II 

110TH CONGRESS 

1ST SESSION S. 596 

To amend the Federal Food, Drug, and Cosmetic Act to provide for the 

regulation of Internet pharmacies. 

IN THE SENATE OF THE UNITED STATES 

FEBRUARY 14, 2007 

Mr. GREGG (for himself and Mr. SMITH) introduced the following bill; which 

was read twice and referred to the Committee on Health, Education, 

Labor, and Pensions 

A BILL 

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

provide for the regulation of Internet pharmacies. 

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 This Act may be cited as the ‘‘Safe Internet Phar5 macy Act of 2007’’. 

6 SEC. 2. INTERNET PHARMACIES. 

7 (a) INTERNET PHARMACIES.—Chapter V of the Fed8 eral Food, Drug, and Cosmetic Act (21 U.S.C. 351 et 

9 seq.) is amended by inserting after section 510 the fol10 lowing: 


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1 ‘‘SEC. 511. INTERNET PHARMACIES. 

2 ‘‘(a) DEFINITIONS.—In this section: 

3 ‘‘(1) ADVERTISING SERVICE PROVIDER.—The 

4 term ‘advertising service provider’ means an adver5 tising company that contracts with a provider of an 

6 interactive computer service (as defined in section 

7 230(f) of the Communications Act of 1934 (47 

8 U.S.C. 230(f)) to provide advertising on the Inter9 net. 

10 ‘‘(2) DESIGNATED PAYMENT SYSTEM.— 

11 ‘‘(A) IN GENERAL.—The term ‘designated 

12 payment system’ means a system used by a per13 son described in subparagraph (B) to effect a 

14 credit transaction, electronic fund transfer, or 

15 money transmitting service that the Board de16 termines, by regulation or order, is regularly 

17 used in connection with, or to facilitate re18 stricted transactions. 

19 ‘‘(B) PERSONS DESCRIBED.—A person re20 ferred to in subparagraph (A) is— 

21 ‘‘(i) a creditor; 

22 ‘‘(ii) a credit card issuer; 

23 ‘‘(iii) a financial institution; 

24 ‘‘(iv) an operator of a terminal at 

25 which an electronic fund transfer may be 

26 initiated; 


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1 ‘‘(v) a money transmitting business; 

2 or 

3 ‘‘(vi) a participant in an international, 

4 national, regional, or local network con5 structed primarily to effect a credit trans6 action, electronic fund transfer, or money 

7 transmitting service. 

8 ‘‘(3) FEDERAL FUNCTIONAL REGULATOR.—The 

9 term ‘Federal functional regulator’ has the meaning 

10 given the term in section 509 of the Gramm-Leach11 Bliley Act (15 U.S.C. 6809). 

12 ‘‘(4) INTERNET PHARMACY.—The term ‘Inter13 net pharmacy’ means a person that offers to dis14 pense or dispenses in the United States a prescrip15 tion drug through an Internet website in interstate 

16 commerce, regardless of whether the physical loca17 tion of the principal place of business of the Internet 

18 pharmacy is in the United States or in another 

19 country. 

20 ‘‘(5) PRESCRIPTION DRUG.—The term ‘pre21 scription drug’ means a drug described in section 

22 503(b) that is approved by the Secretary under sec23 tion 505. 

24 ‘‘(6) RESTRICTED TRANSACTION.—The term 

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1 mittal, on behalf of a individual who places an un2 lawful Internet pharmacy request to any person en3 gaged in the operation of an unlicensed Internet 

4 pharmacy, of— 

5 ‘‘(A) credit, or the proceeds of credit, ex6 tended to or on behalf of the individual for the 

7 purpose of the unlawful Internet request (in8 cluding credit extended through the use of a 

9 credit card); 

10 ‘‘(B) an electronic fund transfer or funds 

11 transmitted by or through a money transmit12 ting business, or the proceeds of an electronic 

13 fund transfer or money transmitting service, 

14 from or on behalf of the individual for the pur15 pose of the unlawful Internet request; 

16 ‘‘(C) a check, draft, or similar instrument 

17 which is drawn by or on behalf of the individual 

18 for the purpose of the unlawful Internet request 

19 and is drawn on or payable at or through any 

20 financial institution; or 

21 ‘‘(D) the proceeds of any other form of fi22 nancial transaction (identified by the Board by 

23 regulation) that involves a financial institution 

24 as a payor or financial intermediary on behalf 


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1 of or for the benefit of the individual for the 

2 purpose of the unlawful Internet request. 

