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[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[S. 957 Introduced in Senate (IS)]

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.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Drug Supply Chain Security Act''.

SEC. 2. PHARMACEUTICAL DISTRIBUTION SUPPLY CHAIN.

    Chapter V of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
351 et seq.) is amended by adding at the end the following:

        ``Subchapter H--Pharmaceutical Distribution Supply Chain

``SEC. 581. DEFINITIONS.

    ``In this subchapter:
            ``(1) Authorized.--The term `authorized' means--
                    ``(A) in the case of a manufacturer or repackager, 
                having a valid registration in accordance with section 
                510;
                    ``(B) in the case of a wholesale distributor, 
                having a valid license under State law or section 583, 
                in accordance with section 582(a)(6) and complying with 
                the licensure reporting requirements under section 
                503(e), as amended by the Drug Supply Chain Security 
                Act;
                    ``(C) in the case of a third-party logistics 
                provider, having a valid license under State law or 
                section 584(a)(1), in accordance with section 582(a)(7) 
                and complying with the licensure reporting requirements 
                under section 584(b); and
                    ``(D) in the case of a dispenser, having a valid 
                license under State law.
            ``(2) Compressed medical gas.--The term `compressed medical 
        gas' means any substance in its gaseous or cryogenic liquid 
        form that meets medical purity standards and has application in 
        a medical or homecare environment, including oxygen and nitrous 
        oxide.
            ``(3) Dispenser.--The term `dispenser'--
                    ``(A) means a retail pharmacy, hospital pharmacy, a 
                group of chain pharmacies under common ownership and 
                control that do not act as a wholesale distributor, or 
                any other person authorized by law to dispense or 
                administer prescription drugs, and the affiliated 
                warehouses or distribution centers of such entities 
                under common ownership and control that do not act as a 
                wholesale distributor; and
                    ``(B) does not include a person who only dispenses 
                products to be used in animals in accordance with 
                section 512(a)(5).
            ``(4) Disposition.--The term `disposition', with respect to 
        a product within the possession or control of an entity, means 
        the removal of such product from the pharmaceutical 
        distribution supply chain, which may include disposal or return 
        of the product for disposal or other appropriate handling and 
        other actions such as retaining a sample of the product for 
        further additional physical examination or laboratory analysis 
        of the product by a manufacturer or regulatory or law 
        enforcement agency.
            ``(5) Distribute or distribution.--The term `distribute' or 
        `distribution' means the sale, purchase, trade, delivery, 
        handling, storage, or receipt of a product.
            ``(6) Exclusive distributor.--The term `exclusive 
        distributor' means the wholesale distributor that directly 
        purchased product from the manufacturer and is the sole 
        distributor of that manufacturer's product to a subsequent 
        wholesale distributor or dispenser.
            ``(7) Homogeneous case.--The term `homogeneous case' means 
        a sealed case containing only product that has a single 
        National Drug Code number belonging to a single lot.
            ``(8) Illegitimate product.--The term `illegitimate 
        product' means a product for which credible evidence shows that 
        the product--
                    ``(A) is counterfeit, diverted, or stolen;
                    ``(B) is intentionally adulterated such that the 
                product would result in serious adverse health 
                consequences or death to humans;
                    ``(C) is the subject of a fraudulent transaction; 
                or
                    ``(D) appears otherwise unfit for distribution such 
                that the product could result in serious adverse health 
                consequence or death to humans.
            ``(9) Licensed.--The term `licensed' means--
                    ``(A) in the case of a wholesale distributor, 
                having a valid license under State law or section 583, 
                in accordance with section 582(a)(6);
                    ``(B) in the case of a third-party logistics 
                provider, having a valid license under State law or 
                section 584(a)(1), in accordance with section 
                582(a)(7); and
                    ``(C) in the case of a dispenser, having a valid 
                license under State law.
            ``(10) Manufacturer.--
                    ``(A) In general.--The term `manufacturer' means, 
                with respect to a product--
                            ``(i) a person that holds an application 
                        approved under section 505 or a license issued 
                        under section 351 of the Public Health Service 
                        Act for such product, or if such product is not 
                        the subject of an approved application or 
                        license, the person who manufactured the 
                        product;
                            ``(ii) a co-licensed partner of the person 
                        described in clause (i) that obtains the 
                        product directly from the person described in 
                        clause (i) or (ii); or
                            ``(iii) an affiliate of a person described 
                        in clause (i) or (iii) that receives the 
                        product directly from a person described in 
                        clause (i), (ii), or (iii).
                    ``(B) Affiliate.--For purposes of this paragraph, 
                the term `affiliate' means a member of an affiliated 
                group, as that term is defined in section 1504(a) of 
                the Internal Revenue Code.
            ``(11) Package.--
                    ``(A) In general.--The term `package' means the 
                smallest individual saleable unit of product for 
                distribution by a manufacturer or repackager that is 
                intended by the manufacturer for ultimate sale to the 
                dispenser of such product.
                    ``(B) Individual saleable unit.--For purposes of 
                this paragraph, an `individual saleable unit' is the 
                smallest container of product introduced into commerce 
                by the manufacturer or repackager that is intended by 
                the manufacturer or repackager for individual sale to a 
                dispenser.
            ``(12) Prescription drug.--The term `prescription drug' 
        means a drug for human use subject to section 503(b)(1).
            ``(13) Product.--The term `product' means a prescription 
        drug in a finished dosage form for administration to a patient 
        without substantial further manufacturing (such as capsules, 
        tablets, and lyophilized products before reconstitution), but 
        does not include blood or blood components intended for 
        transfusion, radioactive drugs or radioactive biological 
        products (as defined in section 600.3(ee) of title 21, Code of 
        Federal Regulations) that are regulated by the Nuclear 
        Regulatory Commission or by a State pursuant to an agreement 
        with such Commission under section 274 of the Atomic Energy Act 
        of 1954 (42 U.S.C. 2021), or any compressed medical gas.
            ``(14) Product identifier.--The term `product identifier' 
        means a standardized graphic that includes, in both human-
        readable form and on a machine-readable data carrier that 
        conforms to the standards developed by a widely recognized 
        international standards development organization, the 
        standardized numerical identifier, lot number, and expiration 
        date of the product.
            ``(15) Quarantine.--The term `quarantine' means the storage 
        or identification of a product, to prevent distribution or 
        transfer of the product, in a physically separate area clearly 
        identified for such use or through other procedures such as 
        automated designation.
            ``(16) Repackager.--The term `repackager' means a person 
        who owns or operates an establishment that repacks and relabels 
        a product or package for further sale.
            ``(17) Return.--The term `return' means providing product 
        to the authorized immediate trading partner from which such 
        product was purchased, or to a returns processor or reverse 
        logistics provider for handling of such product.
            ``(18) Returns processor or reverse logistics provider.--
        The term `returns processor' or `reverse logistics provider' 
        means a person who owns or operates an establishment that 
        dispositions or otherwise processes saleable or nonsaleable 
        product received from an authorized trading partner such that 
        the product may be processed for credit to the purchaser, 
        manufacturer, or seller or disposed of for no further 
        distribution.
            ``(19) Specific patient need.--The term `specific patient 
        need' refers to the transfer of a product from one pharmacy to 
        another to fill a prescription for an identified patient. Such 
        term does not include the transfer of a product from one 
        pharmacy to another for the purpose of increasing or 
        replenishing stock in anticipation of a potential need.
            ``(20) Standardized numerical identifier or sni.--The term 
        `standardized numerical identifier' or `SNI' means a set of 
        numbers or characters used to uniquely identify each package or 
        homogenous case that is composed of the National Drug Code that 
        corresponds to the specific product (including the particular 
        package configuration) combined with a unique alphanumeric 
        serial number of up to 20 characters.
            ``(21) Suspect product.--The term `suspect product' means a 
        product for which there is reason to believe that such 
        product--
                    ``(A) is potentially counterfeit, diverted, or 
                stolen;
                    ``(B) is potentially intentionally adulterated such 
                that the product would result in serious adverse health 
                consequences or death to humans;
                    ``(C) is potentially the subject of a fraudulent 
                transaction; or
                    ``(D) appears otherwise unfit for distribution such 
                that the product would result in serious adverse health 
                consequences or death to humans.
            ``(22) Third-party logistics provider.--The term `third-
        party logistics provider' means an entity that provides or 
        coordinates warehousing, or other logistics services of a 
        product in interstate commerce on behalf of a manufacturer, 
        wholesale distributor, or dispenser of a product, but does not 
        take ownership of the product, nor have responsibility to 
        direct the sale or disposition of the product.
            ``(23) Trading partner.--The term `trading partner' means--
                    ``(A) a manufacturer, repackager, wholesale 
                distributor, or dispenser from whom a manufacturer, 
                repackager, wholesale distributor, or dispenser accepts 
                direct ownership of a product or to whom a 
                manufacturer, repackager, wholesale distributor, or 
                dispenser transfers direct ownership of a product; or
                    ``(B) a third-party logistics provider from whom a 
                manufacturer, repackager, wholesale distributor, or 
                dispenser accepts direct possession of a product or to 
                whom a manufacturer, repackager, wholesale distributor, 
                or dispenser transfers direct possession of a product.
            ``(24) Transaction.--
                    ``(A) In general.--The term `transaction' means the 
                transfer of product between persons in which a change 
                of ownership occurs.
                    ``(B) Exemptions.--The term `transaction' does not 
                include--
                            ``(i) intracompany distribution of any 
                        product between members of an affiliated group 
                        (as defined in section 1504(a) of the Internal 
                        Revenue Code of 1986);
                            ``(ii) the distribution of a product among 
                        hospitals or other health care entities that 
                        are under common control;
                            ``(iii) the distribution of a product for 
                        emergency medical reasons including a public 
                        health emergency declaration pursuant to 
                        section 319 of the Public Health Service Act, 
                        except that a drug shortage not caused by a 
                        public health emergency shall not constitute an 
                        emergency medical reason;
                            ``(iv) the dispensing of a product pursuant 
                        to a valid prescription executed in accordance 
                        with section 503(b)(1);
                            ``(v) the distribution of product samples 
                        by a manufacturer or a licensed wholesale 
                        distributor in accordance with section 503(d);
                            ``(vi) the distribution of blood or blood 
                        components intended for transfusion;
                            ``(vii) the distribution of minimal 
                        quantities of product by a licensed retail 
                        pharmacy to a licensed practitioner for office 
                        use;
                            ``(viii) the sale, purchase, or trade of a 
                        drug or an offer to sell, purchase, or trade a 
                        drug by a charitable organization described in 
                        section 501(c)(3) of the Internal Revenue Code 
                        of 1954 to a nonprofit affiliate of the 
                        organization to the extent otherwise permitted 
                        by law;
                            ``(ix) the distribution of a product 
                        pursuant to the sale or merger of a pharmacy or 
                        pharmacies or a wholesale distributor or 
                        wholesale distributors, except that any records 
                        required to be maintained for the product shall 
                        be transferred to the new owner of the pharmacy 
                        or pharmacies or wholesale distributor or 
                        wholesale distributors;
                            ``(x) the dispensing of a product approved 
                        under section 512(b);
                            ``(xi) products transferred to or from any 
                        facility that is licensed by the Nuclear 
                        Regulatory Commission or by a State pursuant to 
                        an agreement with such Commission under section 
                        274 of the Atomic Energy Act of 1954 (42 U.S.C. 
                        2021);
                            ``(xii) a combination product that is--
                                    ``(I) a product comprised of a 
                                device and 1 or more other regulated 
                                components (such as a drug/device, 
                                biologic/device, or drug/device/
                                biologic) that are physically, 
                                chemically, or otherwise combined or 
                                mixed and produced as a single entity;
                                    ``(II) 2 or more separate products 
                                packaged together in a single package 
                                or as a unit and comprised of a drug 
                                and device products or device and 
                                biological product; or
                                    ``(III) 2 or more finished medical 
                                devices plus one or more drug or 
                                biological products which are packaged 
                                together in what is referred to as a 
                                `medical convenience kit' as described 
                                in clause (xiii);
                            ``(xiii) the distribution of a collection 
                        of finished medical devices or a collection of 
                        finished drug or biological products assembled 
                        in kit form strictly for the convenience of the 
                        purchaser or user (to be known as a `medical 
                        convenience kit') if--
                                    ``(I) the medical convenience kit 
                                is assembled in an establishment that 
                                is registered with the Food and Drug 
                                Administration as a device manufacturer 
                                in accordance with section 510(b)(2);
                                    ``(II) the person who manufactures 
                                a medical convenience kit purchased the 
                                product contained in the medical 
                                convenience kit directly from the 
                                pharmaceutical manufacturer or from a 
                                wholesale distributor that purchased 
                                the product directly from the 
                                pharmaceutical manufacturer;
                                    ``(III) the person who manufactures 
                                a medical convenience kit does not 
                                alter the primary container or label of 
                                the product as purchased from the 
                                manufacturer or wholesale distributor;
                                    ``(IV) the medical convenience kit 
                                does not contain a controlled substance 
                                that appears in a schedule contained in 
                                the Comprehensive Drug Abuse Prevention 
                                and Control Act of 1970; and
                                    ``(V) the products contained in the 
                                medical convenience kit are--
                                            ``(aa) intravenous 
                                        solutions intended for the 
                                        replenishment of fluids and 
                                        electrolytes;
                                            ``(bb) products intended to 
                                        maintain the equilibrium of 
                                        water and minerals in the body;
                                            ``(cc) products intended 
                                        for irrigation or 
                                        reconstitution;
                                            ``(dd) anesthetics;
                                            ``(ee) anticoagulants;
                                            ``(ff) vasopressors; or
                                            ``(gg) sympathicomimetics;
                            ``(xiv) the distribution of an intravenous 
                        product that, by its formulation, is intended 
                        for the replenishment of fluids and 
                        electrolytes (such as sodium, chloride, and 
                        potassium) or calories (such as dextrose and 
                        amino acids);
                            ``(xv) the distribution of an intravenous 
                        product used to maintain the equilibrium of 
                        water and minerals in the body, such as 
                        dialysis solutions;
                            ``(xvi) the distribution of a product that 
                        is intended for irrigation or reconstitution, 
                        or sterile water, whether intended for such 
                        purposes or for injection;
                            ``(xvii) the distribution of compressed 
                        medical gas; or
                            ``(xviii) the distribution or sale of any 
                        licensed product under section 351 of the 
                        Public Health Service Act that meets the 
                        definition of a device under section 201(h).
            ``(25) Transaction history.--The term `transaction history' 
        means a statement in paper or electronic form, including the 
        transaction information for each prior transaction going back 
        to the manufacturer of the product.
            ``(26) Transaction information.--The term `transaction 
        information' means--
                    ``(A) the proprietary or established name or names 
                of the product;
                    ``(B) the strength and dosage form of the product;
                    ``(C) the National Drug Code number of the product;
                    ``(D) the container size;
                    ``(E) the number of containers;
                    ``(F) the lot number of the product;
                    ``(G) the date of the transaction;
                    ``(H) the date of the shipment, if different from 
                the date of the transaction;
                    ``(I) the business name and address of the person 
                from whom ownership is being transferred; and
                    ``(J) the business name and address of the person 
                to whom ownership is being transferred.
            ``(27) Transaction statement.--The `transaction statement' 
        is a statement, in paper or electronic form, that the entity 
        transferring ownership in a transaction--
                    ``(A) is authorized as required under the Drug 
                Supply Chain Security Act;
                    ``(B) received the product from a person that is 
                authorized as required under the Drug Supply Chain 
                Security Act;
                    ``(C) received transaction information and a 
                transaction statement from the prior owner of the 
                product, as required under section 582;
                    ``(D) did not knowingly ship a suspect or 
                illegitimate product;
                    ``(E) had systems and processes in place to comply 
                with verification requirements under section 582;
                    ``(F) did not knowingly provide false transaction 
                information; and
                    ``(G) did not knowingly alter the transaction 
                history.
            ``(28) Verification or verify.--The term `verification' or 
        `verify' means determining whether the product identifier 
        affixed to, or imprinted upon, a package or homogeneous case 
        corresponds to the standardized numerical identifier or lot 
        number, and expiration date assigned to the product by the 
        manufacturer or the repackager, as applicable in accordance 
        with section 582.
            ``(29) Wholesale distributor.--The term `wholesale 
        distributor' means a person (other than a manufacturer, a 
        manufacturer's co-licensed partner, a third-party logistics 
        provider, or repackager) engaged in wholesale distribution (as 
        defined in section 503(e)(4), as amended by the Drug Supply 
        Chain Security Act).

