I 
113TH CONGRESS 
1ST SESSION H. R. 3089 
To amend section 503A of the Federal Food, Drug, and Cosmetic Act with 
respect to pharmacy compounding. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 12, 2013 
Mr. GRIFFITH of Virginia (for himself, Ms. DEGETTE, and Mr. GENE GREEN 
of Texas) introduced the following bill; which was referred to the Com-
mittee on Energy and Commerce 
A BILL 
To amend section 503A of the Federal Food, Drug, and 
Cosmetic Act with respect to pharmacy compounding. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Compounding Clarity 
Act of 2013’’. 
SEC. 2. TRADITIONAL PHARMACY COMPOUNDING. 
Section 503A of the Federal Food, Drug, and Cos-
metic Act (21 U.S.C. 353a) is amended to read as follows: 
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‘‘SEC. 503A. TRADITIONAL PHARMACY COMPOUNDING. 
‘‘(a) 
IN
GENERAL.—Sections 
501(a)(2)(B), 
502(f)(1), and 505 of this Act and section 351 of the Pub-
lic Health Service Act shall not apply to a drug product 
for human use if each of the following conditions is met: 
‘‘(1) IDENTIFIED
PATIENT
AND
RECEIPT
OF 
PRESCRIPTION.—The drug product is compounded 
in accordance with one of the following: 
‘‘(A) IN GENERAL.—The drug product is 
compounded by a licensed pharmacist in a 
State-licensed pharmacy or a Federal facility, 
or by a licensed physician, for an identified in-
dividual patient based on the receipt of a valid 
prescription. 
‘‘(B) ANTICIPATORY COMPOUNDING.—The 
drug product is compounded by a licensed phar-
macist in a State-licensed pharmacy or a Fed-
eral facility, or by a licensed physician, in lim-
ited quantities before the receipt of a valid pre-
scription for an identified individual patient, 
based on— 
‘‘(i) historical demand for the drug 
product; and 
‘‘(ii) a history of prescriptions for the 
drug product generated solely within an es-
tablished relationship between the licensed 
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pharmacist or licensed physician who is 
performing the compounding and— 
‘‘(I) the individual patient; or 
‘‘(II) the physician or other li-
censed practitioner who writes the 
prescription. 
‘‘(C) COMPOUNDING FOR OFFICE USE.— 
The drug product is compounded by a licensed 
pharmacist in a State-licensed pharmacy or a 
Federal facility, or by a licensed physician, pur-
suant to a non-patient-specific purchase order 
and— 
‘‘(i) the drug product will be adminis-
tered by a health care practitioner within 
a physician’s office, a hospital, or another 
health care setting; 
‘‘(ii) valid patient-specific prescrip-
tions or, when a compounded drug product 
is administered within the same health sys-
tem in which it was compounded, valid pa-
tient names— 
‘‘(I) are submitted, electronically 
or otherwise, to the pharmacist or 
physician who performs the com-
pounding, not later than 7 business 
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days after the drug product is admin-
istered; and 
‘‘(II) will, in the aggregate, ac-
count for the total volume of drug 
product compounded pursuant to the 
non-patient-specific purchase order; 
‘‘(iii) during any 6-month period, of 
the total drug products dispensed from the 
facility at which the drug product was 
compounded, not more than 5 percent are 
compounded sterile drug products that 
are— 
‘‘(I) dispensed pursuant to this 
subparagraph; and 
‘‘(II) shipped interstate; 
‘‘(iv) records of the compounding will 
be kept for not less than 3 years; and 
‘‘(v) the statement ‘Office Use Only’ 
and the statement ‘Not for resale’ appear 
on the compounded drug product. 
Compounding under this subparagraph shall 
not be considered to be in violation of clause (ii) 
because of the failure of a pharmacist or a phy-
sician to account for valid patient-specific pre-
scriptions or valid patient names as required by 
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such clause, so long as the pharmacist or physi-
cian makes a good faith, reasonable effort to 
account for the prescriptions or names, as ap-
plicable, and does not continue to compound 
drug products under this subparagraph for a 
health care practitioner or facility with a his-
tory of failing to submit such prescriptions or 
patient names. 
