II 

109TH CONGRESS 

1ST SESSION S. 1978 

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, to establish recall 

authority regarding drugs, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

NOVEMBER 9, 2005 

Mr. SCHUMER introduced the following bill; which was read twice and referred 

to the Committee on Health, Education, Labor, and Pensions 

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, to 

establish recall authority regarding drugs, and for other 

purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as ‘‘Tim Fagan’s Law’’ or the 

5 ‘‘Counterfeit Drug Enforcement Act of 2005’’. 
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1 SEC. 2. SALE OR TRADE OF PRESCRIPTION DRUGS KNOW2 INGLY CAUSED TO BE ADULTERATED OR MIS3 BRANDED; MISREPRESENTATION AS AP4 PROVED DRUGS. 

5 (a) CRIMINAL PENALTY.—Section 303(a) of the Fed6 eral Food, Drug, and Cosmetic Act (21 U.S.C. 333(a)) 

7 is amended by adding at the end the following paragraphs: 

8 ‘‘(3) Notwithstanding paragraph (1) or (2), in 

9 the case of a person who violates section 301(a), 

10 301(b), or 301(c) with respect to a drug that is sub11 ject to section 503(b)(1)(B), if the person knowingly 

12 caused the drug to be adulterated or misbranded 

13 and sells or trades the drug, or the person purchases 

14 or trades for the drug knowing or having reason to 

15 know that the drug was knowingly caused to be 

16 adulterated or misbranded, the person shall be fined 

17 in accordance with title 18, United States Code, or 

18 imprisoned for any term of years or for life, or both. 

19 ‘‘(4) Notwithstanding paragraph (1) or (2), in 

20 the case of a person who violates section 301(d) with 

21 respect to a drug, if the person caused the drug to 

22 be misrepresented as a drug that is subject to sec23 tion 503(b)(1)(B) and for which an approved appli24 cation is in effect under section 505 and the person 

25 sells or trades the drug, or the person purchases or 

26 trades for the drug knowing or having reason to 
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1 know that the drug was knowingly caused to be so 

2 misrepresented, the person shall be fined in accord3 ance with title 18, United States Code, or impris4 oned for any term of years or for life, or both.’’. 

5 (b) NOTIFICATION OF FOOD AND DRUG ADMINIS6 TRATION BY MANUFACTURERS.—Section 505(k) of the 

7 Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(k)) 

8 is amended by adding at the end the following paragraph: 

9 ‘‘(3) A manufacturer of a drug that receives or 

10 otherwise becomes aware of information that reason11 ably suggests that a violation described in paragraph 

12 (3) or (4) of section 303(a) may have occurred with 

13 respect to the drug shall report such information to 

14 the Secretary not later than 48 hours after first re15 ceiving or otherwise becoming aware of the informa16 tion.’’. 

17 SEC. 3. USE OF TECHNOLOGIES FOR PREVENTING COUN18 TERFEITING OF DRUGS. 

19 Section 502 of the Federal Food, Drug, and Cosmetic 

20 Act (21 U.S.C. 352) is amended by adding at the end the 

21 following: 

22 ‘‘(x) If it is a drug and it is not manufactured in 

23 accordance with any regulations of the Secretary requiring 

24 the use of technologies that the Secretary has determined 

25 are technically feasible and will assist in preventing viola-
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1 tions of this Act to which paragraphs (3) and (4) of sec2 tion 303(a) apply (relating to the knowing adulteration or 

3 misbranding of drugs and the knowing misrepresentation 

4 of drugs).’’. 

5 SEC. 4. WHOLESALE DISTRIBUTION OF DRUGS; STATE6 MENTS REGARDING PRIOR SALE, PURCHASE, 

7 OR TRADE. 

8 (a) STRIKING OF EXEMPTIONS FOR MANUFACTUR9 ERS AND AUTHORIZED DISTRIBUTORS OF RECORD.—Sec10 tion 503(e) of the Federal Food, Drug, and Cosmetic Act 

11 (21 U.S.C. 353(e)) is amended— 

12 (1) in paragraph (1)— 

13 (A) by striking ‘‘and who is not the manu14 facturer or an authorized distributor of record 

15 of such drug’’; 

16 (B) by striking ‘‘to an authorized dis17 tributor of record or’’; and 

18 (C) by striking subparagraph (B) and in19 serting the following: 

20 ‘‘(B) The Secretary shall by regulation es21 tablish requirements that supersede subpara22 graph (A) (referred to in this subparagraph as 

