II 

113TH CONGRESS 

1ST SESSION S. 957 

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

pharmaceutical distribution supply chain. 

IN THE SENATE OF THE UNITED STATES 

MAY 15, 2013 

Mr. BENNET (for himself, Mr. BURR, Mr. HARKIN, Mr. ALEXANDER, and Mr. 

ISAKSON) 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 the pharmaceutical distribution supply chain. 

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 the ‘‘Drug Supply Chain 

5 Security Act’’. 

6 SEC. 2. PHARMACEUTICAL DISTRIBUTION SUPPLY CHAIN. 

7 Chapter V of the Federal Food, Drug, and Cosmetic 

8 Act (21 U.S.C. 351 et seq.) is amended by adding at the 

9 end the following: 


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1 ‘‘Subchapter H—Pharmaceutical Distribution 

2 Supply Chain 

3 ‘‘SEC. 581. DEFINITIONS. 

4 ‘‘In this subchapter: 

5 ‘‘(1) AUTHORIZED.—The term ‘authorized’ 

6 means— 

7 ‘‘(A) in the case of a manufacturer or re8 packager, having a valid registration in accord9 ance with section 510; 

10 ‘‘(B) in the case of a wholesale distributor, 

11 having a valid license under State law or sec12 tion 583, in accordance with section 582(a)(6) 

13 and complying with the licensure reporting re14 quirements under section 503(e), as amended 

15 by the Drug Supply Chain Security Act; 

16 ‘‘(C) in the case of a third-party logistics 

17 provider, having a valid license under State law 

18 or section 584(a)(1), in accordance with section 

19 582(a)(7) and complying with the licensure re20 porting requirements under section 584(b); and 

21 ‘‘(D) in the case of a dispenser, having a 

22 valid license under State law. 

23 ‘‘(2) COMPRESSED MEDICAL GAS.—The term 

24 ‘compressed medical gas’ means any substance in its 

25 gaseous or cryogenic liquid form that meets medical 


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1 purity standards and has application in a medical or 

2 homecare environment, including oxygen and nitrous 

3 oxide. 

4 ‘‘(3) DISPENSER.—The term ‘dispenser’— 

5 ‘‘(A) means a retail pharmacy, hospital 

6 pharmacy, a group of chain pharmacies under 

7 common ownership and control that do not act 

8 as a wholesale distributor, or any other person 

9 authorized by law to dispense or administer 

10 prescription drugs, and the affiliated ware11 houses or distribution centers of such entities 

12 under common ownership and control that do 

13 not act as a wholesale distributor; and 

14 ‘‘(B) does not include a person who only 

15 dispenses products to be used in animals in ac16 cordance with section 512(a)(5). 

17 ‘‘(4) DISPOSITION.—The term ‘disposition’, 

18 with respect to a product within the possession or 

19 control of an entity, means the removal of such 

20 product from the pharmaceutical distribution supply 

21 chain, which may include disposal or return of the 

22 product for disposal or other appropriate handling 

23 and other actions such as retaining a sample of the 

24 product for further additional physical examination 


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1 or laboratory analysis of the product by a manufac2 turer or regulatory or law enforcement agency. 

3 ‘‘(5) DISTRIBUTE OR DISTRIBUTION.—The 

4 term ‘distribute’ or ‘distribution’ means the sale, 

5 purchase, trade, delivery, handling, storage, or re6 ceipt of a product. 

7 ‘‘(6) EXCLUSIVE DISTRIBUTOR.—The term ‘ex8 clusive distributor’ means the wholesale distributor 

9 that directly purchased product from the manufac10 turer and is the sole distributor of that manufactur11 er’s product to a subsequent wholesale distributor or 

12 dispenser. 

13 ‘‘(7) HOMOGENEOUS CASE.—The term ‘homo14 geneous case’ means a sealed case containing only 

15 product that has a single National Drug Code num16 ber belonging to a single lot. 

17 ‘‘(8) ILLEGITIMATE PRODUCT.—The term ‘ille18 gitimate product’ means a product for which credible 

19 evidence shows that the product— 

20 ‘‘(A) is counterfeit, diverted, or stolen; 

21 ‘‘(B) is intentionally adulterated such that 

22 the product would result in serious adverse 

23 health consequences or death to humans; 

24 ‘‘(C) is the subject of a fraudulent trans25 action; or 


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1 ‘‘(D) appears otherwise unfit for distribu2 tion such that the product could result in seri3 ous adverse health consequence or death to hu4 mans. 

5 ‘‘(9) LICENSED.—The term ‘licensed’ means— 

6 ‘‘(A) in the case of a wholesale distributor, 

7 having a valid license under State law or sec8 tion 583, in accordance with section 582(a)(6); 

9 ‘‘(B) in the case of a third-party logistics 

10 provider, having a valid license under State law 

11 or section 584(a)(1), in accordance with section 

12 582(a)(7); and 

13 ‘‘(C) in the case of a dispenser, having a 

14 valid license under State law. 

15 ‘‘(10) MANUFACTURER.— 

16 ‘‘(A) IN GENERAL.—The term ‘manufac17 turer’ means, with respect to a product— 

18 ‘‘(i) a person that holds an application 

19 approved under section 505 or a license 

20 issued under section 351 of the Public 

21 Health Service Act for such product, or if 

22 such product is not the subject of an ap23 proved application or license, the person 

24 who manufactured the product; 


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1 ‘‘(ii) a co-licensed partner of the per2 son described in clause (i) that obtains the 

3 product directly from the person described 

4 in clause (i) or (ii); or 

5 ‘‘(iii) an affiliate of a person described 

6 in clause (i) or (iii) that receives the prod7 uct directly from a person described in 

8 clause (i), (ii), or (iii). 

9 ‘‘(B) AFFILIATE.—For purposes of this 

10 paragraph, the term ‘affiliate’ means a member 

11 of an affiliated group, as that term is defined 

12 in section 1504(a) of the Internal Revenue 

13 Code. 

14 ‘‘(11) PACKAGE.— 

15 ‘‘(A) IN GENERAL.—The term ‘package’ 

16 means the smallest individual saleable unit of 

17 product for distribution by a manufacturer or 

18 repackager that is intended by the manufac19 turer for ultimate sale to the dispenser of such 

20 product. 

21 ‘‘(B) INDIVIDUAL SALEABLE UNIT.—For 

22 purposes of this paragraph, an ‘individual sale23 able unit’ is the smallest container of product 

24 introduced into commerce by the manufacturer 

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1 turer or repackager for individual sale to a dis2 penser. 

3 ‘‘(12) PRESCRIPTION DRUG.—The term ‘pre4 scription drug’ means a drug for human use subject 

5 to section 503(b)(1). 

6 ‘‘(13) PRODUCT.—The term ‘product’ means a 

7 prescription drug in a finished dosage form for ad8 ministration to a patient without substantial further 

9 manufacturing (such as capsules, tablets, and 

10 lyophilized products before reconstitution), but does 

11 not include blood or blood components intended for 

12 transfusion, radioactive drugs or radioactive biologi13 cal products (as defined in section 600.3(ee) of title 

14 21, Code of Federal Regulations) that are regulated 

15 by the Nuclear Regulatory Commission or by a State 

16 pursuant to an agreement with such Commission 

17 under section 274 of the Atomic Energy Act of 1954 

18 (42 U.S.C. 2021), or any compressed medical gas. 

19 ‘‘(14) PRODUCT IDENTIFIER.—The term ‘prod20 uct identifier’ means a standardized graphic that in21 cludes, in both human-readable form and on a ma22 chine-readable data carrier that conforms to the 

23 standards developed by a widely recognized inter24 national standards development organization, the 


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1 standardized numerical identifier, lot number, and 

2 expiration date of the product. 

3 ‘‘(15) QUARANTINE.—The term ‘quarantine’ 

4 means the storage or identification of a product, to 

5 prevent distribution or transfer of the product, in a 

6 physically separate area clearly identified for such 

7 use or through other procedures such as automated 

8 designation. 

9 ‘‘(16) REPACKAGER.—The term ‘repackager’ 

10 means a person who owns or operates an establish11 ment that repacks and relabels a product or package 

12 for further sale. 

13 ‘‘(17) RETURN.—The term ‘return’ means pro14 viding product to the authorized immediate trading 

15 partner from which such product was purchased, or 

16 to a returns processor or reverse logistics provider 

17 for handling of such product. 

18 ‘‘(18) RETURNS PROCESSOR OR REVERSE LO19 GISTICS PROVIDER.—The term ‘returns processor’ or 

20 ‘reverse logistics provider’ means a person who owns 

21 or operates an establishment that dispositions or 

22 otherwise processes saleable or nonsaleable product 

23 received from an authorized trading partner such 

24 that the product may be processed for credit to the 


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1 purchaser, manufacturer, or seller or disposed of for 

2 no further distribution. 

3 ‘‘(19) SPECIFIC PATIENT NEED.—The term 

4 ‘specific patient need’ refers to the transfer of a 

5 product from one pharmacy to another to fill a pre6 scription for an identified patient. Such term does 

7 not include the transfer of a product from one phar8 macy to another for the purpose of increasing or re9 plenishing stock in anticipation of a potential need. 

10 ‘‘(20) STANDARDIZED NUMERICAL IDENTIFIER

11 OR SNI.—The term ‘standardized numerical identi12 fier’ or ‘SNI’ means a set of numbers or characters 

13 used to uniquely identify each package or homoge14 nous case that is composed of the National Drug 

15 Code that corresponds to the specific product (in16 cluding the particular package configuration) com17 bined with a unique alphanumeric serial number of 

18 up to 20 characters. 

19 ‘‘(21) SUSPECT PRODUCT.—The term ‘suspect 

20 product’ means a product for which there is reason 

21 to believe that such product— 

22 ‘‘(A) is potentially counterfeit, diverted, or 

23 stolen; 

24 ‘‘(B) is potentially intentionally adulterated 

25 such that the product would result in serious 


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1 adverse health consequences or death to hu2 mans; 

3 ‘‘(C) is potentially the subject of a fraudu4 lent transaction; or 

5 ‘‘(D) appears otherwise unfit for distribu6 tion such that the product would result in seri7 ous adverse health consequences or death to hu8 mans. 

9 ‘‘(22) THIRD-PARTY LOGISTICS PROVIDER.— 

10 The term ‘third-party logistics provider’ means an 

11 entity that provides or coordinates warehousing, or 

12 other logistics services of a product in interstate 

13 commerce on behalf of a manufacturer, wholesale 

14 distributor, or dispenser of a product, but does not 

15 take ownership of the product, nor have responsi16 bility to direct the sale or disposition of the product. 

17 ‘‘(23) TRADING PARTNER.—The term ‘trading 

18 partner’ means— 

19 ‘‘(A) a manufacturer, repackager, whole20 sale distributor, or dispenser from whom a 

21 manufacturer, repackager, wholesale dis22 tributor, or dispenser accepts direct ownership 

23 of a product or to whom a manufacturer, re24 packager, wholesale distributor, or dispenser 

25 transfers direct ownership of a product; or 


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1 ‘‘(B) a third-party logistics provider from 

2 whom a manufacturer, repackager, wholesale 

3 distributor, or dispenser accepts direct posses4 sion of a product or to whom a manufacturer, 

5 repackager, wholesale distributor, or dispenser 

6 transfers direct possession of a product. 

7 ‘‘(24) TRANSACTION.— 

8 ‘‘(A) IN GENERAL.—The term ‘transaction’ 

9 means the transfer of product between persons 

10 in which a change of ownership occurs. 

11 ‘‘(B) EXEMPTIONS.—The term ‘trans12 action’ does not include— 

13 ‘‘(i) intracompany distribution of any 

14 product between members of an affiliated 

15 group (as defined in section 1504(a) of the 

16 Internal Revenue Code of 1986); 

17 ‘‘(ii) the distribution of a product 

18 among hospitals or other health care enti19 ties that are under common control; 

20 ‘‘(iii) the distribution of a product for 

21 emergency medical reasons including a 

22 public health emergency declaration pursu23 ant to section 319 of the Public Health 

24 Service Act, except that a drug shortage 

25 not caused by a public health emergency 


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1 shall not constitute an emergency medical 

2 reason; 

3 ‘‘(iv) the dispensing of a product pur4 suant to a valid prescription executed in 

5 accordance with section 503(b)(1); 

6 ‘‘(v) the distribution of product sam7 ples by a manufacturer or a licensed 

8 wholesale distributor in accordance with 

9 section 503(d); 

10 ‘‘(vi) the distribution of blood or blood 

11 components intended for transfusion; 

12 ‘‘(vii) the distribution of minimal 

13 quantities of product by a licensed retail 

14 pharmacy to a licensed practitioner for of15 fice use; 

16 ‘‘(viii) the sale, purchase, or trade of 

17 a drug or an offer to sell, purchase, or 

18 trade a drug by a charitable organization 

19 described in section 501(c)(3) of the Inter20 nal Revenue Code of 1954 to a nonprofit 

21 affiliate of the organization to the extent 

22 otherwise permitted by law; 

23 ‘‘(ix) the distribution of a product 

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1 tributor or wholesale distributors, except 

2 that any records required to be maintained 

3 for the product shall be transferred to the 

4 new owner of the pharmacy or pharmacies 

5 or wholesale distributor or wholesale dis6 tributors; 

7 ‘‘(x) the dispensing of a product ap8 proved under section 512(b); 

9 ‘‘(xi) products transferred to or from 

10 any facility that is licensed by the Nuclear 

11 Regulatory Commission or by a State pur12 suant to an agreement with such Commis13 sion under section 274 of the Atomic En14 ergy Act of 1954 (42 U.S.C. 2021); 

15 ‘‘(xii) a combination product that is— 

16 ‘‘(I) a product comprised of a de17 vice and 1 or more other regulated 

18 components (such as a drug/device, 

19 biologic/device, or drug/device/biologic) 

20 that are physically, chemically, or oth21 erwise combined or mixed and pro22 duced as a single entity; 

23 ‘‘(II) 2 or more separate prod24 ucts packaged together in a single 

25 package or as a unit and comprised of 


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1 a drug and device products or device 

2 and biological product; or 

3 ‘‘(III) 2 or more finished medical 

4 devices plus one or more drug or bio5 logical products which are packaged 

6 together in what is referred to as a 

7 ‘medical convenience kit’ as described 

8 in clause (xiii); 

9 ‘‘(xiii) the distribution of a collection 

10 of finished medical devices or a collection 

11 of finished drug or biological products as12 sembled in kit form strictly for the conven13 ience of the purchaser or user (to be 

14 known as a ‘medical convenience kit’) if— 

15 ‘‘(I) the medical convenience kit 

16 is assembled in an establishment that 

17 is registered with the Food and Drug 

18 Administration as a device manufac19 turer in accordance with section 

20 510(b)(2); 

21 ‘‘(II) the person who manufac22 tures a medical convenience kit pur23 chased the product contained in the 

24 medical convenience kit directly from 

25 the pharmaceutical manufacturer or 


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1 from a wholesale distributor that pur2 chased the product directly from the 

3 pharmaceutical manufacturer; 

4 ‘‘(III) the person who manufac5 tures a medical convenience kit does 

6 not alter the primary container or 

7 label of the product as purchased 

8 from the manufacturer or wholesale 

9 distributor; 

10 ‘‘(IV) the medical convenience kit 

11 does not contain a controlled sub12 stance that appears in a schedule con13 tained in the Comprehensive Drug 

14 Abuse Prevention and Control Act of 

15 1970; and 

16 ‘‘(V) the products contained in 

17 the medical convenience kit are— 

18 ‘‘(aa) intravenous solutions 

19 intended for the replenishment of 

20 fluids and electrolytes; 

21 ‘‘(bb) products intended to 

22 maintain the equilibrium of water 

23 and minerals in the body; 

24 ‘‘(cc) products intended for 

25 irrigation or reconstitution; 


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1 ‘‘(dd) anesthetics; 

2 ‘‘(ee) anticoagulants; 

3 ‘‘(ff) vasopressors; or 

4 ‘‘(gg) sympathicomimetics; 

5 ‘‘(xiv) the distribution of an intra6 venous product that, by its formulation, is 

7 intended for the replenishment of fluids 

8 and electrolytes (such as sodium, chloride, 

9 and potassium) or calories (such as dex10 trose and amino acids); 

11 ‘‘(xv) the distribution of an intra12 venous product used to maintain the equi13 librium of water and minerals in the body, 

14 such as dialysis solutions; 

15 ‘‘(xvi) the distribution of a product 

16 that is intended for irrigation or recon17 stitution, or sterile water, whether intended 

18 for such purposes or for injection; 

19 ‘‘(xvii) the distribution of compressed 

20 medical gas; or 

21 ‘‘(xviii) the distribution or sale of any 

22 licensed product under section 351 of the 

23 Public Health Service Act that meets the 

24 definition of a device under section 201(h). 


