I 

112TH CONGRESS 

1ST SESSION H. R. 3026 

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

of drugs. 

IN THE HOUSE OF REPRESENTATIVES 

SEPTEMBER 22, 2011 

Mr. MATHESON (for himself and Mr. BILBRAY) 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 

improve the safety of drugs. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Safeguarding Amer5 ica’s Pharmaceuticals Act of 2011’’. 

6 SEC. 2. TABLE OF CONTENTS. 

7 The table of contents of this Act is as follows: 

Sec. 1. Short title. 

Sec. 2. Table of contents. 

Sec. 3. Destruction of counterfeit drugs offered for import. 

Sec. 4. Interim provisions to assure the safety of the wholesale distribution of 

prescription drugs. 

Sec. 5. Unique standardized numerical identifiers for each prescription drug. 

Sec. 6. Prescription drug identification and tracking system. 


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Sec. 7. Uniform national standards. 

Sec. 8. Requirements for licensure of wholesale distributors. 

Sec. 9. Injunctions; civil penalties. 

Sec. 10. State enforcement of Federal requirements. 

Sec. 11. Study on threats to domestic prescription drug supply chain. 

1 SEC. 3. DESTRUCTION OF COUNTERFEIT DRUGS OFFERED 

2 FOR IMPORT. 

3 Section 801(a) of the Federal Food, Drug, and Cos4 metic Act (21 U.S.C. 381(a)) is amended— 

5 (1) in the third sentence— 

6 (A) by striking ‘‘or (2) such’’ and inserting 

7 ‘‘(2) such’’; and 

8 (B) by striking ‘‘or (3) such’’ and inserting 

9 ‘‘(3) such’’; and 

10 (C) by striking ‘‘or (4) such’’ and inserting 

11 ‘‘(4) such’’; and 

12 (D) by inserting ‘‘or (5) such article is a 

13 counterfeit drug,’’ before ‘‘then such article 

14 shall be refused admission’’; and 

15 (2) in the last sentence, by striking ‘‘Clause (2) 

16 of the third sentence of this paragraph’’ and insert17 ing ‘‘Notwithstanding the preceding sentence, the 

18 Secretary of the Treasury shall cause the destruction 

19 of any such article refused admission if (1) the arti20 cle is a drug, the article appears to be adulterated, 

21 misbranded, or in violation of section 505, and the 

22 article has a value less than $2,000 or such amount 

23 as the Secretary of Health and Human Services may 


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1 determine by regulation; or (2) the article appears to 

2 be a counterfeit drug. Before causing the destruction 

3 of an article with a value greater than $2,000 under 

4 the preceding sentence, the Secretary shall provide 

5 notice and an opportunity for an informal hearing to 

6 the owner or consignee. The Secretary of Health and 

7 Human Services shall retain a sample of any prod8 uct destroyed under the seventh sentence of this 

9 subsection and shall investigate any counterfeit 

10 products so destroyed. Clause (2) of the third sen11 tence of this subsection’’. 

12 SEC. 4. INTERIM PROVISIONS TO ASSURE THE SAFETY OF 

13 THE WHOLESALE DISTRIBUTION OF PRE14 SCRIPTION DRUGS. 

15 (a) IN GENERAL.—Subsection (e) of section 503 of 

16 the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 

17 353) is amended— 

18 (1) by striking ‘‘(e)(1)(A)’’ and all that follows 

19 through the end of paragraph (1) and inserting the 

20 following: 

21 ‘‘(e) REGULATION OF WHOLESALE DISTRIBUTORS

22 OF PRESCRIPTION DRUGS.—’’; 

23 (2) by striking paragraph (3); 


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1 (3) by redesignating paragraph (2) as para2 graph (4) and moving the margin of such paragraph 

3 2 ems to the right; and 

4 (4) by inserting before paragraph (4), as so re5 designated by paragraph (3) of this subsection, the 

6 following: 

7 ‘‘(1) INTERIM PROVISIONS.— 

8 ‘‘(A) DEFINITIONS.—Except as otherwise 

9 provided, for purposes of this subsection— 

10 ‘‘(i) for purposes of this paragraph 

11 and subsection (d) only, the term ‘author12 ized distributor of record’ with respect to 

13 a prescription drug means a wholesale dis14 tributor that has a written agreement for 

15 such drug currently in effect with the 

16 drug’s manufacturer (as defined in clause 

17 (iv)(I) or (II)) to distribute such drug; 