23 ‘alternative requirements’) to identify the chain 

24 of custody of a drug subject to subsection (b) 

25 from the manufacturer of the drug throughout 
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1 the wholesale distribution of the drug to a phar2 macist who intends to sell the drug at retail if 

3 the Secretary determines that— 

4 ‘‘(i) the alternative requirements, 

5 which may include standardized anti-coun6 terfeiting or track-and-trace technologies, 

7 will identify such chain of custody or the 

8 identity of the discrete package of the drug 

9 from which the drug is dispensed with 

10 equal or greater certainty to the require11 ments of subparagraph (A); and 

12 ‘‘(ii) the alternative requirements are 

13 economically and technically feasible.’’; and 

14 (2) in paragraph (3), by striking ‘‘and sub15 section (d)—’’ in the matter preceding subparagraph 

16 (A) and all that follows through ‘‘the term ‘whole17 sale distribution’ means’’ in subparagraph (B) and 

18 inserting the following: ‘‘and subsection (d), the 

19 term ‘wholesale distribution’ means’’. 

20 (b) CONFORMING AMENDMENT.—Section 503(d) of 

21 the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 

22 353(d)) is amended by adding at the end the following: 

23 ‘‘(4) Each manufacturer of a drug subject to 

24 subsection (b) shall maintain at its corporate offices 
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1 a current list of the authorized distributors of record 

2 of such drug. 

3 ‘‘(5) For purposes of this subsection, the term 

4 ‘authorized distributors of record’ means any dis5 tributor that a manufacturer designates as an au6 thorized distributor of record and whose name the 

7 manufacturer makes publicly available.’’. 

8 (c) EFFECTIVE DATE.— 

9 (1) IN GENERAL.—The amendments made by 

10 subsections (a) and (b) shall take effect on January 

11 1, 2010. 

12 (2) HIGH-RISK DRUGS.— 

13 (A) IN GENERAL.—Notwithstanding para14 graph (1), the Secretary of Health and Human 

15 Services (referred to in this section as the ‘‘Sec16 retary’’) may apply the amendments made by 

17 subsections (a) and (b) before January 1, 2010, 

18 with respect to a prescription drug if the Sec19 retary— 

20 (i) determines that the drug is at high 

21 risk for being counterfeited; and 

22 (ii) publishes the determination and 

23 the basis for the determination in the Fed24 eral Register. 
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1 (B) PEDIGREE NOT REQUIRED.—Notwith2 standing a determination under subparagraph 

3 (A) with respect to a prescription drug, the 

4 amendments described in such subparagraph 

5 shall not apply with respect to a wholesale dis6 tribution of such drug if the drug is distributed 

7 by the manufacturer of the drug to a person 

8 that distributes the drug to a retail pharmacy 

9 for distribution to the consumer or patient, with 

10 no other intervening transactions. 

11 (C) LIMITATION.—The Secretary may 

12 make the determination under subparagraph 

13 (A) with respect to not more than 50 drugs be14 fore January 1, 2010. 

15 (3) ALTERNATIVE REQUIREMENTS.—The Sec16 retary shall issue regulations to establish the alter17 native requirements, referred to in the amendment 

18 made by subsection (a)(1), that take effect not later 

19 than— 

20 (A) January 1, 2008, with respect to a 

21 prescription drug determined under paragraph 

22 (2)(A) to be at high risk for being counter23 feited; and 

24 (B) January 1, 2010, with respect to all 

25 other prescription drugs. 
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1 (4) INTERMEDIATE REQUIREMENTS.—With re2 spect to the prescription drugs described under para3 graph (3)(B), the Secretary shall by regulation re4 quire the use of standardized anti-counterfeiting or 

5 track-and-trace technologies on such prescription 

6 drugs at the case and pallet level effective not later 

7 than January 1, 2008. 

8 SEC. 5. COUNTERFEIT DRUGS; INCREASED FUNDING FOR 

9 INSPECTIONS, EXAMINATIONS, AND INVES10 TIGATIONS. 

11 For the purpose of increasing the capacity of the 

12 Food and Drug Administration to conduct inspections, ex13 aminations, and investigations under the Federal Food, 

14 Drug, and Cosmetic Act with respect to violations de15 scribed in paragraphs (3) and (4) of section 303(a) of such 

16 Act (as added by this Act), there is authorized to be ap17 propriated $60,000,000 for each of the fiscal years 2006 

18 through 2010, in addition to other authorizations of ap19 propriations that are available for such purpose. 

