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[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[S. 959 Introduced in Senate (IS)]

113th CONGRESS
  1st Session
                                 S. 959

   To amend the Federal Food, Drug, and Cosmetic Act with respect to 
                           compounding drugs.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                              May 15, 2013

 Mr. Harkin (for himself, Mr. Alexander, Mr. Roberts, Mr. Franken, and 
 Ms. Mikulski) 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 with respect to 
                           compounding drugs.

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

SECTION 1. SHORT TITLE; REFERENCES IN ACT.

    (a) Short Title.--This Act may be cited as the ``Pharmaceutical 
Compounding Quality and Accountability Act''.
    (b) References in Act.--Except as otherwise specified, amendments 
made by this Act to a section or other provision of law are amendments 
to such section or other provision of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 301 et seq.).

SEC. 2. REGULATION OF HUMAN AND ANIMAL DRUG COMPOUNDING.

    (a) Clarification of New Drug and New Animal Drug Status.--For 
purposes of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et 
seq.), the terms ``new drug'' (as defined in section 201(p) of such 
Act) and ``new animal drug'' (as defined in section 201(v) of such Act) 
shall include a compounded human drug and a compounded animal drug, 
respectively.
    (b) Regulation of Human and Animal Drug Compounding.--Section 503A 
(21 U.S.C. 353a) is amended to read as follows:

``SEC. 503A. HUMAN AND ANIMAL DRUG COMPOUNDING.