3 ‘‘(7) TREATING PROVIDER.—The term ‘treating 

4 provider’ means a health care provider licensed in 

5 the United States who is authorized to prescribe 

6 medications and who— 

7 ‘‘(A)(i) performs a documented patient 

8 evaluation (including a patient history and 

9 physical examination) of an individual, portions 

10 of which may be conducted by other health pro11 fessionals; 

12 ‘‘(ii) discusses with the individual the 

13 treatment options of the individual and the 

14 risks and benefits of treatment; and 

15 ‘‘(iii) maintains contemporaneous medical 

16 records concerning the individual; or 

17 ‘‘(B) provides care to an individual as part 

18 of an on-call or cross-coverage arrangement 

19 with a health care provider described in sub20 paragraph (A). 

21 ‘‘(8) UNLAWFUL INTERNET PHARMACY RE22 QUEST.—The term ‘unlawful Internet pharmacy re23 quest’ means the request, or transmittal of a re24 quest, made to an unlicensed Internet pharmacy for 

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1 rier), facsimile, telephone, or electronic mail, or by 

2 a means that involves the use, in whole or in part, 

3 of the Internet. 

4 ‘‘(9) UNLICENSED INTERNET PHARMACY.—The 

5 term ‘unlicensed Internet pharmacy’ means an 

6 Internet pharmacy that is not licensed under this 

7 section. 

8 ‘‘(10) OTHER DEFINITIONS.— 

9 ‘‘(A) BOARD.—The term ‘Board’ means 

10 the Board of Governors of the Federal Reserve 

11 System. 

12 ‘‘(B) CREDIT; CREDITOR; CREDIT CARD.— 

13 The terms ‘credit’, ‘creditor’, and ‘credit card’ 

14 have the meanings given the terms in section 

15 103 of the Truth in Lending Act (15 U.S.C. 

16 1602). 

17 ‘‘(C) ELECTRONIC FUND TRANSFER.—The 

18 term ‘electronic fund transfer’— 

19 ‘‘(i) has the meaning given the term 

20 in section 903 of the Electronic Fund 

21 Transfer Act (15 U.S.C. 1693a); and 

22 ‘‘(ii) includes any fund transfer cov23 ered under article 4A of the Uniform Com24 mercial Code, as in effect in any State. 


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1 ‘‘(D) FINANCIAL INSTITUTION.—The term 

2 ‘financial institution’— 

3 ‘‘(i) has the meaning given the term 

4 in section 903 of the Electronic Transfer 

5 Fund Act (15 U.S.C. 1693a); and 

6 ‘‘(ii) includes a financial institution 

7 (as defined in section 509 of the Gramm8 Leach-Bliley Act (15 U.S.C. 6809)). 

9 ‘‘(E) MONEY TRANSMITTING BUSINESS; 

10 MONEY TRANSMITTING SERVICE.—The terms 

11 ‘money transmitting business’ and ‘money 

12 transmitting service’ have the meanings given 

13 the terms in section 5330(d) of title 31, United 

14 States Code. 

15 ‘‘(b) IN GENERAL.—An Internet pharmacy may only 

16 dispense or offer to dispense a prescription drug to a per17 son in the United States in accordance with this section. 

18 ‘‘(c) LICENSING OF INTERNET PHARMACIES.— 

19 ‘‘(1) IN GENERAL.—An Internet pharmacy shall 

20 be licensed by the Secretary in accordance with this 

21 section prior to offering to dispense or dispensing a 

22 prescription drug to an individual. 

23 ‘‘(2) CONDITIONS FOR LICENSING.— 


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1 ‘‘(A) APPLICATION REQUIREMENTS.—An 

2 Internet pharmacy shall submit to the Sec3 retary an application that includes— 

4 ‘‘(i)(I) in the case of an Internet 

5 pharmacy located in the United States, 

6 verification that, in each State in which 

7 the Internet pharmacy engages in dis8 pensing or offering to dispense prescription 

9 drugs, the Internet pharmacy, and all em10 ployees and agents of the Internet phar11 macy, is in compliance with applicable 

12 Federal and State laws regarding— 

13 ‘‘(aa) the practice of pharmacy, 

14 including licensing laws and inspec15 tion requirements; and 

16 ‘‘(bb) the manufacturing and dis17 tribution of controlled substances, in18 cluding with respect to mailing or 

19 shipping controlled substances to con20 sumers; or 

21 ‘‘(II) in the case of an Internet phar22 macy whose principal place of business is 

23 located outside the United States, 

24 verification that— 


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1 ‘‘(aa) all employees and agents of 

2 the Internet pharmacy are in compli3 ance with applicable Federal and 

4 State laws regarding the practice of 

5 pharmacy, including licensing laws 

6 and inspection requirements; 

