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[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4790 Introduced in House (IH)]

108th CONGRESS
  2d Session
                                H. R. 4790

  To amend the Federal Food, Drug, and Cosmetic Act to authorize the 
    importation of prescription drugs from Canada and certain other 
                   countries, and for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                              July 9, 2004

   Mr. John introduced the following bill; which was referred to the 
                    Committee on Energy and Commerce

_______________________________________________________________________

                                 A BILL

 
  To amend the Federal Food, Drug, and Cosmetic Act to authorize the 
    importation of prescription drugs from Canada and certain other 
                   countries, and for other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Drug Importation 
Promotion and Safety Act''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Importation of prescription drugs; Office of Drug Importation 
                            Promotion and Safety; other general 
                            provisions.
Sec. 3. Commercial importation.
Sec. 4. Personal importation; Internet pharmacies.
Sec. 5. Personal importation; entering United States in possession of 
                            prescription drugs; compassionate use.
Sec. 6. Particular products; suspension of authority for importation.
Sec. 7. Registration of importation facilities.
Sec. 8. Enforcement; regulations; effective dates.
Sec. 9. Licensing of Internet pharmacies.
Sec. 10. Chain of custody of prescription drugs; network for 
                            notifications regarding counterfeit drugs.

SEC. 2. IMPORTATION OF PRESCRIPTION DRUGS; OFFICE OF DRUG IMPORTATION 
              PROMOTION AND SAFETY; OTHER GENERAL PROVISIONS.

    Chapter VIII of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
381 et seq.) is amended--
            (1) by inserting after the chapter heading the following:

               ``Subchapter A--General Provisions''; and

            (2) by adding at the end the following:

           ``Subchapter B--Importation of Prescription Drugs

``SEC. 811. GENERAL PROVISIONS.

    ``(a) Office of Drug Importation Promotion and Safety.--There is 
established within the Office of the Commissioner of Food and Drugs an 
office to be known as the Office of Drug Importation Promotion and 
Safety, which shall be headed by an Associate Commissioner appointed by 
the Commissioner. The Commissioner of Food and Drugs shall carry out 
this subchapter acting through such Associate Commissioner.
    ``(b) Annual Report.--The Secretary shall annually submit to the 
Congress a report on activities carried out under this subchapter, 
including a determination by the Secretary of whether prescription 
drugs imported under this subchapter are safe and effective.
    ``(c) Definitions.--For purposes of this subchapter:
            ``(1) Drug importation facility.--The term `drug 
        importation facility' means a person, other than an individual 
        importing a prescription drug under section 814, located 
        outside the United States (other than a transporter) that 
        engages in the distribution or dispensing of a prescription 
        drug that is imported or offered for importation into the 
        United States.
            ``(2) Internet pharmacy.--The term `Internet pharmacy' 
        means a person, other than an individual importing a 
        prescription drug under section 814, that offers to dispense in 
        the United States a prescription drug through an Internet 
        website in interstate commerce, regardless of whether the 
        physical location of the principal place of business of the 
        Internet pharmacy is in the United States or in another 
        country.
            ``(3) Pharmacy.--The term `pharmacy' means a person, other 
        than an individual importing a prescription drug under section 
        814, licensed by a State to dispense prescription drugs or to 
        provide pharmaceutical care.
            ``(4) Permitted country.--The term `permitted country' 
        means--
                    ``(A) Australia;
                    ``(B) a member country of the European Union as of 
                January 1, 2003;
                    ``(C) Japan;
                    ``(D) New Zealand;
                    ``(E) Switzerland; and
                    ``(F) such additional countries as the Secretary 
                may specify.
            ``(5) Prescription drug.--
                    ``(A) In general.--The term `prescription drug' 
                means a drug described in section 503(b) that is 
                approved by the Secretary under section 505.
                    ``(B) Exclusions.--The term `prescription drug' 
                does not include--
                            ``(i) a controlled substance (as defined in 
                        section 102 of the Controlled Substances Act 
                        (21 U.S.C. 802));
                            ``(ii) a biological product (as defined in 
                        section 351 of the Public Health Service Act 
                        (42 U.S.C. 262));
                            ``(iii) an infused drug (including a 
                        peritoneal dialysis solution);
                            ``(iv) an intravenously injected drug;
                            ``(v) a drug that is inhaled during 
                        surgery;
                            ``(vi) a parenteral drug;
                            ``(vii) a drug manufactured through 1 or 
                        more biotechnology processes, including--
                                    ``(I) a therapeutic DNA plasmid 
                                product;
                                    ``(II) a therapeutic synthetic 
                                peptide product of not more than 40 
                                amino acids;
                                    ``(III) a monoclonal antibody 
                                product for in vivo use; and
                                    ``(IV) a therapeutic recombinant 
                                DNA-derived product;
                            ``(viii) a drug required to be refrigerated 
                        at any time during manufacturing, packing, 
                        processing, or holding; or
                            ``(ix) a photoreactive drug.
            ``(6) Treating provider.--The term `treating provider' 
        means a licensed health care provider that--
                    ``(A)(i) performs a documented patient evaluation 
                (including a patient history and physical examination) 
                of an individual to establish the diagnosis for which a 
                prescription drug is prescribed;
                    ``(ii) discusses with the individual the treatment 
                options of the individual and the risks and benefits of 
                treatment; and
                    ``(iii) maintains contemporaneous medical records 
                concerning the individual; or
                    ``(B) provides care to an individual as part of an 
                on-call or cross-coverage arrangement with a health 
                care provider described in subparagraph (A).
            ``(7) Wholesaler.--
                    ``(A) In general.--The term `wholesaler' means a 
                person licensed as a wholesaler or distributor of 
                prescription drugs in the United States as described in 
                section 503(e)(2).
                    ``(B) Exclusion.--The term `wholesaler' does not 
                include--
                            ``(i) a person authorized to import drugs 
                        under section 801(d)(1); or
                            ``(ii) an individual importing a 
                        prescription drug under section 812.''.

