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[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 663 Introduced in House (IH)]

108th CONGRESS
  1st Session
                                H. R. 663

 To amend title IX of the Public Health Service Act to provide for the 
  improvement of patient safety and to reduce the incidence of events 
     that adversely affect patient safety, and for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                           February 11, 2003

Mr. Bilirakis (for himself, Mr. Brown of Ohio, Mr. Tauzin, Mr. Dingell, 
Mr. Barton of Texas, Mr. Waxman, Mr. Upton, Mr. Markey, Mr. Greenwood, 
   Mr. Towns, Mr. Burr, Mr. Pallone, Mr. Whitfield, Mr. Gordon, Mr. 
Norwood, Mr. Deutsch, Mr. Terry, Mr. Rush, Mr. Rogers of Michigan, Mr. 
Engel, Mr. Wynn, Ms. McCarthy of Missouri, Mr. Strickland, Mrs. Capps, 
  Mr. John, and Ms. Harman) introduced the following bill; which was 
            referred to the Committee on Energy and Commerce

_______________________________________________________________________

                                 A BILL

 
 To amend title IX of the Public Health Service Act to provide for the 
  improvement of patient safety and to reduce the incidence of events 
     that adversely affect patient safety, 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.

    This Act may be cited as the ``Patient Safety and Quality 
Improvement Act''.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--The Congress finds as follows:
            (1) In 1999, the Institute of Medicine released a report 
        entitled ``To Err Is Human'' that described medical errors as 
        the 8th leading cause of death in the United States, with as 
        many as 98,000 people dying as a result of medical errors each 
        year.
            (2) To address these deaths and injuries due to medical 
        errors, the health care system must identify and learn from 
        such errors so that systems of care can be improved.
            (3) Myriad public and private patient safety initiatives 
        have begun. The Quality Interagency Coordination Task Force has 
        recommended steps to improve patient safety that may be taken 
        by each Federal agency involved in health care and activities 
        relating to these steps are ongoing.
            (4) The Department of Health and Human Services has 
        initiated several patient safety projects. The Joint Commission 
        on Accreditation of Healthcare Organizations issued a patient 
        safety standard that went into effect on July 1, 2001, and the 
        peer review organizations are conducting ongoing studies of 
        clinical performance measurement of care delivered to 
        beneficiaries under the medicare program under title XVIII of 
        the Social Security Act.
            (5) Several steps can be taken now to improve patient 
        safety. For example, according to the Centers for Disease 
        Control and Prevention, hand washing is the single most 
        important means of preventing the spread of infection. Repeated 
        studies indicate that lack of or improper hand washing still 
        contributes significantly to disease transmission in health 
        care settings. Working with experts from the private sector, 
        the Centers for Disease Control and Prevention has drafted 
        ``Guidelines for Hand Hygiene in Healthcare Settings'' setting 
        forth recommendations to promote improved hand hygiene 
        practices and reduce transmission of pathogenic microorganisms 
        to patients and personnel in health care settings.
            (6) According to the Centers for Disease Control and 
        Prevention, nosocomial infections affect approximately 2 
        million patients annually in acute care facilities in the 
        United States at an estimated direct patient care cost of 
        approximately $3.5 billion each year.
            (7) The Congress encourages the continuation and 
        acceleration of private sector efforts to take immediate steps 
        to improve patient safety and recognizes the need for action in 
        the public sector to complement these efforts.
            (8) The research on patient safety unequivocally calls for 
        a learning environment, where providers will feel safe to 
        report health care errors, in order to improve patient safety.
            (9) Voluntary data gathering systems are more supportive 
        than mandatory systems in creating the learning environment 
        referred to in paragraph (8) as stated in the Institute of 
        Medicine's report.
            (10) Promising patient safety reporting systems have been 
        established throughout the United States, and the best ways to 
        structure and use these systems are currently being determined, 
        largely through projects funded by the Agency for Healthcare 
        Research and Quality.
            (11) Many organizations currently collecting patient safety 
        information have expressed a need for protections that will 
        allow them to review protected information so that they may 
        collaborate in the development and implementation of patient 
        safety improvement strategies. Currently, the State peer review 
        protections provide inadequate conditions to allow the sharing 
        of information to promote patient safety.
            (12) In 2001, the Institute of Medicine released a report 
        entitled ``Crossing the Quality Chasm'' that found that the 
        United States health care system does not consistently deliver 
        high-quality care to patients.
    (b) Purposes.--The purposes of this Act are--
            (1) to encourage a culture of safety and quality in the 
        United States health care system by providing for a health care 
        errors reporting system that both protects information and 
        improves patient safety and quality of health care; and
            (2) to ensure accountability by raising standards and 
        expectations for continuous quality improvements in patient 
        safety through the actions of the Secretary of Health and Human 
        Services.