20 SEC. 6. PUBLIC EDUCATION REGARDING COUNTERFEIT 

21 DRUGS. 

22 (a) IN GENERAL.—The Secretary of Health and 

23 Human Services shall carry out a program to educate the 

24 public and health care professionals on counterfeit drugs, 

25 including techniques to identify drugs as counterfeit. 
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1 (b) AUTHORIZATION OF APPROPRIATIONS.—For the 

2 purpose of carrying out subsection (a), there is authorized 

3 to be appropriated $5,000,000 for each of the fiscal years 

4 2006 through 2010, in addition to other authorizations 

5 of appropriations that are available for such purpose. 

6 SEC. 7. RECALL AUTHORITY REGARDING DRUGS. 

7 Subchapter A of chapter V of the Federal Food, 

8 Drug, and Cosmetic Act (21 U.S.C. 351 et seq.) is amend9 ed by inserting after section 506C the following: 

10 ‘‘SEC. 506D. RECALL AUTHORITY. 

11 ‘‘(a) ORDER TO CEASE DISTRIBUTION OF DRUG; 

12 NOTIFICATION OF HEALTH PROFESSIONALS.— 

13 ‘‘(1) IN GENERAL.—If the Secretary finds that 

14 there is a reasonable probability that a drug in15 tended for human use would cause serious, adverse 

16 health consequences or death, the Secretary shall 

17 issue an order requiring the appropriate person (in18 cluding the manufacturers, importers, distributors, 

19 or retailers of the drug)— 

20 ‘‘(A) to immediately cease distribution of 

21 the drug; and 

22 ‘‘(B) to immediately notify health profes23 sionals of the order and to instruct such profes24 sionals to cease administering or prescribing the 

25 drug. 
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1 ‘‘(2) INFORMAL HEARING.—An order under 

2 paragraph (1) shall provide the person subject to the 

3 order with an opportunity for an informal hearing, 

4 to be held not later than 10 days after the date of 

5 the issuance of the order, on the actions required by 

6 the order and on whether the order should be 

7 amended to require a recall of the drug involved. If, 

8 after providing an opportunity for such a hearing, 

9 the Secretary determines that inadequate grounds 

10 exist to support the actions required by the order, 

11 the Secretary shall vacate the order. 

12 ‘‘(b) ORDER TO RECALL DRUG.— 

13 ‘‘(1) IN GENERAL.—If, after providing an op14 portunity for an informal hearing under subsection 

15 (a)(2), the Secretary determines that the order 

16 should be amended to include a recall of the drug 

17 with respect to which the order was issued, the Sec18 retary shall, except as provided in paragraphs (2) 

19 and (3), amend the order to require a recall. The 

20 Secretary shall specify a timetable in which the drug 

21 recall will occur and shall require periodic reports to 

22 the Secretary describing the progress of the recall. 

23 ‘‘(2) CERTAIN ACTIONS.—An amended order 

24 under paragraph (1)— 
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1 ‘‘(A) shall not include recall of a drug from 

2 individuals; and 

3 ‘‘(B) shall provide for notice to individuals 

4 subject to the risks associated with the use of 

5 the drug. 

6 ‘‘(3) ASSISTANCE OF HEALTH PROFES7 SIONALS.—In providing the notice required by para8 graph (2)(B), the Secretary may use the assistance 

9 of health professionals who administered the drug 

10 involved to individuals or prescribed the drug for in11 dividuals. If a significant number of such individuals 

12 cannot be identified, the Secretary shall notify such 

13 individuals pursuant to section 705(b).’’. 

14 SEC. 8. AUTHORITY TO ISSUE SUBPOENAS WITH RESPECT 

15 TO PREVENTING THREATS TO THE PUBLIC 

16 HEALTH. 

17 Section 303 of the Federal Food, Drug, and Cosmetic 

18 Act (21 U.S.C. 333) is amended by adding at the end the 

19 following subsection: 

20 ‘‘(g) The Secretary and the Attorney General shall 

21 develop and implement a procedure through which the 

22 Chief Counsel in the Food and Drug Administration is au23 thorized to issue subpoenas regarding investigations under 

24 this Act of acts or omissions that may constitute a threat 

25 to the public health, including investigations of alleged vio-
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1 lations to which paragraph (3) or (4) of subsection (a) 

2 apply and alleged violations with respect to which the Sec3 retary is considering the use of authorities under section 

4 304.’’. 

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