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[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3089 Introduced in House (IH)]

113th CONGRESS
  1st Session
                                H. R. 3089

To amend section 503A of the Federal Food, Drug, and Cosmetic Act with 
                    respect to pharmacy compounding.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                           September 12, 2013

Mr. Griffith of Virginia (for himself, Ms. DeGette, and Mr. Gene Green 
  of Texas) introduced the following bill; which was referred to the 
                    Committee on Energy and Commerce

_______________________________________________________________________

                                 A BILL

 
To amend section 503A of the Federal Food, Drug, and Cosmetic Act with 
                    respect to pharmacy compounding.

    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 ``Compounding Clarity Act of 2013''.

SEC. 2. TRADITIONAL PHARMACY COMPOUNDING.

    Section 503A of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
353a) is amended to read as follows:

``SEC. 503A. TRADITIONAL PHARMACY COMPOUNDING.

    ``(a) In General.--Sections 501(a)(2)(B), 502(f)(1), and 505 of 
this Act and section 351 of the Public Health Service Act shall not 
apply to a drug product for human use if each of the following 
conditions is met:
            ``(1) Identified patient and receipt of prescription.--The 
        drug product is compounded in accordance with one of the 
        following:
                    ``(A) In general.--The drug product is compounded 
                by a licensed pharmacist in a State-licensed pharmacy 
                or a Federal facility, or by a licensed physician, for 
                an identified individual patient based on the receipt 
                of a valid prescription.
                    ``(B) Anticipatory compounding.--The drug product 
                is compounded by a licensed pharmacist in a State-
                licensed pharmacy or a Federal facility, or by a 
                licensed physician, in limited quantities before the 
                receipt of a valid prescription for an identified 
                individual patient, based on--
                            ``(i) historical demand for the drug 
                        product; and
                            ``(ii) a history of prescriptions for the 
                        drug product generated solely within an 
                        established relationship between the licensed 
                        pharmacist or licensed physician who is 
                        performing the compounding and--
                                    ``(I) the individual patient; or
                                    ``(II) the physician or other 
                                licensed practitioner who writes the 
                                prescription.
                    ``(C) Compounding for office use.--The drug product 
                is compounded by a licensed pharmacist in a State-
                licensed pharmacy or a Federal facility, or by a 
                licensed physician, pursuant to a non-patient-specific 
                purchase order and--
                            ``(i) the drug product will be administered 
                        by a health care practitioner within a 
                        physician's office, a hospital, or another 
                        health care setting;
                            ``(ii) valid patient-specific prescriptions 
                        or, when a compounded drug product is 
                        administered within the same health system in 
                        which it was compounded, valid patient names--
                                    ``(I) are submitted, electronically 
                                or otherwise, to the pharmacist or 
                                physician who performs the compounding, 
                                not later than 7 business days after 
                                the drug product is administered; and
                                    ``(II) will, in the aggregate, 
                                account for the total volume of drug 
                                product compounded pursuant to the non-
                                patient-specific purchase order;
                            ``(iii) during any 6-month period, of the 
                        total drug products dispensed from the facility 
                        at which the drug product was compounded, not 
                        more than 5 percent are compounded sterile drug 
                        products that are--
                                    ``(I) dispensed pursuant to this 
                                subparagraph; and
                                    ``(II) shipped interstate;
                            ``(iv) records of the compounding will be 
                        kept for not less than 3 years; and
                            ``(v) the statement `Office Use Only' and 
                        the statement `Not for resale' appear on the 
                        compounded drug product.
                Compounding under this subparagraph shall not be 
                considered to be in violation of clause (ii) because of 
                the failure of a pharmacist or a physician to account 
                for valid patient-specific prescriptions or valid 
                patient names as required by such clause, so long as 
                the pharmacist or physician makes a good faith, 
                reasonable effort to account for the prescriptions or 
                names, as applicable, and does not continue to compound 
                drug products under this subparagraph for a health care 
                practitioner or facility with a history of failing to 
                submit such prescriptions or patient names.
            ``(2) Quality standards.--Irrespective of whether a drug 
        product is compounded under subparagraph (A), (B), or (C) of 