SEC. 3. COMMERCIAL IMPORTATION.

    Subchapter B of chapter VIII of the Federal Food, Drug, and 
Cosmetic Act, as added by section 2 of this Act, is amended by adding 
at the end the following section:

``SEC. 812. COMMERCIAL IMPORTATION.

    ``(a) In General.--
            ``(1) No presumption against importation.--A drug 
        importation facility, pharmacy, Internet pharmacy, or 
        wholesaler may import a prescription drug from Canada or a 
        permitted country into the United States for dispensing in the 
        United States unless the importation of the prescription drug 
        is not in accordance with this subchapter.
            ``(2) Limitation to certain ports.--The Secretary may limit 
        the ports of entry in the United States through which a 
        prescription drug may be imported under this section to a 
        reasonable number of ports designated by the Secretary.
    ``(b) Requirements.--Each prescription drug imported under this 
subchapter shall--
            ``(1) be approved under section 505;
            ``(2) comply with sections 501 and 502;
            ``(3) be in a container that bears a label stating, in 
        prominent and conspicuous type--
                    ``(A) the lot number of the prescription drug;
                    ``(B) the name, address and phone number of the 
                drug importation facility;
                    ``(C) comply with regulations promulgated by the 
                Secretary to require labeling regarding the fact that 
                the drug is imported; and
                    ``(D) a unique identifier code provided by the 
                Secretary that modifies the national drug code of the 
                prescription drug to indicate that the drug has been 
                imported; and
            ``(4) comply with any other applicable requirement of this 
        Act.
    ``(c) Approved Labeling.--
            ``(1) In general.--A drug importation facility that offers 
        for importation a prescription drug under this subchapter shall 
        submit to the Secretary an application for approval that 
        demonstrates that the labeling of the prescription drug to be 
        imported into the United States complies with the requirements 
        of sections 502 and 503.
            ``(2) Procedure.--Not later than 60 days after receipt of a 
        completed application under paragraph (1), the Secretary 
        shall--
                    ``(A) approve or deny the application consistent 
                with the requirements of sections 502 and 503; and
                    ``(B) notify the applicant of the decision of the 
                Secretary and, if the application is denied, the reason 
                for the denial.
            ``(3) Lists.--
                    ``(A) Applications.--The Secretary shall maintain 
                an updated list of applications pending, applications 
                approved, and applications denied under this 
                subsection.
                    ``(B) Ports.--The Secretary shall maintain an 
                updated list of ports through which a prescription drug 
                may be imported under this section and make the list 
                available to the public on an Internet website.
    ``(d) Prohibition of Importation of a Prescription Drug That Enters 
Other Countries.--
            ``(1) In general.--A drug importation facility, pharmacy, 
        Internet pharmacy, or wholesaler shall not import a 
        prescription drug if, during any period in which the 
        prescription drug was not in the control of the manufacturer, 
        the prescription drug entered a country other than--
                    ``(A) Canada; or
                    ``(B) subject to paragraph (2), a permitted 
                country.
            ``(2) Limitation.--The Secretary may exclude one or more of 
        the countries under subparagraph (B) of paragraph (1) from the 
        application of that subparagraph if the Secretary determines 
        that allowing a prescription drug to be imported into the 
        United States after having entered that country outside control 
        of a manufacturer would present a risk to the public health.
    ``(e) Prohibition of Commingling.--
            ``(1) In general.--A drug importation facility, pharmacy, 
        Internet pharmacy, or wholesaler shall not commingle a 
        prescription drug imported into the United States under this 
        subchapter with a prescription drug that is not imported from 
        Canada or a permitted country.
            ``(2) Label.--A pharmacy or Internet pharmacy that 
        dispenses a prescription drug imported from Canada or a 
        permitted country shall affix on each dispensed container of 
        the prescription drug the label required under subsection 
        (b)(3) unless such a label is already affixed to the container.
    ``(f) Drug Recalls.--On receipt of notification from the 
manufacturer of a prescription drug imported from Canada or a permitted 
country under this section that the prescription drug has been recalled 
or withdrawn from the market in Canada or a permitted country, a drug 
importation facility shall promptly provide the Secretary and any 
person to whom the prescription drug was distributed a notice that the 
drug has been recalled or withdrawn from the market and that includes--
            ``(1) information (including the lot number) that 
        identifies the prescription drug; and
            ``(2) a statement of the reason for the recall or 
        withdrawal.
    ``(g) Charitable Contributions.--Notwithstanding any other 
provision of this section, section 801(d)(1) continues to apply to a 
prescription drug that is donated or otherwise supplied at no charge or 
a nominal charge by the manufacturer of the prescription drug to a 
charitable or humanitarian organization (including the United Nations 
and affiliates) or to a government of a foreign country.
    ``(h) Jurisdiction.--The district courts of the United States shall 
have jurisdiction in an action brought by the United States against a 
person importing or offering for importation a prescription drug in 
violation of the requirements of this section.
    ``(i) Effect of Section.--Nothing in this section limits the 
authority of the Secretary relating to the importation of prescription 
drugs (including the interdiction of prescription drugs that are 
unapproved, adulterated, or misbranded), other than with respect to 
section 801(d)(1) as provided in subsection (g).''.

SEC. 4. PERSONAL IMPORTATION; INTERNET PHARMACIES.

    Subchapter B of chapter VIII of the Federal Food, Drug, and 
Cosmetic Act, as amended by section 3 of this Act, is amended by adding 
at the end the following section:

``SEC. 813. PERSONAL IMPORTATION; INTERNET PHARMACIES.