7 ‘‘(bb) the Internet pharmacy is in 

8 compliance with applicable Federal 

9 and State laws regarding the practice 

10 of pharmacy, including licensing laws 

11 and inspection requirements; 

12 ‘‘(cc) the Internet pharmacy ex13 pressly and affirmatively agrees to 

14 provide and maintain an agent for 

15 service of process in the United 

16 States; 

17 ‘‘(dd) the Internet pharmacy ex18 pressly and affirmatively agrees to be 

19 subject to the jurisdiction of the 

20 United States and any of its States or 

21 territories where it engages in com22 merce; and 

23 ‘‘(ee) the Internet pharmacy 

24 agrees to affix to each shipping con25 tainer of drugs to be shipped in the 


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1 United States such markings as the 

2 Secretary determines to be necessary 

3 to identify that the shipment is from 

4 a licensed Internet pharmacy, which 

5 may include anticounterfeiting or 

6 track-and-trace technologies; 

7 ‘‘(ii) verification that the person that 

8 owns the Internet pharmacy has not had a 

9 license for an Internet pharmacy termi10 nated by the Secretary, and that no other 

11 Internet pharmacy owned by the person 

12 has had a license under this subsection 

13 that has been terminated by the Secretary; 

14 ‘‘(iii) verification from the person that 

15 owns the Internet pharmacy that the per16 son will permit inspection of the facilities 

17 and business practices of the Internet 

18 pharmacy by the Secretary to the extent 

19 necessary to determine whether the Inter20 net pharmacy is in compliance with this 

21 subsection; 

22 ‘‘(iv) in the case of an agreement be23 tween a patient and an Internet pharmacy 

24 that releases the Internet pharmacy, and 

25 any employee or agent of the Internet 


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1 pharmacy, from liability for damages aris2 ing out of the negligence of the Internet 

3 pharmacy, an assurance that such a limita4 tion of liability shall be null and void; 

5 ‘‘(v) verification that the Internet 

6 pharmacy expressly and affirmatively 

7 agrees to provide the Secretary with the 

8 identity of any providers of interactive 

9 computer services that provide host serv10 ices or advertising services for the Internet 

11 pharmacy; and 

12 ‘‘(vi) assurance that the Internet 

13 pharmacy will comply with the require14 ments under subparagraphs (B) and (C). 

15 ‘‘(B) IDENTIFICATION REQUIREMENTS.— 

16 An Internet pharmacy shall post in a clear and 

17 visible manner, on each page of the website of 

18 the Internet pharmacy or by a link to a sepa19 rate page, the following information: 

20 ‘‘(i) The street address, city, ZIP 

21 Code or comparable mail code, State (or 

22 comparable entity), country, and telephone 

23 number of— 

24 ‘‘(I) each place of business of the 

25 Internet pharmacy; and 


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1 ‘‘(II) the name of the supervising 

2 pharmacist of the Internet pharmacy 

3 and each individual who serves as a 

4 pharmacist for purposes of the Inter5 net pharmacy website. 

6 ‘‘(ii) The names of all States in which 

7 the Internet pharmacy and the phar8 macists employed by the Internet phar9 macy are licensed or otherwise authorized 

10 to dispense prescription drugs. 

11 ‘‘(iii) If the Internet pharmacy makes 

12 referrals to, or solicits on behalf of, a 

13 health care practitioner or group of practi14 tioners in the United States for prescrip15 tion services— 

16 ‘‘(I) the name, street address, 

17 city, ZIP Code or comparable mail 

18 code, State, and telephone number of 

19 the practitioner or group; and 

20 ‘‘(II) the name of each State in 

21 which each practitioner is licensed or 

22 otherwise authorized to prescribe 

23 drugs. 

24 ‘‘(iv) A statement that the Internet 

25 pharmacy will dispense prescription drugs 


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1 only after receipt of a valid prescription 

2 from a treating provider. 

3 ‘‘(v) A distinctive tamper resistant 

4 seal to identify that the Internet pharmacy 

5 is licensed. 

6 ‘‘(C) PROFESSIONAL SERVICES REQUIRE7 MENTS.—An Internet pharmacy shall carry out 

8 the following: 

9 ‘‘(i) Maintain patient medication pro10 files and other related data in a readily ac11 cessible format organized to facilitate con12 sultation with treating providers, care13 givers, and patients. 

14 ‘‘(ii) Conduct prospective drug use re15 views before dispensing medications or 

16 medical devices. 

17 ‘‘(iii) Ensure patient confidentiality 

18 and the protection of patient identity and 

19 patient-specific information, in accordance 

20 with the regulations promulgated under 

21 section 264(c) of the Health Insurance 

22 Portability and Accountability Act of 1996. 

23 ‘‘(iv) Offer interactive and meaningful 

24 consultation by a licensed pharmacist to 

25 the caregiver or patient before and after 


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1 the time at which the Internet pharmacy 

2 dispenses the drug. 