SEC. 3. AMENDMENTS TO PUBLIC HEALTH SERVICE ACT.

    (a) In General.--Title IX of the Public Health Service Act (42 
U.S.C. 299 et seq.) is amended--
            (1) in section 912(c), by inserting ``, in accordance with 
        part C,'' after ``The Director shall'';
            (2) by redesignating part C as part D;
            (3) by redesignating sections 921 through 928, as sections 
        931 through 938, respectively;
            (4) in section 938(1) (as so redesignated), by striking 
        ``921'' and inserting ``931''; and
            (5) by inserting after part B the following:

                  ``PART C--PATIENT SAFETY IMPROVEMENT

``SEC. 921. DEFINITIONS.

    ``In this part:
            ``(1) Identifiable information.--The term `identifiable 
        information' means information that is presented in a form and 
        manner that allows the identification of any provider, patient, 
        or reporter of patient safety work product. With respect to 
        patients, such information includes any individually 
        identifiable health information as that term is defined in the 
        regulations promulgated pursuant to section 264(c) of the 
        Health Insurance Portability and Accountability Act of 1996 
        (Public Law 104-191; 110 Stat. 2033).
            ``(2) Nonidentifiable information.--The term 
        `nonidentifiable information' means information that is 
        presented in a form and manner that prevents the identification 
        of any provider, patient, or reporter of patient safety work 
        product. With respect to patients, such information must be de-
        identified consistent with the regulations promulgated pursuant 
        to section 264(c) of the Health Insurance Portability and 
        Accountability Act of 1996 (Public Law 104-191; 110 Stat. 
        2033).
            ``(3) Patient safety evaluation system.--The term `patient 
        safety evaluation system' means a process that involves the 
        collection, management, or analysis of information for 
        submission to or by a patient safety organization.
            ``(4) Patient safety organization.--The term `patient 
        safety organization' means a private or public organization or 
        component thereof that is certified, through a process to be 
        determined by the Secretary under section 925, to perform each 
        of the following activities:
                    ``(A) The conduct, as the organization or 
                component's primary activity, of efforts to improve 
                patient safety and the quality of health care delivery.
                    ``(B) The collection and analysis of patient safety 
                work product that is submitted by providers.
                    ``(C) The development and dissemination of 
                evidence-based information to providers with respect to 
                improving patient safety, such as recommendations, 
                protocols, or information regarding best practices.
                    ``(D) The utilization of patient safety work 
                product to carry out activities limited to those 
                described under this paragraph and for the purposes of 
                encouraging a culture of safety and of providing direct 
                feedback and assistance to providers to effectively 
                minimize patient risk.
                    ``(E) The maintenance of confidentiality with 
                respect to identifiable information.
                    ``(F) The provision of appropriate security 
                measures with respect to patient safety work product.
                    ``(G) The submission of nonidentifiable information 
                to the Agency consistent with standards established by 
                the Secretary under section 923(b) for any National 
                Patient Safety Database.
            ``(5) Patient safety work product.--
                    ``(A) The term `patient safety work product' means 
                any document or communication (including any 
                information, report, record, memorandum, analysis, 
                deliberative work, statement, or root cause analysis) 
                that--
                            ``(i) except as provided in subparagraph 
                        (B), is developed by a provider for the purpose 
                        of reporting to a patient safety organization, 
                        and is reported to a patient safety 
                        organization;
                            ``(ii) is created by a patient safety 
                        organization; or
                            ``(iii) would reveal the deliberations or 
                        analytic process of a patient safety evaluation 
                        system (as defined in paragraph (3)).
                    ``(B)(i) Patient safety work product described in 
                subparagraph (A)(i)--
                            ``(I) does not include any separate 
                        information described in clause (ii); and
                            ``(II) shall not be construed to include 
                        such separate information merely by reason of 
                        inclusion of a copy of the document or 
                        communication involved in a submission to, or 
                        the fact of submission of such a copy to, a 
                        patient safety organization.
                    ``(ii) Separate information described in this 
                clause is a document or communication (including a 
                patient's medical record or any other patient or 
                hospital record) that is developed or maintained, or 
                exists, separately from any patient safety evaluation 
                system.
                    ``(C) Information available from sources other than 
                a patient safety work product under this section may be 
                discovered or admitted in a civil or administrative 
                proceeding, if discoverable or admissible under 
                applicable law.
            ``(6) Provider.--The term `provider' means--
                    ``(A) an individual or entity licensed or otherwise 
                authorized under State law to provide health care 
                services, including--
                            ``(i) a hospital, nursing facility, 
                        comprehensive outpatient rehabilitation 
                        facility, home health agency, and hospice 
                        program;
                            ``(ii) a physician, physician assistant, 
                        nurse practitioner, clinical nurse specialist, 
                        certified nurse midwife, psychologist, 
                        certified social worker, registered dietitian 
                        or nutrition professional, physical or 
                        occupational therapist, or other individual 
                        health care practitioner;
                            ``(iii) a pharmacist; and
                            ``(iv) a renal dialysis facility, 
                        ambulatory surgical center, pharmacy, physician 
                        or health care practitioner's office, long-term 
                        care facility, behavioral health residential 
                        treatment facility, clinical laboratory, or 
                        community health center; or
                    ``(B) any other person or entity specified in 
                regulations by the Secretary after public notice and 
                comment.