‘‘(2) QUALITY
STANDARDS.—Irrespective of 
whether a drug product is compounded under sub-
paragraph (A), (B), or (C) of paragraph (1), the 
drug product is compounded, stored, and dated in 
compliance with the United States Pharmacopoeia 
chapters that are applicable to pharmaceutical 
compounding (including the chapter on sterile prep-
arations). 
‘‘(3) BULK
DRUG
SUBSTANCES.—If the drug 
product is compounded using bulk drug substances 
(as defined in regulations of the Secretary published 
at section 207.3(a)(4) of title 21 of the Code of Fed-
eral Regulations (or any successor regulations))— 
‘‘(A) the bulk drug substances— 
‘‘(i) if an applicable monograph exists 
under the United States Pharmacopoeia, 
the National Formulary, or another com-
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pendium 
or 
pharmacopeia 
recognized 
under Federal law, each comply with the 
monograph; 
‘‘(ii) if such a monograph does not 
exist, each are drug substances that are 
components of drug products approved or 
licensed by the Secretary for human use; 
or 
‘‘(iii) if such a monograph does not 
exist and the drug substance is not a com-
ponent of a drug product so approved or li-
censed, each appear on a list published by 
the Secretary (through regulations issued 
under subsection (e)); 
‘‘(B) the bulk drug substances are each 
manufactured by an establishment that is reg-
istered under section 510 (including a foreign 
establishment that is registered under section 
510(i)); and 
‘‘(C) the bulk drug substances are each ac-
companied by a valid certificate of analysis. 
‘‘(4) INGREDIENTS (OTHER THAN BULK DRUG 
SUBSTANCES).—If any ingredients (other than bulk 
drug substances) are used in compounding the drug 
product, such ingredients comply with the standards 
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of an applicable United States Pharmacopoeia or 
National Formulary monograph. 
‘‘(5) DRUG
PRODUCTS
WITHDRAWN
OR
RE-
MOVED BECAUSE UNSAFE OR NOT EFFECTIVE.—The 
drug product does not appear on a list published by 
the Secretary of drug products that have been with-
drawn or removed from the market because such 
drug products or components of such drug products 
have been found to be unsafe or not effective. 
‘‘(6) ESSENTIALLY A COPY OF A MARKETED 
AND
APPROVED
DRUG
PRODUCT.—The licensed 
pharmacist or licensed physician does not compound 
any drug product that is essentially a copy of a mar-
keted and approved drug product. 
‘‘(7) DRUG
PRODUCTS
PRESENTING
DEMON-
STRABLE
DIFFICULTIES
FOR
COMPOUNDING.—The 
drug product is not identified (directly or as part of 
a category of drug products) in a list published by 
the Secretary (through regulations issued under sub-
section (e)) as a drug product that presents demon-
strable difficulties for compounding that reasonably 
demonstrate an adverse effect on the safety or effec-
tiveness of that drug product. 
‘‘(8) PROHIBITION
ON
WHOLESALING.—The 
drug product will not be sold by an entity other than 
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the pharmacy or physician that compounded such 
drug product. 
‘‘(b) STATE REGULATION.—Nothing in this section 
shall prevent a State from— 
‘‘(1) imposing restrictions on the type of 
compounding described in subparagraph (B) or (C) 
of subsection (a)(1) that are in addition to the re-
strictions applicable under this section; or 
‘‘(2) enforcing requirements or restrictions con-
tained in the chapters or standards described in sub-
section (a)(2). 
‘‘(c) NOTIFICATION SYSTEM.— 
‘‘(1) DEVELOPMENT AND IMPLEMENTATION.— 
The Secretary shall develop and implement a system 
for receiving and reviewing submissions from State 
boards of pharmacy— 
‘‘(A) describing actions taken against 
compounding pharmacies; or 
‘‘(B) expressing concerns that a com-
pounding pharmacy may be acting in violation 
of one or more requirements of this section. 