3 ‘‘(v)(I) Establish a mechanism for pa4 tients to report errors and suspected ad5 verse drug reactions. 

6 ‘‘(II) Document in the reporting 

7 mechanism the response of the Internet 

8 pharmacy to those reports. 

9 ‘‘(III) Submit those reports within 3 

10 days of receipt and the response of the 

11 Internet pharmacy to the Food and Drug 

12 Administration in a manner determined 

13 appropriate by the Secretary. 

14 ‘‘(vi) Develop a system to inform care15 givers and patients about drug recalls. 

16 ‘‘(vii) Educate caregivers and patients 

17 about the appropriate means of disposing 

18 of expired, damaged, or unusable medica19 tions. 

20 ‘‘(viii) Assure that the sale of a pre21 scription drug is in accordance with a valid 

22 prescription from the treating provider of 

23 the individual. 


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1 ‘‘(ix)(I) Verify the validity of the pre2 scription of an individual by using 1 of the 

3 following methods: 

4 ‘‘(aa) If the prescription for any 

5 drug other than a controlled sub6 stance (as defined in section 102 of 

7 the Controlled Substances Act (21 

8 U.S.C. 802)) is received from an indi9 vidual or the treating provider of the 

10 individual by mail (including a private 

11 carrier), or from the treating provider 

12 of the individual by electronic mail, 

13 the validity of the prescription shall be 

14 confirmed in accordance with all ap15 plicable Federal and State laws. 

16 ‘‘(bb) If the prescription is for a 

17 controlled substance (as defined in 

18 section 102 of the Controlled Sub19 stances Act), the validity of the pre20 scription shall be confirmed with the 

21 treating provider as described in sub22 clause (II). 

23 ‘‘(II) When seeking verification of a 

24 prescription of an individual under sub25 clause (I)(bb), an Internet pharmacy shall 


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1 provide to the treating provider the fol2 lowing information: 

3 ‘‘(aa) The full name and address 

4 of the individual. 

5 ‘‘(bb) Identification of the pre6 scription drug. 

7 ‘‘(cc) The quantity of the pre8 scription drug to be dispensed. 

9 ‘‘(dd) The date on which the in10 dividual presented the prescription to 

11 the Internet pharmacy. 

12 ‘‘(ee) The date and time of the 

13 verification request. 

14 ‘‘(ff) The name of a contact per15 son at the Internet pharmacy, includ16 ing a voice telephone number, elec17 tronic mail address, and facsimile tele18 phone number. 

19 ‘‘(III) A prescription is verified under 

20 subclause (I)(bb) only if 1 of the following 

21 occurs: 

22 ‘‘(aa) The treating provider con23 firms, by direct communication with 

24 the Internet pharmacy, that the pre25 scription is accurate. 


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1 ‘‘(bb) The treating provider in2 forms the Internet pharmacy that the 

3 prescription is inaccurate and provides 

4 the accurate prescription. 

5 ‘‘(IV) An Internet pharmacy shall not 

6 fill a prescription if— 

7 ‘‘(aa) a treating provider informs 

8 the Internet pharmacy within 72 

9 hours after receipt of a communica10 tion under subclause (I)(bb) that the 

11 prescription is inaccurate or expired; 

12 or 

13 ‘‘(bb) the treating provider does 

14 not respond within that time. 

15 ‘‘(x) Maintain, for such period of time 

16 as the Secretary shall prescribe by regula17 tion, a record of all direct communications 

18 with a treating provider regarding the dis19 pensing of a prescription drug, including 

20 verification of the prescription. 

21 ‘‘(3) LICENSURE PROCEDURE.— 

22 ‘‘(A) ACTION BY SECRETARY.—On receipt 

23 of a complete licensing application from an 

24 Internet pharmacy under paragraph (2), the 

25 Secretary shall— 


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1 ‘‘(i) assign an identification number 

2 to the Internet pharmacy; 

3 ‘‘(ii) notify the applicant of the receipt 

4 of the licensing application; and 

5 ‘‘(iii) if the Internet pharmacy is in 

6 compliance with the conditions under para7 graph (2), issue a license not later than 60 

8 days after receipt of a licensing application 

9 from the Internet pharmacy. 

10 ‘‘(B) ELECTRONIC FILING.— 

11 ‘‘(i) IN GENERAL.—For the purpose 

12 of reducing paperwork and reporting bur13 dens, the Secretary shall require the use of 

14 electronic methods of submitting to the 

15 Secretary a licensing application required 

16 under this section and provide for elec17 tronic methods of receiving the applica18 tions. 