18 ‘‘(ii) the term ‘co-licensed partner’ 

19 means one of two or more persons who has 

20 the right to engage in the manufacturing 

21 or marketing of a prescription drug; 

22 ‘‘(iii) the term ‘dispenser’ means a re23 tail pharmacy, hospital pharmacy, or any 

24 other person authorized by law to dispense 

25 or administer prescription drugs; 


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1 ‘‘(iv) for purposes of this paragraph 

2 and subsection (d) only, the term ‘manu3 facturer’ means, with respect to a prescrip4 tion drug— 

5 ‘‘(I) the person that holds the ap6 plication approved under section 505 

7 or the license issued under section 

8 351 of the Public Health Service Act 

9 for the drug, or if the drug is not the 

10 subject of an approved application or 

11 license, the person identified on the 

12 original label of the drug as the man13 ufacturer, distributor, or both; 

14 ‘‘(II) a co-licensed partner of the 

15 person identified in subclause (I) that 

16 obtains the drug directly from the 

17 person identified in subclause (I) or 

18 (III); 

19 ‘‘(III) a person that manufac20 tures the prescription drug for the 

21 person identified in subclause (I) or 

22 (II); 

23 ‘‘(IV) a third-party logistics pro24 vider operating on behalf of the per25 son identified in subclause (I) or (II) 


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1 that obtains the drug directly from 

2 the person identified in subclause (I), 

3 (II), or (III); or 

4 ‘‘(V) the exclusive distributor of 

5 the person identified in subclause (I) 

6 or (II) that obtains the drug directly 

7 from the person identified in sub8 clause (I), (II), or (III); 

9 ‘‘(v) the term ‘exclusive distributor’ 

10 means any person who contracts with an11 other person to provide or coordinate 

12 warehousing, distribution, or other services 

13 on behalf of such person and who takes 

14 title to that person’s prescription drug, but 

15 who does not have general responsibility to 

16 direct the sale or disposition of that per17 son’s prescription drug; 

18 ‘‘(vi) the term ‘prescription drug’ 

19 means a drug subject to subsection (b); 

20 ‘‘(vii) the term ‘third party logistics 

21 provider’ means a person that, by agree22 ment with another person, is responsible 

23 for providing or coordinating distribution, 

24 warehousing, and related services with re25 spect to a prescription drug on behalf of 


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1 that person, but that does not take title to 

2 such drug and does not have general re3 sponsibility to direct the sale or distribu4 tion of the prescription drug; 

5 ‘‘(viii) for purposes of subsection (d) 

6 and this subsection, the term ‘wholesale 

7 distribution’ means the sale, purchase, 

8 trade, or delivery of a prescription drug be9 tween and within any State, but does not 

10 include— 

11 ‘‘(I) intracompany sales, pur12 chases, trades, or transfers of any 

13 prescription drug between members of 

14 an affiliated group (as that term is 

15 defined in section 1504 of the Inter16 nal Revenue Code); 

17 ‘‘(II) the purchase or other ac18 quisition by a hospital or other health 

19 care entity that is a member of a 

20 group purchasing organization of a 

21 drug for its own use from the group 

22 purchasing organization or from other 

23 hospitals or health care entities that 

24 are members of such organizations; 


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1 ‘‘(III) the sale, purchase, or 

2 trade of a drug or an offer to sell, 

3 purchase, or trade a drug by a chari4 table organization to a nonprofit affil5 iate of the organization to the extent 

6 otherwise permitted by law; 

7 ‘‘(IV) the sale, purchase, or trade 

8 of a drug or an offer to sell, purchase, 

9 or trade a drug among hospitals or 

10 other health care entities that are 

11 under common control; 

12 ‘‘(V) the sale, purchase, or trade 

13 of a drug or an offer to sell, purchase, 

14 or trade a drug for emergency medical 

15 reasons; 

16 ‘‘(VI) the sale, purchase, or trade 

17 of a drug, an offer to sell, purchase, 

18 or trade a drug, or the dispensing of 

19 a drug under a prescription executed 

20 in accordance with subsection (b); 

21 ‘‘(VII) the distribution of drug 

22 samples by a manufacturer’s rep23 resentative or an authorized dis24 tributor of record’s representative; 


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1 ‘‘(VIII) the sale, purchase, or 

2 trade of blood or blood components in3 tended for transfusion; 

4 ‘‘(IX) drug returns, when con5 ducted by a dispenser or wholesale 

6 distributor in accordance with the re7 quirements of subparagraph (D); 

