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‘‘(B) QUALIFICATIONS FOR CARRIER OPER-
ATING
OFFICIAL
WEBSITE.—For purposes of
paragraph (1), a qualified carrier is a carrier
that demonstrates to the satisfaction of the Sec-
retary the ability to operate the Internet site
and to provide for appropriate screening and
oversight of the qualified Internet pharmacies
so as to ensure the delivery of safe products.
‘‘(C) CONTRACT WITH ONLY 1 CARRIER.—
The Secretary shall enter into such a contract
with only 1 carrier.
‘‘(D) 
SEEKING
MOST
COMPETITIVE
PRICE.—In entering into a contract with a car-
rier under this subsection, the Secretary shall
seek to obtain the greatest accessibility at the
most competitive price available for prescription
drugs for medicare beneficiaries, physicians,
and pharmacies serving medicare beneficiaries.
For this purpose, the carrier may limit the
number of Internet pharmacies which are linked
through the carrier’s website under this sub-
section.
‘‘(E) POSTING OF PRICES FOR COVERED
DRUGS.—The contractor shall agree to post in
a clear and visible manner on the homepage for
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its Internet site, or on a page directly linked to
the homepage (by a clear and visible link on the
homepage), the five lowest prices for a par-
ticular prescription drug, including its thera-
peutic brand and generic equivalents, requested
by the medicare beneficiary.
‘‘(F) 
RECOVERY
OF
ADMINISTRATIVE
COSTS.—The carrier shall seek to recover the
administrative costs of the contract under this
subsection by assessing a reasonable fee (which
may be based on such criteria as the contractor
determines most efficient) on Internet phar-
macies which use the carrier’s website to post
pharmaceutical products for sale of medicare
beneficiaries, physicians, and pharmacies serv-
ing medicare beneficiaries. Such fees shall be
adjusted from year to year as necessary to re-
cover administrative costs over a multi-year pe-
riod.
‘‘(G) PRIVACY
STANDARDS.—The carrier
shall not disclose any personal or medical infor-
mation regarding a medicare beneficiary if the
information is not utilized solely for the proc-
essing of claims, delivery of covered drugs, or is
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not vital to the immediate health or welfare of
the medicare beneficiary.
‘‘(2) QUALIFICATIONS
FOR
INTERNET
PHAR-
MACIES.—For purposes of this subsection, the Sec-
retary shall establish standards for qualification of
Internet pharmacies which may participate in the
carrier’s website. In establishing such standards, the
Secretary shall consider the recommendations of the
National Association of Boards of Pharmacy and
shall assure that each qualified Internet pharmacy—
‘‘(A) is licensed in each State as a phar-
macy;
‘‘(B) is in compliance with applicable re-
quirements of Federal and State law governing
the practice of pharmacy;
‘‘(C) agrees not to dispense a drug except
upon a prescription of a practitioner licensed by
law to administer the drug;
‘‘(D) agrees to post in a clear and visible
manner on the homepage for its Internet site,
or on a page directly linked to the homepage
(by a clear and visible link on the homepage),
such information regarding the identity of the
pharmacy and restrictions applicable to its dis-
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pensing of prescription drugs as the Secretary
shall specify; and
‘‘(E) meets such other requirements as the
Secretary shall establish.’’.
SEC. 3. INTERNET PHARMACIES FOR MEDICARE BENE-
FICIARIES.
(a) IN GENERAL.—Chapter VIII of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 381 et seq.)
is amended—
(1) in section 801(d)(1), by striking ‘‘Except as
provide in paragraph (2),’’ and inserting ‘‘Except as
provided in paragraph (2) or section 801A,’’; and
(2) by inserting after section 801 the following
section:
‘‘SEC. 801A. (a) PROMULGATION OF CRITERIA FOR
INTERNET
PHARMACIES
ELIGIBLE
TO
PARTICIPATE
WITH A MEDICARE CARRIER UNDER 1842(u) OF THE SO-
CIAL SECURITY ACT.—The Secretary shall by regulation
promulgate uniform criteria for the operation of Internet
pharmacies pursuant to subsection (d)(1), including re-
quirements regarding the manner in which such phar-
macies serve medicare beneficiaries and physicians or
pharmacies serving medicare beneficiaries. In establishing
such criteria, the Secretary shall with respect to Internet
pharmacies consider the recommendations of the National
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Association of Boards of Pharmacy. Such criteria shall
provide that a waiver under subsection (c) will be provided
to a medicare Internet pharmacy only if the following con-
ditions are met:
‘‘(1) The Internet pharmacy is licensed under a
uniform name as a pharmacy among the States in
each State.
‘‘(2) The Internet pharmacy is in compliance
with applicable requirements of Federal and State
law governing the practice of pharmacy.
‘‘(3) The Internet pharmacy agrees that it will
dispense a drug as written for an individual only
upon a prescription of a practitioner licensed by law
to administer the drug.