    ``An individual may, for personal use or for the use of a family 
member of the individual (rather than for resale), import a 
prescription drug into the United States from any Internet pharmacy 
that is registered under section 816 and licensed under section 503B, 
except to the extent that the Secretary determines that importation of 
the prescription drug is not in accordance with this subchapter.''.

SEC. 5. PERSONAL IMPORTATION; ENTERING UNITED STATES IN POSSESSION OF 
              PRESCRIPTION DRUGS; COMPASSIONATE USE.

    Subchapter B of chapter VIII of the Federal Food, Drug, and 
Cosmetic Act, as amended by section 4 of this Act, is amended by adding 
at the end the following section:

``SEC. 814. PERSONAL IMPORTATION; ENTERING UNITED STATES IN POSSESSION 
              OF PRESCRIPTION DRUGS; COMPASSIONATE USE.

    ``(a) In General.--An individual may, for personal use or for the 
use of a family member of the individual (rather than for resale), 
import a prescription drug from Canada or a permitted country into the 
United States, subject to subsections (b) and (c).
    ``(b) Importation.--An individual may import a prescription drug 
if--
            ``(1) the prescription drug is purchased from a licensed 
        pharmacy in Canada or a licensed pharmacy in a permitted 
        country and dispensed in compliance with the applicable laws of 
        Canada or the permitted country regarding the practice of 
        pharmacy;
            ``(2) the prescription drug is imported from Canada or a 
        permitted country into the United States;
            ``(3) the prescription drug is imported by the individual 
        on the person of the individual;
            ``(4) the quantity of the prescription drug imported does 
        not exceed a 90-day supply during any 90-day period; and
            ``(5) the prescription drug is accompanied by--
                    ``(A) a copy of a prescription valid in a State and 
                cosigned by a prescribing physician in Canada or the 
                permitted country; or
                    ``(B) if the prescription drug is available in 
                Canada or the permitted country without a prescription, 
                a copy of the valid prescription signed by a pharmacist 
                licensed in Canada or the permitted country.
    ``(c) Compassionate Use.--The Secretary may permit an individual to 
import an up to a 90-day supply of a drug that is not approved by the 
Secretary under section 505 if the importation is for continuation of 
personal use by the individual for treatment, begun in a foreign 
country, of a serious medical condition.''.

SEC. 6. PARTICULAR PRODUCTS; SUSPENSION OF AUTHORITY FOR IMPORTATION.

    Subchapter B of chapter VIII of the Federal Food, Drug, and 
Cosmetic Act, as amended by section 5 of this Act, is amended by adding 
at the end the following section:

``SEC. 815. PARTICULAR PRODUCTS; SUSPENSION OF AUTHORITY FOR 
              IMPORTATION.

    ``(a) Prescription Drug.--If the Secretary determines that the 
importation of a particular prescription drug or particular dosage form 
of a prescription drug into the United States presents a risk to the 
public health, the Secretary may immediately order the suspension of 
the importation of the particular prescription drug or particular 
dosage form of the prescription drug.
    ``(b) Suspension.--If the Secretary determines that a drug 
importation facility, pharmacy, Internet pharmacy, or wholesaler is 
engaged in a pattern of importing or offering for importation a 
prescription drug into the United States in violation of any of the 
requirements of this Act, the Secretary may immediately order the 
suspension of that person from engaging in the importation or offering 
for importation of prescription drugs into the United States.
    ``(c) Canada or Permitted Country.--If the Secretary determines 
that there is a pattern of prescription drugs being imported or offered 
for importation into the United States from Canada or a permitted 
country in violation of any of the requirements of this Act, the 
Secretary may immediately order the suspension of the importation or 
offering for importation into the United States of prescription drugs 
from Canada or that permitted country, as appropriate.
    ``(d) Appeal of Suspension Order.--
            ``(1) In general.--
                    ``(A) Prescription drugs.--With respect to the 
                importation of a prescription drug, the importation of 
                which is suspended under subsection (a), any person 
                that would be entitled to be a claimant for the 
                prescription drug may appeal the suspension order to 
                the Secretary.
                    ``(B) Suspended persons.--With respect to a drug 
                importation facility, pharmacy, Internet pharmacy, or 
                wholesaler subject to a suspension order under 
                subsection (b) or (c), the drug importation facility, 
                pharmacy, Internet pharmacy or wholesaler may appeal 
                the suspension order to the Secretary.
            ``(2) Action by the secretary.--Not later than 30 days 
        after an appeal is filed, the Secretary, after providing 
        opportunity for an informal hearing, shall confirm or terminate 
        the order.
            ``(3) Failure to act.--If, during the 30-day period 
        specified in paragraph (2), the Secretary fails to provide an 
        opportunity for a hearing or to confirm or terminate the order, 
        the order shall be deemed to be terminated.
    ``(e) No Judicial Review.--An order under this section shall not be 
subject to judicial review.
    ``(f) Effect of Section.--Nothing in this section applies to a 
prescription drug imported by an individual under section 812 or to a 
commercial transaction conducted between an Internet pharmacy and an 
individual.''.

SEC. 7. REGISTRATION OF IMPORTATION FACILITIES.

    (a) In General.--Subchapter B of chapter VIII of the Federal Food, 
Drug, and Cosmetic Act, as amended by section 6 of this Act, is amended 
by adding after section 815 the following section:

``SEC. 816. REGISTRATION OF CERTAIN IMPORTERS.