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1 ‘‘(25) TRANSACTION HISTORY.—The term 

2 ‘transaction history’ means a statement in paper or 

3 electronic form, including the transaction informa4 tion for each prior transaction going back to the 

5 manufacturer of the product. 

6 ‘‘(26) TRANSACTION INFORMATION.—The term 

7 ‘transaction information’ means— 

8 ‘‘(A) the proprietary or established name 

9 or names of the product; 

10 ‘‘(B) the strength and dosage form of the 

11 product; 

12 ‘‘(C) the National Drug Code number of 

13 the product; 

14 ‘‘(D) the container size; 

15 ‘‘(E) the number of containers; 

16 ‘‘(F) the lot number of the product; 

17 ‘‘(G) the date of the transaction; 

18 ‘‘(H) the date of the shipment, if different 

19 from the date of the transaction; 

20 ‘‘(I) the business name and address of the 

21 person from whom ownership is being trans22 ferred; and 

23 ‘‘(J) the business name and address of the 

24 person to whom ownership is being transferred. 


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1 ‘‘(27) TRANSACTION STATEMENT.—The ‘trans2 action statement’ is a statement, in paper or elec3 tronic form, that the entity transferring ownership 

4 in a transaction— 

5 ‘‘(A) is authorized as required under the 

6 Drug Supply Chain Security Act; 

7 ‘‘(B) received the product from a person 

8 that is authorized as required under the Drug 

9 Supply Chain Security Act; 

10 ‘‘(C) received transaction information and 

11 a transaction statement from the prior owner of 

12 the product, as required under section 582; 

13 ‘‘(D) did not knowingly ship a suspect or 

14 illegitimate product; 

15 ‘‘(E) had systems and processes in place to 

16 comply with verification requirements under 

17 section 582; 

18 ‘‘(F) did not knowingly provide false trans19 action information; and 

20 ‘‘(G) did not knowingly alter the trans21 action history. 

22 ‘‘(28) VERIFICATION OR VERIFY.—The term 

23 ‘verification’ or ‘verify’ means determining whether 

24 the product identifier affixed to, or imprinted upon, 

25 a package or homogeneous case corresponds to the 


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1 standardized numerical identifier or lot number, and 

2 expiration date assigned to the product by the man3 ufacturer or the repackager, as applicable in accord4 ance with section 582. 

5 ‘‘(29) WHOLESALE DISTRIBUTOR.—The term 

6 ‘wholesale distributor’ means a person (other than a 

7 manufacturer, a manufacturer’s co-licensed partner, 

8 a third-party logistics provider, or repackager) en9 gaged in wholesale distribution (as defined in section 

10 503(e)(4), as amended by the Drug Supply Chain 

11 Security Act). 

12 ‘‘SEC. 582. REQUIREMENTS. 

13 ‘‘(a) IN GENERAL.— 

14 ‘‘(1) OTHER ACTIVITIES.—Each manufacturer, 

15 repackager, wholesale distributor, third-party logis16 tics provider, and dispenser shall comply with the re17 quirements set forth in this section with respect to 

18 the role of such manufacturer, repackager, wholesale 

19 distributor, third-party logistics provider, or dis20 penser in a transaction involving product. If an enti21 ty meets the definition of more than one of the enti22 ties listed in the preceding sentence, such entity 

23 shall comply with all applicable requirements in this 

24 section, but shall not be required to duplicate re25 quirements. 


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1 ‘‘(2) INITIAL STANDARDS.— 

2 ‘‘(A) IN GENERAL.—The Secretary shall, 

3 in consultation with other appropriate Federal 

4 officials, manufacturers, repackagers, wholesale 

5 distributors, third-party logistics providers, dis6 pensers, and other pharmaceutical distribution 

7 supply chain stakeholders, issue a draft guid8 ance document that establishes standards for 

9 the interoperable exchange of transaction infor10 mation for compliance with subsections (a), (b), 

11 (c), (d), (e), and (f). The standards established 

12 under this paragraph shall take into consider13 ation the standards established under section 

14 505D and shall comply with a form and format 

15 developed by a widely recognized international 

16 standards development organization. 

17 ‘‘(B) PUBLIC INPUT.—Prior to issuing the 

18 draft guidance under subparagraph (A), the 

19 Secretary shall gather comments and informa20 tion from stakeholders and maintain such com21 ments and information in a public docket for at 

22 least 60 days prior to issuing such guidance. 

23 ‘‘(C) PUBLICATION.—The Secretary shall 

24 publish the standards established under sub25 paragraph (A) not later than 1 year after the 


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1 date of enactment of the Drug Supply Chain 

2 Security Act. 

3 ‘‘(3) WAIVERS, EXCEPTIONS, AND EXEMP4 TIONS.— 

5 ‘‘(A) IN GENERAL.—Not later than 2 years 

6 after the date of enactment of the Drug Supply 

7 Chain Security Act, the Secretary shall, by 

8 guidance— 

9 ‘‘(i) establish a process by which an 

10 authorized manufacturer, repackager, 

11 wholesale distributor, or dispenser may re12 quest a waiver from any of the require13 ments set forth in this section if the Sec14 retary determines that such requirements 

15 would result in an undue economic hard16 ship or for emergency medical reasons, in17 cluding a public health emergency declara18 tion pursuant to section 319 of the Public 

19 Health Service Act; 

20 ‘‘(ii) establish a process by which the 

21 Secretary determines exceptions, and a 

22 process through which a manufacturer or 

23 repackager may request such an exception, 

24 to the requirements relating to product 

25 identifiers if a product is packaged in a 


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1 container too small or otherwise unable to 

2 accommodate a label with sufficient space 

3 to bear the information required for com4 pliance with this section; and 

5 ‘‘(iii) establish a process by which the 

6 Secretary may determine other products or 

7 transactions that shall be exempt from the 

8 requirements of this section. 

9 ‘‘(B) CONTENT.—The guidance issued 

10 under subparagraph (A) shall include a process 

11 for the biennial review and renewal of such 

12 waivers, exceptions, and exemptions, as applica13 ble. 

14 ‘‘(C) PROCESS.—In issuing the guidance 

15 under this section, the Secretary shall provide 

16 an effective date that is not later than 180 days 

17 prior to the date on which manufacturers are 

18 required to affix or imprint a product identifier 

19 to each package and homogenous case of prod20 uct intended to be introduced in a transaction 

21 into commerce consistent with this section. 

22 ‘‘(4) SELF-EXECUTING REQUIREMENTS.—Ex23 cept where otherwise specified, the requirements of 

24 this section may be enforced without further regula25 tions or guidance from the Secretary. 


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1 ‘‘(5) GRANDFATHERING PRODUCT.— 

2 ‘‘(A) PRODUCT IDENTIFIER.—Not later 

3 than 2 years after the date of enactment of the 

4 Drug Supply Chain Security Act, the Secretary 

5 shall finalize guidance specifying whether and 

6 under what circumstances product that is not 

7 labeled with a product identifier and that is in 

8 the pharmaceutical distribution supply chain at 

9 the time of the effective date of the require10 ments of this section shall be exempted from 

11 the requirements of this section. 

12 ‘‘(B) TRACING.—For a product that en13 tered the pharmaceutical distribution supply 

14 chain prior to the date that is 1 year after the 

15 date of enactment of the Drug Supply Chain 

16 Security Act— 

17 ‘‘(i) authorized trading partners shall 

18 be exempt from providing transaction in19 formation as required under subsections 

20 (b)(1)(A)(i), (c)(1)(A)(ii), (d)(1)(A)(ii), 

21 and (e)(1)(A)(ii) of this section; 

22 ‘‘(ii) transaction history required 

23 under this section shall begin with the 

24 owner of such product on such date; and 


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1 ‘‘(iii) the owners of such product on 

2 such date shall be exempt from asserting 

3 receipt of transaction information and 

4 transaction statement from the prior owner 

5 as required under this section. 

6 ‘‘(6) WHOLESALE DISTRIBUTOR LICENSES.— 

7 Notwithstanding section 581(9)(A), until the effec8 tive date of the wholesale distributor licensing regu9 lations under section 583, the term ‘licensed’ or ‘au10 thorized’, as it relates to a wholesale distributor with 

11 respect to prescription drugs, shall mean a wholesale 

12 distributor with a valid license under State law. 

13 ‘‘(7) THIRD-PARTY LOGISTICS PROVIDER LI14 CENSES.—Until the effective date of the third-party 

15 logistics provider licensing regulations under section 

16 584, a third-party logistics provider shall be consid17 ered ‘licensed’ under section 581(9)(B) unless the 

18 Secretary has made a finding that the third-party lo19 gistics provider does not utilize good handling and 

20 distribution practices and publishes notice thereof. 

21 ‘‘(8) LABEL CHANGES.—Changes made to pack22 age labels solely to incorporate the product identifier 

23 may be submitted to the Secretary in the annual re24 port of an establishment, in accordance with section 


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1 314.70(d) of chapter 21, Code of Federal Regula2 tions (or any successor regulation). 

3 ‘‘(9) PRODUCT IDENTIFIERS.—With respect to 

4 any requirement relating to product identifiers under 

5 this subchapter— 

6 ‘‘(A) unless the Secretary allows, through 

7 guidance, the use of other technologies for data 

8 instead of or in addition to the technologies de9 scribed in clauses (i) and (ii), the applicable 

10 data— 

11 ‘‘(i) shall be included in a 2-dimen12 sional data matrix barcode when affixed to, 

13 or imprinted upon, a package; or 

14 ‘‘(ii) shall be included in a linear or 2- 

15 dimensional data matrix barcode when af16 fixed to, or imprinted upon, a homo17 geneous case; and 

18 ‘‘(B) verification of the product identifier 

19 may occur by using human-readable or ma20 chine-readable methods. 

21 ‘‘(b) MANUFACTURER REQUIREMENTS.— 

22 ‘‘(1) PRODUCT TRACING.— 

23 ‘‘(A) IN GENERAL.—Beginning not later 

24 than 1 year after the date of enactment of the 


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1 Drug Supply Chain Security Act, a manufac2 turer shall— 

3 ‘‘(i) prior to, or at the time of, each 

4 transaction in which such manufacturer 

5 transfers— 

6 ‘‘(I) ownership of a product, pro7 vide the subsequent recipient with 

8 transaction history, transaction infor9 mation, and a transaction statement; 

10 or 

11 ‘‘(II) possession of a product to a 

12 third-party logistics provider for the 

13 purpose of transferring ownership as 

14 part of a transaction to a subsequent 

15 recipient, provide to the third-party 

16 logistics provider the transaction his17 tory, transaction information, and a 

18 transaction statement for such trans19 action to a subsequent recipient; and 

20 ‘‘(ii) maintain the transaction infor21 mation, transaction history, and trans22 action statement for each transaction for 

23 not less than 6 years after the date of the 

24 transaction. 


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1 ‘‘(B) REQUESTS FOR INFORMATION.— 

2 Upon a request by the Secretary or other ap3 propriate Federal or State official, in the event 

4 of a recall or for the purpose of investigating a 

5 suspect product or an illegitimate product, a 

6 manufacturer shall, not later than 24 hours 

7 after receiving the request or in other such rea8 sonable time as determined by the Secretary, 

9 based on the circumstances of the request, pro10 vide the applicable transaction information, 

11 transaction history, and transaction statement 

12 for the product. 

13 ‘‘(2) PRODUCT IDENTIFIER.—Beginning not 

14 later than 4 years after the date of enactment of the 

15 Drug Supply Chain Security Act, a manufacturer 

16 shall affix or imprint a product identifier to each 

17 package and homogenous case of a product intended 

18 to be introduced in a transaction into commerce. 

19 Such manufacturer shall maintain the product iden20 tifier information for such product for not less than 

21 6 years after the date of the transaction. 

22 ‘‘(3) AUTHORIZED TRADING PARTNERS.—Be23 ginning not later than 1 year after the date of enact24 ment of the Drug Supply Chain Security Act, the 


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1 trading partners of a manufacturer may be only au2 thorized trading partners. 

3 ‘‘(4) VERIFICATION.—Beginning not later than 

4 1 year after the date of enactment of the Drug Sup5 ply Chain Security Act, a manufacturer shall have 

6 systems in place to enable the manufacturer to com7 ply with the following requirements: 

8 ‘‘(A) SUSPECT PRODUCT.— 

9 ‘‘(i) IN GENERAL.—Upon making a 

10 determination that a product in the posses11 sion or control of the manufacturer is a 

12 suspect product, or upon receiving a re13 quest for verification from the Secretary 

14 that has made a determination that a 

15 product within the possession or control of 

16 a manufacturer is a suspect product, a 

17 manufacturer shall— 

18 ‘‘(I) quarantine such product 

19 within the possession or control of the 

20 manufacturer from product intended 

21 for distribution until such product is 

22 cleared or dispositioned; and 

23 ‘‘(II) promptly conduct an inves24 tigation in coordination with trading 

25 partners, as applicable, to determine 


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1 whether the product is an illegitimate 

2 product, which shall include validating 

3 any applicable transaction history and 

4 transaction information in the posses5 sion of the manufacturer and other6 wise investigating to determine wheth7 er the product is an illegitimate prod8 uct, and, beginning 4 years after the 

9 date of enactment of the Drug Supply 

10 Chain Security Act, verifying the 

11 product at the package level. 