``SEC. 922. PRIVILEGE FOR PATIENT SAFETY WORK PRODUCT.

    ``(a) Privilege.--Notwithstanding any other provision of law and 
subject to subsection (c), patient safety work product shall not be--
            ``(1) subject to a civil or administrative subpoena or 
        order;
            ``(2) subject to discovery in connection with a civil or 
        administrative proceeding;
            ``(3) subject to disclosure pursuant to section 552 of 
        title 5, United States Code (commonly known as the Freedom of 
        Information Act), or any other similar Federal or State law;
            ``(4) required to be admitted as evidence or otherwise 
        disclosed in any State or Federal civil or administrative 
        proceeding; or
            ``(5) if the patient safety work product is identifiable 
        information and is received by a national accreditation 
        organization in its capacity as a patient safety organization--
                    ``(A) used by a national accreditation organization 
                in an accreditation action against the provider that 
                reported the information;
                    ``(B) shared by such organization with its survey 
                team; or
                    ``(C) required as a condition of accreditation by a 
                national accreditation association.
    ``(b) Reporter Protection.--
            ``(1) In general.--A provider may not use against an 
        individual in an adverse employment action described in 
        paragraph (2) the fact that the individual in good faith 
        reported information--
                    ``(A) to the provider with the intention of having 
                the information reported to a patient safety 
                organization; or
                    ``(B) directly to a patient safety organization.
            ``(2) Adverse employment action.--For purposes of this 
        subsection, an `adverse employment action' includes--
                    ``(A) the failure to promote an individual or 
                provide any other employment-related benefit for which 
                the individual would otherwise be eligible;
                    ``(B) an adverse evaluation or decision made in 
                relation to accreditation, certification, 
                credentialing, or licensing of the individual; and
                    ``(C) a personnel action that is adverse to the 
                individual concerned.
            ``(3) Remedies.--Any provider that violates this subsection 
        shall be subject to a civil monetary penalty of not more than 
        $20,000 for each such violation involved. Such penalty shall be 
        imposed and collected in the same manner as civil money 
        penalties under subsection (a) of section 1128A of the Social 
        Security Act are imposed and collected.
    ``(c) Disclosures.--Nothing in this section prohibits any of the 
following disclosures:
            ``(1) Voluntary disclosure of nonidentifiable information.
            ``(2) Voluntary disclosure of identifiable information by a 
        provider or patient safety organization, if such disclosure--
                    ``(A) is authorized by the provider for the 
                purposes of improving quality and safety;
                    ``(B) is to an entity or person subject to the 
                requirements of section 264(c) of the Health Insurance 
                Portability and Accountability Act of 1996 (Public Law 
                104-191; 110 Stat. 2033), or any regulation promulgated 
                under such section; and
                    ``(C) is not in conflict with such section or any 
                regulation promulgated under such section.
            ``(3) Disclosure as required by law by a provider to the 
        Food and Drug Administration, or on a voluntary basis by a 
        provider to a federally established patient safety program, 
        with respect to an Administration-regulated product or activity 
        for which that entity has responsibility, for the purposes of 
        activities related to the quality, safety, or effectiveness of 
        such Administration-regulated product or activity.
            ``(4) Disclosures of patient safety work product in 
        accordance with this part by a provider to a patient safety 
        organization.
    ``(d) Effect of Transfer, Disclosure.--The following shall not be 
treated as a waiver of any privilege or protection established under 
this part:
            ``(1) The transfer of any patient safety work product 
        between a provider and a patient safety organization.
            ``(2) Disclosure of patient safety work product as 
        described in subsection (c).