    ``(a) In General.--A drug importation facility, pharmacy, Internet 
pharmacy, or wholesaler engaged in the importation or offering for 
importation of prescription drugs into the United States, or in the 
dispensing of such drugs, shall register with the Secretary in 
accordance with this section.
    ``(b) Registration.--
            ``(1) In general.--To register, the owner, operator, or 
        agent in charge of a drug importation facility, pharmacy, 
        Internet pharmacy, or wholesaler shall submit to the Secretary 
        a registration that discloses--
                    ``(A) the name and address of each drug importation 
                facility, pharmacy, Internet pharmacy, or wholesaler at 
                which, and all trade names under which, the registrant 
                conducts business;
                    ``(B) the name of each prescription drug to be 
                imported into the United States by each drug 
                importation facility, pharmacy, Internet pharmacy, or 
                wholesaler; and
                    ``(C) the name and address of an agent for service 
                of process in the United States.
            ``(2) Change in information.--The registrant shall notify 
        the Secretary in a timely manner of any change in the 
        information provided under paragraph (1).
            ``(3) Procedure.--Not later than 60 days after receipt of a 
        completed registration under paragraph (1), the Secretary 
        shall--
                    ``(A) assign a registration number to each 
                registered drug importation facility, pharmacy, 
                Internet pharmacy, and wholesaler; and
                    ``(B) notify the registrant of the receipt of the 
                registration.
            ``(4) List.--
                    ``(A) In general.--The Secretary shall compile, 
                maintain, and periodically update a list of 
                registrants.
                    ``(B) Availability.--The Secretary shall make the 
                list described under subparagraph (A) and information 
                submitted by a registrant under paragraph (1) available 
                to the public on an Internet website and through a 
                toll-free telephone number.
    ``(c) Electronic Filing.--
            ``(1) In general.--For the purpose of reducing paperwork 
        and reporting burdens, the Secretary shall provide for, and 
        require the use of, electronic methods of submitting to the 
        Secretary registrations required under this section and shall 
        provide for electronic methods of receiving the registrations.
            ``(2) Authentication.--In providing for the electronic 
        submission of such registrations under this section, the 
        Secretary shall ensure that adequate authentication protocols 
        are used to allow identification of the registrant and 
        validation of the data as appropriate.
    ``(d) Effect of Section.--
            ``(1) Authority.--Nothing in this section authorizes the 
        Secretary to require an application, review, or licensing 
        process for a drug importation facility, pharmacy, or 
        wholesaler.
            ``(2) Importation by individuals.--Nothing in this section 
        applies to a prescription drug imported by an individual under 
        section 814 or to a commercial transaction conducted between an 
        Internet pharmacy and an individual.''.
    (b) Importation; Failure to Register.--Section 801 of the Federal 
Food, Drug, and Cosmetic Act is amended by adding at the end the 
following:
    ``(p) Failure to Register.--
            ``(1) In general.--If a drug importation facility, 
        pharmacy, Internet pharmacy, or wholesaler engaged in the 
        importation or offering for importation of prescription drugs 
        into the United States has not submitted a registration to the 
        Secretary in accordance with section 816, a prescription drug 
        that is being imported or offered for importation into the 
        United States shall not be delivered to the importer, owner, or 
        consignee of the prescription drug until the drug importation 
        facility, pharmacy, Internet pharmacy, or wholesaler is 
        registered in accordance with section 816.
            ``(2) Effect of subsection (b).--Subsection (b) does not 
        authorize the delivery of the prescription drug pursuant to the 
        execution of a bond while the prescription drug is held under 
        this subsection.
            ``(3) Removal.--A prescription drug held under this 
        subsection shall be removed to a secure facility, as 
        appropriate.
            ``(4) No transfer.--During the period in which a 
        prescription drug is held under this subsection, the 
        prescription drug shall not be transferred by any person from 
        the port of entry into the United States for the prescription 
        drug or from the secure facility to which the prescription drug 
        has been removed.''.

SEC. 8. ENFORCEMENT; REGULATIONS; EFFECTIVE DATES.

    (a) Prohibited Acts.--Section 301 of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 331) is amended by adding at the end the 
following:
    ``(hh) Dispensing or offering to dispense a prescription drug 
imported into the United States in violation of the requirements of 
section 812.
    ``(ii) The importation or offering for importation of a 
prescription drug in violation of an order under section 815.
    ``(jj) The failure of a drug importation facility, pharmacy, 
Internet pharmacy, or wholesaler engaged in the importation or offering 
for importation of prescription drugs into the United States, or in the 
dispensing of such drugs, to register in accordance with section 816. 
''.
    (b) Regulations; Effective Dates.--
            (1) Commercial importation.--With respect to carrying out 
        section 812 of the Federal Food, Drug, and Cosmetic Act (as 
        added by section 3 of this Act):
                    (A) The Secretary of Health and Human Services 
                (referred to in this subsection as the ``Secretary'') 
                shall promulgate interim final regulations regarding 
                importation of prescription drugs from Canada not later 
                than 30 days after the date of the enactment of this 
                Act. Such section 812 takes effect regarding the 
                importation of prescription drugs from Canada upon the 
                expiration of such 30 days, without regard to whether 
                the Secretary has promulgated such regulations.
                    (B) The Secretary shall promulgate interim final 
                regulations regarding importation of prescription drugs 
                from permitted countries not later than one year after 
                the date of the enactment of this Act. Such section 812 
                takes effect regarding importation of prescription 
                drugs from permitted countries upon the expiration of 
                such one-year period, without regard to whether the 
                Secretary has promulgated such regulations.
            (2) Personal importation; entering united states in 
        possession of prescription drug; compassionate use.--The 
        Secretary may promulgate regulations to carry out section 814 
        of the Federal Food, Drug, and Cosmetic Act (as added by 
        section 5 of this Act). Such section 813 takes effect upon the 
        date of enactment of this Act, without regard to whether the 
        Secretary has promulgated such regulations.
            (3) Registration of importation facilities.--Not later than 
        one year after the date of the enactment of this Act, the 
        Secretary shall promulgate regulations to carry out section 816 
        of the Federal Food, Drug, and Cosmetic Act (as added by 
        section 7(a) of this Act). The requirement of registration 
        under such section takes effect--
                    (A) on the effective date of such final 
                regulations; or
                    (B) if the final regulations have not been made 
                effective as of the expiration of such one-year period, 
                on the date that is one year after the date of the 
                enactment of this Act, subject to compliance with the 
                final regulations when the final regulations are made 
                effective.