8 ‘‘(X) the sale of minimal quan9 tities of drugs by retail pharmacies to 

10 licensed practitioners for office use; or 

11 ‘‘(XI) the sale, purchase, or trade 

12 of prescription drugs when such drugs 

13 are contained in sealed medical or 

14 surgical kits that have been assembled 

15 in a facility registered with the Food 

16 and Drug Administration as a device 

17 manufacturer under section 510(c) 

18 and such drug was purchased by the 

19 kit assembler directly from the manu20 facturer of such drug; and 

21 ‘‘(ix) the term ‘wholesale distributor’ 

22 means any person engaged in wholesale 

23 distribution, except a common carrier. 

24 ‘‘(B) MANUFACTURER PACKING LIST.— 

25 The manufacturer of a prescription drug shall 


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1 provide to each wholesale distributor or dis2 penser to whom it delivers such drug a packing 

3 list or comparable document, in paper or elec4 tronic form, that identifies the proprietary and 

5 established names of the drug, the National 

6 Drug Code number of the drug, the strength of 

7 the drug, the container size of the drug, the 

8 number of containers of the drug, the lot num9 ber or numbers of the drug, the date of the 

10 transaction, and the names and addresses of 

11 the manufacturer and the person to whom the 

12 drug is being delivered. 

13 ‘‘(C) STATEMENT OF DISTRIBUTION HIS14 TORY.—Each person engaged in wholesale dis15 tribution of a prescription drug (except a manu16 facturer that is engaged in the wholesale dis17 tribution of a prescription drug, or a wholesale 

18 distributor on whose behalf a manufacturer de19 livers a prescription drug directly to a dis20 penser) shall provide to each wholesale dis21 tributor or dispenser to whom such person de22 livers such a drug before, or at the time of, 

23 each wholesale distribution, one of the fol24 lowing: 

25 ‘‘(i) DIRECT PURCHASE PEDIGREE.— 


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1 ‘‘(I) If the person providing the 

2 statement is an authorized distributor 

3 of record for such drug and purchased 

4 such drug directly from the manufac5 turer, a statement on the invoice, 

6 whether in paper or electronic form, 

7 stating that such person is an author8 ized distributor of record for such 

9 drug; and such person purchased the 

10 specific unit of the prescription drug 

11 directly from the manufacturer. 

12 ‘‘(II) If the person providing the 

13 statement is a member of the affili14 ated group (as that term is defined in 

15 section 1504 of the Internal Revenue 

16 Code) of an authorized distributor of 

17 record that purchased such drug di18 rectly from the manufacturer, and 

19 such person obtained such drug from 

20 such authorized distributor of record 

21 directly or by means of one or more 

22 transactions involving only members 

23 of such affiliated group, a statement 

24 on the invoice, whether in paper or 

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1 thorized distributor of record; stating 

2 that such person is a member of the 

3 affiliated group (as that term is de4 fined in section 1504 of the Internal 

5 Revenue Code) of such authorized dis6 tributor of record; and stating that 

7 such authorized distributor of record 

8 purchased the specific unit of the pre9 scription drug directly from the manu10 facturer. 

11 ‘‘(ii) STANDARD PEDIGREE.—For all 

12 situations not described in clause (i), a 

13 statement, whether in paper or electronic 

14 form, identifying each wholesale distribu15 tion of such drug, back to the authorized 

16 distributor of record for such drug or a 

17 member of the affiliated group (as that 

18 term is defined in section 1504 of the In19 ternal Revenue Code) of such authorized 

20 distributor of record that provided one of 

21 the statements described in clause (i), or, 

22 if there is no such authorized distributor of 

23 record, back to the manufacturer of such 

24 drug, and including the following: 


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1 ‘‘(I) The proprietary and estab2 lished names of the drug. 

3 ‘‘(II) The drug’s National Drug 

4 Code number. 

5 ‘‘(III) Strength. 

6 ‘‘(IV) Container size. 

7 ‘‘(V) Number of containers. 

8 ‘‘(VI) The drug’s lot or control 

9 number or numbers. 

10 ‘‘(VII) The business name and 

11 address of all parties to each prior 

12 transaction involving the drug, start13 ing with the authorized distributor of 

14 record who provided the original 

15 statement of distribution history re16 quired under clause (i) or, if there is 

17 no such authorized distributor of 

18 record, back to the manufacturer of 

19 such drug. 