12 ‘‘(ii) CLEARED PRODUCT.—If the 

13 manufacturer makes the determination 

14 that a suspect product is not an illegit15 imate product, the manufacturer shall 

16 promptly notify the Secretary, if applica17 ble, of such determination and such prod18 uct may be further distributed. 

19 ‘‘(iii) RECORDS.—A manufacturer 

20 shall keep records of the investigation of a 

21 suspect product for not less than 6 years 

22 after the conclusion of the investigation. 

23 ‘‘(B) ILLEGITIMATE PRODUCT.— 

24 ‘‘(i) IN GENERAL.—Upon determining 

25 that a product in the possession or control 


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1 of a manufacturer is an illegitimate prod2 uct, the manufacturer shall, in a manner 

3 consistent with the systems and processes 

4 of such manufacturer— 

5 ‘‘(I) quarantine such product 

6 within the possession or control of the 

7 manufacturer from product intended 

8 for distribution until such product is 

9 dispositioned; 

10 ‘‘(II) disposition the illegitimate 

11 product within the possession or con12 trol of the manufacturer; 

13 ‘‘(III) take reasonable and appro14 priate steps to assist a trading part15 ner to disposition an illegitimate prod16 uct not in the possession or control of 

17 the manufacturer; and 

18 ‘‘(IV) retain a sample of the 

19 product for further physical examina20 tion or laboratory analysis of the 

21 product by the manufacturer or Sec22 retary (or other appropriate Federal 

23 or State official) upon request by the 

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1 eral or State official), as necessary 

2 and appropriate. 

3 ‘‘(ii) MAKING A NOTIFICATION.— 

4 ‘‘(I) ILLEGITIMATE PRODUCT.— 

5 Upon determining that a product in 

6 the possession or control of the manu7 facturer is an illegitimate product, the 

8 manufacturer shall notify the Sec9 retary and all immediate trading part10 ners that the manufacturer has reason 

11 to believe may have received such ille12 gitimate product of such determina13 tion not later than 24 hours after 

14 making such determination. 

15 ‘‘(II) HIGH RISK OF ILLEGIT16 IMACY.—A manufacturer shall notify 

17 the Secretary and immediate trading 

18 partners that the manufacturer has 

19 reason to believe may have in the 

20 trading partner’s possession a product 

21 manufactured by, or purported to be a 

22 product manufactured by, the manu23 facturer not later than 24 hours after 

24 determining or being notified by the 

25 Secretary or a trading partner that 


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1 there is a high risk that such product 

2 is an illegitimate product. For pur3 poses of this subclause, a ‘high risk’ 

4 may include a specific high-risk that 

5 could increase the likelihood that ille6 gitimate product will enter the phar7 maceutical distribution supply chain 

8 and other high risks as determined by 

9 the Secretary in guidance pursuant to 

10 subsection (i). 

11 ‘‘(iii) RESPONDING TO A NOTIFICA12 TION.—Upon the receipt of a notification 

13 from the Secretary or a trading partner 

14 that a determination has been made that a 

15 product is an illegitimate product, a manu16 facturer shall identify all illegitimate prod17 uct subject to such notification that is in 

18 the possession or control of the manufac19 turer, including any product that is subse20 quently received, and shall perform the ac21 tivities described in subparagraph (A). 

22 ‘‘(iv) TERMINATING A NOTIFICA23 TION.—Upon making a determination, in 

24 consultation with the Secretary, that a no25 tification is no longer necessary, a manuVerDate Mar 15 2010 03:15 May 21, 2013 Jkt 029200 PO 00000 Frm 00032 Fmt 6652 Sfmt 6201 E:\BILLS\S957.IS S957

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1 facturer shall promptly notify immediate 

2 trading partners that the manufacturer no3 tified pursuant to clause (ii) that such no4 tification has been terminated. 

5 ‘‘(v) RECORDS.—A manufacturer shall 

6 keep records of the disposition of an illegit7 imate product for not less than 6 years 

8 after the conclusion of the disposition. 

9 ‘‘(C) REQUESTS FOR VERIFICATION.—Be10 ginning 4 years after the date of enactment of 

11 the Drug Supply Chain Security Act, upon re12 ceiving a request for verification from an au13 thorized repackager, wholesale distributor, or 

14 dispenser that is in possession or control of a 

15 product they believe to be manufactured by 

16 such manufacturer, a manufacturer shall, not 

17 later than 24 hours after receiving the 

18 verification request or in other such reasonable 

19 time as determined by the Secretary, based on 

20 the circumstances of the request, notify the per21 son making the request whether the product 

22 identifier, including the standard numeric iden23 tifier, that is the subject of the request cor24 responds to the product identifier affixed or im25 printed by the manufacturer. If a manufacturer 


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1 responding to a verification request identifies a 

2 product identifier that does not correspond to 

3 that affixed or imprinted by the manufacturer, 

4 the manufacturer shall treat such product as 

5 suspect product and conduct an investigation as 

6 described in subparagraph (A). If the manufac7 turer has reason to believe the product is an il8 legitimate product, the manufacturer shall ad9 vise the person making the request of such be10 lief at the time such manufacturer responds to 

11 the verification request. 

12 ‘‘(D) ELECTRONIC DATABASE.—A manu13 facturer may satisfy the requirements of this 

14 paragraph by developing a secure electronic 

15 database or utilizing a secure electronic data16 base developed or operated by another entity. 

17 The owner of such database shall establish the 

18 requirements and processes to respond to re19 quests and may provide for data access to other 

20 members of the pharmaceutical distribution 

21 supply chain, as appropriate. The development 

22 and operation of such a database shall not re23 lieve a manufacturer of the requirement under 

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1 quest submitted by means other than a secure 

2 electronic database. 

3 ‘‘(E) SALEABLE RETURNED PRODUCT.— 

4 Beginning 4 years after the date of enactment 

5 of the Drug Supply Chain Security Act (except 

6 as provided pursuant to subsection (a)(5)), 

7 upon receipt of a returned product that the 

8 manufacturer intends to further distribute, be9 fore further distributing such product, the man10 ufacturer shall verify the product identifier for 

11 each sealed homogeneous case of such product 

12 or, if such product is not in a sealed homo13 geneous case, verify the product identifier on 

14 each package. 

15 ‘‘(F) NONSALEABLE RETURNED PROD16 UCT.—A manufacturer may return a nonsale17 able product to the manufacturer or repack18 ager, to the wholesale distributor from whom 

19 such product was purchased, or to a person act20 ing on behalf of such a person, including a re21 turns processor, without providing the informa22 tion required under paragraph (1)(A)(i). 

23 ‘‘(c) WHOLESALE DISTRIBUTOR REQUIREMENTS.— 

24 ‘‘(1) PRODUCT TRACING.— 


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1 ‘‘(A) IN GENERAL.—Beginning not later 

2 than 1 year after the date of enactment of the 

3 Drug Supply Chain Security Act, the following 

4 requirements shall apply to wholesale distribu5 tors: 

6 ‘‘(i) A wholesale distributor shall not 

7 accept ownership of a product unless the 

8 previous owner prior to, or at the time of, 

9 the transaction provides the transaction 

10 history, transaction information, and a 

11 transaction statement for the product, as 

12 applicable under this subparagraph. 

13 ‘‘(ii)(I)(aa) If the wholesale dis14 tributor purchased a product directly from 

15 the manufacturer, the exclusive distributor 

16 of the manufacturer, or a repackager that 

17 purchased directly from the manufacturer, 

18 then prior to, or at the time of, each trans19 action in which the wholesale distributor 

20 transfers ownership of a product, the 

21 wholesale distributor shall provide to the 

22 subsequent purchaser— 

23 ‘‘(AA) a transaction statement, 

24 which shall state that such wholesale 

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1 ated group of such wholesale dis2 tributor, purchased the product di3 rectly from the manufacturer, exclu4 sive distributor of the manufacturer, 

5 or repackager that purchased directly 

6 from the manufacturer; and 

7 ‘‘(BB) subject to subclause (II), 

8 the transaction history and trans9 action information. 

10 ‘‘(bb) The wholesale distributor shall 

11 provide the transaction history, transaction 

12 information, and transaction statement 

13 under item (aa)— 

14 ‘‘(AA) if provided to a dispenser, 

15 on a single document in an electronic 

16 or paper format; and 

17 ‘‘(BB) if provided to a wholesale 

18 distributor, through any combination 

19 of self-generated paper, electronic 

20 data, or manufacturer-provided infor21 mation on the product package. 

22 ‘‘(II) For purposes of transactions de23 scribed in subclause (I), transaction his24 tory and transaction information shall not 

25 be required to include the lot number of 


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1 the product, the initial transaction date, or 

2 the initial shipment date from the manu3 facturer (as defined in subparagraphs (F), 

4 (G), and (H) of section 581(26)). 

5 ‘‘(iii) If the wholesale distributor did 

6 not purchase a product directly from the 

7 manufacturer, the exclusive distributor of 

8 the manufacturer, or a repackager that 

9 purchased directly from the manufacturer, 

10 as described in clause (ii), then prior to, or 

11 at the time of, each transaction or subse12 quent transaction, the wholesale dis13 tributor— 

14 ‘‘(I) shall provide to the subse15 quent purchaser a transaction state16 ment, transaction history, and trans17 action information; and 

18 ‘‘(II) may provide the informa19 tion described in subclause (I) to a 

20 subsequent purchaser on a single doc21 ument in an electronic or paper for22 mat or through any combination of 

23 self-generated paper, electronic data, 

24 or manufacturer provided information 

25 on the product package. 


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1 ‘‘(iv) For the purposes of clause 

2 (iii)(I), the transaction history supplied 

3 shall begin only with the wholesale dis4 tributor described in clause (ii)(I), but the 

5 wholesale distributor described in clause 

6 (iii) shall inform the subsequent purchaser 

7 that such wholesale distributor received a 

8 direct purchase statement from the manu9 facturer, the exclusive distributor of the 

10 manufacturer, or a repackager that pur11 chased directly from the manufacturer, 

12 and shall identify the manufacturer, exclu13 sive distributor of the manufacturer, or re14 packager that purchased directly from the 

15 manufacturer from which the direct pur16 chase statement was received. 

17 ‘‘(v) A wholesale distributor shall 

18 maintain the transaction information, 

19 transaction history, and transaction state20 ment for each transaction described in 

21 clauses (i), (ii), and (iii) for not less than 

22 6 years after the date of the transaction. 

23 ‘‘(B) RETURNS.— 


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1 ‘‘(i) SALEABLE RETURNS.—Notwith2 standing subparagraph (A)(i), the fol3 lowing shall apply: 

4 ‘‘(I) REQUIREMENTS.—Until the 

5 date that is 6 years after the date of 

6 enactment of the Drug Supply Chain 

7 Security Act (except as provided pur8 suant to subsection (a)(5)), a whole9 sale distributor may accept returned 

10 product from a dispenser pursuant to 

11 the terms and conditions of any agree12 ment between the parties, and, not13 withstanding subparagraph (A)(ii), 

14 may distribute such returned product 

15 without providing the transaction his16 tory. For transactions subsequent to 

17 the return, the transaction history of 

18 such product shall begin with the 

19 wholesale distributor that accepted the 

20 returned product, consistent with the 

21 requirements of this subsection. 

22 ‘‘(II) ENHANCED REQUIRE23 MENTS.—Beginning 6 years after the 

24 date of enactment of the Drug Supply 

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•S 957 IS

1 vided pursuant to subsection (a)(5)), 

2 a wholesale distributor may accept re3 turned product from a dispenser only 

4 if the wholesale distributor can asso5 ciate returned product with the trans6 action information and transaction 

7 statement associated with that prod8 uct. For all transactions after such 

9 date, the transaction history, as appli10 cable, of such product shall begin with 

11 the wholesale distributor that accepted 

12 and verified the returned product. For 

13 purposes of this subparagraph, the 

14 transaction information and trans15 action history, as applicable, need not 

16 include transaction dates if it is not 

17 reasonably practicable to obtain such 

18 dates. 

19 ‘‘(ii) NONSALEABLE RETURNS.—A 

20 wholesale distributor may return a non21 saleable prescription drug to the manufac22 turer or repackager, to the wholesale dis23 tributor from whom such prescription drug 

24 was purchased, or to a person acting on 

25 behalf of such a person, including a reVerDate Mar 15 2010 03:15 May 21, 2013 Jkt 029200 PO 00000 Frm 00041 Fmt 6652 Sfmt 6201 E:\BILLS\S957.IS S957

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•S 957 IS

1 turns processor, without providing the in2 formation required under subparagraph 

3 (A)(i). 

4 ‘‘(C) REQUESTS FOR INFORMATION.— 

5 Upon a request by the Secretary or other ap6 propriate Federal or State official, in the event 

7 of a recall or for the purpose of investigating a 

8 suspect product or an illegitimate product a 

9 wholesale distributor shall, not later than 24 

10 hours after receiving the request or in other 

11 such reasonable time as determined by the Sec12 retary, based on the circumstances of the re13 quest, provide the applicable transaction infor14 mation, transaction history, and transaction 

15 statement for the product. 

16 ‘‘(2) PRODUCT IDENTIFIER.—Beginning 6 

17 years after the date of enactment of the Drug Sup18 ply Chain Security Act, a wholesale distributor may 

19 engage in transactions involving a product only if 

20 such product is encoded with a product identifier 

21 (except as provided pursuant to subsection (a)(5)). 

22 ‘‘(3) AUTHORIZED TRADING PARTNERS.—Be23 ginning not later than 1 year after the date of enact24 ment of the Drug Supply Chain Security Act, the 


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1 trading partners of a wholesale distributor may be 

2 only authorized trading partners. 

3 ‘‘(4) VERIFICATION.—Beginning not later than 

4 1 year after the date of enactment of the Drug Sup5 ply Chain Security Act, a wholesale distributor shall 

6 have systems in place to enable the wholesale dis7 tributor to comply with the following requirements: 

8 ‘‘(A) SUSPECT PRODUCT.— 

9 ‘‘(i) IN GENERAL.—Upon making a 

10 determination that a product in the posses11 sion or control of the wholesale distributor 

12 is a suspect product, or upon receiving a 

13 request for verification from the Secretary 

14 that has made a determination that a 

15 product within the possession or control of 

16 a wholesale distributor is a suspect prod17 uct, a wholesale distributor shall— 

18 ‘‘(I) quarantine such product 

19 within the possession or control of the 

20 wholesale distributor from product in21 tended for distribution until such 

22 product is cleared or dispositioned; 

23 and 

24 ‘‘(II) promptly conduct an inves25 tigation in coordination with trading 


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•S 957 IS

1 partners, as applicable, to determine 

2 whether the product is an illegitimate 

3 product, which shall include validating 

4 any applicable transaction history and 

5 transaction information in the posses6 sion of the wholesale distributor and 

7 otherwise investigating to determine 

8 whether the product is an illegitimate 

9 product, and, beginning 6 years after 

10 the date of enactment of the Drug 

11 Supply Chain Security Act (except as 

12 provided pursuant to subsection 

13 (a)(5)), verifying the product at the 

14 package level. 