        paragraph (1), the drug product is compounded, stored, and 
        dated in compliance with the United States Pharmacopoeia 
        chapters that are applicable to pharmaceutical compounding 
        (including the chapter on sterile preparations).
            ``(3) Bulk drug substances.--If the drug product is 
        compounded using bulk drug substances (as defined in 
        regulations of the Secretary published at section 207.3(a)(4) 
        of title 21 of the Code of Federal Regulations (or any 
        successor regulations))--
                    ``(A) the bulk drug substances--
                            ``(i) if an applicable monograph exists 
                        under the United States Pharmacopoeia, the 
                        National Formulary, or another compendium or 
                        pharmacopeia recognized under Federal law, each 
                        comply with the monograph;
                            ``(ii) if such a monograph does not exist, 
                        each are drug substances that are components of 
                        drug products approved or licensed by the 
                        Secretary for human use; or
                            ``(iii) if such a monograph does not exist 
                        and the drug substance is not a component of a 
                        drug product so approved or licensed, each 
                        appear on a list published by the Secretary 
                        (through regulations issued under subsection 
                        (e));
                    ``(B) the bulk drug substances are each 
                manufactured by an establishment that is registered 
                under section 510 (including a foreign establishment 
                that is registered under section 510(i)); and
                    ``(C) the bulk drug substances are each accompanied 
                by a valid certificate of analysis.
            ``(4) Ingredients (other than bulk drug substances).--If 
        any ingredients (other than bulk drug substances) are used in 
        compounding the drug product, such ingredients comply with the 
        standards of an applicable United States Pharmacopoeia or 
        National Formulary monograph.
            ``(5) Drug products withdrawn or removed because unsafe or 
        not effective.--The drug product does not appear on a list 
        published by the Secretary of drug products that have been 
        withdrawn or removed from the market because such drug products 
        or components of such drug products have been found to be 
        unsafe or not effective.
            ``(6) Essentially a copy of a marketed and approved drug 
        product.--The licensed pharmacist or licensed physician does 
        not compound any drug product that is essentially a copy of a 
        marketed and approved drug product.
            ``(7) Drug products presenting demonstrable difficulties 
        for compounding.--The drug product is not identified (directly 
        or as part of a category of drug products) in a list published 
        by the Secretary (through regulations issued under subsection 
        (e)) as a drug product that presents demonstrable difficulties 
        for compounding that reasonably demonstrate an adverse effect 
        on the safety or effectiveness of that drug product.
            ``(8) Prohibition on wholesaling.--The drug product will 
        not be sold by an entity other than the pharmacy or physician 
        that compounded such drug product.
    ``(b) State Regulation.--Nothing in this section shall prevent a 
State from--
            ``(1) imposing restrictions on the type of compounding 
        described in subparagraph (B) or (C) of subsection (a)(1) that 
        are in addition to the restrictions applicable under this 
        section; or
            ``(2) enforcing requirements or restrictions contained in 
        the chapters or standards described in subsection (a)(2).
    ``(c) Notification System.--
            ``(1) Development and implementation.--The Secretary shall 
        develop and implement a system for receiving and reviewing 
        submissions from State boards of pharmacy--
                    ``(A) describing actions taken against compounding 
                pharmacies; or
                    ``(B) expressing concerns that a compounding 
                pharmacy may be acting in violation of one or more 
                requirements of this section.
            ``(2) Content of submissions from state boards of 
        pharmacy.--An action referred to in paragraph (1)(A) is, with 
        respect to a pharmacy that compounds drug products, any of the 
        following:
                    ``(A) The issuance of a warning letter, or the 
                imposition of sanctions or penalties, by a State for 
                violations of a State's pharmacy regulations pertaining 
                to compounding.
                    ``(B) The suspension or revocation of a State-
                issued pharmacy license or registration.
                    ``(C) The recall of compounded drug products due to 
                concerns relating to the quality or purity of such 
                products.
            ``(3) Consultation.--The Secretary shall develop the system 
        under paragraph (1) in consultation with the National 
        Association of Boards of Pharmacy.
            ``(4) Review and determination by secretary.--The Secretary 
        shall review each submission received under paragraph (1) and 
        such other information as the Secretary determines necessary 
        (including information collected through an inspection or 
        maintained in the Adverse Event Reporting System database) and 
        make a determination as to whether the pharmacy involved may be 
        in violation of one or more requirements of this section.
            ``(5) Notifying state boards of pharmacy.--The system under 
        paragraph (1) shall be designed to immediately notify State 
        boards of pharmacy when--
                    ``(A) the Secretary receives a submission under 