            ``(3) The unauthorized disclosure of patient safety work 
        product.
    ``(e) Penalty.--
            ``(1) Prohibition.--Except as provided in this part, and 
        subject to paragraphs (2) and (4), it shall be unlawful for any 
        person to disclose patient safety work product in violation of 
        this section, if such disclosure constitutes a negligent or 
        knowing breach of confidentiality.
            ``(2) Relation to HIPAA.--The penalty under paragraph (3) 
        for a disclosure in violation of paragraph (1) does not apply 
        if the person would be subject to a penalty under section 
        264(c) of the Health Insurance Portability and Accountability 
        Act of 1996 (Public Law 104-191; 110 Stat. 2033), or any 
        regulation promulgated under such section, for the same 
        disclosure.
            ``(3) Amount.--Any person who violates paragraph (1) shall 
        be subject to a civil monetary penalty of not more than $10,000 
        for each such violation involved. Such penalty shall be imposed 
        and collected in the same manner as civil money penalties under 
        subsection (a) of section 1128A of the Social Security Act are 
        imposed and collected.
            ``(4) Subsequent disclosure.--Paragraph (1) applies only to 
        the first person that breaches confidentiality with respect to 
        particular patient safety work product.
    ``(f) Relation to HIPAA.--
            ``(1) In general.--For purposes of applying the regulations 
        promulgated pursuant to section 264(c) of the Health Insurance 
Portability and Accountability Act of 1996 (Public Law 104-191; 110 
Stat. 2033)--
                    ``(A) patient safety organizations shall be treated 
                as business associates; and
                    ``(B) activities of such organizations described in 
                section 921(4) in relation to a provider are deemed to 
                be health care operations (as defined in such 
                regulations) of the provider.
            ``(2) Rule of construction.--Nothing in this section shall 
        be construed to alter or affect the implementation of such 
        regulations or such section 264(c).
    ``(g) No Limitation of Other Privileges.--Nothing in this section 
shall be construed to affect privileges, including peer review and 
confidentiality protections, that are otherwise available under Federal 
or State laws.
    ``(h) No Limitation on Contracts.--Nothing in this section shall be 
construed to limit the power of a provider and a patient safety 
organization, or a patient safety organization and the Agency or any 
National Patient Safety Database, consistent with the provisions of 
this Act and other applicable law, to enter into a contract requiring 
greater confidentiality or delegating authority to make an authorized 
disclosure.
    ``(i) Relation to State Reporting Requirements.--Nothing in this 
part shall be construed as preempting or otherwise affecting any State 
law requiring a provider to report information, including information 
described in section 921(5)(B), that is not patient safety work 
product.
    ``(j) Continuation of Privilege.--Patient safety work product of an 
organization that is certified as a patient safety organization shall 
continue to be privileged and confidential, in accordance with this 
section, if the organization's certification is terminated or revoked 
or if the organization otherwise ceases to qualify as a patient safety 
organization.
    ``(k) Reports on Strategies To Improve Patient Safety.--
            ``(1) Draft report.--Not later than the date that is 18 
        months after any National Patient Safety Database is 
        operational, the Secretary, in consultation with the Director, 
        shall prepare a draft report on effective strategies for 
        reducing medical errors and increasing patient safety. The 
        draft report shall include any measure determined appropriate 
        by the Secretary to encourage the appropriate use of such 
        strategies, including use in any federally funded programs. The 
        Secretary shall make the draft report available for public 
        comment and submit the draft report to the Institute of 
        Medicine for review.
            ``(2) Final report.--Not later than 1 year after the date 
        described in paragraph (1), the Secretary shall submit a final 
        report to the Congress that includes, in an appendix, any 
        findings by the Institute of Medicine concerning research on 
        the strategies discussed in the draft report and any 
        modifications made by the Secretary based on such findings.

``SEC. 923. NATIONAL DATABASE.

