposes of this section:
                    (A) December 2000 medical privacy rule.--The term 
                ``December 2000 medical privacy rule'' means the final 
                rule on standards for privacy of individually 
                identifiable health information published on December 
                28, 2000, in the Federal Register (65 Fed. Reg. 82462), 
                including the provisions of title 45, Code of Federal 
                Regulations, revised or added by such rule.
                    (B) August 2002 medical privacy rule.--The term 
                ``August 2002 medical privacy rule'' means the final 
                rule, published on August 14, 2002, in the Federal 
                Register (67 Fed. Reg. 53182), that modified the 
                December 2000 medical privacy rule.
            (2) Other terms defined.--For purposes of this section:
                    (A) Health care provider.--The term ``health care 
                provider'' shall have the meaning given such term in 
                section 160.103 of title 45, Code of Federal 
                Regulations, as contained in the December 2000 medical 
                privacy rule.
                    (B) Disclosure; individual; protected health 
                information; treatment; use.--The terms ``disclosure'', 
                ``individual'', ``protected health information'', 
                ``treatment'', and ``use'' shall have the meaning given 
                such terms in section 164.501 of title 45, Code of 
                Federal Regulations, as contained in the December 2000 
                medical privacy rule.

SEC. 203. RESTRICTIONS ON THE USE OF THE SOCIAL SECURITY ACCOUNT 
              NUMBER.

    (a) Repeal of Provisions Authorizing Certain Usages of the Social 
Security Account Number.--Section 205(c)(2) of the Social Security Act 
(42 U.S.C. 405(c)(2)) is amended--
            (1) in subparagraph (C), by striking ``(C)(i) It is the 
        policy'' and all that follows through clause (vi);
            (2) by striking clause (ix) of subparagraph (C) and 
        redesignating clauses (vii) and (viii) of subparagraph (C) as 
        clauses (iv) and (v), respectively;
            (3) by striking subparagraphs (E) and (H);
            (4) by redesignating subparagraphs (F) and (G) as 
        subparagraphs (E) and (F), respectively; and
            (5) in subparagraph (E) (as redesignated by paragraph (4)), 
        by inserting ``(i)'' after ``(E)'', and by adding at the end 
        the following new clause:
    ``(ii) No individual shall be treated under any provision of law, 
rule, or regulation as required for any purpose to apply for assignment 
of a social security account number for himself or herself or on behalf 
of any other individual, except as a condition for receipt of benefits 
under this title as provided in clause (i).''.
    (b) New Rules Applicable to Social Security Account Numbers.--
Section 205(c)(2) of such Act is amended further--
            (1) by inserting after subparagraph (B) the following:
                    ``(C)(i) All social security account numbers issued 
                under this subsection shall be randomly generated.
                    ``(ii) Except as otherwise provided in this 
                paragraph--
                            ``(I) the social security account number 
                        issued under this subsection to any individual 
                        shall be the exclusive property of such 
                        individual, and
                            ``(II) the Social Security Administration 
                        shall not divulge the social security account 
                        number issued to any individual under this 
                        subsection to any agency or instrumentality of 
                        the Federal Government, to any State, political 
                        subdivision of a State, or agency or 
                        instrumentality of a State or political 
                        subdivision thereof, or to any other 
                        individual.
                    ``(iii) Clause (ii) shall not apply with respect to 
                the use of the social security account number as an 
                identifying number to the extent provided in section 
                6109(d) of the Internal Revenue Code of 1986 (relating 
                to use of the social security account number for social 
                security and related purposes).''.
    (c) Effective Dates and Related Rules.--
            (1) Effective dates.--Not later than 60 days after the date 
        of the enactment of this Act, the Commissioner of Social 
        Security shall publish in the Federal Register the date 
        determined by the Commissioner, in consultation with the 
        Secretary of the Treasury, to be the earliest date thereafter 
        by which implementation of the amendments made by this section 
        is practicable. The amendments made by subsection (a) shall 
        take effect on the earlier of such date or the date which 
        occurs 5 years after the date of the enactment of this Act. The 
        amendments made by subsection (b) shall apply with respect to 
        social security account numbers issued on or after such earlier 
        date. The amendments made by subsection (c) shall apply with 
        respect to calendar quarters and taxable years beginning on or 
        after such earlier date.
            (2) Reissuance of numbers.--The Commissioner of Social 
        Security shall ensure that, not later than 5 years after the 
        date of the enactment of this Act, all individuals who have 
        been issued social security account numbers under section 
        205(c) of the Social Security Act as of the date prior to the 
        earlier date specified in paragraph (1) can request new social 
        security account numbers in accordance with such section as 
        amended by this section. Upon issuance of such new social 
        security account numbers, any social security account numbers 
        issued to such individuals prior to such earlier date specified 
        in paragraph (1) shall be null and void and subject to the 
        requirements of section 205(c)(2)(C)(ii)(II) of such Act, as 
        amended by this section. Any individual to whom, or on behalf 
        of whom, such a new social security account number has been 
        issued pursuant to a request made under this paragraph shall be 
        exempt from any requirement under the laws of the United States 
        or of any State or political subdivision thereof, or under the 
        rules and regulations of any agency or instrumentality of the 
        United States or any State or political subdivision thereof, to 
        divulge, use, or acknowledge any social security account number 
        previously issued to such individual. All persons who obtain 
        new social security account numbers under this Act are granted 
        lawful immunity from any Federal, State, or local government 
        agency requirement to divulge, use, or acknowledge previously 
        issued social security account numbers. Nothing in this section 
        or the amendments made thereby shall be construed to preclude 
        the Social Security Administration and the Secretary of the 
        Treasury from cross-referencing such social security account 
        numbers newly issued to individuals pursuant to this paragraph 
        to the former social security account numbers of such 
        individuals for purposes of administering title II or title XVI 
        of such Act or administering the Internal Revenue Code of 1986 
        in connection with section 86, chapter 2, and subtitle C 
        thereof.