19 ‘‘(ii) AUTHENTICATION.—In providing 

20 for the electronic submission of such li21 censing applications under this section, the 

22 Secretary shall ensure that adequate au23 thentication protocols are used to allow 

24 identification of the Internet pharmacy and 

25 validation of the data as appropriate. 


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1 ‘‘(4) DATABASE.— 

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

3 compile, maintain, and periodically update a 

4 database of the Internet pharmacies licensed 

5 under this section. 

6 ‘‘(B) AVAILABILITY.—The Secretary shall 

7 make the database described under subpara8 graph (A) and information submitted by the li9 censee under paragraph (2)(B) available to the 

10 public on an Internet website and through a 

11 toll-free telephone number. 

12 ‘‘(5) FEES.— 

13 ‘‘(A) IN GENERAL.— 

14 ‘‘(i) LICENSING APPLICATION FEE.— 

15 The Secretary shall establish a licensing 

16 application fee to be paid by all applicants. 

17 ‘‘(ii) RENEWAL FEE.—The Secretary 

18 shall establish a yearly renewal fee to be 

19 paid by all Internet pharmacies licensed 

20 under this section. 

21 ‘‘(B) COLLECTION.— 

22 ‘‘(i) COLLECTION OF LICENSING AP23 PLICATION FEE.—A licensing application 

24 fee payable for the fiscal year in which the 

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1 plication, as established under subpara2 graph (C), shall be payable upon the sub3 mission to the Secretary of such licensing 

4 application. 

5 ‘‘(ii) COLLECTION OF RENEWAL

6 FEES.—After the licensing application fee 

7 is paid for the first fiscal year of licensure, 

8 the yearly renewal fee, as established 

9 under subparagraph (C), shall be payable 

10 on or before October 1 of each subsequent 

11 fiscal year. 

12 ‘‘(iii) ONE FEE PER INTERNET PHAR13 MACY.—The licensing application fee and 

14 yearly renewal fee shall be paid only once 

15 for each Internet pharmacy for a fiscal 

16 year in which the fee is payable. 

17 ‘‘(C) FEE AMOUNT.—The amount of the li18 censing application fee and the yearly renewal 

19 fee for an Internet pharmacy shall be deter20 mined each year by the Secretary based on the 

21 anticipated costs to the Secretary of enforcing 

22 the requirements of this section in the subse23 quent fiscal year. 

24 ‘‘(D) ANNUAL FEE DETERMINATION.— 


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1 ‘‘(i) IN GENERAL.—Not later than 60 

2 days before the beginning of each fiscal 

3 year beginning after September 30, 2007, 

4 the Secretary shall determine the amount 

5 of the licensing application fee and the 

6 yearly renewal fee for that fiscal year. 

7 ‘‘(ii) PUBLICATION OF FEE

8 AMOUNT.—Not later than 60 days before 

9 each fiscal year, the Secretary shall publish 

10 the amount of the licensing application fee 

11 and the yearly renewal fee under this sec12 tion for that fiscal year and provide for a 

13 period of 30 days for the public to provide 

14 written comments on the fees. 

15 ‘‘(E) USE OF FEES.—The fees collected 

16 under this section shall be used, without further 

17 appropriation, to carry out this section. 

18 ‘‘(F) FAILURE TO PAY FEE.— 

19 ‘‘(i) DUE DATE.—A fee payable under 

20 this section shall be paid by the date that 

21 is 30 days after the date on which the fee 

22 is due. 

23 ‘‘(ii) FAILURE TO PAY.—If an Inter24 net pharmacy subject to a fee under this 

25 section fails to pay the fee by the date 


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1 specified under clause (i), the Secretary 

2 shall not permit the Internet pharmacy to 

3 engage in the dispensing of drugs as de4 scribed under this section until all such 

5 fees owed by the Internet pharmacy are 

6 paid. 

7 ‘‘(G) REPORTS.—Beginning with fiscal 

8 year 2008, not later than 60 days after the end 

9 of each fiscal year during which licensing appli10 cation fees are collected under this section, the 

11 Secretary shall submit to the Committee on 

12 Health, Education, Labor, and Pensions of the 

13 Senate and the Committee on Energy and Com14 merce of the House of Representatives a report 

15 that describes— 

16 ‘‘(i) implementation of the licensing 

17 fee authority during the fiscal year; and 

18 ‘‘(ii) the use by the Secretary of the 

19 licensing fees collected during the fiscal 

20 year for which the report is made. 

21 ‘‘(6) SUSPENSION.— 

22 ‘‘(A) IN GENERAL.—If the Secretary deter23 mines that an Internet pharmacy is engaged in 

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1 diately order the suspension of the license of 

2 the Internet pharmacy. 

