I 

111TH CONGRESS 

1ST SESSION H. R. 2726 

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

penalties for the sale or trade of prescription drugs knowingly caused 

to be adulterated or misbranded, to modify requirements for maintaining 

records of the chain-of-custody of prescription drugs, to establish recall 

authority regarding drugs, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 4, 2009 

Mr. ISRAEL 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 

increase criminal penalties for the sale or trade of prescription drugs knowingly caused to be adulterated or 

misbranded, to modify requirements for maintaining 

records of the chain-of-custody of prescription drugs, to 

establish recall authority regarding drugs, and for other 

purposes. 

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 ‘‘Tim Fagan’s Law’’ or the 

5 ‘‘Counterfeit Drug Enforcement Act of 2009’’. 


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1 SEC. 2. SALE OR TRADE OF PRESCRIPTION DRUGS KNOW2 INGLY CAUSED TO BE ADULTERATED OR MIS3 BRANDED; MISREPRESENTATION AS AP4 PROVED DRUGS. 

5 (a) CRIMINAL PENALTY.—Section 303(a) of the Fed6 eral Food, Drug, and Cosmetic Act (21 U.S.C. 333(a)) 

7 is amended by adding at the end the following paragraphs: 

8 ‘‘(3) Notwithstanding paragraph (1) or (2), in the 

9 case of a person who violates section 301(a), 301(b), or 

10 301(c) with respect to a drug that is subject to section 

11 503(b)(1)(B), if the person knowingly caused the drug to 

12 be adulterated or misbranded and sells or trades the drug, 

13 or the person purchases or trades for the drug knowing 

14 or having reason to know that the drug was knowingly 

15 caused to be adulterated or misbranded, the person shall 

16 be fined in accordance with title 18, United States Code, 

17 or imprisoned for any term of years or for life, or both. 

18 ‘‘(4) Notwithstanding paragraph (1) or (2), in the 

19 case of a person who violates section 301(d) with respect 

20 to a drug, if the person caused the drug to be misrepre21 sented as a drug that is subject to section 503(b)(1)(B) 

22 and for which an approved application is in effect under 

23 section 505 and the person sells or trades the drug, or 

24 the person purchases or trades for the drug knowing or 

25 having reason to know that the drug was knowingly 

26 caused to be so misrepresented, the person shall be fined 


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1 in accordance with title 18, United States Code, or impris2 oned for any term of years or for life, or both.’’. 

3 (b) NOTIFICATION OF FOOD AND DRUG ADMINIS4 TRATION BY MANUFACTURERS.—Section 505(k) of the 

5 Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(k)) 

6 is amended by adding at the end the following paragraph: 

7 ‘‘(3) A manufacturer of a drug that receives or other8 wise becomes aware of information that reasonably sug9 gests that a violation described in paragraph (3) or (4) 

10 of section 303(a) may have occurred with respect to the 

11 drug shall report such information to the Secretary not 

12 later than 48 hours after first receiving or otherwise be13 coming aware of the information.’’. 

14 SEC. 3. USE OF TECHNOLOGIES FOR PREVENTING COUN15 TERFEITING OF DRUGS. 

16 Section 502 of the Federal Food, Drug, and Cosmetic 

17 Act (21 U.S.C. 352) is amended by adding at the end the 

18 following: 

19 ‘‘(aa) If it is a drug and it is not manufactured in 

20 accordance with any regulations of the Secretary requiring 

21 the use of technologies that the Secretary has determined 

22 are technically feasible and will assist in preventing viola23 tions of this Act to which paragraphs (3) and (4) of sec24 tion 303(a) apply (relating to the knowing adulteration or 


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1 misbranding of drugs and the knowing misrepresentation 

2 of drugs).’’. 