SEC. 9. LICENSING OF INTERNET PHARMACIES.

    (a) In General.--Chapter V of the Federal Food, Drug, and Cosmetic 
Act (21 U.S.C. 351 et seq.) is amended by inserting after section 503A 
the following section:

``SEC. 503B. LICENSING OF INTERNET PHARMACIES.

    ``(a) In General.--An Internet pharmacy that is licensed in 
accordance with this section may dispense or offer to dispense a 
prescription drug to a person in the United States. An Internet 
pharmacy may not dispense or offer to dispense a prescription drug to 
such a person prior to obtaining a license under this section.
    ``(b) Definitions.--For purposes of this section:
            ``(1) Advertising service provider.--The term `advertising 
        service provider' means an advertising company that contracts 
        with a provider of an interactive computer service (as defined 
        in section 230(f) of the Communications Act of 1934 (47 U.S.C. 
        230(f)) to provide advertising on the Internet.
            ``(2) Permitted country.--The term `permitted country' has 
        the meaning given such term in section 811(c).
            ``(3) Prescription drug.--The term `prescription drug' 
        means a drug described in section 503(b) that is approved by 
        the Secretary under section 505.
            ``(4) Internet pharmacy.--The term `Internet pharmacy' 
        means a person that dispenses or offers to dispense a 
        prescription drug through an Internet website in interstate 
        commerce in the United States regardless of whether the 
        physical location of the principal place of business of the 
        Internet pharmacy is in the United States or in another 
        country.
    ``(c) Licensing of Internet Pharmacies.--
            ``(1) In general.--The Secretary may issue a license under 
        this section to an Internet pharmacy only if such pharmacy--
                    ``(A) has its principal place of business in the 
                United States, Canada, or a permitted country; and
                    ``(B) meets the requirements of paragraph (2).
            ``(2) Conditions for licensing.--
                    ``(A) Application requirements.--An Internet 
                pharmacy shall submit to the Secretary an application 
                for a license under this section that includes--
                            ``(i)(I) in the case of an Internet 
                        pharmacy located in the United States, 
                        verification that, in each State in which the 
                        Internet pharmacy engages in dispensing or 
                        offering to dispense prescription drugs, the 
                        Internet pharmacy, and all employees and agents 
                        of the Internet pharmacy, is in compliance with 
                        applicable Federal and State laws regarding--
                                    ``(aa) the practice of pharmacy, 
                                including licensing laws and inspection 
                                requirements; and
                                    ``(bb) the manufacturing and 
                                distribution of controlled substances, 
                                including with respect to mailing or 
                                shipping controlled substances to 
                                consumers; or
                            ``(II) in the case of an Internet pharmacy 
                        located in Canada or a permitted country, 
                        verification that--
                                    ``(aa) all employees and agents of 
                                the Internet pharmacy are in compliance 
                                with applicable laws of Canada or the 
                                permitted country regarding the 
                                practice of pharmacy, including 
                                licensing laws and inspection 
                                requirements; and
                                    ``(bb) the Internet pharmacy is in 
                                compliance with applicable Federal and 
                                State laws regarding the practice of 
                                pharmacy, including licensing laws and 
                                inspection requirements;
                            ``(ii) verification that the person that 
                        owns the Internet pharmacy has not had a 
                        license for an Internet pharmacy terminated by 
                        the Secretary, and that no other Internet 
                        pharmacy owned by the person has had a license 
                        under this subsection that has been terminated 
                        by the Secretary;
                            ``(iii) verification from the person that 
                        owns the Internet pharmacy that the person will 
                        permit inspection of the facilities and 
                        business practices of the Internet pharmacy by 
                        the Secretary to the extent necessary to 
                        determine whether the Internet pharmacy is in 
                        compliance with this subsection; and
                            ``(iv) in the case of an agreement between 
                        a patient and an Internet pharmacy that 
                        releases the Internet pharmacy, and any 
                        employee or agent of the Internet pharmacy, 
                        from liability for damages arising out of the 
                        negligence of the Internet pharmacy, an 
                        assurance that such a limitation of liability 
                        shall be null and void.
                    ``(B) Identification requirements.--An Internet 
                pharmacy shall provide to any person that accesses the 
                Internet pharmacy website, on each page of the website 
                of the Internet pharmacy or by a link to a separate 
                page, the following information:
                            ``(i) The street address, city, ZIP Code or 
                        comparable mail code, State (or comparable 
                        entity), country, and telephone number of--
                                    ``(I) each place of business of the 
                                Internet pharmacy; and
                                    ``(II) the name of the supervising 
                                pharmacist of the Internet pharmacy and 
                                each individual who serves as a 
                                pharmacist for purposes of the Internet 
                                pharmacy website.
                            ``(ii) The names of all States or 
                        countries, as appropriate, in which the 
                        Internet pharmacy and the pharmacists employed 
                        by the Internet pharmacy are licensed or 
                        otherwise authorized to dispense prescription 
                        drugs.
                            ``(iii) If the Internet pharmacy makes 
                        referrals to, or solicits on behalf of, a 
                        health care practitioner or group of 
                        practitioners in the United States for 
                        prescription services--
                                    ``(I) the name, street address, 
                                city, ZIP Code or comparable mail code, 
                                State, and telephone number of the 
                                practitioner or group; and
                                    ``(II) the name of each State in 
                                which each practitioner is licensed or 
                                otherwise authorized to prescribe 
                                drugs.
                            ``(iv) A statement that the Internet 
                        pharmacy will dispense prescription drugs only 
                        after receipt of a valid prescription.
                    ``(C) Professional services requirements.--An 
                Internet pharmacy shall carry out the following:
                            ``(i) Maintain patient medication profiles 