SEC. 204. PROHIBITION OF GOVERNMENTWIDE UNIFORM IDENTIFYING NUMBERS.

    (a) In General.--Except as authorized under section 205(c)(2) of 
the Social Security Act, any two agencies or instrumentalities of the 
Federal Government may not implement the same identifying number with 
respect to any individual.
    (b) Identifying Numbers.--For purposes of this section--
            (1) the term ``identifying number'', with respect to an 
        individual means any combination of alpha-numeric symbols which 
        serves to identify such individual; and
            (2) any identifying number and any one or more derivatives 
        of such number shall be treated as the same identifying number.
    (c) Effective Date.--The provisions of this section shall take 
effect January 1, 2005.

SEC. 205. PROHIBITION OF GOVERNMENT-ESTABLISHED IDENTIFIERS.

    (a) In General.--Subject to subsection (b), a Federal agency may 
not--
            (1) establish or mandate a uniform standard for 
        identification of an individual that is required to be used by 
        any other Federal agency, a State agency, or a private person 
        for any purpose other than the purpose of conducting the 
        authorized activities of the Federal agency establishing or 
        mandating the standard; or
            (2) condition receipt of any Federal grant or contract or 
        other Federal funding on the adoption, by a State, a State 
        agency, or a political subdivision of a State, of a uniform 
        standard for identification of an individual.
    (b) Transactions Between Private Persons.--Notwithstanding 
subsection (a), a Federal agency may not establish, mandate, or 
encourage the use of a uniform standard for identification of an 
individual that is required to be used within the agency, or by any 
other Federal agency, a State agency, or a private person, for the 
purpose of--
            (1) investigating, monitoring, overseeing, or otherwise 
        regulating a transaction to which the Federal Government is not 
        a party; or
            (2) administrative simplification.
    (c) Amendment of Privacy Act of 1974.--(1) Section 7 of the Privacy 
Act of 1974 (5 U.S.C. 552a note) is amended--
            (A) in subsection (a)(2), by striking ``respect to--'' and 
        all that follows through the end of subparagraph (B) and 
        inserting ``respect to any disclosure which is required by 
        Federal statute.''; and
            (B) in subsection (b), by inserting ``Federal'' before 
        ``statutory''.
    (2) Section 205(c)(2)(C)(ii) of the Social Security Act (42 U.S.C. 
405(c)(2)(C)(ii)) is amended by striking ``, unless section 7(a)'' and 
all that follows through the end of the section and inserting a period.
    (d) Enforcement.--
            (1) Amendments relating to privacy act of 1974.--Subsection 
        (g) of section 552a of title 5, United States Code, is 
        amended--
                    (A) in subparagraph (D), by inserting after ``this 
                section,'' the following: ``subsection (a) or (b) of 
                section 207 of the Medical Independence, Privacy, and 
                Innovation Act of 2003, or section 7 of the Privacy Act 
                of 1974,''; and
                    (B) by adding at the end the following new 
                paragraph:
    ``(6) For purposes of any suit brought under the provisions of 
subsection (g)(1)(D) for failure to comply with any provision of 
section 7 of the Privacy Act of 1974, the term `agency' shall include 
an agency of a State or local government.''.
            (2) Criminal penalties for misuse of social security 
        account numbers.--Section 208(a) of the Social Security Act (42 
        U.S.C. 408(a)) is amended--
                    (A) by adding ``or'' at the end of paragraph (8); 
                and
                    (B) by inserting after paragraph (8) the following 
                new paragraph:
            ``(9) is a medical service provider or health insurance 
        issuer and--
                    ``(A) uses a social security account number as a 
                medical patient tracking number, patient record number, 
                or prescription tracking number; or
                    ``(B) denies any person medical care or health 
                insurance coverage based upon such person's refusal to 
                disclose his or her social security account number;''.