3 SEC. 4. WHOLESALE DISTRIBUTION OF DRUGS; STATE4 MENTS REGARDING PRIOR SALE, PURCHASE, 

5 OR TRADE. 

6 (a) STRIKING OF EXEMPTIONS FOR AUTHORIZED

7 DISTRIBUTORS OF RECORD.—Section 503(e) of the Fed8 eral Food, Drug, and Cosmetic Act (21 U.S.C. 353(e)) 

9 is amended— 

10 (1) in paragraph (1)— 

11 (A) by striking ‘‘and who is not the manu12 facturer or an authorized distributor of record 

13 of such drug’’; 

14 (B) by striking ‘‘to an authorized dis15 tributor of record or’’; and 

16 (C) by striking subparagraph (B) and in17 serting the following: 

18 ‘‘(B) The Secretary shall by regulation establish re19 quirements (referred to in this subparagraph as ‘alter20 native requirements’) that supersede subparagraph (A) to 

21 identify the chain of custody of a drug subject to sub22 section (b) from the manufacturer of the drug throughout 

23 the wholesale distribution of the drug to a pharmacist who 

24 intends to sell the drug at retail if the Secretary deter25 mines that— 


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1 ‘‘(i) the alternative requirements (which may in2 clude standardized anticounterfeiting or track-and3 trace technologies) will identify such chain of cus4 tody, or the identity of the discrete package of the 

5 drug from which the drug is dispensed, with equal 

6 or greater certainty than the requirements of sub7 paragraph (A); and 

8 ‘‘(ii) the alternative requirements are tech9 nically feasible.’’; and 

10 (2) in paragraph (3), by striking ‘‘and sub11 section (d)—’’ in the matter preceding subparagraph 

12 (A) and all that follows through ‘‘the term ‘whole13 sale distribution’ means’’ in subparagraph (B) and 

14 inserting the following: ‘‘and subsection (d), the 

15 term ‘wholesale distribution’ means’’. 

16 (b) CONFORMING AMENDMENT.—Section 503(d) of 

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

18 353(d)) is amended by adding at the end the following: 

19 ‘‘(4) Each manufacturer of a drug subject to sub20 section (b) shall maintain at its corporate offices a current 

21 list of the authorized distributors of record of such drug. 

22 ‘‘(5) For purposes of this subsection, the term ‘au23 thorized distributors of record’ means any distributor that 

24 a manufacturer designates as an authorized distributor of 


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1 record and whose name the manufacturer makes publicly 

2 available.’’. 

3 (c) FINAL RULE.—The Secretary shall ensure that, 

4 not later than 90 days after the date of the enactment 

5 of this Act, there is in effect a final rule to implement 

6 section 503(e) of the Federal Food, Drug, and Cosmetic 

7 Act, including the amendments made by this section. 

8 SEC. 5. COUNTERFEIT DRUGS; INCREASED FUNDING FOR 

9 INSPECTIONS, EXAMINATIONS, AND INVES10 TIGATIONS. 

11 For the purpose of increasing the capacity of the 

12 Food and Drug Administration to conduct inspections, ex13 aminations, and investigations under the Federal Food, 

14 Drug, and Cosmetic Act with respect to violations de15 scribed in paragraphs (3) and (4) of section 303(a) of such 

16 Act, there is authorized to be appropriated $60,000,000 

17 for each of the fiscal years 2010 through 2014, in addition 

18 to other authorizations of appropriations that are available 

19 for such purpose. 

20 SEC. 6. PUBLIC EDUCATION REGARDING COUNTERFEIT 

21 DRUGS. 

22 (a) IN GENERAL.—The Secretary of Health and 

23 Human Services shall carry out a program to educate the 

24 public and health care professionals on counterfeit drugs, 

25 including techniques to identify drugs as counterfeit. 


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1 (b) AUTHORIZATION OF APPROPRIATIONS.—For the 

2 purpose of carrying out subsection (a), there is authorized 

3 to be appropriated $5,000,000 for each of the fiscal years 

4 2010 through 2014, in addition to other authorizations 

5 of appropriations that are available for such purpose. 