                paragraph (1); or
                    ``(B) the Secretary makes a determination that a 
                pharmacy may be in violation of one or more 
                requirements of this section.
            ``(6) Timing.--Not later than one year after the date of 
        enactment of the Compounding Clarity Act of 2013, the Secretary 
        shall begin implementation of the system under paragraph (1).
    ``(d) Inspection Authority.--In accordance with section 704(a), the 
Secretary may inspect a pharmacy's records to determine whether the 
pharmacy is in violation of one or more requirements of this Act if--
            ``(1) the inspection is conducted in coordination with the 
        relevant State board or boards of pharmacy; or
            ``(2) the Secretary has evidence that the pharmacy may be 
        in violation of such a requirement.
    ``(e) Regulations.--
            ``(1) In general.--The Secretary shall issue regulations to 
        implement this section.
            ``(2) Advisory committee on compounding.--Before issuing 
        regulations to implement subsections (a)(3)(A)(iii) and (a)(7), 
        the Secretary shall convene and consult an advisory committee 
        on compounding. The advisory committee shall include 
        representatives from the National Association of Boards of 
        Pharmacy, the United States Pharmacopoeia, pharmacists having 
        current experience and expertise in compounding, physicians 
        having background and knowledge in compounding, and consumer 
        organizations with an expertise in compounding.
            ``(3) Interim lists.--Before the date on which final 
        regulations are issued to implement subsections (a)(3)(A)(iii) 
        and (a)(7), if the Secretary determines it is necessary to 
        protect the public health, the Secretary may designate drug 
        products or substances as described in such subsections, by--
                    ``(A) publishing a notice of such drug products or 
                substances proposed for designation, including the 
                rationale for such designation, in the Federal 
                Register;
                    ``(B) providing a period of not less than 60 
                calendar days for comment on the notice; and
                    ``(C) publishing a notice in the Federal Register 
                designating such drug products or substances.
            ``(4) Updating lists.--The Secretary shall update the 
        regulations containing the lists of drug products and 
        substances described in subsections (a)(3)(A)(iii) and (a)(7) 
        regularly, but not less than once every three years.
            ``(5) Sunset of notice.--Any notice published under 
        paragraph (3) shall not be effective after the earlier of--
                    ``(A) the date that is 3 years after the date of 
                Compounding Clarity Act of 2013; and
                    ``(B) the effective date of the final regulations 
                issued to implement subsections (a)(3)(A)(iii) and 
                (a)(7).
    ``(f) Definitions.--In this section:
            ``(1) The term `compounding' includes--
                    ``(A) the combining, admixing, mixing, diluting, 
                reconstituting, or otherwise altering of a marketed 
                drug product, except when performed in accordance with 
                specific directions for such acts contained in approved 
                labeling provided by the product's manufacturer or 
                otherwise provided by that manufacturer consistent with 
                that labeling;
                    ``(B) the combining, admixing, mixing, diluting, 
                reconstituting, or otherwise altering a bulk drug 
                substance to create a drug product; and
                    ``(C) repackaging.
            ``(2) The term `essentially a copy of a marketed and 
        approved drug product' does not include--
                    ``(A) a drug product in which there is a change, 
                made for an identified individual patient, which 
                produces for that patient a clinical difference, as 
                determined by the prescribing practitioner, between the 
                compounded drug product and the comparable marketed and 
                approved drug product; or
                    ``(B) a drug product that appears on the drug 
                shortage list in effect under section 506E.
            ``(3) The term `licensed pharmacist' includes any 
        individual who compounds drug products under the supervision of 
        a practitioner licensed to compound drug products under State 
        law.
            ``(4) The term `marketed and approved drug product' means a 
        drug product that--
                    ``(A) is currently marketed; and
                    ``(B) is approved under section 505 of this Act or 
                licensed under section 351 of the Public Health Service 
                Act.
            ``(5)(A) The term `repackaging' means taking a drug 
        approved under section 505 of this Act or licensed under 
        section 351 of the Public Health Service Act from the container 
        in which the drug is distributed by the original manufacturer 
        and placing such drug in a different container of the same or 
        smaller size without further manipulating the drug (such as by 
        diluting it or mixing it with another, different drug or 
        drugs).
            ``(B) Such term does not include removing the drug from its 
        original container for immediate administration to an 
        identified individual patient, such as withdrawing a drug into 
        a syringe for immediate injection or removing the drug from its 
        original container within a health care entity by a 
        practitioner, or other licensed individual under the 
        supervision or direction of such practitioner, for 
        administration within the same day within such health care 
        entity.''.