20 ‘‘(VIII) The date of each pre21 vious transaction involving such drug, 

22 back to the authorized distributor of 

23 record who provided the original 

24 statement of distribution history re25 quired under clause (i) or, if there is 


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1 no such authorized distributor of 

2 record, back to the manufacturer of 

3 such drug. 

4 ‘‘(D) RETURNS.— 

5 ‘‘(i) IN GENERAL.—Subject to the 

6 succeeding provisions of this subparagraph, 

7 a wholesale distributor or dispenser may 

8 return prescription drugs to a wholesale 

9 distributor, manufacturer, or a person act10 ing on behalf of the wholesale distributor 

11 or the manufacturer. 

12 ‘‘(ii) DRUGS.—Any return of a drug 

13 to a distributor, manufacturer, or other 

14 person under clause (i) shall be docu15 mented on the same pedigree as the trans16 action that resulted in the receipt of the 

17 drug by the wholesale distributor or dis18 penser returning it. 

19 ‘‘(iii) EXCEPTION.—Clause (i) shall 

20 not apply to the sale or transfer from a re21 tail pharmacy, mail order pharmacy, or 

22 non-wholesaling pharmacy warehouse of 

23 expired, damaged, returned, or recalled 

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1 turer, the originating wholesaler, or to a 

2 third party returns processor. 

3 ‘‘(iv) TERMS AND CONDITIONS.—A 

4 wholesaler or manufacturer shall receive 

5 prescription drug returns from a pharmacy 

6 or other person authorized to administer or 

7 dispense drugs or non-wholesaling phar8 macy warehouse pursuant to the terms and 

9 condition of the agreement between the 

10 wholesaler or manufacturer and the phar11 macy or non-wholesaling pharmacy ware12 house. Returns of expired, damaged, re13 called, or otherwise non-saleable pharma14 ceutical products shall be distributed by 

15 the receiving wholesaler only to either the 

16 original manufacturer or a third party re17 turns processor. Returns of prescription 

18 drugs, saleable or otherwise, shall not be 

19 subject to clause (ii) so long as they are 

20 also exempt from the pedigree requirement 

21 of the most current applicable prescription 

22 drug marketing guidance of the Food and 

23 Drug Administration. Both licensees under 

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1 scription drugs shall be accountable for ad2 ministering their returns process and en3 suring that the aspects of this operation 

4 are secure and do not permit the entry of 

5 unadulterated, counterfeit, or misbranded 

6 product into the prescription drug supply 

7 chain. 

8 ‘‘(E) LIST OF AUTHORIZED DISTRIBUTORS

9 OF RECORD.—Each manufacturer described in 

10 subclause (I) or (II) of subparagraph (A)(iv) of 

11 a prescription drug shall— 

12 ‘‘(i) maintain a list of the authorized 

13 distributors of record of such drug at its 

14 corporate offices; 

15 ‘‘(ii) make such list publicly available, 

16 including placement on its Internet 

17 website; and 

18 ‘‘(iii) update such list not less than 

19 once a month. 

20 ‘‘(F) APPLICABILITY.—The requirements 

21 of this paragraph shall not apply with respect 

22 to any prescription drug that is subject to a re23 quirement under paragraph (3) for an effective 

24 drug identification and tracking system based 

25 on standardized numerical identifiers.’’. 


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1 (b) EFFECTIVE DATE.—The amendments made by 

2 subsection (a) shall take effect 180 days after the date 

3 of enactment of this Act. 

4 SEC. 5. UNIQUE STANDARDIZED NUMERICAL IDENTIFIERS 

5 FOR EACH PRESCRIPTION DRUG. 

6 (a) IN GENERAL.—Subsection (e) of section 503 of 

7 the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 

8 353), as amended by section 4, is amended by inserting 

9 after paragraph (1) the following: 

10 ‘‘(2) STANDARDIZED DRUG IDENTIFIERS.— 

11 ‘‘(A) ANNOUNCEMENT OF DEVELOPMENT

12 OF STANDARDIZED NUMERICAL IDENTIFIER.— 

13 Not later than March 27, 2012, the Secretary 

14 shall announce the development of a standard15 ized numerical identifier under section 

16 505D(b)(2) by means of a notice published in 

17 the Federal Register. 