    ``(a) Scope.--
            ``(1) Compounding.--In this section, the terms 
        `compounding' and `compound'--
                    ``(A) include--
                            ``(i) the combining, admixing, mixing, 
                        diluting, reconstituting, or otherwise altering 
                        of a marketed drug;
                            ``(ii) compounding a drug from a bulk drug 
                        substance; and
                            ``(iii) repackaging, as defined in 
                        subsection (b)(5); and
                    ``(B) exclude mixing, reconstituting, or other such 
                acts with respect to a marketed drug that are limited 
                to and performed solely in accordance with specific 
                directions for such acts contained in approved labeling 
                provided by a drug's manufacturer, when performed upon 
                receipt of a prescription order for an identified 
                individual patient.
            ``(2) Dispensing not a sale.--In this section, the terms 
        `sell' or `resale' do not include dispensing to patients, or, 
        in the case of animal drugs, to the individual responsible for 
        providing care for the animal for which the drug is intended, 
        in accordance with State law, including any fee associated with 
        such dispensing.
            ``(3) Exemptions.--This section shall not apply to--
                    ``(A) medical gases;
                    ``(B) animal drugs that are subject to regulation 
                as biological products by the Secretary of Agriculture 
                under the Act commonly known as the Virus-Serum-Toxin 
                Act; or
                    ``(C) human blood and blood components for 
                transfusion.
    ``(b) Definitions.--In this section:
            ``(1) Compounding manufacturer.--
                    ``(A) In general.--The term `compounding 
                manufacturer' means a facility at one geographic 
                location or address--
                            ``(i) that compounds any sterile drug 
                        product without receiving a prescription order 
                        for such sterile drug product prior to 
                        beginning compounding, and distributes or 
                        offers to sell such compounded sterile drug 
                        product in interstate commerce; or
                            ``(ii) that repackages any preservative-
                        free sterile drug product or pools any sterile 
                        drug products, except as provided in paragraph 
                        (7)(B).
                    ``(B) Excluded activities.--Notwithstanding 
                subparagraph (A)(ii), a facility shall not be 
                considered a compounding manufacturer if such 
                facility--
                            ``(i) repackages drugs in accordance with 
                        section 506F or the final guidance described in 
                        section 506F(d); and
                            ``(ii) does not otherwise meet the 
                        definition of compounding manufacturer under 
                        subparagraph (A).
            ``(2) Pooling; pools.--The terms `pooling' and `pool'--
                    ``(A) mean taking a single drug approved under 
                section 505 or 512, conditionally approved under 
                section 571, included on the index established under 
                section 572(a)(1), or licensed under section 351 of the 
                Public Health Service Act from the container in which 
                it is distributed by the original manufacturer and 
                combining it with the same drug from one or more other 
                containers without or before further manipulating the 
                product (such as by diluting it or mixing it with 
                another, different drug or drugs);
                    ``(B) do not include combining the drug from two or 
                more separate containers of the same drug when a single 
                container of the drug is not sufficient to prepare a 
                single dose for administration to an individual 
                patient; and
                    ``(C) do not include combining the drug from two or 
                more separate containers of component products of a 
                total parenteral nutrition product, if such pooling, 
                and labeling and use of the finished total parenteral 
                nutrition product, comply with State pharmacy law.
            ``(3) Practitioner.--The term `practitioner' includes a 
        physician, veterinarian, or any other person that is authorized 
        to prescribe medication under State law.
            ``(4) Prescription; prescription order.--The term 
        `prescription' or `prescription order' means a prescription or 
        prescription order, as defined under applicable State law, that 
        complies with requirements applicable under such State law.
            ``(5) Repackage or repackaging.--The term `repackage' or 
        `repackaging' means taking a drug approved under section 505 or 
        512, conditionally approved under section 571, included on the 
        index established under section 572(a)(1), or licensed under 
        section 351 of the Public Health Service Act from the container 
        in which it is distributed by the original manufacturer and 
        placing it in a different container of the same or smaller size 
        without further manipulating the drug (such as by diluting it 
        or mixing it with another, different drug or drugs), unless 
        such repackaging is done pursuant to a prescription for an 
        identified individual patient.
            ``(6) Sterile drug product.--The term `sterile drug 
        product' means a drug that is--
                    ``(A) intended for parenteral administration;
                    ``(B) an ophthalmic or inhalation drug; or
                    ``(C) required to be sterile under Federal or State 
                law.
            ``(7) Traditional compounder.--
                    ``(A) In general.--The term `traditional 
                compounder' means an entity--
                            ``(i) wherein a drug is compounded by--
                                    ``(I) a licensed pharmacist, or 
                                other pharmacy personnel (to the extent 
                                permitted under State law), in a State-
                                licensed pharmacy or a Federal 
                                facility; or
                                    ``(II) a licensed physician or 
                                licensed veterinarian, to the extent 
                                permitted under State law;
                            ``(ii) that--
                                    ``(I) compounds a drug upon receipt 
                                of a prescription order for an 
                                identified individual patient; or
                                    ``(II) compounds a drug in limited 
                                quantities before receipt of a 
                                prescription order for an identified 
                                individual patient, to the extent 
                                permitted under State law, if such 
                                compounding is based on a history of 
                                the licensed pharmacist, licensed 
                                physician, or licensed veterinarian 
                                receiving prescription orders for the 
                                compounding of the drug, which orders 
                                have been generated solely within an 
                                established relationship between the 
                                licensed pharmacist, licensed 
                                physician, or licensed veterinarian 
                                and--
                                            ``(aa) such individual 
                                        patient for whom the 
                                        prescription order will be 
                                        provided, or, in the case of an 
                                        animal drug, such individual 
                                        responsible for providing care 
                                        for the animal for which the 
                                        drug is ordered; or
                                            ``(bb) the licensed 
                                        physician, licensed 
                                        veterinarian, or other licensed 
                                        practitioner who will write 
                                        such prescription order; and
                            ``(iii) that does not meet the definition 
                        of a compounding manufacturer under paragraph 
                        (1).
                    ``(B) Exceptions.--
                            ``(i) Hospitals and health systems.--
                                    ``(I) In general.--A pharmacy 
                                within a hospital, veterinary hospital, 
                                or health system that compounds a drug 
                                and dispenses such drug (which may 
                                include interstate shipment) within 
                                such hospital or health system or ships 
                                such drug for dispensing to patients 
                                with an established relationship with 
                                the hospital or health system (which 
                                may include interstate shipment), or 
                                that repackages preservative-free 
                                sterile drug product or pools sterile 
                                drug products, shall be considered a 
                                traditional compounder if such pharmacy 
                                otherwise meets the definition under 
                                subparagraph (A).
                                    ``(II) Health system defined.--For 
                                purposes of this subparagraph, the term 
                                `health system' means two or more 
                                hospitals or veterinary hospitals that 
                                are owned and operated by the same 
                                entity and that share access to 
                                databases with drug order information 
                                for patients or animals, as applicable. 
                                A health system includes both the 
                                inpatient and outpatient facilities of 
                                hospitals within the health system.
                            ``(ii) PET and radiopharmaceuticals.--A 
                        pharmacy that compounds positron emission 
                        tomography drugs or radiopharmaceuticals shall 
                        be considered a traditional compounder if it 
                        does not compound other drugs that would cause 
                        it to be a compounding manufacturer described 
                        in paragraph (1)(A).
    ``(c) Exemptions From Certain Requirements.--
            ``(1) Drugs compounded by traditional compounders.--
        Sections 501(a)(2)(B), 502(f)(1), 505 (in the case of a human 
        drug), section 512 (in the case of an animal drug), and section 
        351 of the Public Health Service Act (in the case of a 
        biological product) shall not apply to a compounded drug if 
        such drug--
                    ``(A) is compounded by a traditional compounder 
                that is in compliance with this section; and
                    ``(B) meets the requirements of this section 
                applicable to drugs compounded by traditional 
                compounders.
            ``(2) Drugs compounded by compounding manufacturers.--