3 ‘‘(B) APPEAL OF SUSPENSION ORDER.— 

4 An Internet pharmacy subject to a suspension 

5 order under subparagraph (A) may appeal the 

6 suspension order to the Secretary. Not later 

7 than 30 days after an appeal is filed, the Sec8 retary, after providing opportunity for an infor9 mal hearing, shall affirm or terminate the 

10 order. 

11 ‘‘(C) FAILURE TO ACT.—If, during the 30- 

12 day period specified in subparagraph (B), the 

13 Secretary fails to provide an opportunity for a 

14 hearing or to affirm or terminate the order, the 

15 order shall be deemed to be terminated. 

16 ‘‘(D) NO JUDICIAL REVIEW.—An order 

17 under this paragraph shall not be subject to ju18 dicial review. 

19 ‘‘(7) TERMINATION OF LICENSE.—The Sec20 retary may terminate a license issued under this 

21 subsection, after notice to the Internet pharmacy 

22 and an opportunity for a hearing, and if the Sec23 retary determines that the Internet pharmacy— 

24 ‘‘(A) has demonstrated a pattern of non25 compliance with this section; 


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1 ‘‘(B) has made an untrue statement of ma2 terial fact in its licensing application; or 

3 ‘‘(C) is in violation of any applicable Fed4 eral or State law relating to the dispensing of 

5 a prescription drug. 

6 ‘‘(8) RENEWAL EVALUATION.— 

7 ‘‘(A) IN GENERAL.—Before renewing a li8 cense of an Internet pharmacy under this sub9 section, the Secretary shall conduct an evalua10 tion to determine whether the Internet phar11 macy is in compliance with this section. 

12 ‘‘(B) EVALUATION OF INTERNET PHAR13 MACIES.—At the discretion of the Secretary and 

14 as applicable, an evaluation under subpara15 graph (A) may include testing of the Internet 

16 pharmacy website or other systems through 

17 which the Internet pharmacy communicates 

18 with consumers, and a physical inspection of 

19 the records and premises of the pharmacy. 

20 ‘‘(9) CONTRACT FOR OPERATION OF PRO21 GRAM.— 

22 ‘‘(A) IN GENERAL.—The Secretary may 

23 award a contract under this subsection for the 

24 operation of the licensing program. 


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1 ‘‘(B) TERM.—The duration of a contract 

2 under subparagraph (A) shall not exceed 5 

3 years and may be renewable. 

4 ‘‘(C) PERFORMANCE REVIEW.—The Sec5 retary shall annually review performance under 

6 a contract under subparagraph (A). 

7 ‘‘(d) PROVIDERS OF INTERACTIVE COMPUTER SERV8 ICES OR ADVERTISING SERVICES.—No provider of inter9 active computer services (as defined in section 230(f) of 

10 the Communications Act of 1934 (47 U.S.C. 230(f)) or 

11 an advertising service provider shall be liable under this 

12 section on account of another person’s selling or dis13 pensing of a prescription drug, so long as the provider of 

14 the interactive computer service or the advertising service 

15 provider does not own or exercise corporate control over 

16 such person. 

17 ‘‘(e) POLICIES AND PROCEDURES REQUIRED TO

18 PREVENT PAYMENTS FOR UNLAWFUL INTERNET PHAR19 MACY REQUESTS.— 

20 ‘‘(1) REGULATIONS.—Not later than 180 days 

21 after designating a system under subsection (a)(2), 

22 the Board shall promulgate regulations that re23 quire— 

24 ‘‘(A) an operator of a credit card system 

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1 ator of an international, national, or local net2 work used to effect a credit transaction, elec3 tronic fund transfer, or money transmitting 

4 service that is a designated payment system, 

5 and an operator of any other designated pay6 ment system specified by the Board that is cen7 trally managed and is primarily engaged in the 

8 transmission and settlement of credit trans9 actions, electronic transfers, or money transmit10 ting services where at least 1 party to the 

11 transaction or transfer is an individual; and 

12 ‘‘(B) in the case of a designated payment 

13 system, other than a designated payment sys14 tem described in subparagraph (A), a person 

15 described in subsection (a)(2)(B); 

16 to establish policies and procedures that are reason17 ably designed to prevent the introduction of re18 stricted transactions into a designated payment sys19 tem or the completion of restricted transactions 

20 using a designated payment system. 