‘‘(2) CONTENT OF SUBMISSIONS FROM STATE 
BOARDS OF PHARMACY.—An action referred to in 
paragraph (1)(A) is, with respect to a pharmacy 
that compounds drug products, any of the following: 
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‘‘(A) The issuance of a warning letter, or 
the imposition of sanctions or penalties, by a 
State for violations of a State’s pharmacy regu-
lations pertaining to compounding. 
‘‘(B) The suspension or revocation of a 
State-issued pharmacy license or registration. 
‘‘(C) The recall of compounded drug prod-
ucts due to concerns relating to the quality or 
purity of such products. 
‘‘(3) CONSULTATION.—The Secretary shall de-
velop the system under paragraph (1) in consulta-
tion with the National Association of Boards of 
Pharmacy. 
‘‘(4) REVIEW
AND
DETERMINATION
BY
SEC-
RETARY.—The Secretary shall review each submis-
sion received under paragraph (1) and such other in-
formation as the Secretary determines necessary (in-
cluding information collected through an inspection 
or maintained in the Adverse Event Reporting Sys-
tem database) and make a determination as to 
whether the pharmacy involved may be in violation 
of one or more requirements of this section. 
‘‘(5) NOTIFYING
STATE
BOARDS
OF
PHAR-
MACY.—The system under paragraph (1) shall be 
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plement subsections (a)(3)(A)(iii) and (a)(7), the 
Secretary shall convene and consult an advisory 
committee on compounding. The advisory committee 
shall include representatives from the National Asso-
ciation of Boards of Pharmacy, the United States 
Pharmacopoeia, pharmacists having current experi-
ence and expertise in compounding, physicians hav-
ing background and knowledge in compounding, and 
consumer 
organizations 
with 
an 
expertise 
in 
compounding. 
‘‘(3) INTERIM LISTS.—Before the date on which 
final regulations are issued to implement subsections 
(a)(3)(A)(iii) and (a)(7), if the Secretary determines 
it is necessary to protect the public health, the Sec-
retary may designate drug products or substances as 
described in such subsections, by— 
‘‘(A) publishing a notice of such drug 
products or substances proposed for designa-
tion, including the rationale for such designa-
tion, in the Federal Register; 
‘‘(B) providing a period of not less than 60 
calendar days for comment on the notice; and 
‘‘(C) publishing a notice in the Federal 
Register designating such drug products or sub-
stances. 
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‘‘(4) UPDATING
LISTS.—The Secretary shall 
update the regulations containing the lists of drug 
products and substances described in subsections 
(a)(3)(A)(iii) and (a)(7) regularly, but not less than 
once every three years. 
‘‘(5) SUNSET
OF
NOTICE.—Any notice pub-
lished under paragraph (3) shall not be effective 
after the earlier of— 
‘‘(A) the date that is 3 years after the date 
of Compounding Clarity Act of 2013; and 
‘‘(B) the effective date of the final regula-
tions 
issued 
to 
implement 
subsections 
(a)(3)(A)(iii) and (a)(7). 
‘‘(f) DEFINITIONS.—In this section: 
‘‘(1) The term ‘compounding’ includes— 
‘‘(A) the combining, admixing, mixing, di-
luting, reconstituting, or otherwise altering of a 
marketed drug product, except when performed 
in accordance with specific directions for such 
acts contained in approved labeling provided by 
the product’s manufacturer or otherwise pro-
vided by that manufacturer consistent with that 
labeling; 
‘‘(B) the combining, admixing, mixing, di-
luting, reconstituting, or otherwise altering a 
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bulk drug substance to create a drug product; 
and 
‘‘(C) repackaging. 
‘‘(2) The term ‘essentially a copy of a marketed 
and approved drug product’ does not include— 
‘‘(A) a drug product in which there is a 
change, made for an identified individual pa-
tient, which produces for that patient a clinical 
difference, as determined by the prescribing 
practitioner, between the compounded drug 
product and the comparable marketed and ap-
proved drug product; or 
‘‘(B) a drug product that appears on the 
drug shortage list in effect under section 506E. 