    ``(a) Authority.--
            ``(1) In general.--In conducting activities under this 
        part, the Secretary shall provide for the establishment and 
        maintenance of a database to receive relevant nonidentifiable 
        patient safety work product, and may designate entities to 
        collect relevant nonidentifiable patient safety work product 
        that is voluntarily reported by patient safety organizations 
        upon the request of the Secretary. Any database established or 
        designated under this paragraph may be referred to as a 
        `National Patient Safety Database'.
            ``(2) Use of information.--Information reported to any 
        National Patient Safety Database shall be used to analyze 
        national and regional statistics, including trends and patterns 
        of health care errors. The information resulting from such 
        analyses may be included in the annual quality reports prepared 
        under section 913(b)(2).
            ``(3) Advisory role.--The Secretary shall provide 
        scientific support to patient safety organizations, including 
        the dissemination of methodologies and evidence-based 
        information related to root causes and quality improvement.
    ``(b) Standards.--In establishing or designating a database under 
subsection (a)(1), the Secretary shall, in consultation with 
representatives of patient safety organizations, the provider 
community, and the health information technology industry, determine 
common formats for the voluntary reporting of nonidentifiable patient 
safety work product, including necessary elements, common and 
consistent definitions, and a standardized computer interface for the 
processing of the work product. To the extent practicable, such 
standards shall be consistent with the administrative simplification 
provisions of part C of title XI of the Social Security Act.
    ``(c) Certain Methodologies for Collection.--The Secretary shall 
ensure that the methodologies for the collection of nonidentifiable 
patient safety work product for any National Patient Safety Database 
include the methodologies developed or recommended by the Patient 
Safety Task Force of the Department of Health and Human Services.
    ``(d) Facilitation of Information Exchange.--To the extent 
practicable, the Secretary may facilitate the direct link of 
information between providers and patient safety organizations and 
between patient safety organizations and any National Patient Safety 
Database.
    ``(e) Restriction on Transfer.--Only nonidentifiable information 
may be transferred to any National Patient Safety Database.

``SEC. 924. TECHNICAL ASSISTANCE.

    ``(a) In General.--The Secretary, acting through the Director, 
may--
            ``(1) provide technical assistance to patient safety 
        organizations, and to States with reporting systems for health 
        care errors; and
            ``(2) provide guidance on the type of data to be 
        voluntarily submitted to any National Patient Safety Database.
    ``(b) Annual Meetings.--Assistance provided under subsection (a) 
may include annual meetings for patient safety organizations to discuss 
methodology, communication, information collection, or privacy 
concerns.

``SEC. 925. CERTIFICATION OF PATIENT SAFETY ORGANIZATIONS.

    ``(a) In General.--Not later than 6 months after the date of 
enactment of the Patient Safety and Quality Improvement Act, the 
Secretary shall establish a process for certifying patient safety 
organizations.
    ``(b) Process.--The process established under subsection (a) shall 
include the following:
            ``(1) Certification of patient safety organizations by the 
        Secretary or by such other national or State governmental 
        organizations as the Secretary determines appropriate.
            ``(2) If the Secretary allows other governmental 
        organizations to certify patient safety organizations under 
        paragraph (1), the Secretary shall establish a process for 
        approving such organizations. Any such approved organization 
        shall conduct certifications and reviews in accordance with 
        this section.
            ``(3) A review of each certification under paragraph (1) 
        (including a review of compliance with each criterion in this 
        section and any related implementing standards as determined by 
        the Secretary through rulemaking) not less often than every 3 
        years, as determined by the Secretary.
            ``(4) Revocation of any such certification by the Secretary 
        or other such governmental organization that issued the 
        certification, upon a showing of cause.
    ``(c) Criteria.--A patient safety organization must meet the 
following criteria as conditions of certification:
            ``(1) The mission of the patient safety organization is to 
        conduct activities that are to improve patient safety and the 
        quality of health care delivery and is not in conflict of 
        interest with the providers that contract with the patient 
        safety organization.
            ``(2) The patient safety organization has appropriately 
        qualified staff, including licensed or certified medical 
        professionals.
            ``(3) The patient safety organization, within any 2 year 
        period, contracts with more than 1 provider for the purpose of 
        receiving and reviewing patient safety work product.
            ``(4) The patient safety organization is not a component of 
        a health insurer or other entity that offers a group health 
        plan or health insurance coverage.
            ``(5) The patient safety organization is managed, 
        controlled, and operated independently from any provider that 
        contracts with the patient safety organization for reporting 
        patient safety work product.
            ``(6) To the extent practical and appropriate, the patient 
        safety organization collects patient safety work product from 
        providers in a standardized manner that permits valid 
        comparisons of similar cases among similar providers.
    ``(d) Additional Criteria for Component Organizations.--If a 
patient safety organization is a component of another organization, the 
patient safety organization must, in addition to meeting the criteria 
described in subsection (c), meet the following criteria as conditions 
of certification:
            ``(1) The patient safety organization maintains patient 
        safety work product separately from the rest of the 
        organization, and establishes appropriate security measures to 
        maintain the confidentiality of the patient safety work 
        product.
            ``(2) The patient safety organization does not make an 
        unauthorized disclosure under this Act of patient safety work 
        product to the rest of the organization in breach of 
        confidentiality.
            ``(3) The mission of the patient safety organization does 
        not create a conflict of interest with the rest of the 
        organization.''.
    (b) Authorization of Appropriations.--Section 937 of the Public 
Health Service Act (as redesignated by subsection (a)) is amended by 
adding at the end the following:
    ``(e) Patient Safety and Quality Improvement.--For the purpose of 
carrying out part C, there are authorized to be appropriated such sums 
as may be necessary for each of the fiscal years 2004 through 2013.''.