21 ‘‘(2) REQUIREMENTS FOR POLICIES AND PRO22 CEDURES.—In promulgating regulations under para23 graph (1), the Board shall— 

24 ‘‘(A) identify types of policies and proce25 dures, including nonexclusive examples, that 


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1 shall be considered to be reasonably designed to 

2 identify and reasonably designed to prevent the 

3 introduction of a restricted transaction in a des4 ignated payment or the completion of restricted 

5 transactions using a designated payment sys6 tem; and 

7 ‘‘(B) to the extent practicable, permit any 

8 designated payment system, or person described 

9 in subsection (a)(2)(B), as applicable, to choose 

10 among alternative means of preventing the in11 troduction or completion of restricted trans12 actions. 

13 ‘‘(3) NO LIABILITY FOR BLOCKING OR REFUS14 ING TO HONOR RESTRICTED TRANSACTION.— 

15 ‘‘(A) IN GENERAL.—A designated payment 

16 system, or a person described in subsection 

17 (a)(2)(B), that is subject to a regulation or an 

18 order issued under this subsection, and any 

19 participant in such payment system, that— 

20 ‘‘(i) prevents or otherwise refuses to 

21 honor restricted transactions, in an effort 

22 to implement the policies and procedures 

23 required under this subsection or to other24 wise comply with this section, shall not be 

25 liable to any party for such action; and 


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1 ‘‘(ii) prevents or otherwise refuses to 

2 honor a nonrestricted transaction in an ef3 fort to implement the policies and proce4 dures under this subsection or to otherwise 

5 comply with this section, shall not be liable 

6 to any party for such action. 

7 ‘‘(B) COMPLIANCE WITH THIS SUB8 SECTION.—A person described in subsection 

9 (a)(2)(B) meets the requirements of this sub10 section, if any, if the person relies on and com11 plies with the policies and procedures of a des12 ignated payment system of which the person is 

13 a member or in which the person is a partici14 pant, and such policies and procedures of the 

15 designated payment system comply with the re16 quirements of the regulations under paragraph 

17 (1)(B). 

18 ‘‘(4) ENFORCEMENT.— 

19 ‘‘(A) IN GENERAL.—This subsection shall 

20 be enforced by the Federal functional regulators 

21 and the Federal Trade Commission under appli22 cable law in the manner provided in section 

23 505(a) of the Gramm-Leach-Bliley Act (21 

24 U.S.C. 6805(a)). 


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1 ‘‘(B) FACTORS TO BE CONSIDERED.—In 

2 considering any enforcement action under this 

3 subsection against a payment system or person 

4 described in subsection (a)(2)(B), the Federal 

5 functional regulators and the Federal Trade 

6 Commission shall consider the following factors: 

7 ‘‘(i) The extent to which the payment 

8 system or person knowingly permits re9 stricted transactions. 

10 ‘‘(ii) The history of the payment sys11 tem or person in connection with permit12 ting restricted transactions. 

13 ‘‘(iii) The extent to which the pay14 ment system or person has established and 

15 is maintaining policies and procedures in 

16 compliance with regulations prescribed 

17 under this subsection. 

18 ‘‘(iv) The feasibility that any specific 

19 remedy prescribed can be implemented by 

20 the payment system or person without sub21 stantial deviation from normal business 

22 practice. 

23 ‘‘(v) The costs and burdens the spe24 cific remedy will have on the payment sys25 tem or person. 


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1 ‘‘(f) REPORTS REGARDING INTERNET-RELATED VIO2 LATIONS OF FEDERAL AND STATE LAWS ON DISPENSING

3 OF DRUGS.—The Secretary shall, pursuant to the submis4 sion of an application meeting criteria prescribed by the 

5 Secretary, make an award of a grant or contract to an 

6 entity with experience in developing and maintaining sys7 tems for the purpose of— 

8 ‘‘(1) identifying Internet pharmacy websites 

9 that are not licensed or that appear to be operating 

10 in violation of Federal or State laws concerning the 

11 dispensing of drugs; 

12 ‘‘(2) reporting such Internet pharmacy websites 

13 to State medical licensing boards and State phar14 macy licensing boards, and to the Attorney General 

15 and the Secretary, for further investigation; and 

16 ‘‘(3) submitting, for each fiscal year for which 

17 the award under this subsection is made, a report to 

18 the Secretary describing investigations undertaken 

19 with respect to violations described in paragraph (1). 

20 ‘‘(g) TRANSACTIONS PERMITTED.—A designated 

21 payment system or person subject to a regulation or an 

22 order issued under subsection (e) may engage in trans23 actions with licensed and unlicensed Internet pharmacies 

24 in connection with investigating violations or potential vio25 lations of any rule or requirement adopted by the payment 


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1 system or person in connection with complying with sub2 section (e). A person subject to a regulation or an order 

3 issued under subsection (e) and the agents and employees 

4 of that person shall not be found to be in violation of, 

5 or liable under, any Federal, State, or other law for engag6 ing in any such transaction. 