‘‘(3) The term ‘licensed pharmacist’ includes 
any individual who compounds drug products under 
the supervision of a practitioner licensed to com-
pound drug products under State law. 
‘‘(4) The term ‘marketed and approved drug 
product’ means a drug product that— 
‘‘(A) is currently marketed; and 
‘‘(B) is approved under section 505 of this 
Act or licensed under section 351 of the Public 
Health Service Act. 
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‘‘(5)(A) The term ‘repackaging’ means taking a 
drug approved under section 505 of this Act or li-
censed under section 351 of the Public Health Serv-
ice Act from the container in which the drug is dis-
tributed by the original manufacturer and placing 
such drug in a different container of the same or 
smaller size without further manipulating the drug 
(such as by diluting it or mixing it with another, dif-
ferent drug or drugs). 
‘‘(B) Such term does not include removing the 
drug from its original container for immediate ad-
ministration to an identified individual patient, such 
as withdrawing a drug into a syringe for immediate 
injection or removing the drug from its original con-
tainer within a health care entity by a practitioner, 
or other licensed individual under the supervision or 
direction of such practitioner, for administration 
within the same day within such health care entity.’’. 
SEC. 3. OUTSOURCING FACILITIES. 
(a) IN GENERAL.—Subchapter A of chapter V of the 
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 351 
et seq.) is amended— 
(1) by redesignating section 503B as section 
503C; and 
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(2) by inserting after section 503A (21 U.S.C. 
353a) the following new section: 
‘‘SEC. 503B. OUTSOURCING FACILITIES. 
‘‘(a) IN GENERAL.—Sections 502(f)(1) and 505 of 
this Act and section 351 of the Public Health Service Act 
shall not apply to a drug product compounded for human 
use by a licensed pharmacist in an outsourcing facility if 
each of the following conditions is met: 
‘‘(1) REGISTRATION AND REPORTING.—The fa-
cility is in compliance with the registration and re-
porting requirements of subsection (b). 
‘‘(2) DRUG PRODUCT AND SUBSTANCE LIMITA-
TIONS.—The facility does not compound drug prod-
ucts in violation of paragraphs (3) through (8) of 
section 503A(a). 
‘‘(3) FEES.—The facility has paid all fees owed 
by such facility pursuant to section 744K. 
‘‘(4) STANDARDIZED
DRUG
PRODUCTS
FROM 
BULK.—The facility does not compound, from bulk 
drug substances, standardized dosages that are not 
otherwise commercially available of a marketed and 
approved drug product. 
‘‘(5) LABELING OF DRUG PRODUCTS.— 
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‘‘(A) LABEL.—The label of a drug product 
compounded by an outsourcing facility shall in-
clude— 
‘‘(i) the statement ‘This is a com-
pounded drug.’ or a reasonable comparable 
alternative statement (as specified by the 
Secretary) that prominently identifies the 
drug as a compounded drug product; 
‘‘(ii) the name, address, and phone 
number of the applicable outsourcing facil-
ity; and 
‘‘(iii) with respect to the compounded 
drug product— 
‘‘(I) the lot or batch number; 
‘‘(II) the established name of the 
drug product; 
‘‘(III) the dosage form and 
strength; 
‘‘(IV) the statement of quantity 
or volume, as appropriate; 
‘‘(V) the date that the drug prod-
uct was compounded; 
‘‘(VI) the expiration date; 
‘‘(VII) storage and handling in-
structions; 
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‘‘(VIII) the National Drug Code 
number, if available; 
‘‘(IX) the ‘Not for resale’ state-
ment 
required 
under 
section 
503A(a)(1)(C)(v); and 
‘‘(X) subject to subparagraph 
(B)(i), a list of active and inactive in-
gredients, identified by established 
name and the quantity or proportion 
of each ingredient. 