                        and other related data in a readily accessible 
                        format organized to facilitate consultation 
                        with treating providers, caregivers, and 
                        patients.
                            ``(ii) Conduct prospective drug use reviews 
                        before dispensing medications or medical 
                        devices.
                            ``(iii) Ensure patient confidentiality and 
                        the protection of patient identity and patient-
                        specific information, in accordance with the 
                        regulations promulgated under section 264(c) of 
                        the Health Insurance Portability and 
                        Accountability Act of 1996 (42 U.S.C. 1320d-2 
                        note).
                            ``(iv) Offer interactive and meaningful 
                        consultation by a licensed pharmacist to the 
                        caregiver or patient prior to and subsequent to 
                        the time at which the Internet pharmacy 
                        dispenses the drug.
                            ``(v)(I) Establish a mechanism for patients 
                        to report errors and suspected adverse drug 
                        reactions.
                            ``(II) Document in the reporting mechanism 
                        the response of the Internet pharmacy to those 
                        reports.
                            ``(vi) Develop a system to inform 
                        caregivers and patients about drug recalls.
                            ``(vii) Educate caregivers and patients 
                        about the appropriate means of disposing of 
                        expired, damaged, or unusable medications.
                            ``(viii) Assure that the sale of a 
                        prescription drug is in accordance with a 
                        prescription from the treating provider of the 
                        individual.
                            ``(ix)(I) Verify the validity of the 
                        prescription of an individual by using 1 of the 
                        following methods:
                                    ``(aa) Receiving from the 
                                individual or treating provider of the 
                                individual the prescription of the 
                                individual by mail (including a private 
                                carrier), or receiving from the 
                                treating provider of the individual the 
                                prescription of the individual by 
                                electronic mail.
                                    ``(bb) If the prescription is for a 
                                controlled substance (as defined in 
                                section 102 of the Controlled 
                                Substances Act (21 U.S.C. 802)), 
                                confirming with the treating provider 
                                the information in subclause (II).
                            ``(II) When seeking verification of a 
                        prescription of an individual under subclause 
                        (I)(bb), an Internet pharmacy shall provide to 
                        the treating provider the following 
                        information:
                                    ``(aa) The full name and address of 
                                the individual.
                                    ``(bb) Identification of the 
                                prescription drug.
                                    ``(cc) The quantity of the 
                                prescription drug to be dispensed.
                                    ``(dd) The date on which the 
                                individual presented the prescription 
                                to the Internet pharmacy.
                                    ``(ee) The date and time of the 
                                verification request.
                                    ``(ff) The name of a contact person 
                                at the Internet pharmacy, including a 
                                voice telephone number, electronic mail 
                                address, and facsimile telephone 
                                number.
                            ``(III) A prescription is verified under 
                        subclause (I)(bb) only if 1 of the following 
                        occurs:
                                    ``(aa) The treating provider 
                                confirms, by direct communication with 
                                the Internet pharmacy, that the 
                                prescription is accurate.
                                    ``(bb) The treating provider 
                                informs the Internet pharmacy that the 
                                prescription is inaccurate and provides 
                                the accurate prescription.
                            ``(IV) An Internet pharmacy shall not fill 
                        a prescription if--
                                    ``(aa) a treating provider informs 
                                the Internet pharmacy within 72 hours 
                                after receipt of a communication under 
                                subclause (I)(bb) that the prescription 
                                is inaccurate or expired; or
                                    ``(bb) the treating provider does 
                                not respond within that time.
                            ``(x) Maintain, for such period of time as 
                        the Secretary shall prescribe by regulation, a 
                        record of all direct communications with a 
                        treating provider regarding the dispensing of a 
                        prescription drug, including verification of 
                        the prescription.
            ``(3) Licensure procedure.--
                    ``(A) Action by secretary.--On receipt of a 
                completed licensing application under paragraph (2), 
                the Secretary shall--
                            ``(i) assign an identification number to 
                        each Internet pharmacy;
                            ``(ii) notify the applicant of the receipt 
                        of the licensure application; and
                            ``(iii) not later than 60 days after 
                        receipt of the licensure application, issue a 
                        license if the Internet pharmacy is in 
                        compliance with conditions under paragraph (3).
                    ``(B) Electronic filing.--
                            ``(i) In general.--For the purpose of 
                        reducing paperwork and reporting burdens, the 
                        Secretary shall require the use of electronic 
                        methods of submitting to the Secretary a 
                        licensure application required under this 
                        section and provide for electronic methods of 
                        receiving the applications.
                            ``(ii) Authentication.--In providing for 
                        the electronic submission of such licensure 
                        applications under this section, the Secretary 
                        shall ensure that adequate authentication 
                        protocols are used to allow identification of 
                        the Internet pharmacy and validation of the 
                        data as appropriate.
            ``(4) List.--
                    ``(A) In general.--The Secretary shall compile, 
                maintain, and periodically update a list of licensees.
                    ``(B) Availability.--The Secretary shall make the 
                list described under subparagraph (A) and information 
                submitted by the licensee under paragraph (2)(B) 
                available to the public on an Internet website and 
                through a toll-free telephone number.
            ``(5) Termination of license.--The Secretary, upon the 