18 ‘‘(B) REQUIREMENT.— 

19 ‘‘(i) IN GENERAL.—Except as pro20 vided in subparagraph (C), each manufac21 turer or repackager of a prescription drug 

22 shall apply in accordance with this sub23 paragraph a standardized numerical identi24 fier that is unique to each unit (namely, a 


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1 package from which the drug may be re2 packaged or dispensed) of the drug— 

3 ‘‘(I) to at least 50 percent of its 

4 drugs not later than January 1, 2015; 

5 and 

6 ‘‘(II) to all of its drugs not later 

7 than January 1, 2016. 

8 ‘‘(ii) APPLICATION OF IDENTIFIER.— 

9 The identifier shall be applied by the man10 ufacturer or repackager (in which case the 

11 serialized number shall be linked to the nu12 merical identifiers applied by the manufac13 turer). Each manufacturer shall notify the 

14 Food and Drug Administration of the seri15 alized drugs and the measures used in des16 ignating its drugs to be serialized and shall 

17 include in the notification the technology 

18 to be used for the standardized numerical 

19 identifier. 

20 ‘‘(iii) METHODOLOGY FOR APPLYING

21 50 PERCENT TEST.—The manufacturer or 

22 repackager shall elect, and notify the Sec23 retary, of which of the following 3 methods 

24 the manufacturer or repackager will use 


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1 for applying the 50 percent requirement of 

2 clause (i)(I): 

3 ‘‘(I) Unit volume. 

4 ‘‘(II) Product package (SKU) 

5 type. 

6 ‘‘(III) Drug product family. 

7 ‘‘(C) EXCEPTION.—The requirement of 

8 subparagraph (B) shall not apply to the fol9 lowing classes of prescription drugs: 

10 ‘‘(i) Radioactive drugs or radioactive 

11 biological products (as defined in section 

12 600.3(ee) of title 21, Code of Federal Reg13 ulations) which are regulated by the Nu14 clear Regulatory Commission. 

15 ‘‘(ii) Intravenous products used to 

16 maintain the equilibrium of water and min17 erals in the body. 

18 ‘‘(iii) Drugs that are placed in a 

19 sealed package with a medical device or 

20 medical supplies at the point of first ship21 ment into commerce by the manufacturer 

22 if— 

23 ‘‘(I) the package remains sealed 

24 until the drug or device is used; and 


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1 ‘‘(II) the drugs and the device or 

2 supplies are used only for surgical 

3 purposes. 

4 ‘‘(iv) Products that are intended for 

5 irrigation or reconstitution, as well as ster6 ile water, whether intended for those pur7 poses or for injection. 

8 ‘‘(v) Intravenous products that, by 

9 their formulation, are intended for the re10 plenishment of fluids and electrolytes, such 

11 as sodium, chloride, and potassium, cal12 ories, such as dextrose and amino acids, or 

13 both. 

14 ‘‘(D) SECRETARIAL WAIVER AUTHORITY IN

15 CASE OF PUBLIC HEALTH EMERGENCIES.—The 

16 Secretary of Health and Human Services may 

17 waive the application of the requirement of sub18 paragraph (B) in the case of a public health 

19 emergency.’’. 

20 (b) VALIDATION.—Paragraph (2) of section 505D(b) 

21 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 

22 355e) is amended by striking ‘‘validation,’’. 


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1 SEC. 6. PRESCRIPTION DRUG IDENTIFICATION AND TRACK2 ING SYSTEM. 

3 Subsection (e) of section 503 of the Federal Food, 

4 Drug, and Cosmetic Act (21 U.S.C. 353), as amended by 

5 section 5, is amended by inserting after paragraph (2) the 

6 following: 

7 ‘‘(3) EFFECTIVE DRUG IDENTIFICATION AND

8 TRACKING SYSTEM.— 

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

10 issue regulations to establish an effective drug 

11 identification and tracking system through 

12 which drug manufacturers, repackagers, whole13 sale distributors, and dispensers may authen14 ticate the wholesale distribution history of any 

15 prescription drug that is subject to a require16 ment for a standardized numerical identifier 

17 under paragraph (2). 

