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[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3026 Introduced in House (IH)]

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.

    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 ``Safeguarding America's 
Pharmaceuticals Act of 2011''.

SEC. 2. TABLE OF CONTENTS.

    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.
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.

SEC. 3. DESTRUCTION OF COUNTERFEIT DRUGS OFFERED FOR IMPORT.

    Section 801(a) of the Federal Food, Drug, and Cosmetic Act (21 
U.S.C. 381(a)) is amended--
            (1) in the third sentence--
                    (A) by striking ``or (2) such'' and inserting ``(2) 
                such''; and
                    (B) by striking ``or (3) such'' and inserting ``(3) 
                such''; and
                    (C) by striking ``or (4) such'' and inserting ``(4) 
                such''; and
                    (D) by inserting `` or (5) such article is a 
                counterfeit drug,'' before ``then such article shall be 
                refused admission''; and
            (2) in the last sentence, by striking ``Clause (2) of the 
        third sentence of this paragraph'' and inserting 
        ``Notwithstanding the preceding sentence, the Secretary of the 
        Treasury shall cause the destruction of any such article 
        refused admission if (1) the article is a drug, the article 
        appears to be adulterated, misbranded, or in violation of 
        section 505, and the article has a value less than $2,000 or 
        such amount as the Secretary of Health and Human Services may 
        determine by regulation; or (2) the article appears to be a 
        counterfeit drug. Before causing the destruction of an article 
        with a value greater than $2,000 under the preceding sentence, 
        the Secretary shall provide notice and an opportunity for an 
        informal hearing to the owner or consignee. The Secretary of 
        Health and Human Services shall retain a sample of any product 
        destroyed under the seventh sentence of this subsection and 
        shall investigate any counterfeit products so destroyed. Clause 
        (2) of the third sentence of this subsection''.

SEC. 4. INTERIM PROVISIONS TO ASSURE THE SAFETY OF THE WHOLESALE 
              DISTRIBUTION OF PRESCRIPTION DRUGS.