``SEC. 582. REQUIREMENTS.

    ``(a) In General.--
            ``(1) Other activities.--Each manufacturer, repackager, 
        wholesale distributor, third-party logistics provider, and 
        dispenser shall comply with the requirements set forth in this 
        section with respect to the role of such manufacturer, 
        repackager, wholesale distributor, third-party logistics 
        provider, or dispenser in a transaction involving product. If 
        an entity meets the definition of more than one of the entities 
        listed in the preceding sentence, such entity shall comply with 
        all applicable requirements in this section, but shall not be 
        required to duplicate requirements.
            ``(2) Initial standards.--
                    ``(A) In general.--The Secretary shall, in 
                consultation with other appropriate Federal officials, 
                manufacturers, repackagers, wholesale distributors, 
                third-party logistics providers, dispensers, and other 
                pharmaceutical distribution supply chain stakeholders, 
                issue a draft guidance document that establishes 
                standards for the interoperable exchange of transaction 
                information for compliance with subsections (a), (b), 
                (c), (d), (e), and (f). The standards established under 
                this paragraph shall take into consideration the 
                standards established under section 505D and shall 
                comply with a form and format developed by a widely 
                recognized international standards development 
                organization.
                    ``(B) Public input.--Prior to issuing the draft 
                guidance under subparagraph (A), the Secretary shall 
                gather comments and information from stakeholders and 
                maintain such comments and information in a public 
                docket for at least 60 days prior to issuing such 
                guidance.
                    ``(C) Publication.--The Secretary shall publish the 
                standards established under subparagraph (A) not later 
                than 1 year after the date of enactment of the Drug 
                Supply Chain Security Act.
            ``(3) Waivers, exceptions, and exemptions.--
                    ``(A) In general.--Not later than 2 years after the 
                date of enactment of the Drug Supply Chain Security 
                Act, the Secretary shall, by guidance--
                            ``(i) establish a process by which an 
                        authorized manufacturer, repackager, wholesale 
                        distributor, or dispenser may request a waiver 
                        from any of the requirements set forth in this 
                        section if the Secretary determines that such 
                        requirements would result in an undue economic 
                        hardship or for emergency medical reasons, 
                        including a public health emergency declaration 
                        pursuant to section 319 of the Public Health 
                        Service Act;
                            ``(ii) establish a process by which the 
                        Secretary determines exceptions, and a process 
                        through which a manufacturer or repackager may 
                        request such an exception, to the requirements 
                        relating to product identifiers if a product is 
                        packaged in a container too small or otherwise 
                        unable to accommodate a label with sufficient 
                        space to bear the information required for 
                        compliance with this section; and
                            ``(iii) establish a process by which the 
                        Secretary may determine other products or 
                        transactions that shall be exempt from the 
                        requirements of this section.
                    ``(B) Content.--The guidance issued under 
                subparagraph (A) shall include a process for the 
                biennial review and renewal of such waivers, 
                exceptions, and exemptions, as applicable.
                    ``(C) Process.--In issuing the guidance under this 
                section, the Secretary shall provide an effective date 
                that is not later than 180 days prior to the date on 
                which manufacturers are required to affix or imprint a 
                product identifier to each package and homogenous case 
                of product intended to be introduced in a transaction 
                into commerce consistent with this section.
            ``(4) Self-executing requirements.--Except where otherwise 
        specified, the requirements of this section may be enforced 
        without further regulations or guidance from the Secretary.
            ``(5) Grandfathering product.--
                    ``(A) Product identifier.--Not later than 2 years 
                after the date of enactment of the Drug Supply Chain 
                Security Act, the Secretary shall finalize guidance 
                specifying whether and under what circumstances product 
                that is not labeled with a product identifier and that 
                is in the pharmaceutical distribution supply chain at 
                the time of the effective date of the requirements of 
                this section shall be exempted from the requirements of 
                this section.
                    ``(B) Tracing.--For a product that entered the 
                pharmaceutical distribution supply chain prior to the 
                date that is 1 year after the date of enactment of the 
                Drug Supply Chain Security Act--
                            ``(i) authorized trading partners shall be 
                        exempt from providing transaction information 
                        as required under subsections (b)(1)(A)(i), 
                        (c)(1)(A)(ii), (d)(1)(A)(ii), and (e)(1)(A)(ii) 
                        of this section;
                            ``(ii) transaction history required under 
                        this section shall begin with the owner of such 
                        product on such date; and
                            ``(iii) the owners of such product on such 
                        date shall be exempt from asserting receipt of 
                        transaction information and transaction 
                        statement from the prior owner as required 
                        under this section.
            ``(6) Wholesale distributor licenses.--Notwithstanding 
        section 581(9)(A), until the effective date of the wholesale 
        distributor licensing regulations under section 583, the term 
        `licensed' or `authorized', as it relates to a wholesale 
        distributor with respect to prescription drugs, shall mean a 
        wholesale distributor with a valid license under State law.
            ``(7) Third-party logistics provider licenses.--Until the 
        effective date of the third-party logistics provider licensing 
        regulations under section 584, a third-party logistics provider 
        shall be considered `licensed' under section 581(9)(B) unless 
        the Secretary has made a finding that the third-party logistics 
        provider does not utilize good handling and distribution 
        practices and publishes notice thereof.
            ``(8) Label changes.--Changes made to package labels solely 
        to incorporate the product identifier may be submitted to the 
        Secretary in the annual report of an establishment, in 
        accordance with section 314.70(d) of chapter 21, Code of 
        Federal Regulations (or any successor regulation).
            ``(9) Product identifiers.--With respect to any requirement 
        relating to product identifiers under this subchapter--
                    ``(A) unless the Secretary allows, through 
                guidance, the use of other technologies for data 
                instead of or in addition to the technologies described 
                in clauses (i) and (ii), the applicable data--
                            ``(i) shall be included in a 2-dimensional 
                        data matrix barcode when affixed to, or 
                        imprinted upon, a package; or
                            ``(ii) shall be included in a linear or 2-
                        dimensional data matrix barcode when affixed 
                        to, or imprinted upon, a homogeneous case; and
                    ``(B) verification of the product identifier may 
                occur by using human-readable or machine-readable 
                methods.
    ``(b) Manufacturer Requirements.--
            ``(1) Product tracing.--
                    ``(A) In general.--Beginning not later than 1 year 
                after the date of enactment of the Drug Supply Chain 
                Security Act, a manufacturer shall--
                            ``(i) prior to, or at the time of, each 
                        transaction in which such manufacturer 
                        transfers--
                                    ``(I) ownership of a product, 
                                provide the subsequent recipient with 
                                transaction history, transaction 
                                information, and a transaction 
                                statement; or
                                    ``(II) possession of a product to a 
                                third-party logistics provider for the 
                                purpose of transferring ownership as 
                                part of a transaction to a subsequent 
                                recipient, provide to the third-party 
                                logistics provider the transaction 
                                history, transaction information, and a 
                                transaction statement for such 
                                transaction to a subsequent recipient; 
                                and
                            ``(ii) maintain the transaction 
                        information, transaction history, and 
                        transaction statement for each transaction for 
                        not less than 6 years after the date of the 
                        transaction.
                    ``(B) Requests for information.--Upon a request by 
                the Secretary or other appropriate Federal or State 
                official, in the event of a recall or for the purpose 
                of investigating a suspect product or an illegitimate 
                product, a manufacturer shall, not later than 24 hours 
                after receiving the request or in other such reasonable 
                time as determined by the Secretary, based on the 
                circumstances of the request, provide the applicable 
                transaction information, transaction history, and 
                transaction statement for the product.
            ``(2) Product identifier.--Beginning not later than 4 years 
        after the date of enactment of the Drug Supply Chain Security 
        Act, a manufacturer shall affix or imprint a product identifier 
        to each package and homogenous case of a product intended to be 
        introduced in a transaction into commerce. Such manufacturer 
        shall maintain the product identifier information for such 
        product for not less than 6 years after the date of the 
        transaction.
            ``(3) Authorized trading partners.--Beginning not later 
        than 1 year after the date of enactment of the Drug Supply 
        Chain Security Act, the trading partners of a manufacturer may 
        be only authorized trading partners.
            ``(4) Verification.--Beginning not later than 1 year after 
        the date of enactment of the Drug Supply Chain Security Act, a 
        manufacturer shall have systems in place to enable the 
        manufacturer to comply with the following requirements:
                    ``(A) Suspect product.--
                            ``(i) In general.--Upon making a 
                        determination that a product in the possession 
                        or control of the manufacturer is a suspect 
                        product, or upon receiving a request for 
                        verification from the Secretary that has made a 
                        determination that a product within the 
                        possession or control of a manufacturer is a 
                        suspect product, a manufacturer shall--
                                    ``(I) quarantine such product 
                                within the possession or control of the 
                                manufacturer from product intended for 
                                distribution until such product is 
                                cleared or dispositioned; and
                                    ``(II) promptly conduct an 
                                investigation in coordination with 
                                trading partners, as applicable, to 
                                determine whether the product is an 
                                illegitimate product, which shall 
                                include validating any applicable 
                                transaction history and transaction 
                                information in the possession of the 
                                manufacturer and otherwise 
                                investigating to determine whether the 
                                product is an illegitimate product, 
                                and, beginning 4 years after the date 
                                of enactment of the Drug Supply Chain 
                                Security Act, verifying the product at 
                                the package level.
                            ``(ii) Cleared product.--If the 
                        manufacturer makes the determination that a 
                        suspect product is not an illegitimate product, 
                        the manufacturer shall promptly notify the 
                        Secretary, if applicable, of such determination 
                        and such product may be further distributed.
                            ``(iii) Records.--A manufacturer shall keep 
                        records of the investigation of a suspect 
                        product for not less than 6 years after the 
                        conclusion of the investigation.
                    ``(B) Illegitimate product.--
                            ``(i) In general.--Upon determining that a 
                        product in the possession or control of a 
                        manufacturer is an illegitimate product, the 
                        manufacturer shall, in a manner consistent with 
                        the systems and processes of such 
                        manufacturer--
                                    ``(I) quarantine such product 
                                within the possession or control of the 
                                manufacturer from product intended for 
                                distribution until such product is 
                                dispositioned;
                                    ``(II) disposition the illegitimate 
                                product within the possession or 
                                control of the manufacturer;
                                    ``(III) take reasonable and 
                                appropriate steps to assist a trading 
                                partner to disposition an illegitimate 
                                product not in the possession or 
                                control of the manufacturer; and
                                    ``(IV) retain a sample of the 
                                product for further physical 
                                examination or laboratory analysis of 
                                the product by the manufacturer or 
                                Secretary (or other appropriate Federal 
                                or State official) upon request by the 
                                Secretary (or other appropriate Federal 
                                or State official), as necessary and 
                                appropriate.
                            ``(ii) Making a notification.--
                                    ``(I) Illegitimate product.--Upon 
                                determining that a product in the 
                                possession or control of the 
                                manufacturer is an illegitimate 
                                product, the manufacturer shall notify 
                                the Secretary and all immediate trading 
                                partners that the manufacturer has 
                                reason to believe may have received 
                                such illegitimate product of such 
                                determination not later than 24 hours 
                                after making such determination.
                                    ``(II) High risk of illegitimacy.--
                                A manufacturer shall notify the 
                                Secretary and immediate trading 
                                partners that the manufacturer has 
                                reason to believe may have in the 
                                trading partner's possession a product 
                                manufactured by, or purported to be a 
                                product manufactured by, the 
                                manufacturer not later than 24 hours 
                                after determining or being notified by 
                                the Secretary or a trading partner that 
                                there is a high risk that such product 
                                is an illegitimate product. For 
                                purposes of this subclause, a `high 
                                risk' may include a specific high-risk 
                                that could increase the likelihood that 
                                illegitimate product will enter the 
                                pharmaceutical distribution supply 
                                chain and other high risks as 
                                determined by the Secretary in guidance 
                                pursuant to subsection (i).
                            ``(iii) Responding to a notification.--Upon 
                        the receipt of a notification from the 
                        Secretary or a trading partner that a 
                        determination has been made that a product is 
                        an illegitimate product, a manufacturer shall 