SEC. 4. PROMOTING THE DIFFUSION AND INTEROPERABILITY OF INFORMATION 
              TECHNOLOGY SYSTEMS INVOLVED WITH HEALTH CARE DELIVERY.

    (a) Voluntary Standards.--
            (1) In general.--Not later than 18 months after the date of 
        the enactment of this Act, the Secretary of Health and Human 
        Services (in this section referred to as the ``Secretary'') 
        shall--
                    (A) develop or adopt voluntary national standards 
                that promote the interoperability of information 
                technology systems involved with health care delivery, 
                including but not limited to computerized physician 
                order entry;
                    (B) in developing or adopting such standards, take 
                into account--
                            (i) the ability of such systems to capture 
                        and aggregate clinically specific data to 
                        enable evidence-based medicine and other 
                        applications that promote the electronic 
                        exchange of patient medical record information; 
                        and
                            (ii) the cost that meeting such standards 
                        would have on providing health care in the 
                        United States and the increased efficiencies in 
                        providing such care achieved under the 
                        standards;
                    (C) in developing or adopting such standards and to 
                the extent practicable, test the efficacy, usability, 
                and scalability of proposed interoperability standards 
                within a variety of clinical settings, including an 
                urban academic medical center, a rural hospital, a 
                community health center, and a community hospital; and
                    (D) submit a report to the Congress containing 
                recommendations on such standards.
            (2) Consultation.--In developing or adopting standards 
        under paragraph (1)(A), the Secretary shall consider the 
        recommendations of the National Committee on Vital Health 
Statistics for the standardization of message formatting, coding, and 
vocabulary for interoperability of information technology systems 
involved with health care delivery. The Secretary shall consult with 
representatives of the health information technology industry and the 
provider community who are involved with the development of 
interoperability standards.
    (b) Updates.--The Secretary shall provide for the ongoing review 
and periodic updating of the standards developed under subsection (a).

SEC. 5. REQUIRED USE OF PRODUCT IDENTIFICATION TECHNOLOGY.

    The Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.) is 
amended--
            (1) in section 502, by adding at the end the following:
    ``(w) If it is a drug or biological product, unless it includes a 
unique product identifier for the drug or biological product as 
required by regulations under section 510(q).''; and
            (2) in section 510, by adding at the end the following:
    ``(q)(1) The Secretary shall issue, and may periodically revise, 
regulations requiring the manufacturer of any drug or biological 
product that is subject to regulation by the Food and Drug 
Administration, or the packager or labeler of a drug or biological 
product that is subject to regulation by the Food and Drug 
Administration, to include a unique product identifier on the packaging 
of the drug or biological product.
    ``(2) For purposes of this subsection, the term `unique product 
identifier' means an identification that--
            ``(A) is affixed by the manufacturer, labeler, or packager 
        to each drug or biological product described in paragraph (1) 
        at each packaging level;
            ``(B) uniquely identifies the item and meets the standards 
        required by this section; and
            ``(C) can be read by a scanning device or other technology 
        acceptable to the Secretary.
    ``(3) A unique product identifier required by regulations issued or 
revised under paragraph (1) shall be based on--
            ``(A) the National Drug Code maintained by the Food and 
        Drug Administration;
            ``(B) commercially accepted standards established by 
        organizations that are accredited by the American National 
        Standards Institute, such as the Health Industry Business 
        Communication Council or the Uniform Code Council; or
            ``(C) other identification formats that the Secretary deems 
        appropriate.
    ``(4) The Secretary may, at the Secretary's discretion, waive the 
requirements of this section, or add additional provisions that are 
necessary to safeguard the public health.''.
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