    (a) In General.--Subsection (e) of section 503 of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 353) is amended--
            (1) by striking ``(e)(1)(A)'' and all that follows through 
        the end of paragraph (1) and inserting the following:
    ``(e) Regulation of Wholesale Distributors of Prescription Drugs.--
'';
            (2) by striking paragraph (3);
            (3) by redesignating paragraph (2) as paragraph (4) and 
        moving the margin of such paragraph 2 ems to the right; and
            (4) by inserting before paragraph (4), as so redesignated 
        by paragraph (3) of this subsection, the following:
            ``(1) Interim provisions.--
                    ``(A) Definitions.--Except as otherwise provided, 
                for purposes of this subsection--
                            ``(i) for purposes of this paragraph and 
                        subsection (d) only, the term `authorized 
                        distributor of record' with respect to a 
                        prescription drug means a wholesale distributor 
                        that has a written agreement for such drug 
                        currently in effect with the drug's 
                        manufacturer (as defined in clause (iv)(I) or 
                        (II)) to distribute such drug;
                            ``(ii) the term `co-licensed partner' means 
                        one of two or more persons who has the right to 
                        engage in the manufacturing or marketing of a 
                        prescription drug;
                            ``(iii) the term `dispenser' means a retail 
                        pharmacy, hospital pharmacy, or any other 
                        person authorized by law to dispense or 
                        administer prescription drugs;
                            ``(iv) for purposes of this paragraph and 
                        subsection (d) only, the term `manufacturer' 
                        means, with respect to a prescription drug--
                                    ``(I) the person that holds the 
                                application approved under section 505 
                                or the license issued under section 351 
                                of the Public Health Service Act for 
                                the drug, or if the drug is not the 
                                subject of an approved application or 
                                license, the person identified on the 
                                original label of the drug as the 
                                manufacturer, distributor, or both;
                                    ``(II) a co-licensed partner of the 
                                person identified in subclause (I) that 
                                obtains the drug directly from the 
                                person identified in subclause (I) or 
                                (III);
                                    ``(III) a person that manufactures 
                                the prescription drug for the person 
                                identified in subclause (I) or (II);
                                    ``(IV) a third-party logistics 
                                provider operating on behalf of the 
                                person identified in subclause (I) or 
                                (II) that obtains the drug directly 
                                from the person identified in subclause 
                                (I), (II), or (III); or
                                    ``(V) the exclusive distributor of 
                                the person identified in subclause (I) 
                                or (II) that obtains the drug directly 
                                from the person identified in subclause 
                                (I), (II), or (III);
                            ``(v) the term `exclusive distributor' 
                        means any person who contracts with another 
                        person to provide or coordinate warehousing, 
                        distribution, or other services on behalf of 
                        such person and who takes title to that 
                        person's prescription drug, but who does not 
                        have general responsibility to direct the sale 
                        or disposition of that person's prescription 
                        drug;
                            ``(vi) the term `prescription drug' means a 
                        drug subject to subsection (b);
                            ``(vii) the term `third party logistics 
                        provider' means a person that, by agreement 
                        with another person, is responsible for 
                        providing or coordinating distribution, 
                        warehousing, and related services with respect 
                        to a prescription drug on behalf of that 
                        person, but that does not take title to such 
                        drug and does not have general responsibility 
                        to direct the sale or distribution of the 
                        prescription drug;
                            ``(viii) for purposes of subsection (d) and 
                        this subsection, the term `wholesale 
                        distribution' means the sale, purchase, trade, 
                        or delivery of a prescription drug between and 
                        within any State, but does not include--
                                    ``(I) intracompany sales, 
                                purchases, trades, or transfers of any 
                                prescription drug between members of an 
                                affiliated group (as that term is 
                                defined in section 1504 of the Internal 
                                Revenue Code);
                                    ``(II) the purchase or other 
                                acquisition by a hospital or other 
                                health care entity that is a member of 
                                a group purchasing organization of a 
                                drug for its own use from the group 
                                purchasing organization or from other 
                                hospitals or health care entities that 
                                are members of such organizations;
                                    ``(III) the sale, purchase, or 
                                trade of a drug or an offer to sell, 
                                purchase, or trade a drug by a 
                                charitable organization to a nonprofit 
                                affiliate of the organization to the 
                                extent otherwise permitted by law;
                                    ``(IV) the sale, purchase, or trade 
                                of a drug or an offer to sell, 
                                purchase, or trade a drug among 
                                hospitals or other health care entities 
                                that are under common control;
                                    ``(V) the sale, purchase, or trade 
                                of a drug or an offer to sell, 
                                purchase, or trade a drug for emergency 
                                medical reasons;
                                    ``(VI) the sale, purchase, or trade 
                                of a drug, an offer to sell, purchase, 
                                or trade a drug, or the dispensing of a 
                                drug under a prescription executed in 
                                accordance with subsection (b);
                                    ``(VII) the distribution of drug 
                                samples by a manufacturer's 
                                representative or an authorized 
                                distributor of record's representative;
                                    ``(VIII) the sale, purchase, or 
                                trade of blood or blood components 
                                intended for transfusion;
                                    ``(IX) drug returns, when conducted 
                                by a dispenser or wholesale distributor 
                                in accordance with the requirements of 
                                subparagraph (D);
                                    ``(X) the sale of minimal 
                                quantities of drugs by retail 
                                pharmacies to licensed practitioners 
                                for office use; or
                                    ``(XI) the sale, purchase, or trade 
                                of prescription drugs when such drugs 
                                are contained in sealed medical or 
                                surgical kits that have been assembled 
                                in a facility registered with the Food 
                                and Drug Administration as a device 
                                manufacturer under section 510(c) and 
                                such drug was purchased by the kit 
                                assembler directly from the 
                                manufacturer of such drug; and
                            ``(ix) the term `wholesale distributor' 
                        means any person engaged in wholesale 
                        distribution, except a common carrier.
                    ``(B) Manufacturer packing list.--The manufacturer 
                of a prescription drug shall provide to each wholesale 
                distributor or dispenser to whom it delivers such drug 
                a packing list or comparable document, in paper or 
                electronic form, that identifies the proprietary and 
                established names of the drug, the National Drug Code 
                number of the drug, the strength of the drug, the 
                container size of the drug, the number of containers of 