15 ‘‘(ii) CLEARED PRODUCT.—If the 

16 wholesale distributor determines that a 

17 suspect product is not an illegitimate prod18 uct, the wholesale distributor shall prompt19 ly notify the Secretary, if applicable, of 

20 such determination and such product may 

21 be further distributed. 

22 ‘‘(iii) RECORDS.—A wholesale dis23 tributor shall keep records of the investiga24 tion of a suspect product for not less than 


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•S 957 IS

1 6 years after the conclusion of the inves2 tigation. 

3 ‘‘(B) ILLEGITIMATE PRODUCT.— 

4 ‘‘(i) IN GENERAL.—Upon deter5 mining, in coordination with the manufac6 turer, that a product in the possession or 

7 control of a wholesale distributor is an ille8 gitimate product, the wholesale distributor 

9 shall, in a manner that is consistent with 

10 the systems and processes of such whole11 sale distributor— 

12 ‘‘(I) quarantine such product 

13 within the possession or control of the 

14 wholesale distributor from product in15 tended for distribution until such 

16 product is dispositioned; 

17 ‘‘(II) disposition the illegitimate 

18 product within the possession or con19 trol of the wholesale distributor; 

20 ‘‘(III) take reasonable and appro21 priate steps to assist a trading part22 ner to disposition an illegitimate prod23 uct not in the possession or control of 

24 the wholesale distributor; and 


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1 ‘‘(IV) retain a sample of the 

2 product for further physical examina3 tion or laboratory analysis of the 

4 product by the manufacturer or Sec5 retary (or other appropriate Federal 

6 or State official) upon request by the 

7 manufacturer or Secretary (or other 

8 appropriate Federal or State official), 

9 as necessary and appropriate. 

10 ‘‘(ii) MAKING A NOTIFICATION.— 

11 Upon determining that a product in the 

12 possession or control of the wholesale dis13 tributor is an illegitimate product, the 

14 wholesale distributor shall notify the Sec15 retary and all immediate trading partners 

16 that the wholesale distributor has reason 

17 to believe may have received such illegit18 imate product of such determination not 

19 later than 24 hours after making such de20 termination. 

21 ‘‘(iii) RESPONDING TO A NOTIFICA22 TION.—Upon the receipt of a notification 

23 from the Secretary or a trading partner 

24 that a determination has been made that a 

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•S 957 IS

1 sale distributor shall identify all illegit2 imate product subject to such notification 

3 that is in the possession or control of the 

4 wholesale distributor, including any prod5 uct that is subsequently received, and shall 

6 perform the activities described in subpara7 graph (A). 

8 ‘‘(iv) TERMINATING A NOTIFICA9 TION.—Upon a determination, in consulta10 tion with the Secretary, that a notification 

11 is no longer necessary, a wholesale dis12 tributor shall promptly notify immediate 

13 trading partners that the wholesale dis14 tributor notified pursuant to clause (ii) 

15 that such notification has been terminated. 

16 ‘‘(v) RECORDS.—A wholesale dis17 tributor shall keep records of the disposi18 tion of an illegitimate product for not less 

19 than 6 years after the conclusion of the 

20 disposition. 

21 ‘‘(C) ELECTRONIC DATABASE.—A whole22 sale distributor may satisfy the requirements of 

23 this paragraph by developing a secure electronic 

24 database or utilizing a secure electronic data25 base developed or operated by another entity. 


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1 The owner of such database shall establish the 

2 requirements and processes to respond to re3 quests and may provide for data access to other 

4 members of the pharmaceutical distribution 

5 supply chain, as appropriate. The development 

6 and operation of such a database shall not re7 lieve a wholesale distributor of the requirement 

8 under this paragraph to respond to a 

9 verification request submitted by means other 

10 than a secure electronic database. 

11 ‘‘(D) VERIFICATION OF SALEABLE RE12 TURNED PRODUCT.—Beginning 6 years after 

13 the date of enactment of the Drug Supply 

14 Chain Security Act, upon receipt of a returned 

15 product that the wholesale distributor intends 

16 to further distribute, before further distributing 

17 such product, the wholesale distributor shall 

18 verify the product identifier for each sealed ho19 mogeneous case of such product or, if such 

20 product is not in a sealed homogeneous case, 

21 verify the product identifier on each package. 

22 ‘‘(d) DISPENSER REQUIREMENTS.— 

23 ‘‘(1) PRODUCT TRACING.— 


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1 ‘‘(A) IN GENERAL.—Beginning 1 year 

2 after the date of enactment of the Drug Supply 

3 Chain Security Act, a dispenser— 

4 ‘‘(i) shall not accept ownership of a 

5 product, unless the previous owner prior 

6 to, or at the time of, the transaction, pro7 vides transaction history, transaction infor8 mation, and a transaction statement; 

9 ‘‘(ii) prior to, or at the time of, each 

10 transaction in which the dispenser trans11 fers ownership of a product (but not in12 cluding dispensing to a patient or returns) 

13 shall provide the subsequent owner with 

14 transaction history, transaction informa15 tion, and a transaction statement for the 

16 product, except that the requirements of 

17 this clause shall not apply to sales by a 

18 dispenser to another dispenser to fulfill a 

19 specific patient need; and 

20 ‘‘(iii) shall maintain transaction infor21 mation, transaction history, and trans22 action statements, as necessary to inves23 tigate a suspect product, for not less than 

24 6 years after the transaction. 


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1 ‘‘(B) AGREEMENTS WITH THIRD PAR2 TIES.—A dispenser may enter into a written 

3 agreement with a third party, including an au4 thorized wholesale distributor, under which the 

5 third party confidentially maintains the trans6 action information, transaction history, and 

7 transaction statements required to be main8 tained under this subsection on behalf of the 

9 dispenser. If a dispenser enters into such an 

10 agreement, the dispenser shall maintain a copy 

11 of the written agreement and shall not be re12 lieved of the obligations of the dispenser under 

13 this subsection. 

14 ‘‘(C) RETURNS.— 

15 ‘‘(i) SALEABLE RETURNS.—A dis16 penser may return product to the trading 

17 partner from which the dispenser obtained 

18 the product without providing the informa19 tion required under subparagraph (B). 

20 ‘‘(ii) NONSALEABLE RETURNS.—A 

21 dispenser may return a nonsaleable prod22 uct to the manufacturer or repackager, to 

23 the wholesale distributor from whom such 

24 product was purchased, to a returns proc25 essor, or to a person acting on behalf of 


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1 such persons without providing the infor2 mation required under subparagraph 

3 (A)(i). 

4 ‘‘(D) REQUESTS FOR INFORMATION.— 

5 Upon a request by the Secretary or other ap6 propriate Federal or State official, in the event 

7 of a recall or for the purpose of investigating a 

8 suspect or an illegitimate product, a dispenser 

9 shall, not later than 2 business days after re10 ceiving the request or in another such reason11 able time as determined by the Secretary, based 

12 on the circumstances of the request, provide the 

13 applicable transaction information, transaction 

14 statement, and transaction history which the 

15 dispenser received from the previous owner, 

16 which shall not include the lot number of the 

17 product, the initial transaction date, or the ini18 tial shipment date from the manufacturer un19 less such information was included in the trans20 action information, transaction statement, and 

21 transaction history provided by the manufac22 turer or wholesale distributor to the dispenser. 

23 ‘‘(2) PRODUCT IDENTIFIER.—Beginning not 

24 later than 7 years after the date of enactment of the 

25 Drug Supply Chain Security Act, a dispenser may 


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1 engage in transactions involving a product only if 

2 such product is encoded with a product identifier 

3 (except as provided pursuant to subsection (a)(5)). 

4 ‘‘(3) AUTHORIZED TRADING PARTNERS.—Be5 ginning not later than 1 year after the date of enact6 ment of the Drug Supply Chain Security Act, the 

7 trading partners of a dispenser may be only author8 ized trading partners. 

9 ‘‘(4) VERIFICATION.—Beginning not later than 

10 1 year after the date of enactment of the Drug Sup11 ply Chain Security Act, a dispenser shall have sys12 tems in place to enable the dispenser to comply with 

13 the following requirements: 

14 ‘‘(A) SUSPECT PRODUCT.— 

15 ‘‘(i) IN GENERAL.—Upon making a 

16 determination that a product in the posses17 sion or control of the dispenser is a suspect 

18 product, or upon receiving a request for 

19 verification from the Secretary that has 

20 made a determination that a product with21 in the possession or control of a dispenser 

22 is a suspect product, a dispenser shall— 

23 ‘‘(I) quarantine such product 

24 within the possession or control of the 

25 dispenser from product intended for 


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1 distribution until such product is 

2 cleared or dispositioned; and 

3 ‘‘(II) promptly conduct an inves4 tigation in coordination with trading 

5 partners, as applicable, to determine 

6 whether the product is an illegitimate 

7 product. 

8 ‘‘(ii) INVESTIGATION.—An investiga9 tion conducted under clause (i)(II) shall in10 clude— 

11 ‘‘(I) beginning 7 years after the 

12 date of enactment of the Drug Supply 

13 Chain Security Act, verifying whether 

14 the lot number of a suspect product 

15 corresponds with the lot number for 

16 such product; 

17 ‘‘(II) beginning 7 years after the 

18 date of enactment of such Act, 

19 verifying that the product identifier of 

20 at least 3 packages or 10 percent of 

21 such suspect product, whichever is 

22 greater, or all packages, if there are 

23 fewer than 3, corresponds with the 

24 product identifier for such product; 


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1 ‘‘(III) validating any applicable 

2 transaction history and transaction in3 formation in the possession of the dis4 penser; and 

5 ‘‘(IV) otherwise investigating to 

6 determine whether the product is an 

7 illegitimate product. 

8 ‘‘(iii) CLEARED PRODUCT.—If the dis9 penser makes the determination that a sus10 pect product is not an illegitimate product, 

11 the dispenser shall promptly notify the 

12 Secretary, if applicable, of such determina13 tion and such product may be further dis14 tributed or dispensed. 

15 ‘‘(iv) RECORDS.—A dispenser shall 

16 keep records of the investigation of a sus17 pect product for not less than 6 years after 

18 the conclusion of the investigation. 

19 ‘‘(B) ILLEGITIMATE PRODUCT.— 

20 ‘‘(i) IN GENERAL.—Upon deter21 mining, in coordination with the manufac22 turer, that a product in the possession or 

23 control of a dispenser is an illegitimate 

24 product, the dispenser shall— 


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1 ‘‘(I) disposition the illegitimate 

2 product within the possession or con3 trol of the dispenser; 

4 ‘‘(II) take reasonable and appro5 priate steps to assist a trading part6 ner to disposition an illegitimate prod7 uct not in the possession or control of 

8 the dispenser; and 

9 ‘‘(III) retain a sample of the 

10 product for further physical examina11 tion or laboratory analysis of the 

12 product by the manufacturer or Sec13 retary (or other appropriate Federal 

14 or State official) upon request by the 

15 manufacturer or Secretary (or other 

16 appropriate Federal or State official), 

17 as necessary and appropriate. 

18 ‘‘(ii) MAKING A NOTIFICATION.— 

19 Upon determining that a product in the 

20 possession or control of the dispenser is an 

21 illegitimate product, the dispenser shall no22 tify the Secretary and all immediate trad23 ing partners that the dispenser has reason 

24 to believe may have received such illegit25 imate product of such determination not 


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1 later than 24 hours after making such de2 termination. 

3 ‘‘(iii) RESPONDING TO A NOTIFICA4 TION.—Upon the receipt of a notification 

5 from the Secretary or a trading partner 

6 that a determination has been made that a 

7 product is an illegitimate product, a dis8 penser shall identify all illegitimate product 

9 subject to such notification that is in the 

10 possession or control of the dispenser, in11 cluding any product that is subsequently 

12 received, and shall perform the activities 

13 described in subparagraph (A). 

14 ‘‘(iv) TERMINATING A NOTIFICA15 TION.—Upon making a determination, in 

16 consultation with the Secretary, that a no17 tification is no longer necessary, a dis18 penser shall promptly notify immediate 

19 trading partners that the dispenser notified 

20 pursuant to clause (ii) that such notifica21 tion has been terminated. 

22 ‘‘(v) RECORDS.—A dispenser shall 

23 keep records of the disposition of an illegit24 imate product for not less than 6 years 

25 after the conclusion of the disposition. 


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1 ‘‘(C) ELECTRONIC DATABASE.—A dis2 penser may satisfy the requirements of this 

3 paragraph by developing a secure electronic 

4 database or utilizing a secure electronic data5 base developed or operated by another entity. 

6 ‘‘(e) REPACKAGER REQUIREMENTS.— 

7 ‘‘(1) PRODUCT TRACING.— 

8 ‘‘(A) IN GENERAL.—Beginning not later 

9 than 1 year after the date of enactment of the 

10 Drug Supply Chain Security Act, a repackager 

11 shall— 

12 ‘‘(i) not accept ownership of a product 

13 unless the previous owner, prior to, or at 

14 the time of, the transaction, provides 

15 transaction history, transaction informa16 tion, and a transaction statement for the 

17 product; 

18 ‘‘(ii) prior to, or at the time of, each 

19 transaction in which the repackager trans20 fers ownership of a product, or transfers 

21 possession of a product to a third-party lo22 gistics provider, provide the subsequent 

23 owner with transaction history, transaction 

24 information, and a transaction statement; 

25 and 


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1 ‘‘(iii) maintain the transaction infor2 mation, transaction history, and trans3 action statement for each transaction de4 scribed in clauses (i) and (ii) for not less 

5 than 6 years after the transaction. 

6 ‘‘(B) NONSALEABLE RETURNS.—A repack7 ager may return a nonsaleable product to the 

8 manufacturer or repackager, or to the wholesale 

9 distributor from whom such product was pur10 chased, or to a person acting on behalf of such 

11 a person, including a returns processor, without 

12 providing the information required under sub13 paragraph (A)(ii). 

14 ‘‘(C) REQUESTS FOR INFORMATION.— 

15 Upon a request by the Secretary or other ap16 propriate Federal or State official, in the event 

17 of a recall or for the purpose of investigating a 

18 suspect product or an illegitimate product, a re19 packager shall, not later than 24 hours after re20 ceiving the request or in other such reasonable 

21 time as determined by the Secretary, based on 

22 the circumstances of the request, provide the 

23 applicable transaction information, transaction 

24 history and transaction statement for the prod25 uct. 