7 ‘‘(h) RELATION TO STATE LAWS.—No requirement, 

8 prohibition, or liability may be imposed on a designated 

9 payment system or person subject to a regulation or an 

10 order issued under subsection (e) under the laws of any 

11 State with respect to any payment transaction by an indi12 vidual because the payment transaction involves a pay13 ment to an Internet pharmacy. 

14 ‘‘(i) TIMING OF REQUIREMENTS.—A designated pay15 ment system or a person subject to a regulation under 

16 subsection (e) shall adopt policies and procedures reason17 ably designed to comply with any regulations required 

18 under subsection (e) not later than 180 days after the date 

19 on which such final regulations are issued.’’. 

20 (b) PROHIBITED ACTS.—Section 301 of the Federal 

21 Food, Drug, and Cosmetic Act (21 U.S.C. 331) is amend22 ed by adding at the end the following: 

23 ‘‘(hh)(1) The sale, under section 511, of a drug that 

24 is not a prescription drug, the sale of such a prescription 

25 drug without a valid prescription from a treating provider, 


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1 or the ownership or operation of an Internet pharmacy, 

2 in violation of section 511. 

3 ‘‘(2) The representation by advertisement, sales pres4 entation, direct communication (including telephone, fac5 simile, or electronic mail), or otherwise by an Internet 

6 pharmacy, that a prescription drug may be obtained from 

7 the Internet pharmacy without a prescription, in violation 

8 of section 511. 

9 ‘‘(3) The advertisement related to a prescription drug 

10 through any media including sales presentation, direct 

11 communication (including telephone, facsimile, or elec12 tronic mail), by an unlicensed Internet pharmacy. 

13 ‘‘(4) The provision of an untrue statement of material 

14 fact in the licensing application of an Internet pharmacy. 

15 ‘‘(5) For purposes of this subsection, any term used 

16 in this subsection that is also used in section 511 shall 

17 have the meaning given that term in section 511.’’. 

18 (c) LINKS TO UNLICENSED INTERNET PHAR19 MACIES.—Section 302 of the Federal Food, Drug, and 

20 Cosmetic Act (21 U.S.C. 332) is amended by adding at 

21 the end the following: 

22 ‘‘(c)(1) In the case of a violation of section 511 relat23 ing to an unlicensed Internet pharmacy (as defined in such 

24 section 511), the district courts of the United States and 

25 the United States courts of the territories shall have jurisVerDate Aug 31 2005 23:28 Feb 17, 2007 Jkt 049196 PO 00000 Frm 00032 Fmt 6652 Sfmt 6201 E:\BILLS\S596.IS S596

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1 diction to order a provider of an interactive computer serv2 ice to remove, or disable access to, links to a website vio3 lating that section that resides on a computer server that 

4 the provider controls or operates. 

5 ‘‘(2) Relief under paragraph (1)— 

6 ‘‘(A) shall be available only after provision to 

7 the provider of notice and an opportunity to appear; 

8 ‘‘(B) shall not impose any obligation on the 

9 provider to monitor its service or to affirmatively 

10 seek facts indicating activity violating section 511; 

11 ‘‘(C) shall specify the provider to which the re12 lief applies; and 

13 ‘‘(D) shall specifically identify the location of 

14 the website to be removed or to which access is to 

15 be disabled.’’. 

16 (d) REGULATIONS.— 

17 (1) IN GENERAL.—Not later than 1 year after 

18 the date of enactment of this Act, the Secretary of 

19 Health and Human Services shall promulgate in20 terim final regulations to carry out the amendments 

21 made by this section. 

22 (2) EFFECTIVE DATE.—The requirement of li23 censure under section 511 of the Federal Food, 

24 Drug, and Cosmetic Act (as added by this section) 

25 shall take effect on the date determined by the SecVerDate Aug 31 2005 23:28 Feb 17, 2007 Jkt 049196 PO 00000 Frm 00033 Fmt 6652 Sfmt 6201 E:\BILLS\S596.IS S596

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1 retary of Health and Human Services but in no 

2 event later than 90 days after the effective date of 

3 the interim final regulations under paragraph (1). 

4 (e) PENALTIES.—Section 303 of the Federal Food, 

5 Drug, and Cosmetic Act (21 U.S.C. 333) is amended by 

6 adding at the end the following: 

7 ‘‘(g) Notwithstanding subsection (a), any person who 

8 knowingly violates paragraph (1), (2), (3), or (4) of sec9 tion 301(hh) shall be imprisoned for not more than 10 

10 years or fined in accordance with title 18, United States 

11 Code, or both.’’. 

Æ 


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