                the drug, the lot number or numbers of the drug, the 
                date of the transaction, and the names and addresses of 
                the manufacturer and the person to whom the drug is 
                being delivered.
                    ``(C) Statement of distribution history.--Each 
                person engaged in wholesale distribution of a 
                prescription drug (except a manufacturer that is 
                engaged in the wholesale distribution of a prescription 
                drug, or a wholesale distributor on whose behalf a 
                manufacturer delivers a prescription drug directly to a 
                dispenser) shall provide to each wholesale distributor 
                or dispenser to whom such person delivers such a drug 
                before, or at the time of, each wholesale distribution, 
                one of the following:
                            ``(i) Direct purchase pedigree.--
                                    ``(I) If the person providing the 
                                statement is an authorized distributor 
                                of record for such drug and purchased 
                                such drug directly from the 
                                manufacturer, a statement on the 
                                invoice, whether in paper or electronic 
                                form, stating that such person is an 
                                authorized distributor of record for 
                                such drug; and such person purchased 
                                the specific unit of the prescription 
                                drug directly from the manufacturer.
                                    ``(II) If the person providing the 
                                statement is a member of the affiliated 
                                group (as that term is defined in 
                                section 1504 of the Internal Revenue 
                                Code) of an authorized distributor of 
                                record that purchased such drug 
                                directly from the manufacturer, and 
                                such person obtained such drug from 
                                such authorized distributor of record 
                                directly or by means of one or more 
                                transactions involving only members of 
                                such affiliated group, a statement on 
                                the invoice, whether in paper or 
                                electronic form, identifying such 
                                authorized distributor of record; 
                                stating that such person is a member of 
                                the affiliated group (as that term is 
                                defined in section 1504 of the Internal 
                                Revenue Code) of such authorized 
                                distributor of record; and stating that 
                                such authorized distributor of record 
                                purchased the specific unit of the 
                                prescription drug directly from the 
                                manufacturer.
                            ``(ii) Standard pedigree.--For all 
                        situations not described in clause (i), a 
                        statement, whether in paper or electronic form, 
                        identifying each wholesale distribution of such 
                        drug, back to the authorized distributor of 
                        record for such drug or a member of the 
                        affiliated group (as that term is defined in 
                        section 1504 of the Internal Revenue Code) of 
                        such authorized distributor of record that 
                        provided one of the statements described in 
                        clause (i), or, if there is no such authorized 
                        distributor of record, back to the manufacturer 
                        of such drug, and including the following:
                                    ``(I) The proprietary and 
                                established names of the drug.
                                    ``(II) The drug's National Drug 
                                Code number.
                                    ``(III) Strength.
                                    ``(IV) Container size.
                                    ``(V) Number of containers.
                                    ``(VI) The drug's lot or control 
                                number or numbers.
                                    ``(VII) The business name and 
                                address of all parties to each prior 
                                transaction involving the drug, 
                                starting with the authorized 
                                distributor of record who provided the 
                                original statement of distribution 
                                history required under clause (i) or, 
                                if there is no such authorized 
                                distributor of record, back to the 
                                manufacturer of such drug.
                                    ``(VIII) The date of each previous 
                                transaction involving such drug, back 
                                to the authorized distributor of record 
                                who provided the original statement of 
                                distribution history required under 
                                clause (i) or, if there is no such 
                                authorized distributor of record, back 
                                to the manufacturer of such drug.
                    ``(D) Returns.--
                            ``(i) In general.--Subject to the 
                        succeeding provisions of this subparagraph, a 
                        wholesale distributor or dispenser may return 
                        prescription drugs to a wholesale distributor, 
                        manufacturer, or a person acting on behalf of 
                        the wholesale distributor or the manufacturer.
                            ``(ii) Drugs.--Any return of a drug to a 
                        distributor, manufacturer, or other person 
                        under clause (i) shall be documented on the 
                        same pedigree as the transaction that resulted 
                        in the receipt of the drug by the wholesale 
                        distributor or dispenser returning it.
                            ``(iii) Exception.--Clause (i) shall not 
                        apply to the sale or transfer from a retail 
                        pharmacy, mail order pharmacy, or non-
                        wholesaling pharmacy warehouse of expired, 
                        damaged, returned, or recalled prescription 
                        drugs to the original manufacturer, the 
                        originating wholesaler, or to a third party 
                        returns processor.
                            ``(iv) Terms and conditions.--A wholesaler 
                        or manufacturer shall receive prescription drug 
                        returns from a pharmacy or other person 
                        authorized to administer or dispense drugs or 
                        non-wholesaling pharmacy warehouse pursuant to 
                        the terms and condition of the agreement 
                        between the wholesaler or manufacturer and the 
                        pharmacy or non-wholesaling pharmacy warehouse. 
                        Returns of expired, damaged, recalled, or 
                        otherwise non-saleable pharmaceutical products 
                        shall be distributed by the receiving 
                        wholesaler only to either the original 
                        manufacturer or a third party returns 
                        processor. Returns of prescription drugs, 
                        saleable or otherwise, shall not be subject to 
                        clause (ii) so long as they are also exempt 
                        from the pedigree requirement of the most 
                        current applicable prescription drug marketing 
                        guidance of the Food and Drug Administration. 
                        Both licensees under this Act and pharmacies or 
                        other persons authorized to administer or 
                        dispense prescription drugs shall be 
                        accountable for administering their returns 
                        process and ensuring that the aspects of this 
                        operation are secure and do not permit the 
                        entry of unadulterated, counterfeit, or 
                        misbranded product into the prescription drug 
                        supply chain.
                    ``(E) List of authorized distributors of record.--
                Each manufacturer described in subclause (I) or (II) of 
                subparagraph (A)(iv) of a prescription drug shall--
                            ``(i) maintain a list of the authorized 
                        distributors of record of such drug at its 
                        corporate offices;
                            ``(ii) make such list publicly available, 
                        including placement on its Internet website; 
                        and
                            ``(iii) update such list not less than once 
                        a month.
                    ``(F) Applicability.--The requirements of this 
                paragraph shall not apply with respect to any 
                prescription drug that is subject to a requirement 
                under paragraph (3) for an effective drug 
                identification and tracking system based on 
                standardized numerical identifiers.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
take effect 180 days after the date of enactment of this Act.