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1 ‘‘(2) PRODUCT IDENTIFIER.—Beginning not 

2 later than 5 years after enactment of the Drug Sup3 ply Chain Security Act, a repackager— 

4 ‘‘(A) shall a fix or imprint a product iden5 tifier to each package and homogenous case of 

6 product intended to be introduced in a trans7 action in commerce; 

8 ‘‘(B) shall maintain the product identifier 

9 information for such product for not less than 

10 6 years after the date of the transaction; 

11 ‘‘(C) may engage in transactions involving 

12 a product only if such product is encoded with 

13 a product identifier (except as provided pursu14 ant to subsection (a)(5)); and 

15 ‘‘(D) maintain records for not less than 6 

16 years to allow the repackager to associate the 

17 product identifier the repackager affixes or im18 prints with the product identifier assigned by 

19 the original manufacturer of the product. 

20 ‘‘(3) AUTHORIZED TRADING PARTNERS.—Be21 ginning 1 year after the date of enactment of the 

22 Drug Supply Chain Security Act, the trading part23 ners of a repackager may be only authorized trading 

24 partners. 


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1 ‘‘(4) VERIFICATION.—Beginning not later than 

2 1 year after the date of enactment of the Drug Sup3 ply Chain Security Act, a repackager shall have sys4 tems in place to enable the repackager to comply 

5 with the following requirements: 

6 ‘‘(A) SUSPECT PRODUCT.— 

7 ‘‘(i) IN GENERAL.—Upon making a 

8 determination that a product in the posses9 sion or control of the repackager is a sus10 pect product, or upon receiving a request 

11 for verification from the Secretary that has 

12 made a determination that a product with13 in the possession or control of a repack14 ager is a suspect product, a repackager 

15 shall— 

16 ‘‘(I) quarantine such product 

17 within the possession or control of the 

18 repackager from product intended for 

19 distribution until such product is 

20 cleared or dispositioned; and 

21 ‘‘(II) promptly conduct an inves22 tigation in coordination with trading 

23 partners, as applicable, to determine 

24 whether the product is an illegitimate 

25 product, which shall include validating 


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1 any applicable transaction history and 

2 transaction information in the posses3 sion of the repackager and otherwise 

4 investigating to determine whether the 

5 product is an illegitimate product, 

6 and, beginning 5 years after the date 

7 of enactment of the Drug Supply 

8 Chain Security Act (except as pro9 vided pursuant to subsection (a)(5)), 

10 verifying the product at the package 

11 level. 

12 ‘‘(ii) CLEARED PRODUCT.—If the re13 packager makes the determination that a 

14 suspect product is not an illegitimate prod15 uct, the repackager shall promptly notify 

16 the Secretary, if applicable, of such deter17 mination and such product may be further 

18 distributed. 

19 ‘‘(iii) RECORDS.—A repackager shall 

20 keep records of the investigation of a sus21 pect product for not less than 6 years after 

22 the conclusion of the investigation. 

23 ‘‘(B) ILLEGITIMATE PRODUCT.— 

24 ‘‘(i) IN GENERAL.—Upon deter25 mining, in coordination with the manufacVerDate Mar 15 2010 03:15 May 21, 2013 Jkt 029200 PO 00000 Frm 00061 Fmt 6652 Sfmt 6201 E:\BILLS\S957.IS S957

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1 turer, that a product in the possession or 

2 control of a repackager is an illegitimate 

3 product, the repackager shall, in a manner 

4 that is consistent with the systems and 

5 processes of such repackager— 

6 ‘‘(I) quarantine such product 

7 within the possession or control of the 

8 repackager from product intended for 

9 distribution until such product is 

10 dispositioned; 

11 ‘‘(II) disposition the illegitimate 

12 product within the possession or con13 trol of the repackager; 

14 ‘‘(III) take reasonable and appro15 priate steps to assist a trading part16 ner to disposition an illegitimate prod17 uct not in the possession or control of 

18 the repackager; and 

19 ‘‘(IV) retain a sample of the 

20 product for further physical examina21 tion or laboratory analysis of the 

22 product by the manufacturer or Sec23 retary (or other appropriate Federal 

24 or State official) upon request by the 

25 manufacturer or Secretary (or other 


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1 appropriate Federal or State official), 

2 as necessary and appropriate. 

3 ‘‘(ii) MAKING A NOTIFICATION.— 

4 Upon determining that a product in the 

5 possession or control of the repackager is 

6 an illegitimate product, the repackager 

7 shall notify the Secretary and all imme8 diate trading partners that the repackager 

9 has reason to believe may have received the 

10 illegitimate product of such determination 

11 not later than 24 hours after making such 

12 determination. 

13 ‘‘(iii) RESPONDING TO A NOTIFICA14 TION.—Upon the receipt of a notification 

15 from the Secretary or a trading partner, a 

16 repackager shall identify all illegitimate 

17 product subject to such notification that is 

18 in the possession or control of the repack19 ager, including any product that is subse20 quently received, and shall perform the ac21 tivities described in subparagraph (A). 

22 ‘‘(iv) TERMINATING A NOTIFICA23 TION.—Upon a determination, in consulta24 tion with the Secretary, that a notification 

25 is no longer necessary, a repackager shall 


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1 promptly notify immediate trading part2 ners that the repackager notified pursuant 

3 to clause (ii) that such notification has 

4 been terminated. 

5 ‘‘(v) RECORDS.—A repackager shall 

6 keep records of the disposition of an illegit7 imate product for not less than 6 years 

8 after the conclusion of the disposition. 

9 ‘‘(C) REQUESTS FOR VERIFICATION.—Be10 ginning 5 years after enactment of the Drug 

11 Supply Chain Security Act, upon receiving a re12 quest for verification from an authorized manu13 facturer, wholesale distributor, or dispenser 

14 that is in possession or control of a product 

15 they believe to be repackaged by such repack16 ager, a repackager shall, not later than 24 

17 hours after receiving the verification request or 

18 in other such reasonable time as determined by 

19 the Secretary, based on the circumstances of 

20 the request, notify the person making the re21 quest whether the product identifier, including 

22 the standard numeric identifier, that is the sub23 ject of the request corresponds to the product 

24 identifier affixed or imprinted by the repack25 ager. If a repackager responding to a 


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1 verification request identifies a product identi2 fier that does not correspond to that affixed or 

3 imprinted by the repackager, the repackager 

4 shall treat such product as suspect product and 

5 conduct an investigation as described in sub6 paragraph (A). If the repackager has reason to 

7 believe the product is an illegitimate product, 

8 the repackager shall advise the person making 

9 the request of such belief at the time such man10 ufacturer responds to the verification request. 

11 ‘‘(D) ELECTRONIC DATABASE.—A repack12 ager may satisfy the requirements of paragraph 

13 (4) by developing a secure electronic database 

14 or utilizing a secure electronic database devel15 oped or operated by another entity. The owner 

16 of such database shall establish the require17 ments and processes to respond to requests and 

18 may provide for data access to other members 

19 of the pharmaceutical distribution supply chain, 

20 as appropriate. The development and operation 

21 of such a database shall not relieve a repack22 ager of the requirement under paragraph (4) to 

23 respond to a verification request submitted by 

24 means other than a secure electronic database. 


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1 ‘‘(E) VERIFICATION OF SALEABLE RE2 TURNED PRODUCT.—Beginning 5 years after 

3 the date of enactment of the Drug Supply 

4 Chain Security Act, upon receipt of a returned 

5 product that the repackager intends to further 

6 distribute, before further distributing such 

7 product, the repackager shall verify the product 

8 identifier for each sealed homogeneous case of 

9 such product or, if such product is not in a 

10 sealed homogeneous case, verify the product 

11 identifier on each package. 

12 ‘‘(f) THIRD-PARTY LOGISTICS PROVIDER REQUIRE13 MENTS.— 

14 ‘‘(1) IN GENERAL.—Beginning not later than 1 

15 year after the date of enactment of the Drug Supply 

16 Chain Security Act, a third-party logistics provider 

17 shall— 

18 ‘‘(A) not accept possession of a product 

19 unless the owner of the product provides the 

20 transaction history, transaction information, 

21 and a transaction statement for the product; 

22 ‘‘(B) maintain a copy of the information 

23 described in subparagraph (A) for not less than 

24 6 years after the transfer of possession; and 


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1 ‘‘(C) upon a request by the Secretary or 

2 other appropriate Federal or State official, in 

3 the event of a recall or for the purpose of inves4 tigating a suspect product or an illegitimate 

5 product, not later than 24 hours after receiving 

6 the request or in other such reasonable time as 

7 determined by the Secretary based on the cir8 cumstances of the request, provide the applica9 ble transaction information, transaction history, 

10 and transaction statement for the product. 

11 ‘‘(2) PRODUCT TRACING.—Beginning not later 

12 than 6 years after the date of enactment of the 

13 Drug Supply Chain Security Act, a third-party logis14 tics provider may accept possession of product only 

15 if such product is encoded with a product identifier 

16 (except as provided pursuant to subsection (a)(5)). 

17 ‘‘(3) AUTHORIZED TRADING PARTNERS.—Be18 ginning 1 year after the date of enactment of the 

19 Drug Supply Chain Security Act, the trading part20 ners of a third-party logistics provider may be only 

21 authorized trading partners. 

22 ‘‘(4) VERIFICATION.—Beginning not later than 

23 1 year after the date of enactment of the Drug Sup24 ply Chain Security Act, a third-party logistics pro25 vider shall have systems in place to enable the thirdVerDate Mar 15 2010 03:15 May 21, 2013 Jkt 029200 PO 00000 Frm 00067 Fmt 6652 Sfmt 6201 E:\BILLS\S957.IS S957

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1 party logistics provider to comply with the following 

2 requirements: 

3 ‘‘(A) SUSPECT PRODUCT.— 

4 ‘‘(i) IN GENERAL.—Upon making a 

5 determination that a product in the posses6 sion or control of a third-party logistics 

7 provider is a suspect product, a third-party 

8 logistics provider shall— 

9 ‘‘(I) quarantine such product 

10 within the possession or control of the 

11 third-party logistics provider from 

12 product intended for distribution until 

13 such product is cleared or transferred 

14 to the owner of such product for dis15 position of the product; and 

16 ‘‘(II) promptly notify the owner 

17 of such product of the need to conduct 

18 an investigation to determine whether 

19 the product is an illegitimate product. 

20 ‘‘(ii) CLEARED PRODUCT.—If the 

21 owner of the product notifies the third22 party logistics provider of the determina23 tion that a suspect product is not an ille24 gitimate product, such product may be fur25 ther distributed. 


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1 ‘‘(iii) RECORDS.—A third-party logis2 tics provider shall keep records of the ac3 tivities described in subclauses (I) and (II) 

4 of clause (i), as such subclauses relate to 

5 a suspect product, for not less than 6 

6 years after the conclusion of the investiga7 tion. 

8 ‘‘(B) ILLEGITIMATE PRODUCT.— 

9 ‘‘(i) IN GENERAL.—Upon deter10 mining, in coordination with the manufac11 turer, that a product in the possession or 

12 control of a third-party logistics provider is 

13 an illegitimate product, the third-party lo14 gistics provider shall— 

15 ‘‘(I) promptly notify the owner of 

16 such product of the need to disposi17 tion such product; and 

18 ‘‘(II) promptly transfer posses19 sion of the product to the owner of 

20 such product to disposition the prod21 uct. 

22 ‘‘(ii) MAKING A NOTIFICATION.— 

23 Upon determining that a product in the 

24 possession or control of the third-party lo25 gistics provider is an illegitimate product, 


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1 the third-party logistics provider shall no2 tify the Secretary not later than 24 hours 

3 after making such determination. 

4 ‘‘(iii) RESPONDING TO A NOTIFICA5 TION.—Upon the receipt of a notification 

6 from the Secretary, a third-party logistics 

7 provider shall identify all illegitimate prod8 uct subject to such notification that is in 

9 the possession or control of the third-party 

10 logistics provider, including any product 

11 that is subsequently received, and shall 

12 perform the activities described in subpara13 graph (A). 

14 ‘‘(iv) TERMINATING A NOTIFICA15 TION.—Upon making a determination, in 

16 consultation with the Secretary and the 

17 owner of such product, that a notification 

18 is no longer necessary, a third-party logis19 tics provider shall promptly terminate such 

20 notification. 

21 ‘‘(v) RECORDS.—A third-party logis22 tics provider shall keep records of the ac23 tivities described in subclauses (I) and (II) 

24 of clause (i) as such subclauses relate to 

25 an illegitimate product for not less than 6 


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1 years after the conclusion of the disposi2 tion. 

3 ‘‘(g) DROP SHIPMENTS.—This section shall not apply 

4 to any entity that does not physically handle, distribute, 

5 or store product. For purposes of this section, providing 

6 various administrative services, including processing of or7 ders and payments, shall not by itself, be construed as 

8 being involved in the handling, distribution, or storage of 

9 a product. For purposes of this section, the term ‘entity’ 

10 means a wholesale distributor, relabeler, repackager, or 

11 any other status.’’. 

12 SEC. 3. ENHANCED DRUG DISTRIBUTION SECURITY. 

13 (a) IN GENERAL.—Section 582 of the Federal Food, 

14 Drug, and Cosmetic Act, as added by section 2, is amend15 ed by adding at the end the following: 

16 ‘‘(h) ENHANCED DRUG DISTRIBUTION SECURITY.— 

17 ‘‘(1) IN GENERAL.—On the date that is 10 

18 years after the date of enactment of the Drug Sup19 ply Chain Security Act, the following interoperable, 

20 electronic tracing of product at the package level re21 quirements shall go into effect: 

22 ‘‘(A) The transaction information and the 

23 transaction statements as required under this 

24 section shall be exchanged in a secure, inter25 operable, electronic manner in accordance with 


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1 the standards established under the guidance 

2 issued pursuant to paragraphs (3) and (4) of 

3 subsection (i), including any revision of such 

4 guidance issued in accordance with paragraph 

5 (5) of such subsection. 

6 ‘‘(B) The transaction information required 

7 under this section shall include the product 

8 identifier at the package level for each package 

9 included in the transaction. 

10 ‘‘(C) Systems and processes for verification 

11 of product at the package level shall be required 

12 in accordance with the standards established 

13 under the guidance issued pursuant to sub14 section (a)(2) and the guidances issued pursu15 ant to paragraphs (2), (3), and (4) of sub16 section (i), including any revision of such guid17 ances issued in accordance with paragraph (5) 

18 of such subsection, which may include the use 

19 of aggregation and inference as necessary. 

20 ‘‘(D) The systems and processes necessary 

21 to promptly respond with the transaction infor22 mation and transaction statement for a product 

23 upon a request by the Secretary (or other ap24 propriate Federal or State official) in the event 

25 of a recall or for the purposes of investigating 


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1 a suspect product or an illegitimate product 

2 shall be required. 

3 ‘‘(E) The systems and processes necessary 

4 to promptly facilitate gathering the information 

5 necessary to produce the transaction informa6 tion for each transaction going back to the 

7 manufacturer, as applicable shall be required— 

8 ‘‘(i) in the event of a request by the 

9 Secretary (or other appropriate Federal or 

10 State official), on account of a recall or for 

11 the purposes of investigating a suspect 

12 product or an illegitimate product; or 

13 ‘‘(ii) in the event of a request by an 

14 authorized trading partner, in a secure 

15 manner that ensures the protection of con16 fidential commercial information and trade 

17 secrets, for purposes of investigating a sus18 pect product or assisting the Secretary (or 

19 other appropriate Federal or State official) 

20 with a request described in clause (i). 