‘‘(B) CONTAINER.—The container from 
which the individual units of a drug product 
compounded by an outsourcing facility are re-
moved for dispensing or for administration 
(such as a plastic bag containing individual 
product syringes) shall include— 
‘‘(i) the information described under 
subparagraph (A)(iii)(X), if there is not 
space on the label for such information; 
‘‘(ii) the following information to fa-
cilitate 
adverse 
event 
reporting: 
www.fda.gov/medwatch and 1–800–FDA– 
1088; and 
‘‘(iii) directions for use, including, as 
appropriate, dosage and administration. 
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‘‘(C) 
ADDITIONAL
INFORMATION.—The 
label and labeling of a drug product com-
pounded by an outsourcing facility shall include 
any other information as determined necessary 
and specified in regulations promulgated by the 
Secretary 
‘‘(b) REGISTRATION OF OUTSOURCING FACILITIES 
AND REPORTING OF DRUG PRODUCTS.— 
‘‘(1) REGISTRATION OF OUTSOURCING FACILI-
TIES.— 
‘‘(A) ANNUAL REGISTRATION.—During the 
period beginning on October 1 and ending on 
December 31 each year, each outsourcing facil-
ity— 
‘‘(i) shall register with the Secretary 
its name, place of business, and unique fa-
cility identifier (which shall conform to the 
requirements for the unique facility identi-
fier established under section 510), and a 
point of contact e-mail address; and 
‘‘(ii) shall indicate whether the out-
sourcing facility intends to compound a 
drug product that appears on the list in ef-
fect under section 506E during the subse-
quent calendar year. 
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‘‘(B) NEW
OUTSOURCING
FACILITIES.— 
Each outsourcing facility, upon first engaging 
in compounding pursuant to this section, shall 
immediately register with the Secretary and 
provide the information described in paragraph 
(1)(A). The Secretary shall establish a timeline 
for registration for the first calendar year fol-
lowing the effective date of the Compounding 
Clarity Act of 2013. In no case may registra-
tion be required until at least 60 calendar days 
following publication of the timeline in the Fed-
eral Register. 
‘‘(C) AVAILABILITY OF REGISTRATION FOR 
INSPECTION; LIST.— 
‘‘(i) REGISTRATIONS.—The Secretary 
shall make available for inspection, to any 
person so requesting, any registration filed 
pursuant to this paragraph. 
‘‘(ii) LIST.—The Secretary shall make 
available on the public Internet Web site of 
the Food and Drug Administration a list 
of the name of each facility registered 
under this subsection as an outsourcing fa-
cility, the State in which each such facility 
is located, whether the facility compounds 
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from bulk drug substances, and whether 
any such compounding from bulk drug 
substances is for sterile or non-sterile drug 
products. 
‘‘(2) DRUG
PRODUCT
REPORTING
BY
OUT-
SOURCING FACILITIES.— 
‘‘(A) IN
GENERAL.—Upon initially reg-
istering as an outsourcing facility, once during 
the month of June of each year, and once dur-
ing the month of December of each year, each 
outsourcing facility that registers with the Sec-
retary under paragraph (1) shall submit to the 
Secretary a report— 
‘‘(i) identifying the drug products 
compounded by such outsourcing facility 
during the previous 6-month period; and 
‘‘(ii) with respect to each drug prod-
uct identified under clause (i), providing 
the active ingredient; the source of such 
active ingredient; the National Drug Code 
number, if available, of the source drug 
product or bulk active ingredient; the 
strength of the active ingredient per unit; 
the dosage form and route of administra-
tion; the package description; the number 
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of individual units produced; and the Na-
tional Drug Code number of the final prod-
uct, if assigned. 
‘‘(B) FORM.—Each report under subpara-
graph (A) shall be prepared in such form and 
manner as the Secretary may prescribe by regu-
lation or guidance. 
‘‘(C) 
CONFIDENTIALITY.—Reports 
sub-
mitted under this paragraph shall be exempt 
from inspection under paragraph (1)(C), unless 
the Secretary finds that such an exemption 
would be inconsistent with the protection of the 
public health. 
‘‘(3) ELECTRONIC REGISTRATION AND REPORT-
ING.—Registrations and drug product reporting 
under this subsection (including the submission of 
updated information) shall be submitted to the Sec-
retary by electronic means unless the Secretary 
grants a request for waiver of such requirement be-
cause use of electronic means is not reasonable for 
the person requesting waiver. 