        Sections 502(f)(1), 505 (in the case of a human drug), section 
        512 (in the case of an animal drug), and section 351 of the 
        Public Health Service Act (in the case of a biological product) 
        shall not apply to a compounded prescription drug if such 
        drug--
                    ``(A) is compounded by a compounding manufacturer--
                            ``(i) that is not licensed as a pharmacy in 
                        any State; and
                            ``(ii) that is in compliance with this 
                        section; and
                    ``(B) meets the requirements of this section 
                applicable to drugs compounded by compounding 
                manufacturers.
    ``(d) Drugs That May Not Be Compounded.--
            ``(1) In general.--The following drugs may not be 
        compounded, except under conditions specified by the Secretary:
                    ``(A) Drugs that are demonstrably difficult to 
                compound.--A drug or category of drugs that presents 
                demonstrable difficulties for compounding, which may 
                include a complex dosage form or biological product, as 
                designated by the Secretary pursuant to paragraph (2).
                    ``(B) Marketed drugs.--A drug, other than a 
                biological product, that is a copy of a marketed drug 
                approved under 505 or 512, conditionally approved under 
                section 571, or included on the index established under 
                section 572(a)(1), except as provided in paragraph (3).
                    ``(C) Biological products.--A drug that is a 
                biological product, except as provided in paragraph 
                (4).
                    ``(D) Drugs removed for safety and efficacy.--A 
                drug that appears on a list published by the Secretary 
                in the Federal Register of drugs that have been 
                withdrawn or removed from the market because such drug 
                or components of such drug have been found to be unsafe 
                or not effective, subject to paragraph (5).
            ``(2) Drugs that are demonstrably difficult to compound.--
                    ``(A) In general.--The Secretary may promulgate a 
                regulation that designates drugs or categories of drugs 
                that are demonstrably difficult to compound that may 
                not be compounded, or that may be compounded only under 
                conditions specified by the Secretary. Such 
                regulation--
                            ``(i) may include the designation of drugs 
                        or categories of drugs that are complex dosage 
                        forms or biological products, such as extended 
                        release products, metered dose inhalers, 
                        transdermal patches, and sterile liposomal 
                        products; and
                            ``(ii) shall specify, for each drug 
                        included on the list, whether the prohibition 
                        or condition applies to the use of the drug in 
                        humans, animals, or both.
                    ``(B) Interim list.--
                            ``(i) In general.--Before the effective 
                        date of the regulation promulgated under 
                        subparagraph (A), the Secretary may designate 
                        drugs that are complex dosage forms or 
                        biological products that cannot be compounded 
                        by--
                                    ``(I) publishing a notice of such 
                                drugs proposed for designation, 
                                including the rationale for such 
                                designation, in the Federal Register;
                                    ``(II) providing a period of not 
                                less than 60 days for comment on the 
                                notice; and
                                    ``(III) publishing a notice in the 
                                Federal Register designating the drugs 
                                that are complex dosage forms and 
                                biological products that cannot be 
                                compounded.
                            ``(ii) Sunset.--Any notice provided under 
                        clause (i) shall cease to have force or effect 
                        on the date that is 5 years after the date of 
                        enactment of the Pharmaceutical Compounding 
                        Quality and Accountability Act or on the 
                        effective date of the final regulation under 
                        subparagraph (A), whichever is earlier.
            ``(3) Exceptions regarding marketed drugs.--
                    ``(A) In general.--A drug (other than a biological 
                product) that is a copy of a marketed drug approved 
                under 505 or 512, conditionally approved under section 
                571, or included on the index established under section 
                572(a)(1), including variations of such drug compounded 
                from bulk substances, may be compounded only if--
                            ``(i)(I) the compounded variation produces 
                        for the patient a clinical difference between 
                        the compounded drug and such marketed drug, as 
                        determined by the prescribing practitioner, 
                        and, prior to beginning compounding a variation 
                        of such drug, the facility compounding the 
                        variation receives a prescription order 
                        specifying that the variation may be 
                        compounded; or
                            ``(II)(aa) such marketed drug, at the time 
                        of compounding a copy of such drug and at the 
                        time of distribution of the compounded drug, is 
                        on the drug shortage list under section 506E 
                        (in the case of a human drug), on the Current 
                        Drug Shortages list for veterinary products 
                        maintained on the Internet Web site of the Food 
                        and Drug Administration (in the case of an 
                        animal drug), or in the Secretary's sole 
                        discretion, has otherwise been identified by 
                        the Secretary as in shortage such as in a 
                        specific region or on a drug shortage list 
                        maintained by a private party; and
                            ``(bb) the traditional compounder or the 
                        compounding manufacturer notifies the Secretary 
                        not later than 3 calendar days after beginning 
                        the compounding, unless the Secretary waives 
                        the notice requirement; and
                            ``(ii) in the case of a marketed drug 
                        approved under section 505 that is subject to a 
                        risk evaluation and mitigation strategy 
                        approved with elements to assure safe use 
                        pursuant to section 505-1, the entity 
                        compounding the drug demonstrates to the 
                        Secretary that the entity will utilize controls 
                        that are comparable to the controls applicable 
                        under the relevant risk evaluation and 
                        mitigation strategy.
                    ``(B) Exclusion.--For purposes of this paragraph, 
                repackaging a marketed drug approved under section 505, 
                512, conditionally approved under section 571, or 
                included on the index established under section 
                572(a)(1), does not make the repackaged drug a copy of 
                such marketed drug.
            ``(4) Exceptions regarding biological products.--A drug 
        that is a biological product may be compounded only if--
                    ``(A) such drug is compounded from a licensed 
                biological product and the compounding does not involve 
                combining or mixing the licensed biological product 
                with--
                            ``(i) a bulk drug substance; or
                            ``(ii) another, different drug or drugs 
                        approved under 505 or 512, conditionally 
                        approved under section 571, included on the 
                        index established under section 572(a)(1), or 
                        licensed under section 351 of the Public Health 
                        Service Act, unless the compounding is limited 
                        to the combining, mixing, or diluting of 
                        licensed allergenic products; and
                    ``(B)(i) with respect to a traditional compounder, 
                the compounded biological product produces for the 
                patient a clinical difference between the compounded 
                drug and the licensed biological product, as determined 
                by the prescribing practitioner, and, prior to 
                beginning compounding such drug, the facility 
                compounding the variation receives a prescription order 
                specifying that the biological product may be 
                compounded;
                    ``(ii) with respect to a compounding manufacturer, 
                the compounded variation biological product produces 
                for the patient a clinical difference between the 
                compounded drug and the licensed biological product, as 
                determined by a licensed practitioner responsible for 
                the patient's care in a health care entity that 
                provides medical services through licensed prescribers 
                directly to patients, and, prior to beginning 
                compounding such drug, the compounding manufacturer 
                receives a duly authorized medical order from a 
                hospital or health system specifying that the 
                biological product may be compounded; or
                    ``(iii) the compounded biological product is an 
                allergenic product.
            ``(5) Requirement regarding drugs removed for safety or 
        efficacy.--The list published by the Secretary in the Federal 
        Register of drugs that have been withdrawn or removed from the 
        market, as described in paragraph (1)(D), shall specify whether 
        a human drug on such list may, notwithstanding the inclusion on 
        such list, be compounded for use in animals. The Secretary 
        shall update the lists described in subparagraphs (D) and (E) 
        of subsection (e)(2), as appropriate, to conform with the list 
        described in paragraph (1)(D).
    ``(e) Quality of Drug Ingredients.--
            ``(1) Human drugs.--A traditional compounder or a 
        compounding manufacturer shall--
                    ``(A) compound a human drug using only bulk drug 
                substances (as defined in regulations of the Secretary 
                published at section 207.3(a)(4) of title 21, Code of 
                Federal Regulations (or any successor regulations))--
                            ``(i) that--
                                    ``(I) comply with the standards of 
                                an applicable United States 
                                Pharmacopoeia or National Formulary 
                                monograph, if a monograph exists and 
                                has not been identified under paragraph 
                                (6), and the United States 
                                Pharmacopoeia chapters on pharmacy 
                                compounding;
                                    ``(II) if such a monograph does not 
                                exist, are drug substances that are 