18 ‘‘(B) CONTENT OF REGULATIONS.—The 

19 regulations under subparagraph (A) shall— 

20 ‘‘(i) establish standards for electroni21 cally accessible and interoperable databases 

22 through which drug manufacturers, re23 packagers, wholesale distributors, and dis24 pensers may authenticate the wholesale 

25 distribution history of prescription drugs 

26 using the numerical identifiers required 


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1 under paragraph (2), while maintaining 

2 the proprietary information of each entity; 

3 ‘‘(ii) require the manufacturer or re4 packager of a prescription drug to apply 

5 such numerical identifier in at least 1 

6 standardized form that is electronically 

7 readable; 

8 ‘‘(iii) require the repackager of a pre9 scription drug to link electronically within 

10 such databases the numerical identifier ap11 plied to the drug by the repackager to the 

12 numerical identifiers applied to the drug 

13 by the manufacturer or previous repack14 ager; 

15 ‘‘(iv) require each person that receives 

16 a prescription drug in wholesale distribu17 tion to authenticate the transaction history 

18 of the drug by authenticating the numer19 ical identifier with the appropriate data20 base; 

21 ‘‘(v) require protections to ensure pa22 tient privacy, in compliance with the regu23 lations promulgated under section 264(c) 

24 of the Health Insurance Portability and 

25 Accountability Act of 1996; and 


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1 ‘‘(vi) define the circumstances under 

2 which participants in the pharmaceutical 

3 supply chain may infer the contents of a 

4 case, pallet, or other aggregate of indi5 vidual units, packages, or containers of 

6 drugs, from a unique identifier associated 

7 with the case, pallet, or other aggregate, 

8 without opening each case, pallet, or other 

9 aggregate or otherwise individually authen10 ticating each unit. 

11 ‘‘(C) ISSUANCE OF REGULATIONS.— 

12 ‘‘(i) TIMING.—The Secretary shall 

13 issue proposed regulations under subpara14 graph (A) not later than 18 months after 

15 the date of the enactment of this para16 graph. In determining such regulations, 

17 the Secretary shall provide sufficient time 

18 for inventory conversion across the supply 

19 chain. 

20 ‘‘(ii) REQUIREMENTS.—With regard 

21 to any drug, the regulations under sub22 paragraph (A) shall be required for— 

23 ‘‘(I) any wholesaler or repackager 

24 beginning on July 1, 2016; and 


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1 ‘‘(II) for any pharmacy beginning 

2 on July 1, 2017. 

3 ‘‘(D) EXCEPTION.—The tracking system 

4 under subparagraph (A) shall not apply to 

5 drugs that are transferred between Federal, 

6 State, or local governments which are author7 ized by Federal law to distribute such drugs. 

8 ‘‘(E) PRESIDENTIAL WAIVER AUTHORITY

9 IN CASE OF PUBLIC HEALTH EMERGENCIES.— 

10 The President may waive the application of the 

11 tracking system under subparagraph (A) in the 

12 case of a public health emergency.’’. 

13 SEC. 7. UNIFORM NATIONAL STANDARDS. 

14 Subsection (e) of section 503 of the Federal Food, 

15 Drug, and Cosmetic Act (21 U.S.C. 353), as amended by 

16 sections 4, 5, and 6 of this Act, is amended by adding 

17 at the end the following: 

18 ‘‘(5) UNIFORM NATIONAL STANDARDS.—Effec19 tive 180 days after the date of enactment of the 

20 Safeguarding America’s Pharmaceuticals Act of 

21 2011, no State or political subdivision of a State 

22 may establish or continue in effect any requirement 

23 with respect to statements of distribution history, 

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1 ing systems for prescription drugs that is different 

2 from, or in addition to, any requirement under this 

3 subsection.’’. 

4 SEC. 8. REQUIREMENTS FOR LICENSURE OF WHOLESALE 

5 DISTRIBUTORS. 

6 (a) REQUIREMENTS.—Section 503(e)(4) of the Fed7 eral Food, Drug, and Cosmetic Act, as so redesignated 

8 by section 4(a)(3) of this Act is amended— 

9 (1) in subparagraph (B), by striking the second 

10 sentence and inserting the following: ‘‘Such guide11 lines shall prescribe requirements for— 

12 ‘‘(i) the storage and handling of such drugs; 

13 ‘‘(ii) the establishment and maintenance of 

14 records of the distributions of such drugs; 

15 ‘‘(iii) the payment to the State of a bond or 

16 other equivalent means of security in an amount 

17 deemed appropriate by the State; 

18 ‘‘(iv) the conduct of mandatory background 

19 checks and fingerprinting of facility manager and 

20 his or her designated representative; 

21 ‘‘(v) the establishment and implementation of 

22 qualifications for key personnel; and 

23 ‘‘(vi) in accordance with subparagraph (D), the 

24 prohibition of certain persons from receiving or 


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1 maintaining licensure for wholesale distribution.’’; 