SEC. 3. OUTSOURCING FACILITIES.

    (a) In General.--Subchapter A of chapter V of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 351 et seq.) is amended--
            (1) by redesignating section 503B as section 503C; and
            (2) by inserting after section 503A (21 U.S.C. 353a) the 
        following new section:

``SEC. 503B. OUTSOURCING FACILITIES.

    ``(a) In General.--Sections 502(f)(1) and 505 of this Act and 
section 351 of the Public Health Service Act shall not apply to a drug 
product compounded for human use by a licensed pharmacist in an 
outsourcing facility if each of the following conditions is met:
            ``(1) Registration and reporting.--The facility is in 
        compliance with the registration and reporting requirements of 
        subsection (b).
            ``(2) Drug product and substance limitations.--The facility 
        does not compound drug products in violation of paragraphs (3) 
        through (8) of section 503A(a).
            ``(3) Fees.--The facility has paid all fees owed by such 
        facility pursuant to section 744K.
            ``(4) Standardized drug products from bulk.--The facility 
        does not compound, from bulk drug substances, standardized 
        dosages that are not otherwise commercially available of a 
        marketed and approved drug product.
            ``(5) Labeling of drug products.--
                    ``(A) Label.--The label of a drug product 
                compounded by an outsourcing facility shall include--
                            ``(i) the statement `This is a compounded 
                        drug.' or a reasonable comparable alternative 
                        statement (as specified by the Secretary) that 
                        prominently identifies the drug as a compounded 
                        drug product;
                            ``(ii) the name, address, and phone number 
                        of the applicable outsourcing facility; and
                            ``(iii) with respect to the compounded drug 
                        product--
                                    ``(I) the lot or batch number;
                                    ``(II) the established name of the 
                                drug product;
                                    ``(III) the dosage form and 
                                strength;
                                    ``(IV) the statement of quantity or 
                                volume, as appropriate;
                                    ``(V) the date that the drug 
                                product was compounded;
                                    ``(VI) the expiration date;
                                    ``(VII) storage and handling 
                                instructions;
                                    ``(VIII) the National Drug Code 
                                number, if available;
                                    ``(IX) the `Not for resale' 
                                statement required under section 
                                503A(a)(1)(C)(v); and
                                    ``(X) subject to subparagraph 
                                (B)(i), a list of active and inactive 
                                ingredients, identified by established 
                                name and the quantity or proportion of 
                                each ingredient.
                    ``(B) Container.--The container from which the 
                individual units of a drug product compounded by an 
                outsourcing facility are removed for dispensing or for 
                administration (such as a plastic bag containing 
                individual product syringes) shall include--
                            ``(i) the information described under 
                        subparagraph (A)(iii)(X), if there is not space 
                        on the label for such information;
                            ``(ii) the following information to 
                        facilitate adverse event reporting: 
                        www.fda.gov/medwatch and 1-800-FDA-1088; and
                            ``(iii) directions for use, including, as 
                        appropriate, dosage and administration.
                    ``(C) Additional information.--The label and 
                labeling of a drug product compounded by an outsourcing 
                facility shall include any other information as 
                determined necessary and specified in regulations 
                promulgated by the Secretary
    ``(b) Registration of Outsourcing Facilities and Reporting of Drug 
Products.--
            ``(1) Registration of outsourcing facilities.--
                    ``(A) Annual registration.--During the period 
                beginning on October 1 and ending on December 31 each 
                year, each outsourcing facility--
                            ``(i) shall register with the Secretary its 
                        name, place of business, and unique facility 
                        identifier (which shall conform to the 
                        requirements for the unique facility identifier 
                        established under section 510), and a point of 
                        contact e-mail address; and
                            ``(ii) shall indicate whether the 
                        outsourcing facility intends to compound a drug 
                        product that appears on the list in effect 
                        under section 506E during the subsequent 
                        calendar year.
                    ``(B) New outsourcing facilities.--Each outsourcing 
                facility, upon first engaging in compounding pursuant 
                to this section, shall immediately register with the 
                Secretary and provide the information described in 
                paragraph (1)(A). The Secretary shall establish a 
                timeline for registration for the first calendar year 
                following the effective date of the Compounding Clarity 
                Act of 2013. In no case may registration be required 
                until at least 60 calendar days following publication 
                of the timeline in the Federal Register.
                    ``(C) Availability of registration for inspection; 
                list.--
                            ``(i) Registrations.--The Secretary shall 
                        make available for inspection, to any person so 