                                components of drugs approved by the 
                                Secretary; or
                                    ``(III) if such a monograph does 
                                not exist and the drug substance is not 
                                a component of a drug approved by the 
                                Secretary, that appear on a list 
                                developed by the Secretary through 
                                regulations issued by the Secretary;
                            ``(ii) that are manufactured by an 
                        establishment that is registered under section 
                        510 (including a foreign establishment that is 
                        registered under section 510(i)); and
                            ``(iii) that are accompanied by valid 
                        certificates of analysis for each specific lot 
                        of bulk drug substance; and
                    ``(B) use ingredients (other than bulk drug 
                substances) that comply with the standards of an 
                applicable United States Pharmacopoeia or National 
                Formulary monograph, if a monograph exists and has not 
                been identified under paragraph (6), and with the 
                United States Pharmacopoeia chapter on pharmacy 
                compounding.
            ``(2) Animal drugs.--A traditional compounder or a 
        compounding manufacturer shall--
                    ``(A) compound an animal drug using only bulk drug 
                substances (as defined in regulations of the Secretary 
                published at section 207.3(a)(4) of title 21, Code of 
                Federal Regulations (or any successor regulations)) 
                that--
                            ``(i) are manufactured by an establishment 
                        that is registered under section 510 (including 
                        a foreign establishment that is registered 
                        under section 510(i)); and
                            ``(ii) are accompanied by valid 
                        certificates of analysis for each specific lot 
                        of bulk drug substance;
                    ``(B) use ingredients (other than bulk drug 
                substances) that comply with the standards of an 
                applicable United States Pharmacopoeia or National 
                Formulary monograph, if a monograph exists and has not 
                been identified under paragraph (6), and with the 
                United States Pharmacopoeia chapters on pharmacy 
                compounding;
                    ``(C) in the case of a compounded animal drug for 
                use in non-food-producing minor species, use bulk 
                substances that--
                            ``(i) comply with the standards of an 
                        applicable United States Pharmacopoeia or 
                        National Formulary monograph, if a monograph 
                        exists and has not been identified under 
                        paragraph (6), and with the United States 
                        Pharmacopoeia chapters on pharmacy compounding;
                            ``(ii) if such a monograph does not exist, 
                        are drug substances that are components of 
                        drugs approved by the Secretary; or
                            ``(iii) if such a monograph does not exist 
                        and the drug substance is not a component of a 
                        drug approved by the Secretary, that appear on 
                        a list developed by the Secretary through 
                        regulations issued by the Secretary;
                    ``(D) in the case of a compounded animal drug for 
                use in non-food-producing major species, beginning on 
                the date of publication of the list established in 
                accordance with paragraph (3)(A), shall use bulk 
                substances that are included on such list, subject to 
                paragraph (3)(C); and
                    ``(E) in the case of a compounded animal drug for 
                use in food-producing major and minor species, shall 
                use bulk substances that are included on a list 
                established by the Secretary of bulk substances 
                acceptable for use in compounding a drug for one or 
                more such species, in accordance with paragraph (4).
            ``(3) Non-food-producing major species listing procedure.--
                    ``(A) In general.--Not later than 30 days after the 
                effective date of the Pharmaceutical Compounding 
                Quality and Accountability Act, the Secretary shall 
                establish a list of bulk substances acceptable for 
                compounding a drug for use in non-food-producing major 
                species, and any conditions applicable to such use, and 
                may also identify bulk substances that the Secretary 
                has determined not acceptable for compounding with 
                respect to a drug for use in such species.
                    ``(B) Procedure.--In developing and updating the 
                list under subparagraph (A), the Secretary shall--
                            ``(i) publish a notice in the Federal 
                        Register identifying bulk substances proposed 
                        as acceptable and any bulk substance determine 
                        to be unacceptable, and the rationale for such 
                        proposed designations;
                            ``(ii) provide a period of not less than 30 
                        days for comment on the notice; and
                            ``(iii) publish a notice in the Federal 
                        Register designating the bulk substances 
                        acceptable, and any bulk substances determined 
                        to be unacceptable, and the rationale for such 
                        designations and determinations.
                    ``(C) Notification.--Upon initial publication of 
                the list under subparagraph (B)(iii), any traditional 
                compounder or compounding manufacturer that has 
                received and filled a prescription in the 60 days prior 
                to such publication for a compounded drug for a non-
                food-producing major species from a bulk substance not 
                addressed in the notice (either as acceptable or 
                unacceptable), and that reasonably expect to receive 
                and fill another prescription for such a drug for such 
                species within 60 days after such publication, may 
                notify the Secretary of such bulk substance within 30 
                days of such publication, in a manner to be determined 
                by the Secretary and published in the Federal Register 
                on or before publication of the list under subparagraph 
                (B)(iii). A traditional compounder or compounding 
                manufacturer that provides such notice shall not be 
                subject to the restriction in paragraph (2)(D) until 
                such time as the Secretary designates such bulk 
                substance as acceptable or determines it to be 
                unacceptable pursuant to the process described in 
                subparagraph (B)(iii).
                    ``(D) Modification of list.--The Secretary may 
                amend the list at any time, in accordance with process 
                described in subparagraph (B).
                    ``(E) Criteria.--In evaluating bulk substances for 
                purposes of subparagraph (B), the Secretary shall 
                consider, among other factors--
                            ``(i) the safety of the bulk substance;
                            ``(ii) historical use of the substance in 
                        pharmacy compounding;
                            ``(iii) evidence of the effectiveness of 
                        the bulk substance or lack of effectiveness;
                            ``(iv) whether any drug approved under 
                        section 505 or 512, conditionally approved 
                        under section 571, or included on the index 
                        established under section 572(a)(1), can be 
                        used on label, or any drug approved under 
                        section 505 or 512 can be used in an extralabel 
                        manner in accordance with section paragraphs 
                        (4) and (5) of section 512(a), to treat the 
                        applicable condition in the identified species; 
                        and
                            ``(v) whether a compounded drug appropriate 
                        to treat the applicable condition in the 
                        identified species could be obtained by 
                        manipulating a drug approved under 505 or 512, 
                        conditionally approved under section 571, or 
                        included on the index established under section 
                        572(a)(1).
            ``(4) Food-producing animals listing procedure.--In 
        establishing a list of designated bulk substances acceptable 
        for use in compounding a drug for use in food-producing major 
        and minor species under paragraph (2), and any conditions 
        applicable to such use, the Secretary shall--
                    ``(A) publish a notice in the Federal Register 
                identifying bulk substances proposed as acceptable and 
                any bulk substance determine to be unacceptable, and 
                the rationale for such designations;
                    ``(B) provide a period of not less than 30 days for 
                comment on the notice; and
                    ``(C) publish a notice in the Federal Register 
                designating the bulk substances acceptable for use in 
                compounding a drug for use in food-producing major and 
                minor species, and the rationale for such designations.
            ``(5) Withdrawal periods.--The requirements for 
        establishing substantially extended withdrawal periods in 
        accordance with section 530.20 of title 21, Code of Federal 
        Regulations (or any successor regulations) shall apply to 
        compounded animal drugs for use in food-producing animals that 
        are compounded using bulk substances.
            ``(6) Identification by secretary.--
                    ``(A) In general.--Notwithstanding the existence of 
                an applicable monograph under subparagraph (A)(i)(I) or 
                (B) of paragraph (1) or subparagraph (B) or (C)(i) of 
                paragraph (2), the Secretary may identify bulk 
                substances that the Secretary determines, based on 
                public health concerns, may not be used in compounding 
                a drug.
                    ``(B) Procedure.--In identifying the bulk 
                substances that may not be used in compounding, the 
                Secretary shall--
                            ``(i) publish a notice of such bulk 
                        substances proposed for identification in the 
                        Federal Register;
                            ``(ii) provide a period of not less than 60 
                        days for comment on the notice;
                            ``(iii) publish a notice in the Federal 
                        Register identifying the bulk substances that 
                        may not be used in compounding a drug; and
                            ``(iv) state whether the bulk is not 
                        suitable for compounding of human drugs, animal 
                        drugs, or both.
    ``(f) Requirements Regarding Wholesaling and Labeling Applicable to 
Traditional Compounders and Compounding Manufacturers.--
            ``(1) In general.--A compounded drug--
                    ``(A) may not be sold by an entity other than the 