2 and 

3 (2) by adding at the end the following: 

4 ‘‘(C) The guidelines under subparagraph (B) shall in5 clude requirements to prohibit a person from receiving or 

6 maintaining licensure for wholesale distribution if the per7 son— 

8 ‘‘(i) has been convicted of any felony for con9 duct relating to wholesale distribution, any felony 

10 violation of sections 301(i) or (k) of this Act, or any 

11 felony violation of 18 U.S.C. 1365 involving a drug 

12 or biologic (relating to product tampering); or 

13 ‘‘(ii) the person has engaged in a pattern of vio14 lating the requirements of this section, or State re15 quirements for licensure, that presents a threat of 

16 serious adverse health consequences or death to hu17 mans.’’. 

18 (b) EFFECTIVE DATE.—The Secretary of Health and 

19 Human Services shall by regulation issue the guidelines 

20 required by section 503(e)(4) of the Federal Food, Drug, 

21 and Cosmetic Act, as amended by subsection (a), not later 

22 than 180 days after the date of the enactment of this Act. 

23 Section 503(e)(4) of such Act, as so amended, shall take 

24 effect upon the expiration of 2 years after the date such 

25 regulations are promulgated. 


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1 SEC. 9. INJUNCTIONS; CIVIL PENALTIES. 

2 (a) INJUNCTION PROCEEDINGS.—Subsection (a) of 

3 section 302 of the Federal Food, Drug, and Cosmetic Act 

4 (21 U.S.C. 332) is amended by deleting ‘‘paragraphs (h), 

5 (i), and (j)’’ and inserting ‘‘paragraphs (h) and (j)’’. 

6 (b) CIVIL PENALTY.—Subsection (f) of section 303 

7 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 

8 333) is amended— 

9 (1) by redesignating paragraphs (5) through 

10 (9) as paragraphs (6) through (10), respectively; 

11 (2) by inserting after paragraph (4) the fol12 lowing: 

13 ‘‘(5)(A) Any person who violates paragraph (2) or (3) 

14 of section 301(i) shall be subject to a civil monetary pen15 alty of not more than $50,000 in the case of an individual 

16 and $250,000 in the case of any other person for such 

17 violation, not to exceed $500,000 for all such violations 

18 adjudicated in a single proceeding. 

19 ‘‘(B) A civil monetary penalty under this paragraph 

20 shall be paid to the United States, except that, in a pro21 ceeding brought by a State under section 310(c)(1), 50 

22 percent of a civil monetary penalty under this paragraph 

23 shall be paid to the State. 

24 ‘‘(C) Amounts paid to the United States under this 

25 paragraph shall be— 


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1 ‘‘(i) deposited in the account providing appro2 priations for salaries and expenses of the Food and 

3 Drug Administration; and 

4 ‘‘(ii) subject to the availability of appropria5 tions, used by the Secretary to prevent and address 

6 unlawful counterfeiting and diversion of drugs, in7 cluding through enforcement of paragraphs (2) and 

8 (3) of section 301(i) and investigation of potential 

9 violations of such paragraphs. 

10 ‘‘(D) For fiscal year 2012 and each subsequent fiscal 

11 year, there is authorized to be appropriated to the Sec12 retary for the programs and activities described in sub13 paragraph (C)(ii) an amount equal to the total amount 

14 paid to the United States under this paragraph during the 

15 preceding fiscal year, to remain available until expended.’’; 

16 (3) in paragraph (6), as so redesignated, by 

17 striking the term ‘‘paragraph (1), (2), (3), (4),’’ 

18 each place such term appears and inserting ‘‘para19 graph (1), (2), (3), (4), (5),’’; 

20 (4) in paragraph (7), as so redesignated, by 

21 striking ‘‘paragraph (5)(A)’’ and inserting ‘‘para22 graph (6)(A)’’; and 

23 (5) in paragraph (8), as so redesignated, by 

24 striking the term ‘‘paragraph (6)’’ each place such 

25 term appears and inserting ‘‘paragraph (7)’’. 


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1 SEC. 10. STATE ENFORCEMENT OF FEDERAL REQUIRE2 MENTS. 