6 SEC. 7. RECALL AUTHORITY REGARDING DRUGS. 

7 Subchapter A of chapter V of the Federal Food, 

8 Drug, and Cosmetic Act (21 U.S.C. 351 et seq.) is amend9 ed by inserting after section 506C the following section: 

10 ‘‘SEC. 506D. RECALL AUTHORITY. 

11 ‘‘(a) ORDER TO CEASE DISTRIBUTION OF DRUG; 

12 NOTIFICATION OF HEALTH PROFESSIONALS.— 

13 ‘‘(1) IN GENERAL.—If the Secretary finds that 

14 there is a reasonable probability that a drug in15 tended for human use would cause serious, adverse 

16 health consequences or death, the Secretary shall 

17 issue an order requiring the appropriate person (in18 cluding the manufacturers, importers, distributors, 

19 or retailers of the drug)— 

20 ‘‘(A) to immediately cease distribution of 

21 the drug; and 

22 ‘‘(B) to immediately notify health profes23 sionals of the order and to instruct such profes24 sionals to cease administering or prescribing the 

25 drug. 


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1 ‘‘(2) INFORMAL HEARING.—An order under 

2 paragraph (1) shall provide the person subject to the 

3 order with an opportunity for an informal hearing, 

4 to be held not later than 10 days after the date of 

5 the issuance of the order, on the actions required by 

6 the order and on whether the order should be 

7 amended to require a recall of the drug involved. If, 

8 after providing an opportunity for such a hearing, 

9 the Secretary determines that inadequate grounds 

10 exist to support the actions required by the order, 

11 the Secretary shall vacate the order. 

12 ‘‘(b) ORDER TO RECALL DRUG.— 

13 ‘‘(1) IN GENERAL.—If, after providing an op14 portunity for an informal hearing under subsection 

15 (a)(2), the Secretary determines that the order 

16 should be amended to include a recall of the drug 

17 with respect to which the order was issued, the Sec18 retary shall, except as provided in paragraphs (2) 

19 and (3), amend the order to require a recall. The 

20 Secretary shall specify a timetable in which the drug 

21 recall will occur and shall require periodic reports to 

22 the Secretary describing the progress of the recall. 

23 ‘‘(2) CERTAIN ACTIONS.—An amended order 

24 under paragraph (1)— 


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1 ‘‘(A) shall not include recall of a drug from 

2 individuals; and 

3 ‘‘(B) shall provide for notice to individuals 

4 subject to the risks associated with the use of 

5 the drug. 

6 ‘‘(3) ASSISTANCE OF HEALTH PROFES7 SIONALS.—In providing the notice required by para8 graph (2)(B), the Secretary may use the assistance 

9 of health professionals who administered the drug 

10 involved to individuals or prescribed the drug for in11 dividuals. If a significant number of such individuals 

12 cannot be identified, the Secretary shall notify such 

13 individuals pursuant to section 705(b).’’. 

14 SEC. 8. AUTHORITY TO ISSUE SUBPOENAS WITH RESPECT 

15 TO PREVENTING THREATS TO THE PUBLIC 

16 HEALTH. 

17 Section 303 of the Federal Food, Drug, and Cosmetic 

18 Act (21 U.S.C. 333(a)) is amended by adding at the end 

19 the following subsection: 

20 ‘‘(h) The Secretary and the Attorney General shall 

21 develop and implement a procedure through which the 

22 Chief Counsel in the Food and Drug Administration is au23 thorized to issue subpoenas regarding investigations under 

24 this Act of acts or omissions that may constitute a threat 

25 to the public health, including investigations of alleged vioVerDate Nov 24 2008 22:13 Jun 05, 2009 Jkt 079200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H2726.IH H2726

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1 lations to which paragraph (3) or (4) of subsection (a) 

2 apply and alleged violations with respect to which the Sec3 retary is considering the use of authorities under section 

4 304.’’. 

Æ 


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