‘‘(4) The Internet site of the Internet pharmacy
posts in a clear and visible manner on the homepage
for the site, or on a page directly linked to the
homepage (by a clear and visible link on the home-
page), the following information:
‘‘(A) A statement that the Internet phar-
macy will dispense prescription drugs only upon
a valid prescription by a licensed practitioner.
‘‘(B) The street address for the principal
place of business for the Internet pharmacy.
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‘‘(C) The name of the chief pharmacist for
the Internet pharmacy, the professional degree
held by such pharmacist, and an identification
of the pharmacy licenses held by the phar-
macist.
‘‘(D) A telephone number at which phar-
macists of the Internet pharmacy may be
reached.
‘‘(5) The Internet pharmacy contracts that it
will make available through the Internet site to phy-
sicians or pharmacies serving medicare beneficiaries
the same covered drugs as are available to medicare
beneficiaries through the site.
‘‘(6) The Internet pharmacy shall not disclose
any personal or medical information regarding a
medicare beneficiary if the information is not uti-
lized solely for the processing of claims, delivery of
covered drugs, or is not vital to the immediate
health or welfare of the medicare beneficiary.
‘‘(7) Such other conditions as the Secretary
may establish by regulation.
‘‘(b) ENFORCEMENT.—
‘‘(1) SUSPENSION
OR
REVOCATION
OF
WAIV-
ER.—After notice and opportunity for a hearing, the
Secretary may suspend or revoke the waiver of an
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Internet pharmacy under subsection (c) on any of
the following grounds:
‘‘(A) The Internet pharmacy ceases to
comply with any condition described in sub-
section (a).
‘‘(B) The Internet pharmacy has violated
any provision of section 301.
‘‘(C) The Internet pharmacy has violated a
provision of the Controlled Substances Act, or
has violated any State law regarding controlled
substances.
‘‘(D) The Internet pharmacy has violated a
State law regarding the unauthorized operation
of a pharmacy or the unauthorized practice of
medicine.
‘‘(E) The Internet pharmacy has engaged
in such other conduct as, with respect to finan-
cial misconduct as well as the safety or effec-
tiveness of drugs, justifies the suspension or
revocation in the interest of protecting medicare
beneficiaries from the Internet pharmacy.
‘‘(2) CRIMINAL PENALTY FOR SUBSEQUENT IM-
PORTATIONS.—If the waiver of an Internet phar-
macy under subsection (c) is suspended or revoked
by the Secretary under paragraph (1), any importa-
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‘‘(B)(i) is a prescription drug; or
‘‘(ii) is a drug composed wholly or partly
of insulin.
‘‘(3) RULE
OF
CONSTRUCTION
REGARDING
SAFETY AND EFFECTIVENESS, ADULTERATION AND
MISBRANDING, 
AND
OTHER
REQUIREMENTS.—A
waiver of section 801(d)(1) under paragraph (1)
may not be construed as waiving any other provision
of Federal law regarding the drugs involved.
‘‘(d) REQUIREMENTS FOR WAIVER.—
‘‘(1) INTERNET PHARMACY QUALIFIED UNDER
1842(u) OF THE SOCIAL SECURITY ACT.—For pur-
poses of subsection (c)(1), the requirement described
in this paragraph is that the Internet pharmacy in-
volved operate, in accordance with criteria under
subsection (a), an Internet site through which medi-
care beneficiaries, physicians, and pharmacies serv-
ing medicare beneficiaries can purchase covered
drugs.
‘‘(2) INFORMATION REGARDING IMPORTATION—
For purposes of subsection (c)(1), the requirement
described in this paragraph is that the Internet
pharmacy involved provide to the Secretary such in-
formation as the Secretary may require for purposes
of determining whether the requirements of this Act
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have been met with respect to the covered drug
being imported.
‘‘(e) DEFINITIONS.—For purposes of this section:
‘‘(1) The term ‘covered drug’ has the meaning
given such term in subsection (c)(2).
‘‘(2) The term ‘generic drug’ means a drug ap-
proved under section 505(j) of the Federal Food,
Drug, and Cosmetic Act.
‘‘(3) The term ‘Internet’ means collectively the
myriad of computer and telecommunications facili-
ties, including equipment and operating software,
which comprise the interconnected world-wide net-
work of networks that employ the Transmission
Control Protocol/Internet Protocol, or any prede-
cessor or successor protocols to such protocol, to
communicate information of all kinds by wire or
radio.
‘‘(4) The term ‘Internet pharmacy’ means an
Internet site through which a medicare beneficiary
or a physician or pharmacy serving medicare bene-
ficiaries can purchase a drug, whether the purchase
is a sale for resale or sale at retail.
‘‘(5) The term ‘Internet site’ means a site on
the telecommunications medium known as the World
Wide Web of the Internet.
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‘‘(6) The term ‘Medicare beneficiary’ means an
individual entitled to benefits under part A of title
XVIII of the Social Security Act, or enrolled under
part B of such title, or both.
‘‘(7) The term ‘prescription drug’ means a drug
that is subject to section 503(b).’’.
(b) EFFECTIVE DATE.—This act shall take effect six
months after the date of enactment.
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