                        requesting, any registration filed pursuant to 
                        this paragraph.
                            ``(ii) List.--The Secretary shall make 
                        available on the public Internet Web site of 
                        the Food and Drug Administration a list of the 
                        name of each facility registered under this 
                        subsection as an outsourcing facility, the 
                        State in which each such facility is located, 
                        whether the facility compounds from bulk drug 
                        substances, and whether any such compounding 
                        from bulk drug substances is for sterile or 
                        non-sterile drug products.
            ``(2) Drug product reporting by outsourcing facilities.--
                    ``(A) In general.--Upon initially registering as an 
                outsourcing facility, once during the month of June of 
                each year, and once during the month of December of 
                each year, each outsourcing facility that registers 
                with the Secretary under paragraph (1) shall submit to 
                the Secretary a report--
                            ``(i) identifying the drug products 
                        compounded by such outsourcing facility during 
                        the previous 6-month period; and
                            ``(ii) with respect to each drug product 
                        identified under clause (i), providing the 
                        active ingredient; the source of such active 
                        ingredient; the National Drug Code number, if 
                        available, of the source drug product or bulk 
                        active ingredient; the strength of the active 
                        ingredient per unit; the dosage form and route 
                        of administration; the package description; the 
                        number of individual units produced; and the 
                        National Drug Code number of the final product, 
                        if assigned.
                    ``(B) Form.--Each report under subparagraph (A) 
                shall be prepared in such form and manner as the 
                Secretary may prescribe by regulation or guidance.
                    ``(C) Confidentiality.--Reports submitted under 
                this paragraph shall be exempt from inspection under 
                paragraph (1)(C), unless the Secretary finds that such 
                an exemption would be inconsistent with the protection 
                of the public health.
            ``(3) Electronic registration and reporting.--Registrations 
        and drug product reporting under this subsection (including the 
        submission of updated information) shall be submitted to the 
        Secretary by electronic means unless the Secretary grants a 
        request for waiver of such requirement because use of 
        electronic means is not reasonable for the person requesting 
        waiver.
            ``(4) Risk-based inspection frequency.--
                    ``(A) In general.--Outsourcing facilities--
                            ``(i) shall be subject to inspection 
                        pursuant to section 704; and
                            ``(ii) shall not be eligible for the 
                        exemption under section 704(a)(2)(A).
                    ``(B) Risk-based schedule.--The Secretary, acting 
                through one or more officers or employees duly 
                designated by the Secretary, shall inspect outsourcing 
                facilities in accordance with a risk-based schedule 
                established by the Secretary.
                    ``(C) Risk factors.--In establishing the risk-based 
                schedule, the Secretary shall inspect outsourcing 
                facilities according to the known safety risks of such 
                outsourcing facilities, which shall be based on the 
                following factors:
                            ``(i) The compliance history of the 
                        outsourcing facility.
                            ``(ii) The record, history, and nature of 
                        recalls linked to the outsourcing facility.
                            ``(iii) The inherent risk of the drug 
                        products compounded at the outsourcing 
                        facility.
                            ``(iv) The inspection frequency and history 
                        of the outsourcing facility, including whether 
                        the outsourcing facility has been inspected 
                        pursuant to section 704 within the last 4 
                        years.
                            ``(v) Whether the outsourcing facility has 
                        registered under this paragraph as an entity 
                        that intends to compound a drug product that 
                        appears on the list in effect under section 
                        506E.
                            ``(vi) Any other criteria deemed necessary 
                        and appropriate by the Secretary for purposes 
                        of allocating inspection resources.
            ``(5) Adverse event reporting.--Outsourcing facilities 
        shall be required to submit adverse event reports to the 
        Secretary in accordance with the content and format 
        requirements established through guidance or regulation under 
        section 310.305 of title 21, Code of Federal Regulations (or 
        any successor regulations) or section 600.80 of title 21, Code 
        of Federal Regulations (or any successor regulations).
    ``(c) Definitions.--In this section:
            ``(1) Outsourcing facility.--The term `outsourcing 
        facility' means a facility at one geographic location or 
        address that compounds sterile drug products for office use in 
        excess of the limitation set forth in section 
        503A(a)(1)(C)(iii).
            ``(2) Other definitions.--The terms `compounding', 
        `essentially a copy of a marketed and approved drug product', 
        `licensed pharmacist', and `marketed and approved drug product' 
        have the meanings given such terms in section 503A(f).''.
    (b) Fees.--Subchapter C of chapter VII of the Federal Food, Drug, 
and Cosmetic Act (21 U.S.C. 379f et seq.) is amended by adding at the 
end the following:

           ``PART 9--FEES RELATING TO OUTSOURCING FACILITIES

``SEC. 744J. DEFINITIONS.

    ``In this part:
            ``(1) The term `affiliate' has the meaning given such term 
        in section 735(11).
            ``(2) The term `gross annual sales' means the total 
        worldwide gross annual sales, in United States dollars, for an 
        outsourcing facility, including the sales of all the affiliates 
        of the outsourcing facility.
            ``(3) The term `outsourcing facility' has the meaning given 
        to such term in section 503B(c).
            ``(4) The term `reinspection' means, with respect to an 
        outsourcing facility, one or more inspections conducted under 
        section 704 subsequent to an inspection conducted under such 
        provision which identified noncompliance materially related to 
        an applicable requirement of this Act, specifically to 
        determine whether compliance has been achieved to the 
        Secretary's satisfaction.

``SEC. 744K. AUTHORITY TO ASSESS AND USE OUTSOURCING FACILITY FEES.

    ``(a) Establishment and Reinspection Fees.----
            ``(1) In general.--For fiscal year 2015 and each subsequent 
        fiscal year, the Secretary shall, in accordance with this 
        subsection, assess and collect--
                    ``(A) an annual establishment fee from each 
                outsourcing facility; and
                    ``(B) a reinspection fee from each outsourcing 
                facility subject to a reinspection in such fiscal year.
            ``(2) Multiple reinspections.--An outsourcing facility 
        subject to multiple reinspections in a fiscal year shall be 
        subject to a reinspection fee for each reinspection.
    ``(b) Establishment and Reinspection Fee Setting.--The Secretary 
shall--
            ``(1) establish the amount of the establishment and 
        reinspection fee to be collected under this section for each 
        fiscal year based on the methodology described in subsection 
        (c); and
            ``(2) publish such fee amounts in a Federal Register notice 
        not later than 60 calendar days before the start of each such 
        year.
    ``(c) Amount of Establishment Fee and Reinspection Fee.--
            ``(1) In general.--For each outsourcing facility in a 
        fiscal year--
                    ``(A) except as provided in paragraph (4), the 
                amount of the annual establishment fee under subsection 
                (b) shall be equal to the sum of--
                            ``(i) $15,000, multiplied by the inflation 
                        adjustment factor described in paragraph (2); 
                        plus
                            ``(ii) the small business adjustment factor 
                        described in paragraph (3); and
                    ``(B) the amount of any reinspection fee (if 
                applicable) under subsection (b) shall be equal to 
                $15,000, multiplied by the inflation adjustment factor 
                described in paragraph (3).
            ``(2) Inflation adjustment factor.--
                    ``(A) In general.--For fiscal year 2015 and 
                subsequent fiscal years, the fee amounts established in 
                paragraph (1) shall be adjusted by the Secretary by 
                notice, published in the Federal Register, for a fiscal 
                year by the amount equal to the sum of--
                            ``(i) one;
                            ``(ii) the average annual percent change in 
                        the cost, per full-time equivalent position of 
                        the Food and Drug Administration, of all 
                        personnel compensation and benefits paid with 
                        respect to such positions for the first 3 years 
                        of the preceding 4 fiscal years, multiplied by 
                        the proportion of personnel compensation and 
                        benefits costs to total costs of an average 
                        full-time equivalent position of the Food and 
                        Drug Administration for the first 3 years of 
                        the preceding 4 fiscal years; and