                compounding manufacturer or traditional compounder that 
                compounded the drug;
                    ``(B) compounded by a compounding manufacturer may 
                not be sold to an entity other than a health care 
                entity that provides medical services through licensed 
                prescribers directly to patients or animals, or a 
                network of such providers, except that a compounding 
                manufacturer may transfer without profit a compounded 
                sterile drug to a licensed pharmacy if--
                            ``(i) the licensed pharmacy falls under the 
                        same corporate ownership as the compounding 
                        manufacturer;
                            ``(ii) the transfer of such compounded 
                        sterile drug is solely for the purpose of 
                        dispensing the compounded sterile drug to the 
                        end user, who has been instructed by the 
                        prescribing physician to self-administer such 
                        compounded sterile drug;
                            ``(iii) as of the date of enactment of the 
                        Pharmaceutical Compounding Quality and 
                        Accountability Act, the compounding 
                        manufacturer is an entity that provides 
                        pharmacy benefits management services on behalf 
                        of a health benefits plan;
                            ``(iv) the compounding manufacturer 
                        identifies itself to the Secretary upon 
                        registering under subsection (g)(2) as an 
                        entity that qualifies for the exemption under 
                        this subparagraph, and provides documentation 
                        of the compounding of such drugs as of the date 
                        of enactment of the Pharmaceutical Compounding 
                        Quality and Accountability Act, in a manner 
                        described by the Secretary; and
                            ``(v) the compounding manufacturer receives 
                        confirmation from the Secretary that the 
                        compounding manufacturer qualifies for the 
                        exemption under this subparagraph and the 
                        sterile drug or drugs for which the exemption 
                        applies; and
                    ``(C) in the case of a compounded drug sold to a 
                health care entity described in subparagraph (B), shall 
                be labeled `not for resale'.
            ``(2) Advertising and promotion.--The advertising and 
        promotion of compounded drugs shall not be false or misleading 
        in any particular.
    ``(g) Other Requirements Applicable to Compounding Manufacturers.--
            ``(1) Licensed pharmacist oversight.--A compounding 
        manufacturer shall ensure that a pharmacist licensed in the 
        State where the compounding manufacturer is located exercises 
        direct supervision over the operations of the compounding 
        manufacturer.
            ``(2) Registration of compounding manufacturers and 
        reporting of drugs.--
                    ``(A) Registration of compounding manufacturers.--
                            ``(i) Annual registration.--During the 
                        period beginning on October 1 and ending on 
                        December 31 each year, each compounding 
                        manufacturer shall register with the Secretary 
                        its name, place of business, and unique 
                        facility identifier (which shall conform to the 
                        requirements for the unique facility identifier 
                        established under section 510), and a point of 
                        contact e-mail address.
                            ``(ii) New compounding manufacturers.--Each 
                        compounding manufacturer, upon first engaging 
                        in the operations described in subsection 
                        (b)(1), shall immediately register with the 
                        Secretary and provide the information described 
                        under clause (i). The Secretary shall establish 
                        a timeline for registration for the first year 
                        following the effective date of the 
                        Pharmaceutical Compounding Quality and 
                        Accountability Act. In no case may registration 
                        be required until at least 60 days following 
                        publication of the timeline in the Federal 
                        Register.
                            ``(iii) Additional facilities.--Each 
                        compounding manufacturer duly registered in 
                        accordance with clauses (i) and (ii) shall 
                        immediately identify to the Secretary any 
                        additional facility that engages in the 
                        activities described in subsection (b)(1) and 
                        that is owned or operated in any State by the 
                        person that owns or operates the compounding 
                        manufacturer.
                            ``(iv) Availability of registration for 
                        inspection.--The Secretary shall make available 
                        for inspection, to any person so requesting, 
                        any registration filed pursuant to this 
                        subparagraph, except that any drug reporting 
                        information submitted pursuant to this 
                        subparagraph and the information accompanying 
                        such reporting shall be exempt from such 
                        inspection, unless the Secretary finds that 
                        such an exemption would be inconsistent with 
                        the protection of the public health.
                    ``(B) Drug reporting by compounding 
                manufacturers.--
                            ``(i) In general.--Each compounding 
                        manufacturer who registers with the Secretary 
                        under subparagraph (A) shall submit to the 
                        Secretary, once during the month of June of 
                        each year and once during the month of December 
                        of each year, a report--
                                    ``(I) identifying the drugs 
                                compounded by such compounding 
                                manufacturer during the previous 6-
                                month period; and
                                    ``(II) with respect to each drug 
                                identified under subclause (I), 
                                providing the active ingredient, the 
                                source of such active ingredient, the 
                                National Drug Code number of the source 
                                drug or bulk active ingredient, the 
                                strength of the active ingredient per 
                                unit, the dosage form and route of 
                                administration, the package 
                                description, the number of individual 
                                units produced, the National Drug Code 
                                number of the final product, and which 
                                conforms to other applicable 
                                requirements identified by the 
                                Secretary in accordance with clause 
                                (ii).
                            ``(ii) Form.--Each report under clause (i) 
                        shall be prepared in such form and manner as 
                        the Secretary may prescribe by regulation or 
                        guidance.
                    ``(C) Electronic registration and reporting.--
                Registrations and drug reporting under this paragraph 
                (including the submission of updated information) shall 
                be submitted to the Secretary by electronic means 
                unless the Secretary grants a request for waiver of 
                such requirement because use of electronic means is not 
                reasonable for the person requesting waiver.
                    ``(D) Risk-based inspection frequency.--
                            ``(i) In general.--Compounding 
                        manufacturers shall be subject to inspection 
                        pursuant to section 704.
                            ``(ii) Risk-based schedule.--The Secretary, 
                        acting through one or more officers or 
                        employees duly designated by the Secretary, 
                        shall inspect compounding manufacturers 
                        described in clause (i) in accordance with a 
                        risk-based schedule established by the 
                        Secretary.
                            ``(iii) Risk factors.--In establishing the 
                        risk-based schedule under clause (ii), the 
                        Secretary shall inspect compounding 
                        manufacturers according to the known safety 
                        risks of such compounding manufacturers, which 
                        shall be based on the following factors:
                                    ``(I) The compliance history of the 
                                compounding manufacturer.
                                    ``(II) The record, history, and 
                                nature of recalls linked to the 
                                compounding manufacturer.
                                    ``(III) The inherent risk of the 
                                drug compounded at the compounding 
                                manufacturer.
                                    ``(IV) The inspection frequency and 
                                history of the compounding 
                                manufacturer, including whether the 
                                compounding manufacturer has been 
                                inspected pursuant to section 704 
                                within the last 4 years.
                                    ``(V) Any other criteria deemed 
                                necessary and appropriate by the 
                                Secretary for purposes of allocating 
                                inspection resources.
            ``(3) Adverse event reporting.--
                    ``(A) Definitions.--In this paragraph:
                            ``(i) Adverse event.--The term `adverse 
                        event' means any health-related event 
                        associated with the use of a compounded drug 
                        that is adverse, including--
                                    ``(I) an event occurring in the 
                                course of the use of the drug in 
                                professional practice;
                                    ``(II) an event occurring from an 
                                overdose of the drug, whether 
                                accidental or intentional;
                                    ``(III) an event occurring from 
                                abuse of the drug;
                                    ``(IV) an event occurring from 
                                withdrawal of the drug; and
                                    ``(V) any failure of expected 
                                pharmacological action of the drug.
                            ``(ii) Serious adverse event.--The term 
                        `serious adverse event' means an adverse event 
                        that--
                                    ``(I) results in--
                                            ``(aa) death;
                                            ``(bb) an adverse drug 