 TITLE III--MODIFICATIONS REGARDING REGULATION OF DRUGS UNDER FEDERAL 
                      FOOD, DRUG, AND COSMETIC ACT

SEC. 301. DEFINITION OF DRUG.

    Section 201(g)(1) of the Federal Food, Drug, and Cosmetic Act (21 
U.S.C. 321(g)(1)) is amended in the first sentence by striking ``and 
(B) articles intended'' and all that follows and inserting the 
following: ``and (B) articles intended for use in the diagnosis, cure, 
or treatment (but not mitigation or prevention) of disease in man or 
other animals.''.

SEC. 302. STRIKING OF EFFECTIVENESS REQUIREMENT; MODIFICATIONS 
              REGARDING PATENT LISTINGS, PATENT CERTIFICATIONS, AND 
              THIRTY-MONTH RULE.

    (a) Striking of Effectiveness Requirement; Prohibition Against 
Listing of Certain Patents.--
            (1) In general.--Section 505(b) of the Federal Food, Drug, 
        and Cosmetic Act (21 U.S.C. 355(b)) is amended by striking 
        ``(b)(1)'' and all that follows through ``clinical trials 
        required by clause (A).'' and inserting the following:
    ``(b) Application.--
            ``(1) Contents.--
                    ``(A) In general.--Any person may file with the 
                Secretary an application with respect to any drug 
                subject to the provisions of subsection (a). Such 
                persons shall submit to the Secretary as a part of the 
                application--
                            ``(i) full reports of investigations which 
                        have been made to show whether or not such drug 
                        is safe for use;
                            ``(ii) a full list of the articles used as 
                        components of such drug;
                            ``(iii) a full statement of the composition 
                        of such drug;
                            ``(iv) a full description of the methods 
                        used in, and the facilities and controls used 
                        for, the manufacture, processing, and packing 
                        of such drug;
                            ``(v) such samples of such drug and of the 
                        articles used as components thereof as the 
                        Secretary may require; and
                            ``(vi) specimens of the labeling proposed 
                        to be used for such drug.
                    ``(B) Patent information.--
                            ``(i) Requirement.--The applicant shall 
                        file with the application the patent number and 
                        the expiration date of any patent which claims 
                        the drug for which the applicant submitted the 
                        application or which claims a method of using 
                        such drug and with respect to which a claim of 
                        patent infringement could reasonably be 
                        asserted if a person not licensed by the owner 
                        engaged in the manufacture use, or sale of the 
                        drug.
                            ``(ii) Types of patents.--
                                    ``(I) Patents subject to 
                                requirement.--The patents for which 
                                information under clause (i) 
is required to be filed with the Secretary are drug substance 
(ingredient) patents, drug product (formulation and composition) 
patents, product by process patents, and method of use patents.
                                    ``(II) Prohibition regarding 
                                certain patents.--Process patents, 
                                patents claiming packaging, patents 
                                claiming metabolites, and patents 
                                claiming intermediates are not patents 
                                described in subclause (I), and 
                                information on such patents may not be 
                                filed with the Secretary.
                                    ``(III) Patent regarding drug 
                                substance.--For patents that claim the 
                                drug substance, the applicant shall 
                                submit information only on patents that 
                                claim the drug substance that is the 
                                subject of the pending or approved 
                                application or that claim a drug 
                                substance that is the same as the 
                                active ingredient that is the subject 
                                of an approved or pending application 
                                within the meaning of subsection 
                                (j)(2)(A)(ii).
                                    ``(IV) Patent regarding drug 
                                product.--For patents that claim a drug 