                        identify all illegitimate product subject to 
                        such notification that is in the possession or 
                        control of the manufacturer, including any 
                        product that is subsequently received, and 
                        shall perform the activities described in 
                        subparagraph (A).
                            ``(iv) Terminating a notification.--Upon 
                        making a determination, in consultation with 
                        the Secretary, that a notification is no longer 
                        necessary, a manufacturer shall promptly notify 
                        immediate trading partners that the 
                        manufacturer notified pursuant to clause (ii) 
                        that such notification has been terminated.
                            ``(v) Records.--A manufacturer shall keep 
                        records of the disposition of an illegitimate 
                        product for not less than 6 years after the 
                        conclusion of the disposition.
                    ``(C) Requests for verification.--Beginning 4 years 
                after the date of enactment of the Drug Supply Chain 
                Security Act, upon receiving a request for verification 
                from an authorized repackager, wholesale distributor, 
                or dispenser that is in possession or control of a 
                product they believe to be manufactured by such 
                manufacturer, a manufacturer shall, not later than 24 
                hours after receiving the verification request or in 
                other such reasonable time as determined by the 
                Secretary, based on the circumstances of the request, 
                notify the person making the request whether the 
                product identifier, including the standard numeric 
                identifier, that is the subject of the request 
                corresponds to the product identifier affixed or 
                imprinted by the manufacturer. If a manufacturer 
                responding to a verification request identifies a 
                product identifier that does not correspond to that 
                affixed or imprinted by the manufacturer, the 
                manufacturer shall treat such product as suspect 
                product and conduct an investigation as described in 
                subparagraph (A). If the manufacturer has reason to 
                believe the product is an illegitimate product, the 
                manufacturer shall advise the person making the request 
                of such belief at the time such manufacturer responds 
                to the verification request.
                    ``(D) Electronic database.--A manufacturer may 
                satisfy the requirements of this paragraph by 
                developing a secure electronic database or utilizing a 
                secure electronic database developed or operated by 
                another entity. The owner of such database shall 
                establish the requirements and processes to respond to 
                requests and may provide for data access to other 
                members of the pharmaceutical distribution supply 
                chain, as appropriate. The development and operation of 
                such a database shall not relieve a manufacturer of the 
                requirement under this paragraph to respond to a 
                verification request submitted by means other than a 
                secure electronic database.
                    ``(E) Saleable returned product.--Beginning 4 years 
                after the date of enactment of the Drug Supply Chain 
                Security Act (except as provided pursuant to subsection 
                (a)(5)), upon receipt of a returned product that the 
                manufacturer intends to further distribute, before 
                further distributing such product, the manufacturer 
                shall verify the product identifier for each sealed 
                homogeneous case of such product or, if such product is 
                not in a sealed homogeneous case, verify the product 
                identifier on each package.
                    ``(F) Nonsaleable returned product.--A manufacturer 
                may return a nonsaleable product to the manufacturer or 
                repackager, to the wholesale distributor from whom such 
                product was purchased, or to a person acting on behalf 
                of such a person, including a returns processor, 
                without providing the information required under 
                paragraph (1)(A)(i).
    ``(c) Wholesale Distributor Requirements.--
            ``(1) Product tracing.--
                    ``(A) In general.--Beginning not later than 1 year 
                after the date of enactment of the Drug Supply Chain 
                Security Act, the following requirements shall apply to 
                wholesale distributors:
                            ``(i) A wholesale distributor shall not 
                        accept ownership of a product unless the 
                        previous owner prior to, or at the time of, the 
                        transaction provides the transaction history, 
                        transaction information, and a transaction 
                        statement for the product, as applicable under 
                        this subparagraph.
                            ``(ii)(I)(aa) If the wholesale distributor 
                        purchased a product directly from the 
                        manufacturer, the exclusive distributor of the 
                        manufacturer, or a repackager that purchased 
                        directly from the manufacturer, then prior to, 
                        or at the time of, each transaction in which 
                        the wholesale distributor transfers ownership 
                        of a product, the wholesale distributor shall 
                        provide to the subsequent purchaser--
                                    ``(AA) a transaction statement, 
                                which shall state that such wholesale 
                                distributor, or a member of the 
                                affiliated group of such wholesale 
                                distributor, purchased the product 
                                directly from the manufacturer, 
                                exclusive distributor of the 
                                manufacturer, or repackager that 
                                purchased directly from the 
                                manufacturer; and
                                    ``(BB) subject to subclause (II), 
                                the transaction history and transaction 
                                information.
                            ``(bb) The wholesale distributor shall 
                        provide the transaction history, transaction 
                        information, and transaction statement under 
                        item (aa)--
                                    ``(AA) if provided to a dispenser, 
                                on a single document in an electronic 
                                or paper format; and
                                    ``(BB) if provided to a wholesale 
                                distributor, through any combination of 
                                self-generated paper, electronic data, 
                                or manufacturer-provided information on 
                                the product package.
                            ``(II) For purposes of transactions 
                        described in subclause (I), transaction history 
                        and transaction information shall not be 
                        required to include the lot number of the 
                        product, the initial transaction date, or the 
                        initial shipment date from the manufacturer (as 
                        defined in subparagraphs (F), (G), and (H) of 
                        section 581(26)).
                            ``(iii) If the wholesale distributor did 
                        not purchase a product directly from the 
                        manufacturer, the exclusive distributor of the 
                        manufacturer, or a repackager that purchased 
                        directly from the manufacturer, as described in 
                        clause (ii), then prior to, or at the time of, 
                        each transaction or subsequent transaction, the 
                        wholesale distributor--
                                    ``(I) shall provide to the 
                                subsequent purchaser a transaction 
                                statement, transaction history, and 
                                transaction information; and
                                    ``(II) may provide the information 
                                described in subclause (I) to a 
                                subsequent purchaser on a single 
                                document in an electronic or paper 
                                format or through any combination of 
                                self-generated paper, electronic data, 
                                or manufacturer provided information on 
                                the product package.
                            ``(iv) For the purposes of clause (iii)(I), 
                        the transaction history supplied shall begin 
                        only with the wholesale distributor described 
                        in clause (ii)(I), but the wholesale 
                        distributor described in clause (iii) shall 
                        inform the subsequent purchaser that such 
                        wholesale distributor received a direct 
                        purchase statement from the manufacturer, the 
                        exclusive distributor of the manufacturer, or a 
                        repackager that purchased directly from the 
                        manufacturer, and shall identify the 
                        manufacturer, exclusive distributor of the 
                        manufacturer, or repackager that purchased 
                        directly from the manufacturer from which the 
                        direct purchase statement was received.
                            ``(v) A wholesale distributor shall 
                        maintain the transaction information, 
                        transaction history, and transaction statement 
                        for each transaction described in clauses (i), 
                        (ii), and (iii) for not less than 6 years after 
                        the date of the transaction.
                    ``(B) Returns.--
                            ``(i) Saleable returns.--Notwithstanding 
                        subparagraph (A)(i), the following shall apply:
                                    ``(I) Requirements.--Until the date 
                                that is 6 years after the date of 
                                enactment of the Drug Supply Chain 
                                Security Act (except as provided 
                                pursuant to subsection (a)(5)), a 
                                wholesale distributor may accept 
                                returned product from a dispenser 
                                pursuant to the terms and conditions of 
                                any agreement between the parties, and, 
                                notwithstanding subparagraph (A)(ii), 
                                may distribute such returned product 
                                without providing the transaction 
                                history. For transactions subsequent to 
                                the return, the transaction history of 
                                such product shall begin with the 
                                wholesale distributor that accepted the 
                                returned product, consistent with the 
                                requirements of this subsection.
                                    ``(II) Enhanced requirements.--
                                Beginning 6 years after the date of 
                                enactment of the Drug Supply Chain 
                                Security Act (except as provided 
                                pursuant to subsection (a)(5)), a 
                                wholesale distributor may accept 
                                returned product from a dispenser only 
                                if the wholesale distributor can 
                                associate returned product with the 
                                transaction information and transaction 
                                statement associated with that product. 
                                For all transactions after such date, 
                                the transaction history, as applicable, 
                                of such product shall begin with the 
                                wholesale distributor that accepted and 
                                verified the returned product. For 
                                purposes of this subparagraph, the 
                                transaction information and transaction 
                                history, as applicable, need not 
                                include transaction dates if it is not 
                                reasonably practicable to obtain such 
                                dates.
                            ``(ii) Nonsaleable returns.--A wholesale 
                        distributor may return a nonsaleable 
                        prescription drug to the manufacturer or 
                        repackager, to the wholesale distributor from 
                        whom such prescription drug was purchased, or 
                        to a person acting on behalf of such a person, 
                        including a returns processor, without 
                        providing the information required under 
                        subparagraph (A)(i).
                    ``(C) Requests for information.--Upon a request by 
                the Secretary or other appropriate Federal or State 
                official, in the event of a recall or for the purpose 
                of investigating a suspect product or an illegitimate 
                product a wholesale distributor shall, not later than 
                24 hours after receiving the request or in other such 
                reasonable time as determined by the Secretary, based 
                on the circumstances of the request, provide the 
                applicable transaction information, transaction 
                history, and transaction statement for the product.
            ``(2) Product identifier.--Beginning 6 years after the date 
        of enactment of the Drug Supply Chain Security Act, a wholesale 
        distributor may engage in transactions involving a product only 
        if such product is encoded with a product identifier (except as 
        provided pursuant to subsection (a)(5)).
            ``(3) Authorized trading partners.--Beginning not later 
        than 1 year after the date of enactment of the Drug Supply 
        Chain Security Act, the trading partners of a wholesale 
        distributor may be only authorized trading partners.
            ``(4) Verification.--Beginning not later than 1 year after 
        the date of enactment of the Drug Supply Chain Security Act, a 
        wholesale distributor shall have systems in place to enable the 
        wholesale distributor to comply with the following 
        requirements:
                    ``(A) Suspect product.--
                            ``(i) In general.--Upon making a 
                        determination that a product in the possession 
                        or control of the wholesale distributor is a 
                        suspect product, or upon receiving a request 
                        for verification from the Secretary that has 
                        made a determination that a product within the 
                        possession or control of a wholesale 
                        distributor is a suspect product, a wholesale 
                        distributor shall--
                                    ``(I) quarantine such product 
                                within the possession or control of the 
                                wholesale distributor from product 
                                intended for distribution until such 
                                product is cleared or dispositioned; 
                                and
                                    ``(II) promptly conduct an 
                                investigation in coordination with 
                                trading partners, as applicable, to 
                                determine whether the product is an 
                                illegitimate product, which shall 
                                include validating any applicable 
                                transaction history and transaction 
                                information in the possession of the 
                                wholesale distributor and otherwise 
                                investigating to determine whether the 
                                product is an illegitimate product, 
                                and, beginning 6 years after the date 
                                of enactment of the Drug Supply Chain 
                                Security Act (except as provided 
                                pursuant to subsection (a)(5)), 
                                verifying the product at the package 
                                level.
                            ``(ii) Cleared product.--If the wholesale 
                        distributor determines that a suspect product 
                        is not an illegitimate product, the wholesale 
                        distributor shall promptly notify the 
                        Secretary, if applicable, of such determination 
                        and such product may be further distributed.
                            ``(iii) Records.--A wholesale distributor 
                        shall keep records of the investigation of a 
                        suspect product for not less than 6 years after 
                        the conclusion of the investigation.
                    ``(B) Illegitimate product.--
                            ``(i) In general.--Upon determining, in 
                        coordination with the manufacturer, that a 
                        product in the possession or control of a 
                        wholesale distributor is an illegitimate 
                        product, the wholesale distributor shall, in a 
                        manner that is consistent with the systems and 