                                        event that places the patient 
                                        at immediate risk of death from 
                                        the adverse drug event as it 
                                        occurred (not including an 
                                        adverse drug event that might 
                                        have caused death had it 
                                        occurred in a more severe 
                                        form);
                                            ``(cc) inpatient 
                                        hospitalization or prolongation 
                                        of existing hospitalization;
                                            ``(dd) a persistent or 
                                        significant incapacity or 
                                        substantial disruption of the 
                                        ability to conduct normal life 
                                        functions; or
                                            ``(ee) a congenital anomaly 
                                        or birth defect; or
                                    ``(II) based on appropriate medical 
                                judgment, may jeopardize the patient 
                                and may require a medical or surgical 
                                intervention to prevent an outcome 
                                described in subclause (I).
                    ``(B) Reports.--
                            ``(i) Adverse event reporting 
                        requirement.--
                                    ``(I) 15-day report.--If a 
                                compounding manufacturer becomes aware 
                                of any serious adverse event, such 
                                manufacturer shall submit reports of 
                                each instance to the Secretary as soon 
                                as practicable, but in no case later 
                                than 15 calendar days after the initial 
                                receipt of the applicable information. 
                                Such manufacturer shall investigate and 
                                submit to the Secretary followup 
                                reports for each such instance not 
                                later than 15 calendar days after 
                                receipt of new information or as 
                                requested by the Secretary. Unless and 
                                until the Secretary establishes the 
                                content and format of adverse event 
                                reports by guidance or regulation, 
                                reports shall be submitted in 
                                accordance with the content and format 
                                requirements under section 310.305 of 
                                title 21, Code of Federal Regulations 
                                (or any successor regulations) (in the 
                                case of human drugs), section 600.80 of 
                                title 21, Code of Federal Regulations 
                                (or any successor regulations) (in the 
                                case of biological products), or 
                                section 514.80 of title 21, Code of 
                                Federal Regulations (or any successor 
                                regulations) (in the case of animal 
                                drugs).
                                    ``(II) Annual report.--Compounding 
                                manufacturers that report serious 
                                adverse events shall submit in December 
                                of each year a narrative summary of any 
                                analysis of each report submitted under 
                                subclause (I), including a history of 
                                actions taken during the year because 
                                of each report, using the content, 
                                format, and manner established by the 
                                Secretary by guidance or regulation. 
                                Until such time as the Secretary 
                                publishes such guidance or regulation, 
                                each compounding manufacturer shall 
                                retain such summaries as part of the 
                                records to be maintained in accordance 
                                with subparagraph (C).
                            ``(ii) Product quality reporting 
                        requirement.--Not later than 3 calendar days 
                        after the compounding manufacturer becomes 
                        aware of information pertaining to sterility, 
                        stability, or other product quality concerns 
                        that could result in serious adverse events, 
                        the compounding manufacturer shall submit to 
                        the Secretary a product quality report, in a 
                        form and manner established by the Secretary by 
                        guidance or regulation.
                    ``(C) Maintenance of records.--A compounding 
                manufacturer shall maintain for a period of 10 years 
                records of all serious adverse drug events known to the 
                compound manufacturer in accordance with section 
                314.80(i) of title 21, Code of Federal Regulations (or 
                any successor regulation), or as otherwise directed by 
                the Secretary in regulations.
            ``(4) Labeling of drugs.--
                    ``(A) Label.--The label of a drug compounded by a 
                compounding manufacturer shall include--
                            ``(i) the statement `This is a compounded 
                        drug.' or a reasonable comparable alternative 
                        statement (as specified by the Secretary) that 
                        identifies the drug as a compounded drug;
                            ``(ii) the name, address, and phone number 
                        of the applicable compounding manufacturer; and
                            ``(iii) with respect to the compounded 
                        drug--
                                    ``(I) the lot or batch number;
                                    ``(II) the established name of the 
                                medication;
                                    ``(III) the dosage form and 
                                strength;
                                    ``(IV) the statement of quantity or 
                                volume, as appropriate;
                                    ``(V) in the case of a drug 
                                intended for use in a food-producing 
                                animal, the withdrawal period 
                                established pursuant to subsection 
                                (e)(5) to ensure that no residues from 
                                the compounded drug can be detected in 
                                edible tissues of the treated animal;
                                    ``(VI) the date that the drug was 
                                compounded;
                                    ``(VII) the expiration date;
                                    ``(VIII) storage and handling 
                                instructions;
                                    ``(IX) the National Drug Code 
                                number, if available;
                                    ``(X) the `not for resale' 
                                statement required as required by 
                                subsection (f)(1)(C); and
                                    ``(XI) subject to subparagraph 
                                (B)(i), a list of active and inactive 
                                ingredients, identified by established 
                                name and the quantity or proportion of 
                                each ingredient.
                    ``(B) Container.--The container from which the 
                individual units of a drug compounded by a compounding 
                manufacturer are removed for dispensing or for 
                administration (such as a plastic bag containing 
                individual product syringes) shall include--
                            ``(i) the information described under 
                        subparagraph (A)(iii)(XI), if there is not 
                        space on the label for such information;
                            ``(ii) the following information to 
                        facilitate adverse event reporting: 
                        www.fda.gov/medwatch and 1-800-FDA-1088; and
                            ``(iii) the directions for use, including 
                        dosage and administration, as appropriate.
                    ``(C) Additional information.--The label and 
                labeling of a drug compounded by a compounding 
                manufacturer shall include any other information as 
                determined necessary and specified in regulations 
                promulgated by the Secretary.
    ``(h) Compounding Manufacturer Establishment and Reinspection 
Fees.--
            ``(1) Definitions.--In this subsection--
                    ``(A) the term `affiliate' has the meaning given 
                such term in section 735(11);
                    ``(B) the term `gross annual sales' means the total 
                worldwide gross annual sales, in United States dollars, 
                for a compounding manufacturer, including the sales of 
                all the affiliates of the compounding manufacturer; and
                    ``(C) the term `reinspection' means, with respect 
                to a compounding manufacturer, one or more inspections 
                conducted under section 704 subsequent to an inspection 
                conducted under such provision which identified 
                noncompliance materially related to an applicable 
                requirement of this Act, specifically to determine 
                whether compliance has been achieved to the Secretary's 
                satisfaction.
            ``(2) Establishment and reinspection fees.--For fiscal year 
        2015 and each subsequent fiscal year, the Secretary shall, in 
        accordance with this subsection, assess and collect--
                    ``(A) an annual establishment fee from each 
                compounding manufacturer to cover inspection-related 
                costs relating to inspections of drug compounders for 
                such year; and
                    ``(B) a reinspection fee from each compounding 
                manufacturer subject to a reinspection in such fiscal 
                year.
            ``(3) Establishment and reinspection fee setting.--The 
        Secretary shall establish the establishment and reinspection 
        fee to be collected under this subsection for each fiscal year, 
        based on the methodology described in paragraph (4) and shall 
        publish such fee in a Federal Register notice not later than 60 
        days before the start of each such year.
            ``(4) Amount of establishment and reinspection fee.--
                    ``(A) In general.--Except as provided in 
                subparagraph (D), the amount of the annual 
                establishment fee and the reinspection fee (if 
                applicable) under paragraph (2) for each compounding 
                manufacturer in a fiscal year shall be equal to the sum 
                of--
                            ``(i)(I) $15,000 per compounding 
                        manufacturer, multiplied by
                            ``(II) the inflation adjustment factor 
                        described in subparagraph (B); plus
                            ``(ii) the small business adjustment factor 
                        described in subparagraph (C).