SEC. 5. UNIQUE STANDARDIZED NUMERICAL IDENTIFIERS FOR EACH PRESCRIPTION 
              DRUG.

    (a) In General.--Subsection (e) of section 503 of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 353), as amended by section 4, is 
amended by inserting after paragraph (1) the following:
            ``(2) Standardized drug identifiers.--
                    ``(A) Announcement of development of standardized 
                numerical identifier.--Not later than March 27, 2012, 
                the Secretary shall announce the development of a 
                standardized numerical identifier under section 
                505D(b)(2) by means of a notice published in the 
                Federal Register.
                    ``(B) Requirement.--
                            ``(i) In general.--Except as provided in 
                        subparagraph (C), each manufacturer or 
                        repackager of a prescription drug shall apply 
                        in accordance with this subparagraph a 
                        standardized numerical identifier that is 
                        unique to each unit (namely, a package from 
                        which the drug may be repackaged or dispensed) 
                        of the drug--
                                    ``(I) to at least 50 percent of its 
                                drugs not later than January 1, 2015; 
                                and
                                    ``(II) to all of its drugs not 
                                later than January 1, 2016.
                            ``(ii) Application of identifier.--The 
                        identifier shall be applied by the manufacturer 
                        or repackager (in which case the serialized 
                        number shall be linked to the numerical 
                        identifiers applied by the manufacturer). Each 
                        manufacturer shall notify the Food and Drug 
                        Administration of the serialized drugs and the 
                        measures used in designating its drugs to be 
                        serialized and shall include in the 
                        notification the technology to be used for the 
                        standardized numerical identifier.
                            ``(iii) Methodology for applying 50 percent 
                        test.--The manufacturer or repackager shall 
                        elect, and notify the Secretary, of which of 
                        the following 3 methods the manufacturer or 
                        repackager will use for applying the 50 percent 
                        requirement of clause (i)(I):
                                    ``(I) Unit volume.
                                    ``(II) Product package (SKU) type.
                                    ``(III) Drug product family.
                    ``(C) Exception.--The requirement of subparagraph 
                (B) shall not apply to the following classes of 
                prescription drugs:
                            ``(i) Radioactive drugs or radioactive 
                        biological products (as defined in section 
                        600.3(ee) of title 21, Code of Federal 
                        Regulations) which are regulated by the Nuclear 
                        Regulatory Commission.
                            ``(ii) Intravenous products used to 
                        maintain the equilibrium of water and minerals 
                        in the body.
                            ``(iii) Drugs that are placed in a sealed 
                        package with a medical device or medical 
                        supplies at the point of first shipment into 
                        commerce by the manufacturer if--
                                    ``(I) the package remains sealed 
                                until the drug or device is used; and
                                    ``(II) the drugs and the device or 
                                supplies are used only for surgical 
                                purposes.
                            ``(iv) Products that are intended for 
                        irrigation or reconstitution, as well as 
                        sterile water, whether intended for those 
                        purposes or for injection.
                            ``(v) Intravenous products that, by their 
                        formulation, are intended for the replenishment 
                        of fluids and electrolytes, such as sodium, 
                        chloride, and potassium, calories, such as 
                        dextrose and amino acids, or both.
                    ``(D) Secretarial waiver authority in case of 
                public health emergencies.--The Secretary of Health and 
                Human Services may waive the application of the 
                requirement of subparagraph (B) in the case of a public 
                health emergency.''.
    (b) Validation.--Paragraph (2) of section 505D(b) of the Federal 
Food, Drug, and Cosmetic Act (21 U.S.C. 355e) is amended by striking 
``validation,''.