                        processes of such wholesale distributor--
                                    ``(I) quarantine such product 
                                within the possession or control of the 
                                wholesale distributor from product 
                                intended for distribution until such 
                                product is dispositioned;
                                    ``(II) disposition the illegitimate 
                                product within the possession or 
                                control of the wholesale distributor;
                                    ``(III) take reasonable and 
                                appropriate steps to assist a trading 
                                partner to disposition an illegitimate 
                                product not in the possession or 
                                control of the wholesale distributor; 
                                and
                                    ``(IV) retain a sample of the 
                                product for further physical 
                                examination or laboratory analysis of 
                                the product by the manufacturer or 
                                Secretary (or other appropriate Federal 
                                or State official) upon request by the 
                                manufacturer or Secretary (or other 
                                appropriate Federal or State official), 
                                as necessary and appropriate.
                            ``(ii) Making a notification.--Upon 
                        determining that a product in the possession or 
                        control of the wholesale distributor is an 
                        illegitimate product, the wholesale distributor 
                        shall notify the Secretary and all immediate 
                        trading partners that the wholesale distributor 
                        has reason to believe may have received such 
                        illegitimate product of such determination not 
                        later than 24 hours after making such 
                        determination.
                            ``(iii) Responding to a notification.--Upon 
                        the receipt of a notification from the 
                        Secretary or a trading partner that a 
                        determination has been made that a product is 
                        an illegitimate product, a wholesale 
                        distributor shall identify all illegitimate 
                        product subject to such notification that is in 
                        the possession or control of the wholesale 
                        distributor, including any product that is 
                        subsequently received, and shall perform the 
                        activities described in subparagraph (A).
                            ``(iv) Terminating a notification.--Upon a 
                        determination, in consultation with the 
                        Secretary, that a notification is no longer 
                        necessary, a wholesale distributor shall 
                        promptly notify immediate trading partners that 
                        the wholesale distributor notified pursuant to 
                        clause (ii) that such notification has been 
                        terminated.
                            ``(v) Records.--A wholesale distributor 
                        shall keep records of the disposition of an 
                        illegitimate product for not less than 6 years 
                        after the conclusion of the disposition.
                    ``(C) Electronic database.--A wholesale distributor 
                may satisfy the requirements of this paragraph by 
                developing a secure electronic database or utilizing a 
                secure electronic database developed or operated by 
                another entity. The owner of such database shall 
                establish the requirements and processes to respond to 
                requests and may provide for data access to other 
                members of the pharmaceutical distribution supply 
                chain, as appropriate. The development and operation of 
                such a database shall not relieve a wholesale 
                distributor of the requirement under this paragraph to 
                respond to a verification request submitted by means 
                other than a secure electronic database.
                    ``(D) Verification of saleable returned product.--
                Beginning 6 years after the date of enactment of the 
                Drug Supply Chain Security Act, upon receipt of a 
                returned product that the wholesale distributor intends 
                to further distribute, before further distributing such 
                product, the wholesale distributor shall verify the 
                product identifier for each sealed homogeneous case of 
                such product or, if such product is not in a sealed 
                homogeneous case, verify the product identifier on each 
                package.
    ``(d) Dispenser Requirements.--
            ``(1) Product tracing.--
                    ``(A) In general.--Beginning 1 year after the date 
                of enactment of the Drug Supply Chain Security Act, a 
                dispenser--
                            ``(i) shall not accept ownership of a 
                        product, unless the previous owner prior to, or 
                        at the time of, the transaction, provides 
                        transaction history, transaction information, 
                        and a transaction statement;
                            ``(ii) prior to, or at the time of, each 
                        transaction in which the dispenser transfers 
                        ownership of a product (but not including 
                        dispensing to a patient or returns) shall 
                        provide the subsequent owner with transaction 
                        history, transaction information, and a 
                        transaction statement for the product, except 
                        that the requirements of this clause shall not 
                        apply to sales by a dispenser to another 
                        dispenser to fulfill a specific patient need; 
                        and
                            ``(iii) shall maintain transaction 
                        information, transaction history, and 
                        transaction statements, as necessary to 
                        investigate a suspect product, for not less 
                        than 6 years after the transaction.
                    ``(B) Agreements with third parties.--A dispenser 
                may enter into a written agreement with a third party, 
                including an authorized wholesale distributor, under 
                which the third party confidentially maintains the 
                transaction information, transaction history, and 
                transaction statements required to be maintained under 
                this subsection on behalf of the dispenser. If a 
                dispenser enters into such an agreement, the dispenser 
                shall maintain a copy of the written agreement and 
                shall not be relieved of the obligations of the 
                dispenser under this subsection.
                    ``(C) Returns.--
                            ``(i) Saleable returns.--A dispenser may 
                        return product to the trading partner from 
                        which the dispenser obtained the product 
                        without providing the information required 
                        under subparagraph (B).
                            ``(ii) Nonsaleable returns.--A dispenser 
                        may return a nonsaleable product to the 
                        manufacturer or repackager, to the wholesale 
                        distributor from whom such product was 
                        purchased, to a returns processor, or to a 
                        person acting on behalf of such persons without 
                        providing the information required under 
                        subparagraph (A)(i).
                    ``(D) Requests for information.--Upon a request by 
                the Secretary or other appropriate Federal or State 
                official, in the event of a recall or for the purpose 
                of investigating a suspect or an illegitimate product, 
                a dispenser shall, not later than 2 business days after 
                receiving the request or in another such reasonable 
                time as determined by the Secretary, based on the 
                circumstances of the request, provide the applicable 
                transaction information, transaction statement, and 
                transaction history which the dispenser received from 
                the previous owner, which shall not include the lot 
                number of the product, the initial transaction date, or 
                the initial shipment date from the manufacturer unless 
                such information was included in the transaction 
                information, transaction statement, and transaction 
                history provided by the manufacturer or wholesale 
                distributor to the dispenser.
            ``(2) Product identifier.--Beginning not later than 7 years 
        after the date of enactment of the Drug Supply Chain Security 
        Act, a dispenser may engage in transactions involving a product 
        only if such product is encoded with a product identifier 
        (except as provided pursuant to subsection (a)(5)).
            ``(3) Authorized trading partners.--Beginning not later 
        than 1 year after the date of enactment of the Drug Supply 
        Chain Security Act, the trading partners of a dispenser may be 
        only authorized trading partners.
            ``(4) Verification.--Beginning not later than 1 year after 
        the date of enactment of the Drug Supply Chain Security Act, a 
        dispenser shall have systems in place to enable the dispenser 
        to comply with the following requirements:
                    ``(A) Suspect product.--
                            ``(i) In general.--Upon making a 
                        determination that a product in the possession 
                        or control of the dispenser is a suspect 
                        product, or upon receiving a request for 
                        verification from the Secretary that has made a 
                        determination that a product within the 
                        possession or control of a dispenser is a 
                        suspect product, a dispenser shall--
                                    ``(I) quarantine such product 
                                within the possession or control of the 
                                dispenser from product intended for 
                                distribution until such product is 
                                cleared or dispositioned; and
                                    ``(II) promptly conduct an 
                                investigation in coordination with 
                                trading partners, as applicable, to 
                                determine whether the product is an 
                                illegitimate product.
                            ``(ii) Investigation.--An investigation 
                        conducted under clause (i)(II) shall include--
                                    ``(I) beginning 7 years after the 
                                date of enactment of the Drug Supply 
                                Chain Security Act, verifying whether 
                                the lot number of a suspect product 
                                corresponds with the lot number for 
                                such product;
                                    ``(II) beginning 7 years after the 
                                date of enactment of such Act, 
                                verifying that the product identifier 
                                of at least 3 packages or 10 percent of 
                                such suspect product, whichever is 
                                greater, or all packages, if there are 
                                fewer than 3, corresponds with the 
                                product identifier for such product;
                                    ``(III) validating any applicable 
                                transaction history and transaction 
                                information in the possession of the 
                                dispenser; and
                                    ``(IV) otherwise investigating to 
                                determine whether the product is an 
                                illegitimate product.
                            ``(iii) Cleared product.--If the dispenser 
                        makes the determination that a suspect product 
                        is not an illegitimate product, the dispenser 
                        shall promptly notify the Secretary, if 
                        applicable, of such determination and such 
                        product may be further distributed or 
                        dispensed.
                            ``(iv) Records.--A dispenser shall keep 
                        records of the investigation of a suspect 
                        product for not less than 6 years after the 
                        conclusion of the investigation.
                    ``(B) Illegitimate product.--
                            ``(i) In general.--Upon determining, in 
                        coordination with the manufacturer, that a 
                        product in the possession or control of a 
                        dispenser is an illegitimate product, the 
                        dispenser shall--
                                    ``(I) disposition the illegitimate 
                                product within the possession or 
                                control of the dispenser;
                                    ``(II) take reasonable and 
                                appropriate steps to assist a trading 
                                partner to disposition an illegitimate 
                                product not in the possession or 
                                control of the dispenser; and
                                    ``(III) retain a sample of the 
                                product for further physical 
                                examination or laboratory analysis of 
                                the product by the manufacturer or 
                                Secretary (or other appropriate Federal 
                                or State official) upon request by the 
                                manufacturer or Secretary (or other 
                                appropriate Federal or State official), 
                                as necessary and appropriate.
                            ``(ii) Making a notification.--Upon 
                        determining that a product in the possession or 
                        control of the dispenser is an illegitimate 
                        product, the dispenser shall notify the 
                        Secretary and all immediate trading partners 
                        that the dispenser has reason to believe may 
                        have received such illegitimate product of such 
                        determination not later than 24 hours after 
                        making such determination.
                            ``(iii) Responding to a notification.--Upon 
                        the receipt of a notification from the 
                        Secretary or a trading partner that a 
                        determination has been made that a product is 
                        an illegitimate product, a dispenser shall 
                        identify all illegitimate product subject to 
                        such notification that is in the possession or 
                        control of the dispenser, including any product 
                        that is subsequently received, and shall 
                        perform the activities described in 
                        subparagraph (A).
                            ``(iv) Terminating a notification.--Upon 
                        making a determination, in consultation with 
                        the Secretary, that a notification is no longer 
                        necessary, a dispenser shall promptly notify 
                        immediate trading partners that the dispenser 
                        notified pursuant to clause (ii) that such 
                        notification has been terminated.
                            ``(v) Records.--A dispenser shall keep 
                        records of the disposition of an illegitimate 
                        product for not less than 6 years after the 
                        conclusion of the disposition.
                    ``(C) Electronic database.--A dispenser may satisfy 
                the requirements of this paragraph by developing a 
                secure electronic database or utilizing a secure 
                electronic database developed or operated by another 
                entity.
    ``(e) Repackager Requirements.--
            ``(1) Product tracing.--
                    ``(A) In general.--Beginning not later than 1 year 
                after the date of enactment of the Drug Supply Chain 
                Security Act, a repackager shall--
                            ``(i) not accept ownership of a product 
                        unless the previous owner, prior to, or at the 
                        time of, the transaction, provides transaction 
                        history, transaction information, and a 
                        transaction statement for the product;
                            ``(ii) prior to, or at the time of, each 
                        transaction in which the repackager transfers 
                        ownership of a product, or transfers possession 
                        of a product to a third-party logistics 
                        provider, provide the subsequent owner with 
                        transaction history, transaction information, 
                        and a transaction statement; and
                            ``(iii) maintain the transaction 
                        information, transaction history, and 
                        transaction statement for each transaction 
                        described in clauses (i) and (ii) for not less 
                        than 6 years after the transaction.
                    ``(B) Nonsaleable returns.--A repackager may return 
                a nonsaleable product to the manufacturer or 
                repackager, or to the wholesale distributor from whom 