21 ‘‘(F) Each person accepting a saleable re22 turn shall have systems and processes in place 

23 to allow acceptance of such product and may 

24 accept saleable returns only if such person can 

25 associate the saleable return product with the 


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1 transaction information and transaction state2 ment associated with that product. 

3 ‘‘(2) COMPLIANCE.— 

4 ‘‘(A) INFORMATION MAINTENANCE AGREE5 MENT.—A dispenser shall be permitted to enter 

6 into a written agreement with a third party, in7 cluding an authorized wholesale distributor, 

8 under which the third party shall confidentially 

9 maintain any information and statements re10 quired to be maintained under this section. If 

11 a dispenser enters into such an agreement, the 

12 dispenser shall maintain a copy of the written 

13 agreement and shall not be relieved of the obli14 gations of the dispenser under this subsection. 

15 ‘‘(B) ALTERNATIVE METHODS.—The Sec16 retary, taking into consideration the assessment 

17 conducted under paragraph (3), shall provide 

18 for alternative methods of compliance with any 

19 of the requirements set forth in paragraph (1), 

20 including— 

21 ‘‘(i) establishing timelines for compli22 ance by small businesses (including small 

23 business dispensers with 25 or fewer full24 time employees) with such requirements, in 

25 order to ensure that such requirements do 


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1 not impose undue economic hardship for 

2 small businesses, including small business 

3 dispensers for whom the criteria set forth 

4 in the assessment under paragraph (3) is 

5 not met, if the Secretary determines that 

6 such requirements under paragraph (1) 

7 would result in undue economic hardship; 

8 and 

9 ‘‘(ii) establishing a process by which a 

10 dispenser may request a waiver from any 

11 of the requirements set forth in paragraph 

12 (1) if the Secretary determines that such 

13 requirements would result in an undue eco14 nomic hardship, which shall include a proc15 ess for the biennial review and renewal of 

16 any such waiver. 

17 ‘‘(3) ASSESSMENT.— 

18 ‘‘(A) IN GENERAL.—Not later than the 

19 date that is 18 months after the Secretary 

20 issues the final guidance required under sub21 section (i), the Secretary shall enter into con22 tract with a private, independent consulting 

23 firm with expertise to conduct a technology and 

24 software assessment that looks at the feasibility 

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1 ees conducting interoperable, electronic tracing 

2 of products at the package level. In no case 

3 may such assessment commence later than 7.5 

4 years after the date of enactment of the Drug 

5 Supply Chain Security Act. 

6 ‘‘(B) CONDITION.—As a condition of the 

7 award of the contract under subparagraph (A), 

8 the private, independent consulting firm shall 

9 agree to consult with dispensers with 25 or 

10 fewer full-time employees when conducting the 

11 assessment under such subparagraph. 

12 ‘‘(C) CONTENT.—The assessment con13 ducted under subparagraph (A) shall assess 

14 whether— 

15 ‘‘(i) the necessary software and hard16 ware is readily accessible to such dis17 pensers; 

18 ‘‘(ii) the necessary software and hard19 ware is not prohibitively expensive to ob20 tain, install, and maintain for such dis21 pensers; and 

22 ‘‘(iii) the necessary hardware and 

23 software can be integrated into business 

24 practices, such as interoperability with 

25 wholesale distributors, for such dispensers. 


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1 ‘‘(D) PUBLICATION.—The Secretary 

2 shall— 

3 ‘‘(i) publish the statement of work for 

4 the assessment conducted under subpara5 graph (A) for public comment prior to be6 ginning the assessment; 

7 ‘‘(ii) publish the final assessment for 

8 public comment not later than 30 calendar 

9 days after receiving such assessment; and 

10 ‘‘(iii) hold a public meeting not later 

11 than 180 calendar days after receiving the 

12 final assessment at which public stake13 holders may present their views on the as14 sessment. 

15 ‘‘(4) PROCEDURE.—Notwithstanding section 

16 553 of title 5, United States Code, the Secretary, in 

17 promulgating any regulation pursuant to this sec18 tion, shall— 

19 ‘‘(A) provide appropriate flexibility by— 

20 ‘‘(i) not requiring the adoption of spe21 cific business systems for the maintenance 

22 and transmission of data; 

23 ‘‘(ii) prescribing alternative methods 

24 of compliance for any of the requirements 

25 set forth in paragraph (1) or set forth in 


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1 regulations implementing such require2 ments, including timelines— 

3 ‘‘(I) for small businesses to com4 ply with the requirements set forth in 

5 the regulations in order to ensure that 

6 such requirements do not impose 

7 undue economic hardship for small 

8 businesses (including small business 

9 dispensers for whom the criteria set 

10 forth in the assessment under para11 graph (3) is not met), if the Secretary 

12 determines that such requirements 

13 would result in undue economic hard14 ship; and 

15 ‘‘(II) which shall include estab16 lishing a process by which a dispenser 

17 may request a waiver from any of the 

18 requirements set forth in such regula19 tions if the Secretary determines that 

20 such requirements would result in an 

21 undue economic hardship; and 

22 ‘‘(iii) taking into consideration— 

23 ‘‘(I) the results of pilot projects, 

24 including pilot projects pursuant to 

25 this section; 


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1 ‘‘(II) the public meetings held 

2 and related guidance documents 

3 issued under this section; 

4 ‘‘(III) the public health benefits 

5 of any additional regulations in com6 parison to the cost of compliance with 

7 such requirements, including on enti8 ties of varying sizes and capabilities; 

9 ‘‘(IV) the diversity of the phar10 maceutical distribution supply chain 

11 by providing appropriate flexibility for 

12 each sector, including both large and 

13 small businesses; and 

14 ‘‘(V) the assessment pursuant to 

15 paragraph (3) with respect to small 

16 business dispensers, including related 

17 public comment and the public meet18 ing, and requirements under this sec19 tion; 

20 ‘‘(B) issue a notice of proposed rulemaking 

21 that includes a copy of the proposed regulation; 

22 ‘‘(C) provide a period of not less than 60 

23 days for comments on the proposed regulation; 

24 and 


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1 ‘‘(D) publish the final regulation not less 

2 than 2 years prior to the effective date of the 

3 regulation. 

4 ‘‘(i) GUIDANCE DOCUMENTS.— 

5 ‘‘(1) IN GENERAL.—For the purposes of facili6 tating the successful and efficient adoption of se7 cure, interoperable product tracing at the package 

8 level in order to enhance drug distribution security 

9 and further protect the public health, the Secretary 

10 shall issue the guidance documents as provided for 

11 in this subsection. 

12 ‘‘(2) SUSPECT AND ILLEGITIMATE PRODUCT.— 

13 ‘‘(A) IN GENERAL.—Not later than 180 

14 days after enactment of the Drug Supply Chain 

15 Security Act, the Secretary shall issue a guid16 ance document to aid trading partners in the 

17 identification of a suspect product and notifica18 tion termination. Such guidance document 

19 shall— 

20 ‘‘(i) identify specific scenarios that 

21 could significantly increase the risk of a 

22 suspect product entering the pharma23 ceutical distribution supply chain; 

24 ‘‘(ii) provide recommendation on how 

25 trading partners may identify such product 


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1 and make a determination if the product is 

2 a suspect product as soon as practicable; 

3 and 

4 ‘‘(iii) set forth the process by which 

5 manufacturers, repackagers, wholesale dis6 tributors, dispensers, and third-party logis7 tics providers shall terminate notifications 

8 in consultation with the Secretary regard9 ing illegitimate product pursuant to sub10 sections (b)(4)(B), (c)(4)(B), (d)(4)(B), 

11 (e)(4)(B), and (f)(B). 

12 ‘‘(B) REVISED GUIDANCE.—If the Sec13 retary revises the guidance issued under sub14 paragraph (A), the Secretary shall follow the 

15 procedure set forth in paragraph (5). 

16 ‘‘(3) UNIT LEVEL TRACING.— 

17 ‘‘(A) IN GENERAL.—In order to enhance 

18 drug distribution security at the package level, 

19 not later than 18 months after conducting a 

20 public meeting on the system attributes nec21 essary to enable secure tracing of product at 

22 the package level, the Secretary shall issue a 

23 final guidance document that outlines and 

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1 ing at the package level as required under the 

2 requirements established under subsection (h). 

3 Such guidance document shall— 

4 ‘‘(i) define the circumstances under 

5 which the sectors within the pharma6 ceutical distribution supply chain may, in 

7 the most efficient manner practicable, infer 

8 the contents of a case, pallet, tote, or other 

9 aggregate of individual packages or con10 tainers of product, from a product identi11 fier associated with the case, pallet, tote, 

12 or other aggregate, without opening each 

13 case, pallet, tote, or other aggregate or 

14 otherwise individually scanning each pack15 age; 

16 ‘‘(ii) identify methods and processes 

17 to enhance secure tracing of product at the 

18 package level, such as enhanced 

19 verification activities, the use of aggrega20 tion and inference, processes that utilize 

21 the product identifiers to enhance tracing 

22 of product at the package level, or package 

23 security features; and 


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1 ‘‘(iii) ensure the protection of con2 fidential commercial information and trade 

3 secrets. 

4 ‘‘(B) PROCEDURE.—In issuing the guid5 ance under subparagraph (A), and in revising 

6 such guidance, if applicable, the Secretary shall 

7 follow the procedure set forth in paragraph (5). 

8 ‘‘(4) STANDARDS FOR INTEROPERABLE DATA

9 EXCHANGE.— 

10 ‘‘(A) IN GENERAL.—In order to enhance 

11 secure tracing of a product at the package level, 

12 the Secretary, not later than 18 months after 

13 conducting a public meeting on the interoper14 able standards necessary to enhance the secu15 rity of the pharmaceutical distribution supply 

16 chain, shall update the guidance issued pursu17 ant to subsection (a)(2), as necessary and ap18 propriate, and finalize such guidance document 

19 so that the guidance document— 

20 ‘‘(i) identifies and makes rec21 ommendation with respect to the standards 

22 necessary for adoption in order to support 

23 the secure, interoperable electronic data 

24 exchange among the pharmaceutical dis25 tribution supply chain that comply with a 


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1 form and format developed by a widely rec2 ognized international standards develop3 ment organization; 

4 ‘‘(ii) takes into consideration stand5 ards established pursuant to subsection 

6 (a)(2) and section 505D; 

7 ‘‘(iii) facilitates the creation of a uni8 form process or methodology for product 

9 tracing; and 

10 ‘‘(iv) ensures the protection of con11 fidential commercial information and trade 

12 secrets. 

13 ‘‘(B) PROCEDURE.—In issuing the guid14 ance under subparagraph (A), and in revising 

15 such guidance, if applicable, the Secretary shall 

16 follow the procedure set forth in paragraph (5). 

17 ‘‘(5) PROCEDURE.—In issuing or revising any 

18 guidance issued pursuant to this subsection or sub19 section (h), except the initial guidance issued under 

20 paragraph (2)(A), the Secretary shall— 

21 ‘‘(A) publish a notice in the Federal Reg22 ister for a period not less than 30 days an23 nouncing that the draft or revised draft guid24 ance is available; 


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1 ‘‘(B) post the draft guidance document on 

2 the Internet Web site of the Food and Drug 

3 Administration and make such draft guidance 

4 document available in hard copy; 

5 ‘‘(C) provide an opportunity for comment 

6 and review and take into consideration any 

7 comments received; 

8 ‘‘(D) revise the draft guidance, as appro9 priate; 

10 ‘‘(E) publish a notice in the Federal Reg11 ister for a period not less than 30 days an12 nouncing that the final guidance or final revised 

13 guidance is available; 

14 ‘‘(F) post the final guidance document on 

15 the Internet Web site of the Food and Drug 

16 Administration and make such final guidance 

17 document available in hard copy; and 

18 ‘‘(G) provide for an effective date of not 

19 earlier than 1 year after such guidance becomes 

20 final. 

21 ‘‘(j) PUBLIC MEETINGS.— 

22 ‘‘(1) IN GENERAL.—The Secretary shall hold 

23 not less than 3 public meetings to enhance the safe24 ty and security of the pharmaceutical distribution 

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1 retary may hold the first such public meeting not 

2 earlier than 1 year after the date of enactment of 

3 the Drug Supply Chain Security Act. In carrying 

4 out the public meetings described in this paragraph, 

5 the Secretary shall— 

6 ‘‘(A) prioritize topics necessary to inform 

7 the issuance of the guidance described in para8 graphs (3) and (4) of subsection (i); and 

9 ‘‘(B) take all measures reasonable and 

10 practicable to ensure the protection of confiden11 tial commercial information and trade secrets. 

12 ‘‘(2) CONTENT.—Each of the following topics 

13 shall be addressed in at least one of the public meet14 ings described in paragraph (1): 

15 ‘‘(A) An assessment of the steps taken 

16 under subsections (b) through (f) to build ca17 pacity for a unit-level system, including the im18 pact of the requirements of such subsections 

19 on— 

20 ‘‘(i) the ability of the health care sys21 tem collectively to maintain patient access 

22 to medicines; 

23 ‘‘(ii) the scalability of such require24 ments, including as it relates to product 

25 lines; and 


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1 ‘‘(iii) the capability of different sec2 tors and subsectors, including both large 

3 and small businesses, to affix and utilize 

4 the product identifier. 

5 ‘‘(B) The system attributes necessary to 

6 support the requirements set forth under sub7 section (h), including the standards necessary 

8 for adoption in order to support the secure, 

9 interoperable electronic data exchange among 

10 sectors within the pharmaceutical distribution 

11 supply chain. 

12 ‘‘(C) Best practices in each of the different 

13 sectors within the pharmaceutical distribution 

14 supply chain to implement the requirements of 

15 this section. 

16 ‘‘(D) The costs and benefits of the imple17 mentation of this section, including the impact 

18 on each pharmaceutical distribution supply 

19 chain sector and on public health. 

20 ‘‘(E) Whether electronic tracing require21 ments, including tracing of product at the pack22 age level are feasible, cost-effective and needed 

23 to protect public health. 


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1 ‘‘(F) The systems and processes needed to 

2 utilize the product identifiers to enhance tracing 

3 of product at the package level. 

4 ‘‘(G) The technical capabilities and legal 

5 authorities, if any, needed to establish an inter6 operable, electronic system that provides for 

7 tracing of product at the package level. 

8 ‘‘(H) The impact that such additional re9 quirements would have on patient safety, the 

10 drug supply, cost and regulatory burden, and 

11 timely patient access to prescription drugs. 

12 ‘‘(I) Other topics, as determined appro13 priate by the Secretary. 