                            ``(iii) the average annual percent change 
                        that occurred in the Consumer Price Index for 
                        urban consumers (U.S. City Average; Not 
                        Seasonally Adjusted; All items; Annual Index) 
                        for the first 3 years of the preceding 4 years 
                        of available data multiplied by the proportion 
                        of all costs other than personnel compensation 
                        and benefits costs to total costs of an average 
                        full-time equivalent position of the Food and 
                        Drug Administration for the first 3 years of 
                        the preceding 4 fiscal years.
                    ``(B) Compounded basis.--The adjustment made each 
                fiscal year under subparagraph (A) shall be added on a 
                compounded basis to the sum of all adjustments made 
                each fiscal year after fiscal year 2014 under 
                subparagraph (A).
            ``(3) Small business adjustment factor.--The small business 
        adjustment factor referred to in paragraph (1)(A)(ii) shall be 
        an amount established by the Secretary for each fiscal year 
        based on the Secretary's estimate of--
                    ``(A) the number of small businesses that will pay 
                a reduced establishment fee for such fiscal year; and
                    ``(B) the adjustment to the establishment fee 
                necessary to achieve total fees equaling the total fees 
                that the Secretary would have collected if no entity 
                qualified for the small business exception in paragraph 
                (4).
            ``(4) Exception for small businesses.--
                    ``(A) In general.--In the case of an outsourcing 
                facility with gross annual sales of $1,000,000 or less 
                in the 12 months ending April 1 of the fiscal year 
                immediately preceding the fiscal year in which the fees 
                under this section are assessed, the amount of the 
                establishment fee under subsection (b) for a fiscal 
                year shall be equal to \1/3\ of the amount calculated 
                under paragraph (1)(A)(i) for such fiscal year.
                    ``(B) Application.--To qualify for the exception 
                under this paragraph, a small business shall submit to 
                the Secretary a written request for such exception, in 
                a format specified by the Secretary in guidance, 
                certifying its gross annual sales for the 12 months 
                ending April 1 of the fiscal year immediately preceding 
                the fiscal year in which fees under this subsection are 
                assessed. Any such application shall be submitted to 
                the Secretary not later than April 30 of such 
                immediately preceding fiscal year.
            ``(5) Crediting of fees.--In establishing the small 
        business adjustment factor under paragraph (3) for a fiscal 
        year, the Secretary shall--
                    ``(A) provide for the crediting of fees from the 
                previous year to the next year if the Secretary 
                overestimated the amount of the small business 
                adjustment factor for such previous fiscal year; and
                    ``(B) consider the need to account for any 
                adjustment of fees and such other factors as the 
                Secretary determines appropriate.
    ``(d) Use of Fees.--The Secretary shall make all of the fees 
collected pursuant to subparagraphs (A) and (B) of subsection (a)(1) 
available solely to pay for the costs of oversight of outsourcing 
facilities.
    ``(e) Supplement Not Supplant.--Funds received by the Secretary 
pursuant to this section shall be used to supplement and not supplant 
any other Federal funds available to carry out the activities described 
in this section.
    ``(f) Crediting and Availability of Fees.--Fees authorized under 
this section shall be collected and available for obligation only to 
the extent and in the amount provided in advance in appropriations 