                such product was purchased, or to a person acting on 
                behalf of such a person, including a returns processor, 
                without providing the information required under 
                subparagraph (A)(ii).
                    ``(C) Requests for information.--Upon a request by 
                the Secretary or other appropriate Federal or State 
                official, in the event of a recall or for the purpose 
                of investigating a suspect product or an illegitimate 
                product, a repackager shall, not later than 24 hours 
                after receiving the request or in other such reasonable 
                time as determined by the Secretary, based on the 
                circumstances of the request, provide the applicable 
                transaction information, transaction history and 
                transaction statement for the product.
            ``(2) Product identifier.--Beginning not later than 5 years 
        after enactment of the Drug Supply Chain Security Act, a 
        repackager--
                    ``(A) shall a fix or imprint a product identifier 
                to each package and homogenous case of product intended 
                to be introduced in a transaction in commerce;
                    ``(B) shall maintain the product identifier 
                information for such product for not less than 6 years 
                after the date of the transaction;
                    ``(C) may engage in transactions involving a 
                product only if such product is encoded with a product 
                identifier (except as provided pursuant to subsection 
                (a)(5)); and
                    ``(D) maintain records for not less than 6 years to 
                allow the repackager to associate the product 
                identifier the repackager affixes or imprints with the 
                product identifier assigned by the original 
                manufacturer of the product.
            ``(3) Authorized trading partners.--Beginning 1 year after 
        the date of enactment of the Drug Supply Chain Security Act, 
        the trading partners of a repackager may be only authorized 
        trading partners.
            ``(4) Verification.--Beginning not later than 1 year after 
        the date of enactment of the Drug Supply Chain Security Act, a 
        repackager shall have systems in place to enable the repackager 
        to comply with the following requirements:
                    ``(A) Suspect product.--
                            ``(i) In general.--Upon making a 
                        determination that a product in the possession 
                        or control of the repackager is a suspect 
                        product, or upon receiving a request for 
                        verification from the Secretary that has made a 
                        determination that a product within the 
                        possession or control of a repackager is a 
                        suspect product, a repackager shall--
                                    ``(I) quarantine such product 
                                within the possession or control of the 
                                repackager from product intended for 
                                distribution until such product is 
                                cleared or dispositioned; and
                                    ``(II) promptly conduct an 
                                investigation in coordination with 
                                trading partners, as applicable, to 
                                determine whether the product is an 
                                illegitimate product, which shall 
                                include validating any applicable 
                                transaction history and transaction 
                                information in the possession of the 
                                repackager and otherwise investigating 
                                to determine whether the product is an 
                                illegitimate product, and, beginning 5 
                                years after the date of enactment of 
                                the Drug Supply Chain Security Act 
                                (except as provided pursuant to 
                                subsection (a)(5)), verifying the 
                                product at the package level.
                            ``(ii) Cleared product.--If the repackager 
                        makes the determination that a suspect product 
                        is not an illegitimate product, the repackager 
                        shall promptly notify the Secretary, if 
                        applicable, of such determination and such 
                        product may be further distributed.
                            ``(iii) Records.--A repackager shall keep 
                        records of the investigation of a suspect 
                        product for not less than 6 years after the 
                        conclusion of the investigation.
                    ``(B) Illegitimate product.--
                            ``(i) In general.--Upon determining, in 
                        coordination with the manufacturer, that a 
                        product in the possession or control of a 
                        repackager is an illegitimate product, the 
                        repackager shall, in a manner that is 
                        consistent with the systems and processes of 
                        such repackager--
                                    ``(I) quarantine such product 
                                within the possession or control of the 
                                repackager from product intended for 
                                distribution until such product is 
                                dispositioned;
                                    ``(II) disposition the illegitimate 
                                product within the possession or 
                                control of the repackager;
                                    ``(III) take reasonable and 
                                appropriate steps to assist a trading 
                                partner to disposition an illegitimate 
                                product not in the possession or 
                                control of the repackager; and
                                    ``(IV) retain a sample of the 
                                product for further physical 
                                examination or laboratory analysis of 
                                the product by the manufacturer or 
                                Secretary (or other appropriate Federal 
                                or State official) upon request by the 
                                manufacturer or Secretary (or other 
                                appropriate Federal or State official), 
                                as necessary and appropriate.
                            ``(ii) Making a notification.--Upon 
                        determining that a product in the possession or 
                        control of the repackager is an illegitimate 
                        product, the repackager shall notify the 
                        Secretary and all immediate trading partners 
                        that the repackager has reason to believe may 
                        have received the illegitimate product of such 
                        determination not later than 24 hours after 
                        making such determination.
                            ``(iii) Responding to a notification.--Upon 
                        the receipt of a notification from the 
                        Secretary or a trading partner, a repackager 
                        shall identify all illegitimate product subject 
                        to such notification that is in the possession 
                        or control of the repackager, including any 
                        product that is subsequently received, and 
                        shall perform the activities described in 
                        subparagraph (A).
                            ``(iv) Terminating a notification.--Upon a 
                        determination, in consultation with the 
                        Secretary, that a notification is no longer 
                        necessary, a repackager shall promptly notify 
                        immediate trading partners that the repackager 
                        notified pursuant to clause (ii) that such 
                        notification has been terminated.
                            ``(v) Records.--A repackager shall keep 
                        records of the disposition of an illegitimate 
                        product for not less than 6 years after the 
                        conclusion of the disposition.
                    ``(C) Requests for verification.--Beginning 5 years 
                after enactment of the Drug Supply Chain Security Act, 
                upon receiving a request for verification from an 
                authorized manufacturer, wholesale distributor, or 
                dispenser that is in possession or control of a product 
                they believe to be repackaged by such repackager, a 
                repackager shall, not later than 24 hours after 
                receiving the verification request or in other such 
                reasonable time as determined by the Secretary, based 
                on the circumstances of the request, notify the person 
                making the request whether the product identifier, 
                including the standard numeric identifier, that is the 
                subject of the request corresponds to the product 
                identifier affixed or imprinted by the repackager. If a 
                repackager responding to a verification request 
                identifies a product identifier that does not 
                correspond to that affixed or imprinted by the 
                repackager, the repackager shall treat such product as 
                suspect product and conduct an investigation as 
                described in subparagraph (A). If the repackager has 
                reason to believe the product is an illegitimate 
                product, the repackager shall advise the person making 
                the request of such belief at the time such 
                manufacturer responds to the verification request.
                    ``(D) Electronic database.--A repackager may 
                satisfy the requirements of paragraph (4) by developing 
                a secure electronic database or utilizing a secure 
                electronic database developed or operated by another 
                entity. The owner of such database shall establish the 
                requirements and processes to respond to requests and 
                may provide for data access to other members of the 
                pharmaceutical distribution supply chain, as 
                appropriate. The development and operation of such a 
                database shall not relieve a repackager of the 
                requirement under paragraph (4) to respond to a 
                verification request submitted by means other than a 
                secure electronic database.
                    ``(E) Verification of saleable returned product.--
                Beginning 5 years after the date of enactment of the 
                Drug Supply Chain Security Act, upon receipt of a 
                returned product that the repackager intends to further 
                distribute, before further distributing such product, 
                the repackager shall verify the product identifier for 
                each sealed homogeneous case of such product or, if 
                such product is not in a sealed homogeneous case, 
                verify the product identifier on each package.
    ``(f) Third-Party Logistics Provider Requirements.--
            ``(1) In general.--Beginning not later than 1 year after 
        the date of enactment of the Drug Supply Chain Security Act, a 
        third-party logistics provider shall--
                    ``(A) not accept possession of a product unless the 
                owner of the product provides the transaction history, 
                transaction information, and a transaction statement 
                for the product;
                    ``(B) maintain a copy of the information described 
                in subparagraph (A) for not less than 6 years after the 
                transfer of possession; and
                    ``(C) upon a request by the Secretary or other 
                appropriate Federal or State official, in the event of 
                a recall or for the purpose of investigating a suspect 
                product or an illegitimate product, not later than 24 
                hours after receiving the request or in other such 
                reasonable time as determined by the Secretary based on 
                the circumstances of the request, provide the 
                applicable transaction information, transaction 
                history, and transaction statement for the product.
            ``(2) Product tracing.--Beginning not later than 6 years 
        after the date of enactment of the Drug Supply Chain Security 
        Act, a third-party logistics provider may accept possession of 
        product only if such product is encoded with a product 
        identifier (except as provided pursuant to subsection (a)(5)).
            ``(3) Authorized trading partners.--Beginning 1 year after 
        the date of enactment of the Drug Supply Chain Security Act, 
        the trading partners of a third-party logistics provider may be 
        only authorized trading partners.
            ``(4) Verification.--Beginning not later than 1 year after 
        the date of enactment of the Drug Supply Chain Security Act, a 
        third-party logistics provider shall have systems in place to 
        enable the third-party logistics provider to comply with the 
        following requirements:
                    ``(A) Suspect product.--
                            ``(i) In general.--Upon making a 
                        determination that a product in the possession 
                        or control of a third-party logistics provider 
                        is a suspect product, a third-party logistics 
                        provider shall--
                                    ``(I) quarantine such product 
                                within the possession or control of the 
                                third-party logistics provider from 
                                product intended for distribution until 
                                such product is cleared or transferred 
                                to the owner of such product for 
                                disposition of the product; and
                                    ``(II) promptly notify the owner of 
                                such product of the need to conduct an 
                                investigation to determine whether the 
                                product is an illegitimate product.
                            ``(ii) Cleared product.--If the owner of 
                        the product notifies the third-party logistics 
                        provider of the determination that a suspect 
                        product is not an illegitimate product, such 
                        product may be further distributed.
                            ``(iii) Records.--A third-party logistics 
                        provider shall keep records of the activities 
                        described in subclauses (I) and (II) of clause 
                        (i), as such subclauses relate to a suspect 
                        product, for not less than 6 years after the 
                        conclusion of the investigation.
                    ``(B) Illegitimate product.--
                            ``(i) In general.--Upon determining, in 
                        coordination with the manufacturer, that a 
                        product in the possession or control of a 
                        third-party logistics provider is an 
                        illegitimate product, the third-party logistics 
                        provider shall--
                                    ``(I) promptly notify the owner of 
                                such product of the need to disposition 
                                such product; and
                                    ``(II) promptly transfer possession 
                                of the product to the owner of such 
                                product to disposition the product.
                            ``(ii) Making a notification.--Upon 
                        determining that a product in the possession or 
                        control of the third-party logistics provider 
                        is an illegitimate product, the third-party 
                        logistics provider shall notify the Secretary 
                        not later than 24 hours after making such 
                        determination.
                            ``(iii) Responding to a notification.--Upon 
                        the receipt of a notification from the 
                        Secretary, a third-party logistics provider 
                        shall identify all illegitimate product subject 
                        to such notification that is in the possession 
                        or control of the third-party logistics 
                        provider, including any product that is 
                        subsequently received, and shall perform the 
                        activities described in subparagraph (A).
                            ``(iv) Terminating a notification.--Upon 
                        making a determination, in consultation with 
                        the Secretary and the owner of such product, 
                        that a notification is no longer necessary, a 
                        third-party logistics provider shall promptly 
                        terminate such notification.
                            ``(v) Records.--A third-party logistics 
                        provider shall keep records of the activities 
                        described in subclauses (I) and (II) of clause 
                        (i) as such subclauses relate to an 
                        illegitimate product for not less than 6 years 
                        after the conclusion of the disposition.
    ``(g) Drop Shipments.--This section shall not apply to any entity 
that does not physically handle, distribute, or store product. For 
purposes of this section, providing various administrative services, 
including processing of orders and payments, shall not by itself, be 
construed as being involved in the handling, distribution, or storage 
of a product. For purposes of this section, the term `entity' means a 
wholesale distributor, relabeler, repackager, or any other status.''.