        initiative of the Secretary, may terminate a license issued 
        under subsection (c), after notice to the Internet pharmacy and 
        an opportunity for a hearing, and if the Secretary determines 
        that an Internet pharmacy--
                    ``(A) has demonstrated a pattern of noncompliance 
                with this section;
                    ``(B) has made an untrue statement of material fact 
                in its license application; or
                    ``(C) is in violation of any applicable Federal or 
                State law relating to the dispensing of a prescription 
                drug.
            ``(6) Renewal evaluation.--
                    ``(A) In general.--Before renewing a license of an 
                Internet pharmacy under this subsection pursuant to the 
                submission of a renewal application, the Secretary 
                shall conduct an evaluation to determine whether the 
                Internet pharmacy is in compliance with this section.
                    ``(B) Evaluation.--At the discretion of the 
                Secretary and as applicable, an evaluation under 
                subparagraph (A) may include testing of the Internet 
                pharmacy website or other systems through which the 
                Internet pharmacy communicates with consumers, and a 
                physical inspection of the records and premises of the 
                pharmacy.
            ``(7) Contract for operation of program.--
                    ``(A) In general.--The Secretary may award a 
                contract under this subsection for the operation of the 
                licensing program.
                    ``(B) Term.--The duration of a contract under 
                subparagraph (A) shall not exceed 5 years and may be 
                renewable.
                    ``(C) Performance review.--The Secretary shall 
                annually review performance under a contract under 
                subparagraph (A).
    ``(d) Providers of Interactive Computer Services or Advertising 
Services.--A provider of interactive computer services (as defined in 
section 230(f) of the Communications Act of 1934 (47 U.S.C. 230(f))) or 
an advertising service provider shall be liable under this section for 
dispensing or selling prescription drugs in violation of this section 
on account of another person's selling or dispensing of a prescription 
drug if the provider of the service--
            ``(1) accepts advertising for a prescription drug from an 
        Internet pharmacy that is not licensed in accordance with this 
        section; or
            ``(2) accepts advertising stating that an individual does 
        not need a physician's prescription to obtain a prescription 
        drug.
    ``(e) Reports Regarding Internet-Related Violations of Federal and 
State Laws on Dispensing of Drugs.--The Secretary shall, pursuant to 
the submission of an application meeting criteria prescribed by the 
Secretary, make an award of a grant or contract to an entity with 
experience in developing and maintaining systems for the purpose of--
            ``(1) identifying Internet pharmacy websites that are not 
        licensed in accordance with this section or that appear to be 
        operating in violation of Federal or State laws concerning the 
        dispensing of drugs;
            ``(2) reporting such Internet pharmacy websites to State 
        medical licensing boards and State pharmacy licensing boards, 
        and to the Attorney General and the Secretary, for further 
        investigation; and
            ``(3) submitting, for each fiscal year for which the award 
        under this subsection is made, a report to the Secretary 
        describing investigations undertaken with respect to violations 
        described in paragraph (1).''.
    (b) Prohibited Acts.--Section 301 of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 331), as amended by section 8(a) of this Act, 
is amended by adding at the end the following:
    ``(kk) The sale of a prescription drug, or the ownership or 
operation of an Internet pharmacy, in violation of section 503B.
    ``(ll) The representation by advertisement, sales presentation, 
direct communication (including telephone, facsimile, or electronic 
mail), or otherwise by an Internet pharmacy, that a prescription drug 
may be obtained from the Internet pharmacy without a prescription, in 
violation of section 503B.
    ``(mm) The acceptance of an advertisement from an Internet pharmacy 
by the provider of an interactive computer service, unless the provider 
has on file a copy of the license issued to the Internet pharmacy under 
section 503B.''.
    (c) Injunctive Proceedings; Links to Illegal Internet Pharmacies.--
Section 302 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 332) 
is amended by adding at the end the following:
    ``(c)(1) In the case of a violation of section 503B relating to an 
illegal Internet pharmacy, the district courts of the United States and 
the United States courts of the territories shall have jurisdiction to 
order a provider of an interactive computer service to remove, or 
disable access to, an Internet website violating that section that 
resides on a computer server that the provider controls or operates.
    ``(2) Relief under paragraph (1)--
            ``(A) shall be available only after provision to the 
        provider of notice and an opportunity to appear;
            ``(B) shall not impose any obligation on the provider to 
        monitor its service or to affirmatively seek facts indicating 
        activity violating section 503B; and
            ``(C) shall specify the provider to which the relief 
        applies.''.
    (d) Importation; Return to Sender.--Section 801 of the Federal 
Food, Drug, and Cosmetic Act (21 U.S.C. 381), as amended by section 
7(b) of this Act, is amended by adding at the end the following:
    ``(q) Unlicensed Internet Pharmacy.--If an Internet pharmacy is not 
licensed by the Secretary in accordance with section 503B, any shipment 
of a prescription drug from such an Internet pharmacy to an individual 
shall be refused admission into the United States and the Secretary 
shall return the prescription drug, other than a prescription drug that 
is required to be destroyed, to the Internet pharmacy at the expense of 
the Internet pharmacy.
    ``(r) Licensed Internet Pharmacy.--If a shipment of a prescription 
drug from an Internet pharmacy licensed by the Secretary in accordance 
with section 503B to an individual is refused admission into the United 
States, the Secretary shall--
            ``(1) return the prescription drug, other than a 
        prescription drug that is required to be destroyed, to the 
        Internet pharmacy at the expense of the Internet pharmacy; and
            ``(2) provide the individual and the Internet pharmacy with 
        a written notice that informs the individual and the Internet 
        pharmacy of the refusal and of the reason for the refusal.''.
    (e) Regulations.--With respect to section 503B of the Federal Food, 
Drug, and Cosmetic Act (as added by subsection (a) of this section):
            (1) Not later than one year after the date of the enactment 
        of this Act, the Secretary of Health and Human Services shall 
        promulgate interim final regulations that are consistent with 
        the Verified Internet Pharmacy Sites certification program 
        developed by the National Association of Boards of Pharmacy to 
        carry out the amendments made by this section.
            (2) The requirement of licensure under such section 503B 
        takes effect on the date determined by the Secretary of Health 
        and Human Services, but in no event later than 90 days after 
        the effective date of the interim final regulations under 
        paragraph (1).
            (3) Section 801(q) of such Act (as added by subsection (d) 
        of this section) takes effect on the effective date that 
        applies under paragraph (2) of this subsection.
            (4) For purposes of section 813 of such Act (as added by 
        section 4 of this Act), an Internet pharmacy located in Canada 
        is deemed to be licensed under such section 503B pending the 
        effective date that applies under paragraph (2) of this 
        subsection.