14 ‘‘(k) PILOT PROJECTS.— 

15 ‘‘(1) IN GENERAL.—The Secretary shall estab16 lish 1 or more pilot projects, in coordination with 

17 authorized manufacturers, repackagers, wholesale 

18 distributors, third-party logistics providers, and dis19 pensers, to explore and evaluate methods to enhance 

20 the safety and security of the pharmaceutical dis21 tribution supply chain. Such projects shall build 

22 upon efforts, in existence as of the date of enact23 ment of the Drug Supply Chain Security Act, to en24 hance the safety and security of the pharmaceutical 

25 distribution supply chain, take into consideration 


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1 any pilot projects conducted prior to such date of 

2 enactment, and inform the draft and final guidance 

3 under paragraphs (3) and (4) of subsection (i). 

4 ‘‘(2) CONTENT.— 

5 ‘‘(A) IN GENERAL.—The Secretary shall 

6 ensure that the pilot projects under paragraph 

7 (1) reflect the diversity of the pharmaceutical 

8 distribution supply chain and that the pilot 

9 projects, when taken as a whole, include partici10 pants representative of every sector, including 

11 both large and small businesses. 

12 ‘‘(B) PROJECT DESIGN.—The pilot 

13 projects under paragraph (1) shall be designed 

14 to— 

15 ‘‘(i) utilize the product identifier for 

16 tracing of a product, which may include 

17 verification of the product identifier of a 

18 product, including the use of aggregation 

19 and inference; 

20 ‘‘(ii) improve the technical capabilities 

21 of each sector and subsector to comply 

22 with systems and processes needed to uti23 lize the product identifiers to enhance trac24 ing of a product; 


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1 ‘‘(iii) identify system attributes that 

2 are necessary to implement the require3 ments established under this section; and 

4 ‘‘(iv) complete other activities as de5 termined by the Secretary. 

6 ‘‘(l) SUNSET.—The following requirements shall have 

7 no force or effect beginning on the date that is 10 years 

8 after the date of enactment of the Drug Supply Chain Se9 curity Act: 

10 ‘‘(1) The provision and receipt of transaction 

11 history under this section. 

12 ‘‘(2) The requirements set forth for returns 

13 under subsection (c)(1)(B)(i). 

14 ‘‘(m) RULE OF CONSTRUCTION.—The requirements 

15 set forth in subsections (h)(4), (j), and (k) shall not be 

16 construed as a condition, prohibition, or precedent for pre17 cluding or delaying the provisions becoming effective pur18 suant to subsection (h).’’. 

19 SEC. 4. NATIONAL LICENSURE STANDARDS FOR WHOLE20 SALE DISTRIBUTORS. 

21 (a) AMENDMENTS.— 

22 (1) LICENSE REQUIREMENT.—Section 503(e) of 

23 the Federal Food, Drug, and Cosmetic Act (21 

24 U.S.C. 353(e)) is amended by striking paragraphs 

25 (1), (2), and (3) and inserting the following: 


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1 ‘‘(1) LICENSE REQUIREMENT.—Subject to sec2 tion 583: 

3 ‘‘(A) IN GENERAL.—No person may en4 gage in wholesale distribution of a drug subject 

5 to subsection (b)(1) in any State unless such 

6 person— 

7 ‘‘(i)(I) is licensed by the State from 

8 which the drug is distributed; or 

9 ‘‘(II) if the State from which the drug 

10 distributed has not established a licensure 

11 requirement, is licensed by the Secretary; 

12 and 

13 ‘‘(ii) if the drug is distributed inter14 state, is licensed by the State into which 

15 the drug is distributed if the State into 

16 which the drug is distributed requires the 

17 licensure of a person that distributes drugs 

18 into the State. 

19 ‘‘(B) LICENSE STANDARDS.—Each Federal 

20 and State license described in subparagraph (A) 

21 shall meet the standards, terms, and conditions 

22 established by the Secretary under section 583. 

23 ‘‘(2) LICENSURE REPORTING AND DATABASE.— 

24 ‘‘(A) LICENSURE REPORTING.—Beginning 

25 1 year after the date of enactment of the Drug 


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1 Supply Chain Security Act, any person who 

2 owns or operates an establishment that engages 

3 in wholesale distribution shall report to the Sec4 retary, on an annual basis pursuant to a sched5 ule determined by the Secretary— 

6 ‘‘(i) each State by which the person is 

7 licensed and the appropriate identification 

8 number of each such license; and 

9 ‘‘(ii) the name and address of each fa10 cility at which, and all trade names under 

11 which, the person conducts business. 

12 ‘‘(B) DATABASE.—Not later than 1 year 

13 after the date of enactment of the Drug Supply 

14 Chain Security Act, the Secretary shall estab15 lish a database of licensed wholesale distribu16 tors. Such database shall— 

17 ‘‘(i) identify each wholesale distributor 

18 by name, contact information, and each 

19 State where such wholesale distributor is 

20 appropriately licensed to engage in whole21 sale distribution; 

22 ‘‘(ii) be available to the public on the 

23 Internet Web site of the Food and Drug 

24 Administration; and 


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1 ‘‘(iii) be regularly updated on a sched2 ule determined by the Secretary. 

3 ‘‘(3) COSTS.— 

4 ‘‘(A) AUTHORIZED LICENSURE FEES OF

5 SECRETARY.—If a State does not establish a li6 censing program for persons engaged in the 

7 wholesale distribution of a drug subject to sub8 section (b), the Secretary shall license a person 

9 engaged in wholesale distribution located in 

10 such State and may collect a reasonable fee in 

11 such amount necessary to reimburse the Sec12 retary for costs associated with establishing and 

13 administering the licensure program and con14 ducting periodic inspections under this section. 

15 The Secretary shall adjust fee rates as needed 

16 on an annual basis to generate only the amount 

17 of revenue needed to perform this service. Fees 

18 authorized under this paragraph shall be col19 lected and available for obligation only to the 

20 extent and in the amount provided in advance 

21 in appropriations Acts. Such fees are authorized 

22 to remain available until expended. 

23 ‘‘(B) STATE LICENSING FEES.—Nothing in 

24 this Act shall prohibit States from collecting 


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1 fees from wholesale distributors in connection 

2 with State licensing of such distributors.’’. 

3 (2) WHOLESALE DISTRIBUTION.—Section 

4 503(e) of the Federal Food, Drug, and Cosmetic Act 

5 (21 U.S.C. 353(e)), as amended by subsection (a), 

6 is further amended by adding at the end the fol7 lowing: 

8 ‘‘(4) For the purposes of this subsection and 

9 subsection (d), the term ‘wholesale distribution’ 

10 means the distribution of a drug subject to sub11 section (b) to a person other than a consumer or pa12 tient, or receipt of a drug subject to subsection (b) 

13 by a person other than the consumer or patient, but 

14 does not include— 

15 ‘‘(A) intracompany distribution of any 

16 drug between members of an affiliated group 

17 (as defined in section 1504(a) of the Internal 

18 Revenue Code of 1986); 

19 ‘‘(B) the distribution of a drug, or an offer 

20 to distribute a drug among hospitals or other 

21 health care entities which are under common 

22 control; 

23 ‘‘(C) the distribution of a drug or an offer 

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1 laration pursuant to section 319 of the Public 

2 Health Service Act, except that a drug shortage 

3 not caused by a public health emergency shall 

4 not constitute an emergency medical reason; 

5 ‘‘(D) the dispensing of a drug pursuant to 

6 a valid prescription executed in accordance with 

7 section 503(b)(1); 

8 ‘‘(E) the distribution of minimal quantities 

9 of drug by a licensed retail pharmacy to a li10 censed practitioner for office use; 

11 ‘‘(F) the distribution of a drug or an offer 

12 to distribute a drug by a charitable organization 

13 to a nonprofit affiliate of the organization to 

14 the extent otherwise permitted by law; 

15 ‘‘(G) the purchase or other acquisition by 

16 a dispenser, hospital, or other health care entity 

17 of a drug for use by such dispenser, hospital, or 

18 other health care entity; 

19 ‘‘(H) the distribution of a drug by the 

20 manufacturer of such drug; 

21 ‘‘(I) the receipt or transfer of a drug by an 

22 authorized third-party logistics provider pro23 vided that such third-party logistics provider 

24 does not take ownership of the drug; 


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1 ‘‘(J) a common carrier that transports a 

2 drug, provided that the common carrier does 

3 not take ownership of the drug; 

4 ‘‘(K) the distribution of a drug, or an offer 

5 to distribute a drug by an authorized repack6 ager that has taken ownership or possession of 

7 the drug and repacks it in accordance with sec8 tion 582(e); 

9 ‘‘(L) saleable drug returns when conducted 

10 by a dispenser; 

11 ‘‘(M) the distribution of a medical conven12 ience kit which is a collection of finished drug 

13 or biologic products assembled in kit form 

14 strictly for the convenience of the purchaser or 

15 user if— 

16 ‘‘(i) the medical convenience kit is as17 sembled in an establishment that is reg18 istered with the Food and Drug Adminis19 tration as a device manufacturer in accord20 ance with section 510(b)(2); 

21 ‘‘(ii) the person who manufactures the 

22 medical convenience kit purchased the fin23 ished drug or biologic product contained in 

24 the medical convenience kit directly from 

25 the pharmaceutical manufacturer or from 


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1 a wholesale distributor that purchased the 

2 product directly from the pharmaceutical 

3 manufacturer; 

4 ‘‘(iii) the person who manufactures a 

5 medical convenience kit does not alter the 

6 primary container or label of the product 

7 as purchased from the manufacturer or 

8 wholesale distributor; 

9 ‘‘(iv) the medical convenience kit does 

10 not contain a controlled substance that ap11 pears in a schedule contained in the Com12 prehensive Drug Abuse Prevention and 

13 Control Act of 1970 (21 U.S.C. 801, et 

14 seq.); and 

15 ‘‘(v) the products contained in the 

16 medical convenience kit are— 

17 ‘‘(I) intravenous solutions in18 tended for the replenishment of fluids 

19 and electrolytes; 

20 ‘‘(II) drugs intended to maintain 

21 the equilibrium of water and minerals 

22 in the body; 

23 ‘‘(III) drugs intended for irriga24 tion or reconstitution; 

25 ‘‘(IV) anesthetics; 


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1 ‘‘(V) anticoagulants; 

2 ‘‘(VI) vasopressors; or 

3 ‘‘(VII) sympathicomimetics; 

4 ‘‘(N) the distribution of an intravenous 

5 drug that, by its formulation, is intended for 

6 the replenishment of fluids and electrolytes 

7 (such as sodium, chloride, and potassium) or 

8 calories (such as dextrose and amino acids); 

9 ‘‘(O) the distribution of an intravenous 

10 drug used to maintain the equilibrium of water 

11 and minerals in the body, such as dialysis solu12 tions; 

13 ‘‘(P) the distribution of a drug that is in14 tended for irrigation or reconstitution, or sterile 

15 water, whether intended for such purposes or 

16 for injection; 

17 ‘‘(Q) the distribution of compressed med18 ical gas, defined as any substance in its gaseous 

19 or cryogenic liquid form that meets medical pu20 rity standards and has application in a medical 

21 or homecare environment, including oxygen and 

22 nitrous oxide; 

23 ‘‘(R) facilitating the distribution of a prod24 uct by providing solely administrative services, 

25 including processing of orders and payments; or 


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1 ‘‘(S) the transfer of a product by a hos2 pital or other health care entity to a repackager 

3 registered under section 510 for the purpose of 

4 repackaging the drug for use by that hospital, 

5 or other health care entity and other health 

6 care entities that are under common control, if 

7 ownership of the drug remains with the hospital 

8 or other health care entity at all times.’’. 

9 (3) THIRD-PARTY LOGISTICS PROVIDERS.—Sec10 tion 503(e) of the Federal Food, Drug, and Cos11 metic Act (21 U.S.C. 353(e)), as amended by sub12 section (a), is further amended by adding at the end 

13 the following: 

14 ‘‘(5) THIRD-PARTY LOGISTICS PROVIDERS.— 

15 Notwithstanding paragraphs (1) through (4), each 

16 entity that meets the definition of a third-party lo17 gistics provider under section 581(22) shall obtain a 

18 license as a third-party logistics provider as de19 scribed in section 584(a) and is not required to ob20 tain a license as a wholesale distributor if the entity 

21 never assumes an ownership interest in the product 

22 it handles.’’. 

23 (4) LICENSURE STANDARDS.—Subchapter H of 

24 chapter V of the Federal Food, Drug, and Cosmetic 


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1 Act, as added by section 2, is amended by adding at 

2 the end the following: 

3 ‘‘SEC. 583. NATIONAL LICENSURE STANDARDS FOR WHOLE4 SALE DISTRIBUTORS. 

5 ‘‘(a) IN GENERAL.—The Secretary shall, not later 

6 than 2 years after the date of enactment of the Drug Sup7 ply Chain Security Act, by regulation establish minimum 

8 standards, terms, and conditions for the licensing of per9 sons under section 503(e)(1) (as amended by the Drug 

10 Supply Chain Security Act), including the revocation, 

11 reissuance, and renewal of such license. 

12 ‘‘(b) CONTENT.—The standards established under 

13 subsection (a) shall apply to all State and Federal licenses 

14 described under section 503(e)(1) (as amended by the 

15 Drug Supply Chain Security Act) and shall prescribe min16 imum requirements for— 

17 ‘‘(1) the storage and handling of such drugs, 

18 including facility requirements; 

19 ‘‘(2) the establishment and maintenance of 

20 records of the distributions of such drugs; 

21 ‘‘(3) the furnishing of a bond or other equiva22 lent means of security if— 

23 ‘‘(A) an applicant that is not a government 

24 owned and operated wholesale distributor, for 

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1 tributor license shall submit a surety bond of 

2 one hundred thousand dollars or other equiva3 lent means of security acceptable to the State; 

4 ‘‘(B) for purposes of subparagraph (A), 

5 the State or other applicable authority may ac6 cept a surety bond less than $100,000 if the 

7 annual gross receipts of the previous tax year 

8 for the wholesaler is $10,000,000 or less, in 

9 which case the surety bond shall be $25,000; 

10 and 

11 ‘‘(C) if a wholesale distributor can provide 

12 evidence that it possesses the required bond in 

13 a State, the requirement for a bond in another 

14 State is waived; 

15 ‘‘(4) mandatory background checks and 

16 fingerprinting of facility managers or designated 

17 representatives; 

18 ‘‘(5) the establishment and implementation of 

19 qualifications for key personnel; 

20 ‘‘(6) the mandatory physical inspection of any 

21 facility to be used in wholesale distribution within a 

22 reasonable time frame from the initial application of 

23 the facility and to be conducted by the licensing au24 thority or by the State, consistent with subsection 

25 (c); and 


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1 ‘‘(7) in accordance with subsection (d), the pro2 hibition of certain persons from receiving or main3 taining licensure for wholesale distribution. 

4 ‘‘(c) INSPECTIONS.—To satisfy the inspection re5 quirement the Federal or State licensing authority may 

6 conduct the inspection, or may accept an inspection by the 

7 State in which the facility is located, or by a third-party 

8 accreditation or inspection service approved by the Sec9 retary or the State licensing such wholesale distributor. 