                    ``(B) Inflation adjustment factor.--
                            ``(i) In general.--For fiscal year 2015 and 
                        subsequent fiscal years, the revenues 
                        established in subparagraph (A) shall be 
                        adjusted by the Secretary by notice, published 
                        in the Federal Register, for a fiscal year by 
                        the amount equal to the sum of--
                                    ``(I) one;
                                    ``(II) the average annual percent 
                                change in the cost, per full-time 
                                equivalent position of the Food and 
                                Drug Administration, of all personnel 
                                compensation and benefits paid with 
                                respect to such positions for the first 
                                3 years of the preceding 4 fiscal 
                                years, multiplied by the proportion of 
                                personnel compensation and benefits 
                                costs to total costs of an average 
                                full-time equivalent position of the 
                                Food and Drug Administration for the 
                                first 3 years of the preceding 4 fiscal 
                                years, and
                                    ``(III) the average annual percent 
                                change that occurred in the Consumer 
                                Price Index for urban consumers (U.S. 
                                City Average; Not Seasonally Adjusted; 
                                All items; Annual Index) for the first 
                                3 years of the preceding 4 years of 
                                available data multiplied by the 
                                proportion of all costs other than 
                                personnel compensation and benefits 
                                costs to total costs of an average 
                                full-time equivalent position of the 
                                Food and Drug Administration for the 
                                first 3 years of the preceding 4 fiscal 
                                years.
                            ``(ii) Compounded basis.--The adjustment 
                        made each fiscal year under clause (i) shall be 
                        added on a compounded basis to the sum of all 
                        adjustments made each fiscal year after fiscal 
                        year 2014 under clause (i).
                    ``(C) Small business adjustment factor.--The small 
                business adjustment factor described in subparagraph 
                (A)(ii) shall be an amount established by the Secretary 
                for each fiscal year based on the Secretary's estimate 
                of--
                            ``(i) the number of small businesses that 
                        will pay a reduced establishment fee for such 
                        fiscal year; and
                            ``(ii) the adjustment to the establishment 
                        fee necessary to achieve total fees equaling 
                        the total fees that the Secretary would have 
                        collected if no entity qualified for the small 
                        business exception in subparagraph (D).
                    ``(D) Exception for small businesses.--
                            ``(i) In general.--In the case of a 
                        compounding manufacturer with gross annual 
                        sales of $1,000,000 or less in the 12 months 
                        ending June 1 of the fiscal year immediately 
                        preceding the fiscal year in which the fees 
                        under this subsection are assessed, the amount 
                        of the establishment fee and reinspection fee 
                        under paragraph (2) for a fiscal year shall be 
                        equal to \1/3\ of the amount calculated under 
                        subparagraph (A)(i) in such fiscal year.
                            ``(ii) Application.--The Secretary may 
                        require a small business to apply for the 
                        exception under this subparagraph by certifying 
                        its gross annual sales for the 12 months ending 
                        June 1 of the fiscal year immediately preceding 
                        the fiscal year in which fees under this 
                        subsection are assessed. Any such application 
                        must be submitted to the Secretary prior to 
                        August 1 for the following fiscal year. Any 
                        statement or representation made to the 
                        Secretary shall be subject to section 1001 of 
                        title 18, United States Code.
                    ``(E) Crediting of fees.--In establishing the small 
                business adjustment factor under subparagraph (C) for a 
                fiscal year, the Secretary shall provide for the 
                crediting of fees from the previous year to the next 
                year if the Secretary overestimated the amount of the 
                small business adjustment factor for such previous 
                fiscal year, and consider the need to account for any 
                adjustment of fees and such other factors as the 
                Secretary determines appropriate.
            ``(5) Use of fees.--The Secretary shall make all of the 
        fees collected pursuant to subparagraph (A) and (B) of 
        paragraph (2) available solely to pay for the inspection-
        related costs (including re-inspection) for the oversight of 
        drug compounding.
            ``(6) Supplement not supplant.--Funds received by the 
        Secretary pursuant to this subsection shall be used to 
        supplement and not supplant any other Federal funds available 
        to carry out the activities described in this subsection.
            ``(7) Crediting and availability of fees.--Fees authorized 
        under this subsection shall be collected and available for 
        obligation only to the extent and in the amount provided in 
        advance in appropriations Acts. Such fees are authorized to 
        remain available until expended. Such sums as may be necessary 
        may be transferred from the Food and Drug Administration 
        salaries and expenses appropriation account without fiscal year 
        limitation to such appropriation account for salaries and 
        expenses with such fiscal year limitation. The sums transferred 
        shall be available solely for the purpose of paying the 
        inspection-related costs (including reinspection) for the 
        oversight of drug compounding.
            ``(8) Collection of fees.--
                    ``(A) Establishment fee.--A compounding 
                manufacturer shall remit the establishment fee due 
                under this subsection in a fiscal year when submitting 
                a registration pursuant to subsection (g) for such 
                fiscal year.
                    ``(B) Reinspection fee.--The Secretary shall 
                specify in the Federal Register notice described in 
                paragraph (3) the manner in which reinspection fees 
                assessed under this subsection shall be collected and 
                the timeline for payment of such fees. Such a fee shall 
                be collected after the Secretary has conducted a 
                reinspection of the compounding manufacturer involved.
                    ``(C) Effect of failure to pay fees.--
                            ``(i) Registration.--A compounding 
                        manufacturer shall not be considered registered 
                        under subsection (g) in a fiscal year until the 
                        date that the compounding manufacturer remits 
                        the establishment fee under this subsection for 
                        such fiscal year.
                            ``(ii) Misbranding.--All drugs compounded 
                        by a compounding manufacturer for which any 
                        establishment fee or reinspection fee has not 
                        been paid as required by this subsection shall 
                        be deemed misbranded under section 502(cc) 
                        until the fees owed for such compounding 
                        manufacturer under this subsection have been 
                        paid.
                    ``(D) Collection of unpaid fees.--In any case where 
                the Secretary does not receive payment of a fee 
                assessed under this subsection within 30 days after it 
                is due, such fee shall be treated as a claim of the 
                United States Government subject to provisions of 
                subchapter II of chapter 37 of title 31, United States 
                Code.
            ``(9) Annual report to congress.--Not later than 120 days 
        after each fiscal year in which fees are assessed and collected 
        under this subsection, the Secretary shall submit a report to 
        the Committee on Health, Education, Labor, and Pensions of the 
        Senate and the Committee on Energy and Commerce of the House of 
        Representatives, to include a description of fees assessed and 
        collected for each year, a summary description of entities 
        paying the fees, and the number of inspections and 
        reinspections of such entities performed each year.
            ``(10) Authorization of appropriations.--For fiscal year 
        2015 and each subsequent fiscal year, there is authorized to be 
        appropriated for fees under this subsection an amount 
        equivalent to the total amount of fees assessed for such fiscal 
        year under this subsection.
    ``(i) Action by Secretary Regarding Complaints From State Boards of 
Pharmacy.--
            ``(1) Designation.--The Secretary shall designate a point 
        of contact and establish a format and procedure for a State 
        Board of Pharmacy to notify the Secretary if it appears to a 
        State Board of Pharmacy that an entity licensed by a State as a 
        pharmacy is required to be registered with the Secretary as a 
        compounding manufacturer.
            ``(2) Determination.--If the Secretary determines that such 
        an entity described in paragraph (1) is required to be 
        registered with the Secretary as a compounding manufacturer, 
        the Secretary shall transmit such determination to the State 
        Board of Pharmacy in the State in which the entity is located, 
        and to the State Board of Pharmacy in the notifying State, if 
        different, within 15 days of such determination.
            ``(3) Effect.--The Secretary shall encourage direct 
        communications between States regarding traditional 
        compounders. Nothing in this subsection shall expand the 
        Secretary's authority over or responsibility for traditional 
        compounding.
    ``(j) Prescription Order Reference.--For purposes of this section, 
reference to a prescription order for an identified individual patient 
includes, in the case of animal drugs, a prescription order for a 
specific herd or flock (or other identified group) of animals.''.
    (c) Prohibited Act.--Section 301 (21 U.S.C. 331) is amended--
            (1) in subsection (e), by striking ``417, 416, 504'' and 
        inserting ``417, 416, 503A(g), 504''; and
            (2) by adding at the end the following:
    ``(ccc) The resale of a compounded drug that is labeled `not for 
resale' as required by section 503A.''.
    (d) Report by GAO.--Not later than November 1, 2016, the 
Comptroller General of the United States shall conduct study and submit 
to Congress a report regarding the impact of this Act (and the 
amendments made by this Act) on the safety of animal drug compounding 
and the availability of safe and effective drugs for animals.