SEC. 3. ENHANCED DRUG DISTRIBUTION SECURITY.

    (a) In General.--Section 582 of the Federal Food, Drug, and 
Cosmetic Act, as added by section 2, is amended by adding at the end 
the following:
    ``(h) Enhanced Drug Distribution Security.--
            ``(1) In general.--On the date that is 10 years after the 
        date of enactment of the Drug Supply Chain Security Act, the 
        following interoperable, electronic tracing of product at the 
        package level requirements shall go into effect:
                    ``(A) The transaction information and the 
                transaction statements as required under this section 
                shall be exchanged in a secure, interoperable, 
                electronic manner in accordance with the standards 
                established under the guidance issued pursuant to 
                paragraphs (3) and (4) of subsection (i), including any 
                revision of such guidance issued in accordance with 
                paragraph (5) of such subsection.
                    ``(B) The transaction information required under 
                this section shall include the product identifier at 
                the package level for each package included in the 
                transaction.
                    ``(C) Systems and processes for verification of 
                product at the package level shall be required in 
                accordance with the standards established under the 
                guidance issued pursuant to subsection (a)(2) and the 
                guidances issued pursuant to paragraphs (2), (3), and 
                (4) of subsection (i), including any revision of such 
                guidances issued in accordance with paragraph (5) of 
                such subsection, which may include the use of 
                aggregation and inference as necessary.
                    ``(D) The systems and processes necessary to 
                promptly respond with the transaction information and 
                transaction statement for a product upon a request by 
                the Secretary (or other appropriate Federal or State 
                official) in the event of a recall or for the purposes 
                of investigating a suspect product or an illegitimate 
                product shall be required.
                    ``(E) The systems and processes necessary to 
                promptly facilitate gathering the information necessary 
                to produce the transaction information for each 
                transaction going back to the manufacturer, as 
                applicable shall be required--
                            ``(i) in the event of a request by the 
                        Secretary (or other appropriate Federal or 
                        State official), on account of a recall or for 
                        the purposes of investigating a suspect product 
                        or an illegitimate product; or
                            ``(ii) in the event of a request by an 
                        authorized trading partner, in a secure manner 
                        that ensures the protection of confidential 
                        commercial information and trade secrets, for 
                        purposes of investigating a suspect product or 
                        assisting the Secretary (or other appropriate 
                        Federal or State official) with a request 
                        described in clause (i).
                    ``(F) Each person accepting a saleable return shall 
                have systems and processes in place to allow acceptance 
                of such product and may accept saleable returns only if 
                such person can associate the saleable return product 
                with the transaction information and transaction 
                statement associated with that product.
            ``(2) Compliance.--
                    ``(A) Information maintenance agreement.--A 
                dispenser shall be permitted to enter into a written 
                agreement with a third party, including an authorized 
                wholesale distributor, under which the third party 
                shall confidentially maintain any information and 
                statements required to be maintained under this 
                section. If a dispenser enters into such an agreement, 
                the dispenser shall maintain a copy of the written 
                agreement and shall not be relieved of the obligations 
                of the dispenser under this subsection.
                    ``(B) Alternative methods.--The Secretary, taking 
                into consideration the assessment conducted under 
                paragraph (3), shall provide for alternative methods of 
                compliance with any of the requirements set forth in 
                paragraph (1), including--
                            ``(i) establishing timelines for compliance 
                        by small businesses (including small business 
                        dispensers with 25 or fewer full-time 
                        employees) with such requirements, in order to 
                        ensure that such requirements do not impose 
                        undue economic hardship for small businesses, 
                        including small business dispensers for whom 
                        the criteria set forth in the assessment under 
                        paragraph (3) is not met, if the Secretary 
                        determines that such requirements under 
                        paragraph (1) would result in undue economic 
                        hardship; and
                            ``(ii) establishing a process by which a 
                        dispenser may request a waiver from any of the 
                        requirements set forth in paragraph (1) if the 
                        Secretary determines that such requirements 
                        would result in an undue economic hardship, 
                        which shall include a process for the biennial 
                        review and renewal of any such waiver.
            ``(3) Assessment.--
                    ``(A) In general.--Not later than the date that is 
                18 months after the Secretary issues the final guidance 
                required under subsection (i), the Secretary shall 
                enter into contract with a private, independent 
                consulting firm with expertise to conduct a technology 
                and software assessment that looks at the feasibility 
                of dispensers with 25 or fewer full-time employees 
                conducting interoperable, electronic tracing of 
                products at the package level. In no case may such 
                assessment commence later than 7.5 years after the date 
                of enactment of the Drug Supply Chain Security Act.
                    ``(B) Condition.--As a condition of the award of 
                the contract under subparagraph (A), the private, 
                independent consulting firm shall agree to consult with 
                dispensers with 25 or fewer full-time employees when 
                conducting the assessment under such subparagraph.
                    ``(C) Content.--The assessment conducted under 
                subparagraph (A) shall assess whether--
                            ``(i) the necessary software and hardware 
                        is readily accessible to such dispensers;
                            ``(ii) the necessary software and hardware 
                        is not prohibitively expensive to obtain, 
                        install, and maintain for such dispensers; and
                            ``(iii) the necessary hardware and software 
                        can be integrated into business practices, such 
                        as interoperability with wholesale 
                        distributors, for such dispensers.
                    ``(D) Publication.--The Secretary shall--
                            ``(i) publish the statement of work for the 
                        assessment conducted under subparagraph (A) for 
                        public comment prior to beginning the 
                        assessment;
                            ``(ii) publish the final assessment for 
                        public comment not later than 30 calendar days 
                        after receiving such assessment; and
                            ``(iii) hold a public meeting not later 
                        than 180 calendar days after receiving the 
                        final assessment at which public stakeholders 
                        may present their views on the assessment.
            ``(4) Procedure.--Notwithstanding section 553 of title 5, 
        United States Code, the Secretary, in promulgating any 
        regulation pursuant to this section, shall--
                    ``(A) provide appropriate flexibility by--
                            ``(i) not requiring the adoption of 
                        specific business systems for the maintenance 
                        and transmission of data;
                            ``(ii) prescribing alternative methods of 
                        compliance for any of the requirements set 
                        forth in paragraph (1) or set forth in 
                        regulations implementing such requirements, 
                        including timelines--
                                    ``(I) for small businesses to 
                                comply with the requirements set forth 
                                in the regulations in order to ensure 
                                that such requirements do not impose 
                                undue economic hardship for small 
                                businesses (including small business 
                                dispensers for whom the criteria set 
                                forth in the assessment under paragraph 
                                (3) is not met), if the Secretary 
                                determines that such requirements would 
                                result in undue economic hardship; and
                                    ``(II) which shall include 
                                establishing a process by which a 
                                dispenser may request a waiver from any 
                                of the requirements set forth in such 
                                regulations if the Secretary determines 
                                that such requirements would result in 
                                an undue economic hardship; and
                            ``(iii) taking into consideration--
                                    ``(I) the results of pilot 
                                projects, including pilot projects 
                                pursuant to this section;
                                    ``(II) the public meetings held and 
                                related guidance documents issued under 
                                this section;
                                    ``(III) the public health benefits 
                                of any additional regulations in 
                                comparison to the cost of compliance 
                                with such requirements, including on 
                                entities of varying sizes and 
                                capabilities;
                                    ``(IV) the diversity of the 
                                pharmaceutical distribution supply 
                                chain by providing appropriate 
                                flexibility for each sector, including 
                                both large and small businesses; and
                                    ``(V) the assessment pursuant to 
                                paragraph (3) with respect to small 
                                business dispensers, including related 
                                public comment and the public meeting, 
                                and requirements under this section;
                    ``(B) issue a notice of proposed rulemaking that 
                includes a copy of the proposed regulation;
                    ``(C) provide a period of not less than 60 days for 
                comments on the proposed regulation; and
                    ``(D) publish the final regulation not less than 2 
                years prior to the effective date of the regulation.
    ``(i) Guidance Documents.--
            ``(1) In general.--For the purposes of facilitating the 
        successful and efficient adoption of secure, interoperable 
        product tracing at the package level in order to enhance drug 
        distribution security and further protect the public health, 
        the Secretary shall issue the guidance documents as provided 
        for in this subsection.
            ``(2) Suspect and illegitimate product.--
                    ``(A) In general.--Not later than 180 days after 
                enactment of the Drug Supply Chain Security Act, the 
                Secretary shall issue a guidance document to aid 
                trading partners in the identification of a suspect 
                product and notification termination. Such guidance 
                document shall--
                            ``(i) identify specific scenarios that 
                        could significantly increase the risk of a 
                        suspect product entering the pharmaceutical 
                        distribution supply chain;
                            ``(ii) provide recommendation on how 
                        trading partners may identify such product and 
                        make a determination if the product is a 
                        suspect product as soon as practicable; and
                            ``(iii) set forth the process by which 
                        manufacturers, repackagers, wholesale 
                        distributors, dispensers, and third-party 
                        logistics providers shall terminate 
                        notifications in consultation with the 
                        Secretary regarding illegitimate product 
                        pursuant to subsections (b)(4)(B), (c)(4)(B), 
                        (d)(4)(B), (e)(4)(B), and (f)(B).
                    ``(B) Revised guidance.--If the Secretary revises 
                the guidance issued under subparagraph (A), the 
                Secretary shall follow the procedure set forth in 
                paragraph (5).
            ``(3) Unit level tracing.--
                    ``(A) In general.--In order to enhance drug 
                distribution security at the package level, not later 
                than 18 months after conducting a public meeting on the 
                system attributes necessary to enable secure tracing of 
                product at the package level, the Secretary shall issue 
                a final guidance document that outlines and makes 
                recommendations with respect to the system attributes 
                necessary to enable secure tracing at the package level 
                as required under the requirements established under 
                subsection (h). Such guidance document shall--
                            ``(i) define the circumstances under which 
                        the sectors within the pharmaceutical 
                        distribution supply chain may, in the most 
                        efficient manner practicable, infer the 
                        contents of a case, pallet, tote, or other 
                        aggregate of individual packages or containers 
                        of product, from a product identifier 
                        associated with the case, pallet, tote, or 
                        other aggregate, without opening each case, 
                        pallet, tote, or other aggregate or otherwise 
                        individually scanning each package;
                            ``(ii) identify methods and processes to 
                        enhance secure tracing of product at the 
                        package level, such as enhanced verification 
                        activities, the use of aggregation and 
                        inference, processes that utilize the product 
                        identifiers to enhance tracing of product at 
                        the package level, or package security 
                        features; and
                            ``(iii) ensure the protection of 
                        confidential commercial information and trade 
                        secrets.
                    ``(B) Procedure.--In issuing the guidance under 
                subparagraph (A), and in revising such guidance, if 
                applicable, the Secretary shall follow the procedure 
                set forth in paragraph (5).
            ``(4) Standards for interoperable data exchange.--
                    ``(A) In general.--In order to enhance secure 
                tracing of a product at the package level, the 
                Secretary, not later than 18 months after conducting a 
                public meeting on the interoperable standards necessary 
                to enhance the security of the pharmaceutical 
                distribution supply chain, shall update the guidance 
                issued pursuant to subsection (a)(2), as necessary and 
                appropriate, and finalize such guidance document so 
                that the guidance document--
                            ``(i) identifies and makes recommendation 
                        with respect to the standards necessary for 
                        adoption in order to support the secure, 
                        interoperable electronic data exchange among 
                        the pharmaceutical distribution supply chain 
                        that comply with a form and format developed by 
                        a widely recognized international standards 
                        development organization;
                            ``(ii) takes into consideration standards 
                        established pursuant to subsection (a)(2) and 
                        section 505D;
                            ``(iii) facilitates the creation of a 
                        uniform process or methodology for product 
                        tracing; and
                            ``(iv) ensures the protection of 
                        confidential commercial information and trade 
                        secrets.
                    ``(B) Procedure.--In issuing the guidance under 
                subparagraph (A), and in revising such guidance, if 
                applicable, the Secretary shall follow the procedure 
                set forth in paragraph (5).
            ``(5) Procedure.--In issuing or revising any guidance 
        issued pursuant to this subsection or subsection (h), except 
        the initial guidance issued under paragraph (2)(A), the 
        Secretary shall--
                    ``(A) publish a notice in the Federal Register for 
                a period not less than 30 days announcing that the 
                draft or revised draft guidance is available;
                    ``(B) post the draft guidance document on the 
                Internet Web site of the Food and Drug Administration 
                and make such draft guidance document available in hard 
                copy;
                    ``(C) provide an opportunity for comment and review 
                and take into consideration any comments received;
                    ``(D) revise the draft guidance, as appropriate;
                    ``(E) publish a notice in the Federal Register for 
                a period not less than 30 days announcing that the 
                final guidance or final revised guidance is available;
                    ``(F) post the final guidance document on the 
                Internet Web site of the Food and Drug Administration 
                and make such final guidance document available in hard 
                copy; and
                    ``(G) provide for an effective date of not earlier 
                than 1 year after such guidance becomes final.
    ``(j) Public Meetings.--
            ``(1) In general.--The Secretary shall hold not less than 3 
        public meetings to enhance the safety and security of the 
        pharmaceutical distribution supply chain and provide for 
        comment. The Secretary may hold the first such public meeting 
        not earlier than 1 year after the date of enactment of the Drug 
        Supply Chain Security Act. In carrying out the public meetings 
        described in this paragraph, the Secretary shall--
                    ``(A) prioritize topics necessary to inform the 
                issuance of the guidance described in paragraphs (3) 
                and (4) of subsection (i); and
                    ``(B) take all measures reasonable and practicable 
                to ensure the protection of confidential commercial 
                information and trade secrets.
            ``(2) Content.--Each of the following topics shall be 
        addressed in at least one of the public meetings described in 
        paragraph (1):
                    ``(A) An assessment of the steps taken under 
                subsections (b) through (f) to build capacity for a 
                unit-level system, including the impact of the 
                requirements of such subsections on--
                            ``(i) the ability of the health care system 
                        collectively to maintain patient access to 
                        medicines;
                            ``(ii) the scalability of such 
                        requirements, including as it relates to 
                        product lines; and
                            ``(iii) the capability of different sectors 
                        and subsectors, including both large and small 
                        businesses, to affix and utilize the product 
                        identifier.
                    ``(B) The system attributes necessary to support 
                the requirements set forth under subsection (h), 
                including the standards necessary for adoption in order 
                to support the secure, interoperable electronic data 
                exchange among sectors within the pharmaceutical 
                distribution supply chain.
                    ``(C) Best practices in each of the different 
                sectors within the pharmaceutical distribution supply 
                chain to implement the requirements of this section.
                    ``(D) The costs and benefits of the implementation 
                of this section, including the impact on each 
                pharmaceutical distribution supply chain sector and on 
                public health.
                    ``(E) Whether electronic tracing requirements, 
                including tracing of product at the package level are 
                feasible, cost-effective and needed to protect public 
                health.
                    ``(F) The systems and processes needed to utilize 
                the product identifiers to enhance tracing of product 
                at the package level.
                    ``(G) The technical capabilities and legal 
                authorities, if any, needed to establish an 
                interoperable, electronic system that provides for 
                tracing of product at the package level.
                    ``(H) The impact that such additional requirements 
                would have on patient safety, the drug supply, cost and 
                regulatory burden, and timely patient access to 
                prescription drugs.
                    ``(I) Other topics, as determined appropriate by 
                the Secretary.
    ``(k) Pilot Projects.--
            ``(1) In general.--The Secretary shall establish 1 or more 
        pilot projects, in coordination with authorized manufacturers, 
        repackagers, wholesale distributors, third-party logistics 
        providers, and dispensers, to explore and evaluate methods to 
        enhance the safety and security of the pharmaceutical 
        distribution supply chain. Such projects shall build upon 
        efforts, in existence as of the date of enactment of the Drug 
        Supply Chain Security Act, to enhance the safety and security 
        of the pharmaceutical distribution supply chain, take into 
        consideration any pilot projects conducted prior to such date 
        of enactment, and inform the draft and final guidance under 
        paragraphs (3) and (4) of subsection (i).
            ``(2) Content.--
                    ``(A) In general.--The Secretary shall ensure that 
                the pilot projects under paragraph (1) reflect the 
                diversity of the pharmaceutical distribution supply 
                chain and that the pilot projects, when taken as a 
                whole, include participants representative of every 
                sector, including both large and small businesses.
                    ``(B) Project design.--The pilot projects under 
                paragraph (1) shall be designed to--
                            ``(i) utilize the product identifier for 
                        tracing of a product, which may include 
                        verification of the product identifier of a 
                        product, including the use of aggregation and 
                        inference;
                            ``(ii) improve the technical capabilities 
                        of each sector and subsector to comply with 
                        systems and processes needed to utilize the 
                        product identifiers to enhance tracing of a 
                        product;
                            ``(iii) identify system attributes that are 
                        necessary to implement the requirements 
                        established under this section; and
                            ``(iv) complete other activities as 
                        determined by the Secretary.
    ``(l) Sunset.--The following requirements shall have no force or 
effect beginning on the date that is 10 years after the date of 
enactment of the Drug Supply Chain Security Act:
            ``(1) The provision and receipt of transaction history 
        under this section.
            ``(2) The requirements set forth for returns under 
        subsection (c)(1)(B)(i).
    ``(m) Rule of Construction.--The requirements set forth in 
subsections (h)(4), (j), and (k) shall not be construed as a condition, 
prohibition, or precedent for precluding or delaying the provisions 
becoming effective pursuant to subsection (h).''.