10 ‘‘(d) PROHIBITED PERSONS.—The standards estab11 lished under subsection (a) shall include requirements to 

12 prohibit a person from receiving or maintaining licensure 

13 for wholesale distribution if the person— 

14 ‘‘(1) has been convicted of any felony for con15 duct relating to wholesale distribution, any felony 

16 violation of subsection (i) or (k) of section 301, or 

17 any felony violation of section 1365 of title 18, 

18 United States Code, relating to product tampering; 

19 or 

20 ‘‘(2) has engaged in a pattern of violating the 

21 requirements of this section, or State requirements 

22 for licensure, that presents a threat of serious ad23 verse health consequences or death to humans. 


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1 ‘‘(e) REQUIREMENTS.—The Secretary, in promul2 gating any regulation pursuant to this section, shall, not3 withstanding section 553 of title 5, United States Code— 

4 ‘‘(1) issue a notice of proposed rulemaking that 

5 includes a copy of the proposed regulation; 

6 ‘‘(2) provide a period of not less than 60 days 

7 for comments on the proposed regulation; and 

8 ‘‘(3) provide that the final regulation take effect 

9 on the date that is 2 years after the date such final 

10 regulation is published.’’. 

11 (b) CONFORMING AMENDMENTS.—Section 503(d) of 

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

13 353(d)) is amended— 

14 (1) by striking ‘‘authorized distributor of 

15 record’’ each place such term appears and inserting 

16 ‘‘wholesale distributor’’; and 

17 (2) by striking ‘‘authorized distributors of 

18 record’’ each place such term appears and inserting 

19 ‘‘wholesale distributors’’. 

20 (c) EFFECTIVE DATE.—The amendments made by 

21 subsections (a) and (b) shall take effect on the day that 

22 is 1 year after the date of enactment of this Act. 


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1 SEC. 5. NATIONAL LICENSURE STANDARDS FOR THIRD2 PARTY LOGISTICS PROVIDERS; UNIFORM NA3 TIONAL POLICY. 

4 Subchapter H of chapter V of the Federal Food, 

5 Drug, and Cosmetic Act, as amended by section 4, is fur6 ther amended by adding at the end the following: 

7 ‘‘SEC. 584. NATIONAL LICENSURE STANDARDS FOR THIRD8 PARTY LOGISTICS PROVIDERS. 

9 ‘‘(a) LICENSE REQUIREMENTS.—No third-party lo10 gistics provider in any State may conduct activities in any 

11 State unless each facility of such third-party logistics pro12 vider— 

13 ‘‘(1)(A) is licensed by the State from which the 

14 drug is distributed by the third-party logistics pro15 vider, in accordance with the regulations promul16 gated under subsection (d); or 

17 ‘‘(B) if the State from which the drug distrib18 uted by the third-party logistics provider has not es19 tablished a licensure requirement, is licensed by the 

20 Secretary, in accordance with the regulations pro21 mulgated under subsection (d); and 

22 ‘‘(2) if the drug is distributed interstate, is li23 censed by the State into which the drug is distrib24 uted by the third-party logistics provider if such 

25 State licenses third-party logistics providers that dis26 tribute drugs into the State and the third-party loVerDate Mar 15 2010 03:15 May 21, 2013 Jkt 029200 PO 00000 Frm 00104 Fmt 6652 Sfmt 6201 E:\BILLS\S957.IS S957

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1 gistics provider is not licensed by the Secretary as 

2 described in subparagraph (A)(ii). 

3 ‘‘(b) LICENSURE REPORTING.—Beginning 1 year 

4 after the date of enactment of the Drug Supply Chain Se5 curity Act, a facility of a third-party logistics provider 

6 shall report to the Secretary, on an annual basis pursuant 

7 to a schedule determined by the Secretary— 

8 ‘‘(1) the State by which the facility is licensed 

9 and the appropriate identification number of such li10 cense; and 

11 ‘‘(2) the name and address of the facility, and 

12 all trade names under which, such facility conducts 

13 business. 

14 ‘‘(c) COSTS.— 

15 ‘‘(1) AUTHORIZED LICENSURE FEES OF SEC16 RETARY.—If a State does not establish a licensing 

17 program for a third-party logistics provider, the Sec18 retary shall license the third-party logistics provider 

19 located in such State and may collect a reasonable 

20 fee in such amount necessary to reimburse the Sec21 retary for costs associated with establishing and ad22 ministering the licensure program and conducting 

23 periodic inspections under this section. The Sec24 retary shall adjust fee rates as needed on an annual 

25 basis to generate only the amount of revenue needed 


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1 to perform this service. Fees authorized under this 

2 paragraph shall be collected and available for obliga3 tion only to the extent and in the amount provided 

4 in advance in appropriations Acts. Such fees are au5 thorized to remain available until expended. 

6 ‘‘(2) STATE LICENSING FEES.— 

7 ‘‘(A) STATE ESTABLISHED PROGRAM.— 

8 Nothing in this Act shall prohibit a State that 

9 has established a program to license a third10 party logistics provider from collecting fees 

11 from a third-party logistics provider for such a 

12 license. 

13 ‘‘(B) NO STATE ESTABLISHED PRO14 GRAM.—A State that does not establish a pro15 gram to license a third-party logistics provider 

16 in accordance with this section shall be prohib17 ited from collecting a State licensing fee from 

18 a third-party logistics provider. 

19 ‘‘(d) LICENSE REGULATIONS.— 

20 ‘‘(1) IN GENERAL.—Not later than 2 years 

21 after the date of enactment of the Drug Supply 

22 Chain Security Act, the Secretary shall issue regula23 tions regarding the minimum issuance and eligibility 

24 requirements for licensing under subsection (a), in25 cluding the revocation and reissuance of such liVerDate Mar 15 2010 03:15 May 21, 2013 Jkt 029200 PO 00000 Frm 00106 Fmt 6652 Sfmt 6201 E:\BILLS\S957.IS S957

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1 cense, to third-party logistics providers under this 

2 section. 

3 ‘‘(2) CONTENT.—Such regulations shall— 

4 ‘‘(A) establish a process by which a third5 party accreditation program approved by the 

6 Secretary shall, upon request by a third-party 

7 logistics provider, issue a license to each third8 party logistics provider that meets the min9 imum requirements set forth in this section; 

10 ‘‘(B) establish a process by which the Sec11 retary shall issue a license to each third-party 

12 logistics provider that meets the minimum re13 quirements set forth in this section if the Sec14 retary is not able to approve a third-party ac15 creditation program because no such program 

16 meets the Secretary’s requirements necessary 

17 for approval of such a third-party accreditation 

18 program; 

19 ‘‘(C) require that the entity complies with 

20 storage practices, as determined by the Sec21 retary for such facility, including— 

22 ‘‘(i) maintaining access to warehouse 

23 space of suitable size to facilitate safe op24 erations, including a suitable area to quar25 antine suspect product; 


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1 ‘‘(ii) maintaining adequate security; 

2 and 

3 ‘‘(iii) having written policies and pro4 cedures to— 

5 ‘‘(I) address receipt, security, 

6 storage, inventory, shipment, and dis7 tribution of a product; 

8 ‘‘(II) identify, record, and report 

9 confirmed losses or thefts in the 

10 United States; 

11 ‘‘(III) correct errors and inac12 curacies in inventories; 

13 ‘‘(IV) provide support for manu14 facturer recalls; 

15 ‘‘(V) prepare for, protect against, 

16 and address any reasonably foresee17 able crisis that affects security or op18 eration at the facility, such as a 

19 strike, fire, or flood; 

20 ‘‘(VI) ensure that any expired 

21 product is segregated from other 

22 products and returned to the manu23 facturer or re-packager or destroyed; 

24 ‘‘(VII) maintain the capability to 

25 electronically trace the receipt and 


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1 outbound distribution of a product, 

2 and supplies and records of inventory; 

3 and 

4 ‘‘(VIII) quarantine or destroy a 

5 suspect product if directed to do so by 

6 the respective manufacturer, wholesale 

7 distributor, dispenser or an authorized 

8 government agency; 

9 ‘‘(D) provide for periodic inspection by the 

10 licensing authority, as determined by the Sec11 retary, of such facility warehouse space to en12 sure compliance with this section; 

13 ‘‘(E) prohibit a facility from having as a 

14 manager or designated representative anyone 

15 convicted of any felony violation of subsection 

16 (i) or (k) of section 301 or any violation of sec17 tion 1365 of title 18, United States Code relat18 ing to product tampering; 

19 ‘‘(F) provide for mandatory background 

20 checks of a facility manager or a designated 

21 representative of such manager; and 

22 ‘‘(G) require a third-party logistics pro23 vider to provide the Secretary, upon a request 

24 by the Secretary, a list of all product manufac25 turers, wholesale distributors, and dispensers 


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1 for whom the third-party logistics provider pro2 vides services at such facility. 

3 ‘‘(3) PROCEDURE.—In promulgating the regula4 tions under this subsection, the Secretary shall, not5 withstanding section 553 of title 5, United States 

6 Code— 

7 ‘‘(A) issue a notice of proposed rulemaking 

8 that includes a copy of the proposed regulation; 

9 ‘‘(B) provide a period of not less than 60 

10 days for comments on the proposed regulation; 

11 and 

12 ‘‘(C) provide that the final regulation takes 

13 effect upon the expiration of 1 year after the 

14 date that such final regulation is issued. 

15 ‘‘(e) RENEWAL OF LICENSES.—The Secretary shall 

16 develop procedures for license renewal. Licenses issued 

17 under this section shall expire on the date that is 3 years 

18 after issuance of the license. Such an expired license may 

19 be renewed for additional 3-year periods according to pro20 cedures developed by the Secretary. 

21 ‘‘SEC. 585. UNIFORM NATIONAL POLICY. 

22 ‘‘(a) PRODUCT TRACING AND OTHER REQUIRE23 MENTS.—Beginning on the date of enactment of the Drug 

24 Supply Chain Security Act, no State or political subdivi25 sion of a State may establish or continue in effect any 


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1 requirements for tracing drugs through the distribution 

2 system (including any requirements with respect to state3 ments of distribution history, transaction history, trans4 action information, or transaction statement of a pharma5 ceutical product as such product changes ownership in the 

6 supply chain, or verification, investigation, disposition, no7 tification, or record-keeping relating to such systems, in8 cluding paper or electronic pedigree systems or for track9 ing and tracing drugs throughout the distribution system) 

10 which are inconsistent with, more stringent than, or in ad11 dition to, any requirements applicable under section 

12 503(e) (as amended by such Act) or this subchapter (or 

13 regulations issued thereunder), or which are inconsistent 

14 with— 

15 ‘‘(1) any waiver, exception, or exemption issued 

16 by the Secretary under section 581 or 582; or 

17 ‘‘(2) any restrictions specified in section 582. 

18 ‘‘(b) DISTRIBUTION AND LICENSING STANDARDS.— 

19 ‘‘(1) IN GENERAL.—Beginning on the date of 

20 enactment of the Drug Supply Chain Security Act, 

21 no State or political subdivision of a State may es22 tablish or continue any standards, requirements, or 

23 regulations with respect to wholesale drug dis24 tributor or third-party logistics provider licensure 

25 that are less stringent than the standards and reVerDate Mar 15 2010 03:15 May 21, 2013 Jkt 029200 PO 00000 Frm 00111 Fmt 6652 Sfmt 6201 E:\BILLS\S957.IS S957

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1 quirements applicable under section 503(e) (as 

2 amended by such Act), in the case of a wholesale 

3 distributor, or section 584, in the case of a third4 party logistics provider. 

5 ‘‘(2) STATE REGULATION OF THIRD-PARTY LO6 GISTICS PROVIDERS.—No State shall regulate third7 party logistics providers as wholesale distributors. 

8 ‘‘(3) ADMINISTRATION FEES.—Notwithstanding 

9 paragraph (1), a State may administer fee collec10 tions for effectuating the wholesale drug distributor 

11 and third-party logistics provider licensure require12 ments under sections 503(e) (as amended by the 

13 Drug Supply Chain Security Act), 583, and 584. 

14 ‘‘(4) ENFORCEMENT, SUSPENSION, AND REV15 OCATION OF LICENSES.—Notwithstanding paragraph 

16 (1), a State— 

17 ‘‘(A) may take administrative action, in18 cluding fines, to enforce a licensure requirement 

19 promulgated by the State in accordance with 

20 section 503(e) (as amended by the Drug Supply 

21 Chain Security Act) or this subchapter; 

22 ‘‘(B) may provide for the suspension or 

23 revocation of licenses issued by the State for 

24 violations of the laws of such State; 


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1 ‘‘(C) upon conviction of violations of Fed2 eral, State, or local drug laws or regulations, 

3 may provide for fines, imprisonment, or civil 

4 penalties; and 

5 ‘‘(D) may regulate activities of licensed en6 tities in a manner that is consistent with prod7 uct tracing requirements under section 582. 

8 ‘‘(c) EXCEPTION.—Nothing in subsection (a) or (b) 

9 shall be construed to preempt State requirements related 

10 to the distribution of prescription drugs if such require11 ments are not related to product tracing as described in 

12 subsection (a), including any requirements applicable 

13 under section 503(e) (as amended by the Drug Supply 

14 Chain Security Act) or this subchapter (or regulations 

15 issued thereunder).’’. 

16 SEC. 6. PENALTIES. 

17 (a) PROHIBITED ACT.—Section 301(t) of the Federal 

18 Food, Drug, and Cosmetic Act (21 U.S.C. 331(t)), is 

19 amended— 

20 (1) by striking ‘‘or’’ after ‘‘the requirements of 

21 section 503(d),’’; and 

22 (2) by inserting ‘‘, failure to comply with the 

23 requirements under section 582, the failure to com24 ply with the requirements under section 584, as ap25 plicable,’’ after ‘‘in violation of section 503(e)’’. 


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1 (b) MISBRANDING.—Section 502 of the Federal 

2 Food, Drug, and Cosmetic Act (21 U.S.C. 352), is amend3 ed by adding at the end the following: 

4 ‘‘(bb) If it is a drug and it fails to bear the product 

5 identifier as required by section 582.’’. 

6 SEC. 7. CONFORMING AMENDMENTS. 

7 Section 303(b)(1)(D) of the Federal Food, Drug, and 

8 Cosmetic Act (21 U.S.C. 333(b)(1)(D)) is amended by 

9 striking ‘‘503(e)(2)(A)’’ and inserting ‘‘503(e)(1)’’. 

10 SEC. 8. SAVINGS CLAUSE. 

11 Except as provided in the amendments made by para12 graphs (1), (2), and (3) of section 4(a) and by section 

13 6(a), nothing in this Act (including the amendments made 

14 by this Act) shall be construed as altering any authority 

15 of the Secretary of Health and Human Services with re16 spect to a drug subject to section 503(b)(1) of the Federal 

17 Food, Drug, and Cosmetic Act (21 U.S.C. 353(b)(1)) 

18 under any other provision of such Act or the Public Health 

19 Service Act (42 U.S.C. 201 et seq.). 

Æ 


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