SEC. 6. PRESCRIPTION DRUG IDENTIFICATION AND TRACKING SYSTEM.

    Subsection (e) of section 503 of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 353), as amended by section 5, is amended by 
inserting after paragraph (2) the following:
            ``(3) Effective drug identification and tracking system.--
                    ``(A) In general.--The Secretary shall issue 
                regulations to establish an effective drug 
                identification and tracking system through which drug 
                manufacturers, repackagers, wholesale distributors, and 
                dispensers may authenticate the wholesale distribution 
                history of any prescription drug that is subject to a 
                requirement for a standardized numerical identifier 
                under paragraph (2).
                    ``(B) Content of regulations.--The regulations 
                under subparagraph (A) shall--
                            ``(i) establish standards for 
                        electronically accessible and interoperable 
                        databases through which drug manufacturers, 
                        repackagers, wholesale distributors, and 
                        dispensers may authenticate the wholesale 
                        distribution history of prescription drugs 
                        using the numerical identifiers required under 
                        paragraph (2), while maintaining the 
                        proprietary information of each entity;
                            ``(ii) require the manufacturer or 
                        repackager of a prescription drug to apply such 
                        numerical identifier in at least 1 standardized 
                        form that is electronically readable;
                            ``(iii) require the repackager of a 
                        prescription drug to link electronically within 
                        such databases the numerical identifier applied 
                        to the drug by the repackager to the numerical 
                        identifiers applied to the drug by the 
                        manufacturer or previous repackager;
                            ``(iv) require each person that receives a 
                        prescription drug in wholesale distribution to 
                        authenticate the transaction history of the 
                        drug by authenticating the numerical identifier 
                        with the appropriate database;
                            ``(v) require protections to ensure patient 
                        privacy, in compliance with the regulations 
                        promulgated under section 264(c) of the Health 
                        Insurance Portability and Accountability Act of 
                        1996; and
                            ``(vi) define the circumstances under which 
                        participants in the pharmaceutical supply chain 
                        may infer the contents of a case, pallet, or 
                        other aggregate of individual units, packages, 
                        or containers of drugs, from a unique 
                        identifier associated with the case, pallet, or 
                        other aggregate, without opening each case, 
                        pallet, or other aggregate or otherwise 
                        individually authenticating each unit.
                    ``(C) Issuance of regulations.--
                            ``(i) Timing.--The Secretary shall issue 
                        proposed regulations under subparagraph (A) not 
                        later than 18 months after the date of the 
                        enactment of this paragraph. In determining 
                        such regulations, the Secretary shall provide 
                        sufficient time for inventory conversion across 
                        the supply chain.
                            ``(ii) Requirements.--With regard to any 
                        drug, the regulations under subparagraph (A) 
                        shall be required for--
                                    ``(I) any wholesaler or repackager 
                                beginning on July 1, 2016; and
                                    ``(II) for any pharmacy beginning 
                                on July 1, 2017.
                    ``(D) Exception.--The tracking system under 
                subparagraph (A) shall not apply to drugs that are 
                transferred between Federal, State, or local 
                governments which are authorized by Federal law to 
                distribute such drugs.
                    ``(E) Presidential waiver authority in case of 
                public health emergencies.--The President may waive the 
                application of the tracking system under subparagraph 
                (A) in the case of a public health emergency.''.

SEC. 7. UNIFORM NATIONAL STANDARDS.