                                product, the applicant shall submit 
                                information only on those patents that 
                                claim a drug product that is the 
                                subject of a pending or approved 
                                application.
                                    ``(V) Patent regarding method of 
                                use.--For patents that claim a method 
                                of use, the applicant shall submit 
                                information only on those patents that 
                                claim indications or other conditions 
                                of use that are the subject of a 
                                pending or approved application. For 
                                approved applications, the applicant 
                                shall identify the indication or other 
                                condition of use in the approved 
                                labeling that corresponds to the listed 
                                patent and claim identified.
                            ``(iii) Filing of patent after submission 
                        of application.--If a application is filed 
                        under this subsection for a drug and a patent 
                        which claims such drug or a method of using 
                        such drug is issued after the filing date but 
                        before approval of the application, the 
                        applicant shall amend the application to 
                        include the information required by clauses (i) 
                        and (ii).
                            ``(iv) Publication of patent information.--
                        Upon approval of the application, the Secretary 
                        shall publish information submitted under 
                        clauses (i) through (iii).
                    ``(C) Guidance regarding inclusion of women and 
                minorities in clinical trials.--The Secretary shall, in 
                consultation with the Director of the National 
                Institutes of Health and with representatives of the 
                drug manufacturing industry, review and develop 
                guidance, as appropriate, on the inclusion of women and 
                minorities in clinical trials required by subparagraph 
                (A)(i).''.
            (2) Conforming amendments.--The Federal Food, Drug, and 
        Cosmetic Act (21 U.S.C. 301 et seq.) is amended--
                    (A) in section 201(p)--
                            (i) by striking ``safety and effectiveness 
                        of'' and inserting ``safety of''; and
                            (ii) by striking ``safe and effective for 
                        use'' and inserting ``safe for use''; and
                    (B) in section 505--
                            (i) by striking ``safety and 
                        effectiveness'' each place such term appears 
                        and inserting ``safety'';
                            (ii) by striking ``safety or 
                        effectiveness'' each place such term appears 
                        and inserting ``safety''; and
                            (iii) in subsection (i)(1)(D), by striking 
                        ``pediatric safety and efficacy'' and inserting 
                        ``pediatric safety''.
    (b) Abbreviated Applications; Single Certification Regarding Patent 
Invalidity or Noninfringement; Single Thirty-Month Delay in Approval.--
Section 505(j)(2)(A) of the Federal Food, Drug, and Cosmetic Act (21 
U.S.C. 355(j)(2)(A)) is amended in the matter after and below clause 
(viii) by adding at the end the following sentence: ``With respect to a 
certification under clause (vii)(IV), an abbreviated application 
(whether or not amended) may not contain more than one such 
certification, without regard to patents filed after the date of the 
certification.''.

SEC. 303. IMPORTATION OF CERTAIN DRUGS.

    Chapter VIII of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
381 et seq.) is amended by striking section 804 and inserting the 
following:

                     ``importation of certain drugs

    ``Sec. 804. (a) Regulations.--The Secretary, after consultation 
with the United States Trade Representative and the Commissioner of 
Customs, shall promulgate regulations permitting pharmacists and 
wholesalers to import prescription drugs from foreign nations.
    ``(b) Limitation.--The regulations under subsection (a) shall 
require that safeguards be in place to ensure that each prescription 
drug imported under the regulations complies with section 505 
(including being safe for the intended use of the prescription drug) 
with sections 501 and 502 and with other applicable requirements of 
this Act.''.
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