SEC. 4. NATIONAL LICENSURE STANDARDS FOR WHOLESALE DISTRIBUTORS.

    (a) Amendments.--
            (1) License requirement.--Section 503(e) of the Federal 
        Food, Drug, and Cosmetic Act (21 U.S.C. 353(e)) is amended by 
        striking paragraphs (1), (2), and (3) and inserting the 
        following:
            ``(1) License requirement.--Subject to section 583:
                    ``(A) In general.--No person may engage in 
                wholesale distribution of a drug subject to subsection 
                (b)(1) in any State unless such person--
                            ``(i)(I) is licensed by the State from 
                        which the drug is distributed; or
                            ``(II) if the State from which the drug 
                        distributed has not established a licensure 
                        requirement, is licensed by the Secretary; and
                            ``(ii) if the drug is distributed 
                        interstate, is licensed by the State into which 
                        the drug is distributed if the State into which 
                        the drug is distributed requires the licensure 
                        of a person that distributes drugs into the 
                        State.
                    ``(B) License standards.--Each Federal and State 
                license described in subparagraph (A) shall meet the 
                standards, terms, and conditions established by the 
                Secretary under section 583.
            ``(2) Licensure reporting and database.--
                    ``(A) Licensure reporting.--Beginning 1 year after 
                the date of enactment of the Drug Supply Chain Security 
                Act, any person who owns or operates an establishment 
                that engages in wholesale distribution shall report to 
                the Secretary, on an annual basis pursuant to a 
                schedule determined by the Secretary--
                            ``(i) each State by which the person is 
                        licensed and the appropriate identification 
                        number of each such license; and
                            ``(ii) the name and address of each 
                        facility at which, and all trade names under 
                        which, the person conducts business.
                    ``(B) Database.--Not later than 1 year after the 
                date of enactment of the Drug Supply Chain Security 
                Act, the Secretary shall establish a database of 
                licensed wholesale distributors. Such database shall--
                            ``(i) identify each wholesale distributor 
                        by name, contact information, and each State 
                        where such wholesale distributor is 
                        appropriately licensed to engage in wholesale 
                        distribution;
                            ``(ii) be available to the public on the 
                        Internet Web site of the Food and Drug 
                        Administration; and
                            ``(iii) be regularly updated on a schedule 
                        determined by the Secretary.
            ``(3) Costs.--
                    ``(A) Authorized licensure fees of secretary.--If a 
                State does not establish a licensing program for 
                persons engaged in the wholesale distribution of a drug 
                subject to subsection (b), the Secretary shall license 
                a person engaged in wholesale distribution located in 
                such State and may collect a reasonable fee in such 
                amount necessary to reimburse the Secretary for costs 
                associated with establishing and administering the 
                licensure program and conducting periodic inspections 
                under this section. The Secretary shall adjust fee 
                rates as needed on an annual basis to generate only the 
                amount of revenue needed to perform this service. Fees 
                authorized under this paragraph shall be collected and 
                available for obligation only to the extent and in the 
                amount provided in advance in appropriations Acts. Such 
                fees are authorized to remain available until expended.
                    ``(B) State licensing fees.--Nothing in this Act 
                shall prohibit States from collecting fees from 
                wholesale distributors in connection with State 
                licensing of such distributors.''.
            (2) Wholesale distribution.--Section 503(e) of the Federal 
        Food, Drug, and Cosmetic Act (21 U.S.C. 353(e)), as amended by 
        subsection (a), is further amended by adding at the end the 
        following:
            ``(4) For the purposes of this subsection and subsection 
        (d), the term `wholesale distribution' means the distribution 
        of a drug subject to subsection (b) to a person other than a 
        consumer or patient, or receipt of a drug subject to subsection 
        (b) by a person other than the consumer or patient, but does 
        not include--
                    ``(A) intracompany distribution of any drug between 
                members of an affiliated group (as defined in section 
                1504(a) of the Internal Revenue Code of 1986);
                    ``(B) the distribution of a drug, or an offer to 
                distribute a drug among hospitals or other health care 
                entities which are under common control;
                    ``(C) the distribution of a drug or an offer to 
                distribute a drug for emergency medical reasons, 
                including a public health emergency declaration 
                pursuant to section 319 of the Public Health Service 
                Act, except that a drug shortage not caused by a public 
                health emergency shall not constitute an emergency 
                medical reason;
                    ``(D) the dispensing of a drug pursuant to a valid 
                prescription executed in accordance with section 
                503(b)(1);
                    ``(E) the distribution of minimal quantities of 
                drug by a licensed retail pharmacy to a licensed 
                practitioner for office use;
                    ``(F) the distribution of a drug or an offer to 
                distribute a drug by a charitable organization to a 
                nonprofit affiliate of the organization to the extent 
                otherwise permitted by law;
                    ``(G) the purchase or other acquisition by a 
                dispenser, hospital, or other health care entity of a 
                drug for use by such dispenser, hospital, or other 
                health care entity;
                    ``(H) the distribution of a drug by the 
                manufacturer of such drug;
                    ``(I) the receipt or transfer of a drug by an 
                authorized third-party logistics provider provided that 
                such third-party logistics provider does not take 
                ownership of the drug;
                    ``(J) a common carrier that transports a drug, 
                provided that the common carrier does not take 
                ownership of the drug;
                    ``(K) the distribution of a drug, or an offer to 
                distribute a drug by an authorized repackager that has 
                taken ownership or possession of the drug and repacks 
                it in accordance with section 582(e);
                    ``(L) saleable drug returns when conducted by a 
                dispenser;
                    ``(M) the distribution of a medical convenience kit 
                which is a collection of finished drug or biologic 
                products assembled in kit form strictly for the 
                convenience of the purchaser or user if--
                            ``(i) the medical convenience kit is 
                        assembled in an establishment that is 
                        registered with the Food and Drug 
                        Administration as a device manufacturer in 
                        accordance with section 510(b)(2);
                            ``(ii) the person who manufactures the 
                        medical convenience kit purchased the finished 
                        drug or biologic product contained in the 
                        medical convenience kit directly from the 
                        pharmaceutical manufacturer or from a wholesale 
                        distributor that purchased the product directly 
                        from the pharmaceutical manufacturer;
                            ``(iii) the person who manufactures a 
                        medical convenience kit does not alter the 
                        primary container or label of the product as 
                        purchased from the manufacturer or wholesale 
                        distributor;
                            ``(iv) the medical convenience kit does not 
                        contain a controlled substance that appears in 
                        a schedule contained in the Comprehensive Drug 
                        Abuse Prevention and Control Act of 1970 (21 
                        U.S.C. 801, et seq.); and
                            ``(v) the products contained in the medical 
                        convenience kit are--
                                    ``(I) intravenous solutions 
                                intended for the replenishment of 
                                fluids and electrolytes;
                                    ``(II) drugs intended to maintain 
                                the equilibrium of water and minerals 
                                in the body;
                                    ``(III) drugs intended for 
                                irrigation or reconstitution;
                                    ``(IV) anesthetics;
                                    ``(V) anticoagulants;
                                    ``(VI) vasopressors; or
                                    ``(VII) sympathicomimetics;
                    ``(N) the distribution of an intravenous drug that, 
                by its formulation, is intended for the replenishment 
                of fluids and electrolytes (such as sodium, chloride, 
                and potassium) or calories (such as dextrose and amino 
                acids);
                    ``(O) the distribution of an intravenous drug used 
                to maintain the equilibrium of water and minerals in 
                the body, such as dialysis solutions;
                    ``(P) the distribution of a drug that is intended 
                for irrigation or reconstitution, or sterile water, 
                whether intended for such purposes or for injection;
                    ``(Q) the distribution of compressed medical gas, 
                defined as any substance in its gaseous or cryogenic 
                liquid form that meets medical purity standards and has 
                application in a medical or homecare environment, 
                including oxygen and nitrous oxide;
                    ``(R) facilitating the distribution of a product by 
                providing solely administrative services, including 
                processing of orders and payments; or
                    ``(S) the transfer of a product by a hospital or 
                other health care entity to a repackager registered 
                under section 510 for the purpose of repackaging the 
                drug for use by that hospital, or other health care 
                entity and other health care entities that are under 
                common control, if ownership of the drug remains with 
                the hospital or other health care entity at all 
                times.''.
            (3) Third-party logistics providers.--Section 503(e) of the 
        Federal Food, Drug, and Cosmetic Act (21 U.S.C. 353(e)), as 
        amended by subsection (a), is further amended by adding at the 
        end the following:
            ``(5) Third-party logistics providers.--Notwithstanding 
        paragraphs (1) through (4), each entity that meets the 
        definition of a third-party logistics provider under section 
        581(22) shall obtain a license as a third-party logistics 
        provider as described in section 584(a) and is not required to 
        obtain a license as a wholesale distributor if the entity never 
        assumes an ownership interest in the product it handles.''.
            (4) Licensure standards.--Subchapter H of chapter V of the 
        Federal Food, Drug, and Cosmetic Act, as added by section 2, is 
        amended by adding at the end the following:

``SEC. 583. NATIONAL LICENSURE STANDARDS FOR WHOLESALE DISTRIBUTORS.