    Subsection (e) of section 503 of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 353), as amended by sections 4, 5, and 6 of 
this Act, is amended by adding at the end the following:
            ``(5) Uniform national standards.--Effective 180 days after 
        the date of enactment of the Safeguarding America's 
        Pharmaceuticals Act of 2011, no State or political subdivision 
        of a State may establish or continue in effect any requirement 
        with respect to statements of distribution history, 
        manufacturer packing lists, unique standardized numerical 
        identifiers, or drug identification and tracking systems for 
        prescription drugs that is different from, or in addition to, 
        any requirement under this subsection.''.

SEC. 8. REQUIREMENTS FOR LICENSURE OF WHOLESALE DISTRIBUTORS.

    (a) Requirements.--Section 503(e)(4) of the Federal Food, Drug, and 
Cosmetic Act, as so redesignated by section 4(a)(3) of this Act is 
amended--
            (1) in subparagraph (B), by striking the second sentence 
        and inserting the following: ``Such guidelines shall prescribe 
        requirements for--
            ``(i) the storage and handling of such drugs;
            ``(ii) the establishment and maintenance of records of the 
        distributions of such drugs;
            ``(iii) the payment to the State of a bond or other 
        equivalent means of security in an amount deemed appropriate by 
        the State;
            ``(iv) the conduct of mandatory background checks and 
        fingerprinting of facility manager and his or her designated 
        representative;
            ``(v) the establishment and implementation of 
        qualifications for key personnel; and
            ``(vi) in accordance with subparagraph (D), the prohibition 
        of certain persons from receiving or maintaining licensure for 
        wholesale distribution.''; and
            (2) by adding at the end the following:
    ``(C) The guidelines under subparagraph (B) shall include 
requirements to prohibit a person from receiving or maintaining 
licensure for wholesale distribution if the person--
            ``(i) has been convicted of any felony for conduct relating 
        to wholesale distribution, any felony violation of sections 
        301(i) or (k) of this Act, or any felony violation of 18 U.S.C. 
        1365 involving a drug or biologic (relating to product 
        tampering); or
            ``(ii) the person has engaged in a pattern of violating the 
        requirements of this section, or State requirements for 
        licensure, that presents a threat of serious adverse health 
        consequences or death to humans.''.
    (b) Effective Date.--The Secretary of Health and Human Services 
shall by regulation issue the guidelines required by section 503(e)(4) 
of the Federal Food, Drug, and Cosmetic Act, as amended by subsection 
(a), not later than 180 days after the date of the enactment of this 
Act. Section 503(e)(4) of such Act, as so amended, shall take effect 
upon the expiration of 2 years after the date such regulations are 
promulgated.

SEC. 9. INJUNCTIONS; CIVIL PENALTIES.

    (a) Injunction Proceedings.--Subsection (a) of section 302 of the 
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 332) is amended by 
deleting ``paragraphs (h), (i), and (j)'' and inserting ``paragraphs 
(h) and (j)''.
    (b) Civil Penalty.--Subsection (f) of section 303 of the Federal 
Food, Drug, and Cosmetic Act (21 U.S.C. 333) is amended--
            (1) by redesignating paragraphs (5) through (9) as 
        paragraphs (6) through (10), respectively;
            (2) by inserting after paragraph (4) the following:
    ``(5)(A) Any person who violates paragraph (2) or (3) of section 
301(i) shall be subject to a civil monetary penalty of not more than 
$50,000 in the case of an individual and $250,000 in the case of any 
other person for such violation, not to exceed $500,000 for all such 
violations adjudicated in a single proceeding.
    ``(B) A civil monetary penalty under this paragraph shall be paid 
to the United States, except that, in a proceeding brought by a State 
under section 310(c)(1), 50 percent of a civil monetary penalty under 
this paragraph shall be paid to the State.
    ``(C) Amounts paid to the United States under this paragraph shall 
be--
            ``(i) deposited in the account providing appropriations for 
        salaries and expenses of the Food and Drug Administration; and
            ``(ii) subject to the availability of appropriations, used 
        by the Secretary to prevent and address unlawful counterfeiting 
        and diversion of drugs, including through enforcement of 
        paragraphs (2) and (3) of section 301(i) and investigation of 
        potential violations of such paragraphs.
    ``(D) For fiscal year 2012 and each subsequent fiscal year, there 
is authorized to be appropriated to the Secretary for the programs and 
activities described in subparagraph (C)(ii) an amount equal to the 
total amount paid to the United States under this paragraph during the 
preceding fiscal year, to remain available until expended.'';
            (3) in paragraph (6), as so redesignated, by striking the 
        term ``paragraph (1), (2), (3), (4),'' each place such term 
        appears and inserting ``paragraph (1), (2), (3), (4), (5),'';
            (4) in paragraph (7), as so redesignated, by striking 
        ``paragraph (5)(A)'' and inserting ``paragraph (6)(A)''; and
            (5) in paragraph (8), as so redesignated, by striking the 
        term ``paragraph (6)'' each place such term appears and 
        inserting ``paragraph (7)''.