‘‘(4) RISK-BASED INSPECTION FREQUENCY.— 
‘‘(A) IN
GENERAL.—Outsourcing facili-
ties— 
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‘‘(i) shall be subject to inspection pur-
suant to section 704; and 
‘‘(ii) shall not be eligible for the ex-
emption under section 704(a)(2)(A). 
‘‘(B) RISK-BASED
SCHEDULE.—The Sec-
retary, acting through one or more officers or 
employees duly designated by the Secretary, 
shall inspect outsourcing facilities in accordance 
with a risk-based schedule established by the 
Secretary. 
‘‘(C) RISK FACTORS.—In establishing the 
risk-based schedule, the Secretary shall inspect 
outsourcing facilities according to the known 
safety risks of such outsourcing facilities, which 
shall be based on the following factors: 
‘‘(i) The compliance history of the 
outsourcing facility. 
‘‘(ii) The record, history, and nature 
of recalls linked to the outsourcing facility. 
‘‘(iii) The inherent risk of the drug 
products compounded at the outsourcing 
facility. 
‘‘(iv) The inspection frequency and 
history of the outsourcing facility, includ-
ing whether the outsourcing facility has 
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been inspected pursuant to section 704 
within the last 4 years. 
‘‘(v) Whether the outsourcing facility 
has registered under this paragraph as an 
entity that intends to compound a drug 
product that appears on the list in effect 
under section 506E. 
‘‘(vi) Any other criteria deemed nec-
essary and appropriate by the Secretary 
for purposes of allocating inspection re-
sources. 
‘‘(5) ADVERSE EVENT REPORTING.—Outsourc-
ing facilities shall be required to submit adverse 
event reports to the Secretary in accordance with the 
content 
and 
format 
requirements 
established 
through guidance or regulation under section 
310.305 of title 21, Code of Federal Regulations (or 
any successor regulations) or section 600.80 of title 
21, Code of Federal Regulations (or any successor 
regulations). 
‘‘(c) DEFINITIONS.—In this section: 
‘‘(1) OUTSOURCING FACILITY.—The term ‘out-
sourcing facility’ means a facility at one geographic 
location or address that compounds sterile drug 
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products for office use in excess of the limitation set 
forth in section 503A(a)(1)(C)(iii). 
‘‘(2) 
OTHER
DEFINITIONS.—The 
terms 
‘compounding’, ‘essentially a copy of a marketed and 
approved drug product’, ‘licensed pharmacist’, and 
‘marketed and approved drug product’ have the 
meanings given such terms in section 503A(f).’’. 
(b) FEES.—Subchapter C of chapter VII of the Fed-
eral Food, Drug, and Cosmetic Act (21 U.S.C. 379f et 
seq.) is amended by adding at the end the following: 
‘‘PART 9—FEES RELATING TO OUTSOURCING 
FACILITIES 
‘‘SEC. 744J. DEFINITIONS. 
‘‘In this part: 
‘‘(1) The term ‘affiliate’ has the meaning given 
such term in section 735(11). 
‘‘(2) The term ‘gross annual sales’ means the 
total worldwide gross annual sales, in United States 
dollars, for an outsourcing facility, including the 
sales of all the affiliates of the outsourcing facility. 
‘‘(3) The term ‘outsourcing facility’ has the 
meaning given to such term in section 503B(c). 
‘‘(4) The term ‘reinspection’ means, with re-
spect to an outsourcing facility, one or more inspec-
tions conducted under section 704 subsequent to an 
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inspection conducted under such provision which 
identified noncompliance materially related to an ap-
plicable requirement of this Act, specifically to deter-
mine whether compliance has been achieved to the 
Secretary’s satisfaction. 
‘‘SEC. 744K. AUTHORITY TO ASSESS AND USE OUTSOURC-
ING FACILITY FEES. 