SEC. 10. CHAIN OF CUSTODY OF PRESCRIPTION DRUGS; NETWORK FOR 
              NOTIFICATIONS REGARDING COUNTERFEIT DRUGS.

    (a) Electronic Track and Trace Technology; Network for 
Notifications Regarding Counterfeit Drugs.--
            (1) Electronic track and trace technology.--Not later than 
        December 31, 2007, the Secretary of Health and Human Services 
        shall require the adoption and use of electronic track and 
        trace technology for a prescription drug at the case and pallet 
        level that will identify each sale, purchase, or trade of that 
        case or pallet (including the date of transmission and the 
        names and addresses of all parties to the transaction).
            (2) Network for notifications regarding counterfeit 
        drugs.--Section 503(e) of the Federal Food, Drug, and Cosmetic 
        Act (21 U.S.C. 353(e)) is amended by adding at the end the 
        following:
    ``(4) The Secretary shall--
            ``(A) establish a network for the purpose of providing 
        prompt notification to health professionals and the public of 
        counterfeit drugs subject to subsection (b);
            ``(B)(i) develop and publish an Internet accessible-
        reference document to facilitate the positive identification by 
        health professionals and regulatory agency personnel of 
        prescription drugs marketed in the United States and Canada; 
        and
            ``(ii) update the materials described under clause (i) 
        quarterly and when a new permitted country is designated by the 
        Secretary;
            ``(C) develop and publish educational materials to health 
        professionals and consumers identify and report cases of 
        counterfeit drugs subject to subsection (b);
            ``(D) develop and publish secure business practice 
        guidelines for the sale and distribution of such drugs in 
        cooperation with members of a drug supply chain; and
            ``(E) in cooperation with the National Association of 
        Boards of Pharmacy, develop and publish revised model rules for 
        licensure of drug wholesalers for adoption by the States.''.
            (3) Authorization of appropriations.--For the purpose of 
        carrying out this subsection and the amendments made by this 
        subsection, there are authorized to be appropriated such sums 
        as may be necessary for each fiscal year, in addition to other 
        authorizations of appropriations that are available for such 
        purpose.
    (b) Required Records.--Section 503(e) of the Federal Food, Drug, 
and Cosmetic Act (21 U.S.C. 353(e)) is amended by striking 
``(e)(1)(A)'' and all that follows through the end of paragraph (1) and 
inserting the following:
    ``(e)(1) A distributor of record that is engaged in the wholesale 
distribution of a drug subject to subsection (b) shall--
            ``(A) before each wholesale distribution of the drug--
                    ``(i) with respect to each wholesale distribution 
                of a drug subject to subsection (b), provide the person 
                that receives the drug a statement that identifies the 
                immediately previous distributor of record from which 
                the drug was purchased; and
                    ``(ii) with respect to a drug subject to subsection 
                (b) that is imported to the United States, provide the 
                person that receives the drug a statement (in such form 
                and containing such information as the Secretary may 
                require) identifying each prior sale, purchase, or 
                trade of the drug (including the date of transmission 
                and the names and addresses of all parties to the 
                transaction); and
            ``(B) create, maintain for 2 years, and make available to 
        the Secretary for inspection at reasonable time, records that--
                    ``(i) with respect to each wholesale distribution 
                of a drug subject to subsection (b), identifies--
                            ``(I) the immediately previous distributor 
                        of record from which the drug was purchased; 
                        and
                            ``(II) the immediately subsequent 
                        distributor of record to which the drug was 
                        sold or otherwise transferred; and
                    ``(ii) with respect to a drug subject to subsection 
                (b) that is imported to the United States, identifies--
                            ``(I) each previous distributor of record 
                        from which the drug was purchased or otherwise 
                        transferred; and
                            ``(II) each subsequent distributor of 
                        record to which the drug was sold or otherwise 
                        transferred, to the extent feasible.''.
    (c) Distributors of Record.--Section 503(e) of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 353(e)) is amended by striking 
paragraph (3) and inserting the following:
    ``(3) For the purposes of this subsection and subsection (d)--
            ``(A) the term `distributor of record'--
                    ``(i) means a person that takes title to or 
                possession of a drug subject to subsection (b) from 
                manufacture to retail sale;
                    ``(ii) includes a person that manufacturers, 
                processes, packs, distributes, receives, holds, 
                imports, or offers for importation a drug subject to 
                subsection (b); and
                    ``(iii) does not include a transporter;
            ``(B) the term `transporter' means the United States Postal 
        Service, or equivalent governmental service of a foreign 
        country, or a private carrier engaged in the business of 
        transporting packages for hire; and
            ``(C) the term `wholesale distribution' means the 
        distribution of a drug subject to subsection (b) to other than 
        the consumer or patient but not including an intracompany sale 
        or distribution of a drug described in subsection (c)(3)(B).''.
                                 <all>
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