SEC. 3. OTHER REQUIREMENTS RELATING TO COMPOUNDING MANUFACTURERS.

    (a) Labeling.--Section 502 (21 U.S.C. 352) is amended by adding at 
the end the following:
    ``(bb) If it is a compounded drug and the labeling does not include 
the information as required by subsections (f)(1)(C) and (g)(4) of 
section 503A, as applicable.
    ``(cc) If it is a drug, and it was compounded by a compounding 
manufacturer for which fees have not been paid as required by section 
503A(g).''.
    (b) Application of Inspection Requirements to Compounding 
Manufacturers.--Section 704(a)(2) (21 U.S.C. 374(a)(2)) is amended by 
adding at the end the following flush text:
``The exemption in subparagraph (A) does not apply with respect to 
compounding manufacturers (as such term is defined in section 503A).''.
    (c) Adulteration of Compounded Animal Drugs Containing Drug 
Residues.--Section 402(a)(2)(C) is amended by striking ``512;'' and 
inserting ``512; or (iii) any residue from a compounded animal drug;''.

SEC. 4. IMPLEMENTATION.

    In promulgating any regulations to implement this Act (and the 
amendments made by this Act), the Secretary of Health and Human 
Services shall--
            (1) issue a notice of proposed rulemaking that includes the 
        proposed regulation;
            (2) provide a period of not less than 60 days for comments 
        on the proposed regulation; and
            (3) publish the final regulation not more than 18 months 
        following publication of the proposed rule and not less than 30 
        days before the effective date of such final regulation.

SEC. 5. EFFECTIVE DATE.

    This Act (and the amendments made by this Act) shall take effect on 
the date that is 1 year after the date of enactment of this Act.
                                 <all>
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