SEC. 10. STATE ENFORCEMENT OF FEDERAL REQUIREMENTS.

    Section 310 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
337) is amended by adding at the end the following:
    ``(c)(1) A State may bring in its own name and within its 
jurisdiction proceedings for the civil enforcement, or to restrain 
violations, of paragraph (2) or (3) of section 301(i) or paragraph (1), 
(2), and (3) of section 503(e) if the drug or person that is the 
subject of the proceedings is located in the State.
    ``(2) No proceeding may be commenced by a State under paragraph 
(1)--
            ``(A) before 30 days after the State has given written 
        notice to the Secretary that the State intends to bring such 
        proceeding;
            ``(B) before 90 days after the State has given written 
        notice to the Secretary of such intent if the Secretary has, 
        within such 30 days, commenced an informal or formal 
        enforcement action pertaining to the violation which would be 
        the subject of such proceeding; or
            ``(C) if the Secretary is diligently prosecuting a 
        proceeding in court pertaining to the violation, has settled 
        such proceeding, or has settled the informal or formal 
        enforcement action pertaining to such violation.''.

SEC. 11. STUDY ON THREATS TO DOMESTIC PRESCRIPTION DRUG SUPPLY CHAIN.

    (a) In General.--Not later than 18 months after the date of the 
enactment of the Safeguarding America's Pharmaceuticals Act of 2011, 
the Secretary of Health and Human Services, in consultation with 
Federal health and security agencies including the Department of 
Homeland Security and the Department of Justice, shall--
            (1) complete a study on threats to the domestic 
        prescription drug supply chain; and
            (2) submit a report to the Congress describing the results 
        of the study and making recommendations for improvement.
    (b) Issues To Be Studied.--The study conducted under this section 
shall address the following:
            (1) How to improve coordination between the Food and Drug 
        Administration (including the Office of Criminal 
        Investigations) and the Department of Homeland Security 
        including at the Nation's 12 international mail facilities and 
        express carrier hubs.
            (2) Any additional authorities needed by the Food and Drug 
        Administration and the Department of Homeland Security in order 
        to ensure misbranded, adulterated, and counterfeit drugs and 
        drugs in violation of section 505 are destroyed at the Nation's 
        international mail facilities and express carrier hubs.
            (3) New and emerging technologies to assist with screening 
        drug imports in a more efficient manner.
            (4) The adequacy of the number of personnel within the Food 
        and Drug Administration and the Department of Homeland Security 
        and room for growth and improvement, including the need for 
        additional personnel and how such additional personnel should 
        be employed at the Nation's international mail facilities and 
        express carrier hubs.
            (5) The potential interface among the Department of 
        Homeland Security targeting systems (including the Automated 
        Targeting System), the Food and Drug Administration targeting 
        system (including the Oasis System), and express carrier 
        targeting systems to create a unified system that--
                    (A) tracks all illegal drug imports arriving at the 
                Nation's 12 international mail facilities and express 
                carrier hubs; and
                    (B) provides for consultation by manufacturers and 
                other private entities actively involved in tracking 
                counterfeit drug enterprises.
            (6) Any additional authorities which the Food and Drug 
        Administration and the Department of Homeland Security need to 
        provide greater security at the Nation's borders and within the 
        Nation against counterfeit and unapproved prescription drugs.
            (7) How the Food and Drug Administration and the Department 
        of Homeland Security can better coordinate with the private 
        sector to provide greater enforcement against counterfeit 
        prescription drugs.
            (8) Statistically significant data calculating the 
        percentage of drugs entering the Nation, including those 
        entering through the Nation's 12 international mail facilities 
        and express carrier hubs, that are counterfeit, misbranded, 
        adulterated, or otherwise inadmissible.
    (c) Consultation.--In conducting the study required by this 
section, the Secretary of Health and Human Services, in consultation 
with the Secretary of Homeland Security, shall consult with technology 
developers, drug manufacturers, and other interested parties.
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