3 Section 310 of the Federal Food, Drug, and Cosmetic 

4 Act (21 U.S.C. 337) is amended by adding at the end the 

5 following: 

6 ‘‘(c)(1) A State may bring in its own name and within 

7 its jurisdiction proceedings for the civil enforcement, or 

8 to restrain violations, of paragraph (2) or (3) of section 

9 301(i) or paragraph (1), (2), and (3) of section 503(e) 

10 if the drug or person that is the subject of the proceedings 

11 is located in the State. 

12 ‘‘(2) No proceeding may be commenced by a State 

13 under paragraph (1)— 

14 ‘‘(A) before 30 days after the State has given 

15 written notice to the Secretary that the State in16 tends to bring such proceeding; 

17 ‘‘(B) before 90 days after the State has given 

18 written notice to the Secretary of such intent if the 

19 Secretary has, within such 30 days, commenced an 

20 informal or formal enforcement action pertaining to 

21 the violation which would be the subject of such pro22 ceeding; or 

23 ‘‘(C) if the Secretary is diligently prosecuting a 

24 proceeding in court pertaining to the violation, has 

25 settled such proceeding, or has settled the informal 


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1 or formal enforcement action pertaining to such vio2 lation.’’. 

3 SEC. 11. STUDY ON THREATS TO DOMESTIC PRESCRIPTION 

4 DRUG SUPPLY CHAIN. 

5 (a) IN GENERAL.—Not later than 18 months after 

6 the date of the enactment of the Safeguarding America’s 

7 Pharmaceuticals Act of 2011, the Secretary of Health and 

8 Human Services, in consultation with Federal health and 

9 security agencies including the Department of Homeland 

10 Security and the Department of Justice, shall— 

11 (1) complete a study on threats to the domestic 

12 prescription drug supply chain; and 

13 (2) submit a report to the Congress describing 

14 the results of the study and making recommenda15 tions for improvement. 

16 (b) ISSUES TO BE STUDIED.—The study conducted 

17 under this section shall address the following: 

18 (1) How to improve coordination between the 

19 Food and Drug Administration (including the Office 

20 of Criminal Investigations) and the Department of 

21 Homeland Security including at the Nation’s 12 

22 international mail facilities and express carrier hubs. 

23 (2) Any additional authorities needed by the 

24 Food and Drug Administration and the Department 

25 of Homeland Security in order to ensure misVerDate Mar 15 2010 02:18 Sep 27, 2011 Jkt 099200 PO 00000 Frm 00030 Fmt 6652 Sfmt 6201 E:\BILLS\H3026.IH H3026

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1 branded, adulterated, and counterfeit drugs and 

2 drugs in violation of section 505 are destroyed at the 

3 Nation’s international mail facilities and express car4 rier hubs. 

5 (3) New and emerging technologies to assist 

6 with screening drug imports in a more efficient man7 ner. 

8 (4) The adequacy of the number of personnel 

9 within the Food and Drug Administration and the 

10 Department of Homeland Security and room for 

11 growth and improvement, including the need for ad12 ditional personnel and how such additional personnel 

13 should be employed at the Nation’s international 

14 mail facilities and express carrier hubs. 

15 (5) The potential interface among the Depart16 ment of Homeland Security targeting systems (in17 cluding the Automated Targeting System), the Food 

18 and Drug Administration targeting system (includ19 ing the Oasis System), and express carrier targeting 

20 systems to create a unified system that— 

21 (A) tracks all illegal drug imports arriving 

22 at the Nation’s 12 international mail facilities 

23 and express carrier hubs; and 


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1 (B) provides for consultation by manufac2 turers and other private entities actively in3 volved in tracking counterfeit drug enterprises. 

4 (6) Any additional authorities which the Food 

5 and Drug Administration and the Department of 

6 Homeland Security need to provide greater security 

7 at the Nation’s borders and within the Nation 

8 against counterfeit and unapproved prescription 

9 drugs. 

10 (7) How the Food and Drug Administration 

11 and the Department of Homeland Security can bet12 ter coordinate with the private sector to provide 

13 greater enforcement against counterfeit prescription 

14 drugs. 

15 (8) Statistically significant data calculating the 

16 percentage of drugs entering the Nation, including 

17 those entering through the Nation’s 12 international 

18 mail facilities and express carrier hubs, that are 

19 counterfeit, misbranded, adulterated, or otherwise 

20 inadmissible. 

21 (c) CONSULTATION.—In conducting the study re22 quired by this section, the Secretary of Health and Human 

23 Services, in consultation with the Secretary of Homeland 


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1 Security, shall consult with technology developers, drug 

2 manufacturers, and other interested parties. 

Æ 


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