‘‘(a) 
ESTABLISHMENT
AND
REINSPECTION 
FEES.—— 
‘‘(1) IN GENERAL.—For fiscal year 2015 and 
each subsequent fiscal year, the Secretary shall, in 
accordance with this subsection, assess and collect— 
‘‘(A) an annual establishment fee from 
each outsourcing facility; and 
‘‘(B) a reinspection fee from each out-
sourcing facility subject to a reinspection in 
such fiscal year. 
‘‘(2) MULTIPLE REINSPECTIONS.—An outsourc-
ing facility subject to multiple reinspections in a fis-
cal year shall be subject to a reinspection fee for 
each reinspection. 
‘‘(b) ESTABLISHMENT AND REINSPECTION FEE SET-
TING.—The Secretary shall— 
‘‘(1) establish the amount of the establishment 
and reinspection fee to be collected under this sec-
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tion for each fiscal year based on the methodology 
described in subsection (c); and 
‘‘(2) publish such fee amounts in a Federal 
Register notice not later than 60 calendar days be-
fore the start of each such year. 
‘‘(c) AMOUNT OF ESTABLISHMENT FEE AND REIN-
SPECTION FEE.— 
‘‘(1) IN GENERAL.—For each outsourcing facil-
ity in a fiscal year— 
‘‘(A) except as provided in paragraph (4), 
the amount of the annual establishment fee 
under subsection (b) shall be equal to the sum 
of— 
‘‘(i) $15,000, multiplied by the infla-
tion adjustment factor described in para-
graph (2); plus 
‘‘(ii) the small business adjustment 
factor described in paragraph (3); and 
‘‘(B) the amount of any reinspection fee (if 
applicable) under subsection (b) shall be equal 
to $15,000, multiplied by the inflation adjust-
ment factor described in paragraph (3). 
‘‘(2) INFLATION ADJUSTMENT FACTOR.— 
‘‘(A) IN GENERAL.—For fiscal year 2015 
and subsequent fiscal years, the fee amounts es-
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tablished in paragraph (1) shall be adjusted by 
the Secretary by notice, published in the Fed-
eral Register, for a fiscal year by the amount 
equal to the sum of— 
‘‘(i) one; 
‘‘(ii) the average annual percent 
change in the cost, per full-time equivalent 
position of the Food and Drug Administra-
tion, of all personnel compensation and 
benefits paid with respect to such positions 
for the first 3 years of the preceding 4 fis-
cal years, multiplied by the proportion of 
personnel compensation and benefits costs 
to total costs of an average full-time equiv-
alent position of the Food and Drug Ad-
ministration for the first 3 years of the 
preceding 4 fiscal years; and 
‘‘(iii) the average annual percent 
change that occurred in the Consumer 
Price Index for urban consumers (U.S. 
City Average; Not Seasonally Adjusted; All 
items; Annual Index) for the first 3 years 
of the preceding 4 years of available data 
multiplied by the proportion of all costs 
other than personnel compensation and 
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benefits costs to total costs of an average 
full-time equivalent position of the Food 
and Drug Administration for the first 3 
years of the preceding 4 fiscal years. 
‘‘(B) COMPOUNDED
BASIS.—The adjust-
ment made each fiscal year under subparagraph 
(A) shall be added on a compounded basis to 
the sum of all adjustments made each fiscal 
year after fiscal year 2014 under subparagraph 
(A). 
‘‘(3) SMALL BUSINESS ADJUSTMENT FACTOR.— 
The small business adjustment factor referred to in 
paragraph (1)(A)(ii) shall be an amount established 
by the Secretary for each fiscal year based on the 
Secretary’s estimate of— 
‘‘(A) the number of small businesses that 
will pay a reduced establishment fee for such 
fiscal year; and 
‘‘(B) the adjustment to the establishment 
fee necessary to achieve total fees equaling the 
total fees that the Secretary would have col-
lected if no entity qualified for the small busi-
ness exception in paragraph (4). 