    ``(a) In General.--The Secretary shall, not later than 2 years 
after the date of enactment of the Drug Supply Chain Security Act, by 
regulation establish minimum standards, terms, and conditions for the 
licensing of persons under section 503(e)(1) (as amended by the Drug 
Supply Chain Security Act), including the revocation, reissuance, and 
renewal of such license.
    ``(b) Content.--The standards established under subsection (a) 
shall apply to all State and Federal licenses described under section 
503(e)(1) (as amended by the Drug Supply Chain Security Act) and shall 
prescribe minimum requirements for--
            ``(1) the storage and handling of such drugs, including 
        facility requirements;
            ``(2) the establishment and maintenance of records of the 
        distributions of such drugs;
            ``(3) the furnishing of a bond or other equivalent means of 
        security if--
                    ``(A) an applicant that is not a government owned 
                and operated wholesale distributor, for the issuance or 
                renewal of a wholesale distributor license shall submit 
                a surety bond of one hundred thousand dollars or other 
                equivalent means of security acceptable to the State;
                    ``(B) for purposes of subparagraph (A), the State 
                or other applicable authority may accept a surety bond 
                less than $100,000 if the annual gross receipts of the 
                previous tax year for the wholesaler is $10,000,000 or 
                less, in which case the surety bond shall be $25,000; 
                and
                    ``(C) if a wholesale distributor can provide 
                evidence that it possesses the required bond in a 
                State, the requirement for a bond in another State is 
                waived;
            ``(4) mandatory background checks and fingerprinting of 
        facility managers or designated representatives;
            ``(5) the establishment and implementation of 
        qualifications for key personnel;
            ``(6) the mandatory physical inspection of any facility to 
        be used in wholesale distribution within a reasonable time 
        frame from the initial application of the facility and to be 
        conducted by the licensing authority or by the State, 
        consistent with subsection (c); and
            ``(7) in accordance with subsection (d), the prohibition of 
        certain persons from receiving or maintaining licensure for 
        wholesale distribution.
    ``(c) Inspections.--To satisfy the inspection requirement the 
Federal or State licensing authority may conduct the inspection, or may 
accept an inspection by the State in which the facility is located, or 
by a third-party accreditation or inspection service approved by the 
Secretary or the State licensing such wholesale distributor.
    ``(d) Prohibited Persons.--The standards established under 
subsection (a) shall include requirements to prohibit a person from 
receiving or maintaining licensure for wholesale distribution if the 
person--
            ``(1) has been convicted of any felony for conduct relating 
        to wholesale distribution, any felony violation of subsection 
        (i) or (k) of section 301, or any felony violation of section 
        1365 of title 18, United States Code, relating to product 
        tampering; or
            ``(2) has engaged in a pattern of violating the 
        requirements of this section, or State requirements for 
        licensure, that presents a threat of serious adverse health 
        consequences or death to humans.
    ``(e) Requirements.--The Secretary, in promulgating any regulation 
pursuant to this section, shall, notwithstanding section 553 of title 
5, United States Code--
            ``(1) issue a notice of proposed rulemaking that includes a 
        copy of the proposed regulation;
            ``(2) provide a period of not less than 60 days for 
        comments on the proposed regulation; and
            ``(3) provide that the final regulation take effect on the 
        date that is 2 years after the date such final regulation is 
        published.''.
    (b) Conforming Amendments.--Section 503(d) of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 353(d)) is amended--
            (1) by striking ``authorized distributor of record'' each 
        place such term appears and inserting ``wholesale 
        distributor''; and
            (2) by striking ``authorized distributors of record'' each 
        place such term appears and inserting ``wholesale 
        distributors''.
    (c) Effective Date.--The amendments made by subsections (a) and (b) 
shall take effect on the day that is 1 year after the date of enactment 
of this Act.

SEC. 5. NATIONAL LICENSURE STANDARDS FOR THIRD-PARTY LOGISTICS 
              PROVIDERS; UNIFORM NATIONAL POLICY.

    Subchapter H of chapter V of the Federal Food, Drug, and Cosmetic 
Act, as amended by section 4, is further amended by adding at the end 
the following:

``SEC. 584. NATIONAL LICENSURE STANDARDS FOR THIRD-PARTY LOGISTICS 
              PROVIDERS.

    ``(a) License Requirements.--No third-party logistics provider in 
any State may conduct activities in any State unless each facility of 
such third-party logistics provider--
            ``(1)(A) is licensed by the State from which the drug is 
        distributed by the third-party logistics provider, in 
        accordance with the regulations promulgated under subsection 
        (d); or
            ``(B) if the State from which the drug distributed by the 
        third-party logistics provider has not established a licensure 
        requirement, is licensed by the Secretary, in accordance with 
        the regulations promulgated under subsection (d); and
            ``(2) if the drug is distributed interstate, is licensed by 
        the State into which the drug is distributed by the third-party 
        logistics provider if such State licenses third-party logistics 
        providers that distribute drugs into the State and the third-
        party logistics provider is not licensed by the Secretary as 
        described in subparagraph (A)(ii).
    ``(b) Licensure Reporting.--Beginning 1 year after the date of 
enactment of the Drug Supply Chain Security Act, a facility of a third-
party logistics provider shall report to the Secretary, on an annual 
basis pursuant to a schedule determined by the Secretary--
            ``(1) the State by which the facility is licensed and the 
        appropriate identification number of such license; and
            ``(2) the name and address of the facility, and all trade 
        names under which, such facility conducts business.
    ``(c) Costs.--
            ``(1) Authorized licensure fees of secretary.--If a State 
        does not establish a licensing program for a third-party 
        logistics provider, the Secretary shall license the third-party 
        logistics provider located in such State and may collect a 
        reasonable fee in such amount necessary to reimburse the 
        Secretary for costs associated with establishing and 
        administering the licensure program and conducting periodic 
        inspections under this section. The Secretary shall adjust fee 
        rates as needed on an annual basis to generate only the amount 
        of revenue needed to perform this service. Fees authorized 
        under this paragraph shall be collected and available for 
        obligation only to the extent and in the amount provided in 
        advance in appropriations Acts. Such fees are authorized to 
        remain available until expended.
            ``(2) State licensing fees.--
                    ``(A) State established program.--Nothing in this 
                Act shall prohibit a State that has established a 
                program to license a third-party logistics provider 
                from collecting fees from a third-party logistics 
                provider for such a license.
                    ``(B) No state established program.--A State that 
                does not establish a program to license a third-party 
                logistics provider in accordance with this section 
                shall be prohibited from collecting a State licensing 
                fee from a third-party logistics provider.
    ``(d) License Regulations.--
            ``(1) In general.--Not later than 2 years after the date of 
        enactment of the Drug Supply Chain Security Act, the Secretary 
        shall issue regulations regarding the minimum issuance and 
        eligibility requirements for licensing under subsection (a), 
        including the revocation and reissuance of such license, to 
        third-party logistics providers under this section.
            ``(2) Content.--Such regulations shall--
                    ``(A) establish a process by which a third-party 
                accreditation program approved by the Secretary shall, 
                upon request by a third-party logistics provider, issue 
                a license to each third-party logistics provider that 
                meets the minimum requirements set forth in this 
                section;
                    ``(B) establish a process by which the Secretary 
                shall issue a license to each third-party logistics 
                provider that meets the minimum requirements set forth 
                in this section if the Secretary is not able to approve 
                a third-party accreditation program because no such 
                program meets the Secretary's requirements necessary 
                for approval of such a third-party accreditation 
                program;
                    ``(C) require that the entity complies with storage 
                practices, as determined by the Secretary for such 
                facility, including--
                            ``(i) maintaining access to warehouse space 
                        of suitable size to facilitate safe operations, 
                        including a suitable area to quarantine suspect 
                        product;
                            ``(ii) maintaining adequate security; and
                            ``(iii) having written policies and 
                        procedures to--
                                    ``(I) address receipt, security, 
                                storage, inventory, shipment, and 
                                distribution of a product;
                                    ``(II) identify, record, and report 
                                confirmed losses or thefts in the 
                                United States;
                                    ``(III) correct errors and 
                                inaccuracies in inventories;
                                    ``(IV) provide support for 
                                manufacturer recalls;
                                    ``(V) prepare for, protect against, 
                                and address any reasonably foreseeable 
                                crisis that affects security or 
                                operation at the facility, such as a 
                                strike, fire, or flood;
                                    ``(VI) ensure that any expired 
                                product is segregated from other 
                                products and returned to the 
                                manufacturer or re-packager or 
                                destroyed;
                                    ``(VII) maintain the capability to 
                                electronically trace the receipt and 
                                outbound distribution of a product, and 
                                supplies and records of inventory; and
                                    ``(VIII) quarantine or destroy a 
                                suspect product if directed to do so by 
                                the respective manufacturer, wholesale 
                                distributor, dispenser or an authorized 
                                government agency;
                    ``(D) provide for periodic inspection by the 
                licensing authority, as determined by the Secretary, of 
                such facility warehouse space to ensure compliance with 
                this section;
                    ``(E) prohibit a facility from having as a manager 
                or designated representative anyone convicted of any 
                felony violation of subsection (i) or (k) of section 
                301 or any violation of section 1365 of title 18, 
                United States Code relating to product tampering;
                    ``(F) provide for mandatory background checks of a 
                facility manager or a designated representative of such 
                manager; and
                    ``(G) require a third-party logistics provider to 
                provide the Secretary, upon a request by the Secretary, 
                a list of all product manufacturers, wholesale 
                distributors, and dispensers for whom the third-party 
                logistics provider provides services at such facility.
            ``(3) Procedure.--In promulgating the regulations under 
        this subsection, the Secretary shall, notwithstanding section 
        553 of title 5, United States Code--
                    ``(A) issue a notice of proposed rulemaking that 
                includes a copy of the proposed regulation;
                    ``(B) provide a period of not less than 60 days for 
                comments on the proposed regulation; and
                    ``(C) provide that the final regulation takes 
                effect upon the expiration of 1 year after the date 
                that such final regulation is issued.
    ``(e) Renewal of Licenses.--The Secretary shall develop procedures 
for license renewal. Licenses issued under this section shall expire on 
the date that is 3 years after issuance of the license. Such an expired 
license may be renewed for additional 3-year periods according to 
procedures developed by the Secretary.

``SEC. 585. UNIFORM NATIONAL POLICY.

    ``(a) Product Tracing and Other Requirements.--Beginning on the 
date of enactment of the Drug Supply Chain Security Act, no State or 
political subdivision of a State may establish or continue in effect 
any requirements for tracing drugs through the distribution system 
(including any requirements with respect to statements of distribution 
history, transaction history, transaction information, or transaction 
statement of a pharmaceutical product as such product changes ownership 
in the supply chain, or verification, investigation, disposition, 
notification, or record-keeping relating to such systems, including 
paper or electronic pedigree systems or for tracking and tracing drugs 
throughout the distribution system) which are inconsistent with, more 
stringent than, or in addition to, any requirements applicable under 
section 503(e) (as amended by such Act) or this subchapter (or 
regulations issued thereunder), or which are inconsistent with--
            ``(1) any waiver, exception, or exemption issued by the 
        Secretary under section 581 or 582; or
            ``(2) any restrictions specified in section 582.
    ``(b) Distribution and Licensing Standards.--
            ``(1) In general.--Beginning on the date of enactment of 
        the Drug Supply Chain Security Act, no State or political 
        subdivision of a State may establish or continue any standards, 
        requirements, or regulations with respect to wholesale drug 
        distributor or third-party logistics provider licensure that 
        are less stringent than the standards and requirements 
        applicable under section 503(e) (as amended by such Act), in 
        the case of a wholesale distributor, or section 584, in the 
        case of a third-party logistics provider.
            ``(2) State regulation of third-party logistics 
        providers.--No State shall regulate third-party logistics 
        providers as wholesale distributors.
            ``(3) Administration fees.--Notwithstanding paragraph (1), 
        a State may administer fee collections for effectuating the 
        wholesale drug distributor and third-party logistics provider 
        licensure requirements under sections 503(e) (as amended by the 
        Drug Supply Chain Security Act), 583, and 584.
            ``(4) Enforcement, suspension, and revocation of 
        licenses.--Notwithstanding paragraph (1), a State--
                    ``(A) may take administrative action, including 
                fines, to enforce a licensure requirement promulgated 
                by the State in accordance with section 503(e) (as 
                amended by the Drug Supply Chain Security Act) or this 
                subchapter;
                    ``(B) may provide for the suspension or revocation 
                of licenses issued by the State for violations of the 
                laws of such State;
                    ``(C) upon conviction of violations of Federal, 
                State, or local drug laws or regulations, may provide 
                for fines, imprisonment, or civil penalties; and
                    ``(D) may regulate activities of licensed entities 
                in a manner that is consistent with product tracing 
                requirements under section 582.
    ``(c) Exception.--Nothing in subsection (a) or (b) shall be 
construed to preempt State requirements related to the distribution of 
prescription drugs if such requirements are not related to product 
tracing as described in subsection (a), including any requirements 
applicable under section 503(e) (as amended by the Drug Supply Chain 
Security Act) or this subchapter (or regulations issued thereunder).''.

SEC. 6. PENALTIES.

    (a) Prohibited Act.--Section 301(t) of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 331(t)), is amended--
            (1) by striking ``or'' after ``the requirements of section 
        503(d),''; and
            (2) by inserting ``, failure to comply with the 
        requirements under section 582, the failure to comply with the 
        requirements under section 584, as applicable,'' after ``in 
        violation of section 503(e)''.
    (b) Misbranding.--Section 502 of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 352), is amended by adding at the end the 
following:
    ``(bb) If it is a drug and it fails to bear the product identifier 
as required by section 582.''.

SEC. 7. CONFORMING AMENDMENTS.

    Section 303(b)(1)(D) of the Federal Food, Drug, and Cosmetic Act 
(21 U.S.C. 333(b)(1)(D)) is amended by striking ``503(e)(2)(A)'' and 
inserting ``503(e)(1)''.

SEC. 8. SAVINGS CLAUSE.

    Except as provided in the amendments made by paragraphs (1), (2), 
and (3) of section 4(a) and by section 6(a), nothing in this Act 
(including the amendments made by this Act) shall be construed as 
altering any authority of the Secretary of Health and Human Services 
with respect to a drug subject to section 503(b)(1) of the Federal 
Food, Drug, and Cosmetic Act (21 U.S.C. 353(b)(1)) under any other 
provision of such Act or the Public Health Service Act (42 U.S.C. 201 
et seq.).
                                 <all>
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