Acts. Such fees are authorized to remain available until expended. Such 
sums as may be necessary may be transferred from the Food and Drug 
Administration salaries and expenses appropriation account without 
fiscal year limitation to such appropriation account for salaries and 
expenses with such fiscal year limitation. The sums transferred shall 
be available solely for the purpose of paying the costs of oversight of 
outsourcing facilities.
    ``(g) Collection of Fees.--
            ``(1) Establishment fee.--An outsourcing facility shall 
        remit the establishment fee due under this section in a fiscal 
        year when submitting a registration pursuant to section 503B(b) 
        for such fiscal year.
            ``(2) Reinspection fee.--The Secretary shall specify in the 
        Federal Register notice described in subsection (b)(2) the 
        manner in which reinspection fees assessed under this section 
        shall be collected and the timeline for payment of such fees. 
        Such a fee shall be collected after the Secretary has conducted 
        a reinspection of the outsourcing facility involved.
            ``(3) Effect of failure to pay fees.--
                    ``(A) Registration.--An outsourcing facility shall 
                not be considered registered under section 503B(b) in a 
                fiscal year until the date that the outsourcing 
                facility remits the establishment fee under this 
                subsection for such fiscal year.
                    ``(B) Misbranding.--All drug products manufactured, 
                prepared, propagated, compounded, or processed by an 
                outsourcing facility for which any establishment fee or 
                reinspection fee has not been paid, as required by this 
                section, shall be deemed misbranded under section 502 
                until the fees owed for such outsourcing facility under 
                this section have been paid.
            ``(4) Collection of unpaid fees.--In any case where the 
        Secretary does not receive payment of a fee assessed under this 
        section within 30 calendar days after it is due, such fee shall 
        be treated as a claim of the United States Government subject 
        to provisions of subchapter II of chapter 37 of title 31, 
        United States Code.
    ``(h) Annual Report to Congress.--Not later than 120 calendar days 
after each fiscal year in which fees are assessed and collected under 
this section, the Secretary shall submit a report to the Committee on 
Health, Education, Labor, and Pensions of the Senate and the Committee 
on Energy and Commerce of the House of Representatives, to include a 
description of fees assessed and collected for such year, a summary 
description of entities paying the fees, a description of the hiring 
and placement of new staff, a description of the use of fee resources 
to support inspecting outsourcing facilities, and the number of 
inspections and reinspections of such facilities performed each year.
    ``(i) Authorization of Appropriations.--For fiscal year 2015 and 
each subsequent fiscal year, there is authorized to be appropriated for 
fees under this subsection an amount equivalent to the total amount of 
fees assessed for such fiscal year under this section.''.

SEC. 4. PROHIBITED ACTS.

    (a) Intentional Falsification of Prescription Order for Compounded 
Drug Product.--Section 301 of the Federal Food, Drug, and Cosmetic Act 
(21 U.S.C. 331) is amended by inserting after paragraph (bbb) the 
following:
    ``(ccc) With respect to a drug product to be compounded under 
section 503A or 503B, the intentional falsification of a prescription, 
a purchase order, or patient name required under section 503A or 
503B.''.
    (b) Intentional Failure of Outsourcing Facility To Register.--
Section 301 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
331), as amended by subsection (a), is further amended by inserting 
after paragraph (ccc) (as added by such subsection), the following:
    ``(ddd) With respect to any year in which an outsourcing facility 
is required to register with the Secretary under section 503B(b), the 
intentional failure of the outsourcing facility to so register.''.
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