‘‘(4) EXCEPTION FOR SMALL BUSINESSES.— 
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‘‘(A) IN GENERAL.—In the case of an out-
sourcing facility with gross annual sales of 
$1,000,000 or less in the 12 months ending 
April 1 of the fiscal year immediately preceding 
the fiscal year in which the fees under this sec-
tion are assessed, the amount of the establish-
ment fee under subsection (b) for a fiscal year 
shall be equal to 1⁄3 of the amount calculated 
under paragraph (1)(A)(i) for such fiscal year. 
‘‘(B) APPLICATION.—To qualify for the ex-
ception under this paragraph, a small business 
shall submit to the Secretary a written request 
for such exception, in a format specified by the 
Secretary in guidance, certifying its gross an-
nual sales for the 12 months ending April 1 of 
the fiscal year immediately preceding the fiscal 
year in which fees under this subsection are as-
sessed. Any such application shall be submitted 
to the Secretary not later than April 30 of such 
immediately preceding fiscal year. 
‘‘(5) CREDITING OF FEES.—In establishing the 
small business adjustment factor under paragraph 
(3) for a fiscal year, the Secretary shall— 
‘‘(A) provide for the crediting of fees from 
the previous year to the next year if the Sec-
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retary overestimated the amount of the small 
business adjustment factor for such previous 
fiscal year; and 
‘‘(B) consider the need to account for any 
adjustment of fees and such other factors as 
the Secretary determines appropriate. 
‘‘(d) USE OF FEES.—The Secretary shall make all 
of the fees collected pursuant to subparagraphs (A) and 
(B) of subsection (a)(1) available solely to pay for the 
costs of oversight of outsourcing facilities. 
‘‘(e) SUPPLEMENT NOT SUPPLANT.—Funds received 
by the Secretary pursuant to this section shall be used 
to supplement and not supplant any other Federal funds 
available to carry out the activities described in this sec-
tion. 
‘‘(f) CREDITING AND AVAILABILITY OF FEES.—Fees 
authorized under this section shall be collected and avail-
able for obligation only to the extent and in the amount 
provided in advance in appropriations Acts. Such fees are 
authorized to remain available until expended. Such sums 
as may be necessary may be transferred from the Food 
and Drug Administration salaries and expenses appropria-
tion account without fiscal year limitation to such appro-
priation account for salaries and expenses with such fiscal 
year limitation. The sums transferred shall be available 
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solely for the purpose of paying the costs of oversight of 
outsourcing facilities. 
‘‘(g) COLLECTION OF FEES.— 
‘‘(1) ESTABLISHMENT
FEE.—An outsourcing 
facility shall remit the establishment fee due under 
this section in a fiscal year when submitting a reg-
istration pursuant to section 503B(b) for such fiscal 
year. 
‘‘(2) REINSPECTION FEE.—The Secretary shall 
specify in the Federal Register notice described in 
subsection (b)(2) the manner in which reinspection 
fees assessed under this section shall be collected 
and the timeline for payment of such fees. Such a 
fee shall be collected after the Secretary has con-
ducted a reinspection of the outsourcing facility in-
volved. 
‘‘(3) EFFECT OF FAILURE TO PAY FEES.— 
‘‘(A) REGISTRATION.—An outsourcing fa-
cility shall not be considered registered under 
section 503B(b) in a fiscal year until the date 
that the outsourcing facility remits the estab-
lishment fee under this subsection for such fis-
cal year. 
‘‘(B) MISBRANDING.—All drug products 
manufactured, 
prepared, 
propagated, 
com-
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pounded, or processed by an outsourcing facility 
for which any establishment fee or reinspection 
fee has not been paid, as required by this sec-
tion, shall be deemed misbranded under section 
502 until the fees owed for such outsourcing fa-
cility under this section have been paid. 
‘‘(4) COLLECTION OF UNPAID FEES.—In any 
case where the Secretary does not receive payment 
of a fee assessed under this section within 30 cal-
endar days after it is due, such fee shall be treated 
as a claim of the United States Government subject 
to provisions of subchapter II of chapter 37 of title 
31, United States Code. 
‘‘(h) ANNUAL REPORT
TO CONGRESS.—Not later 
than 120 calendar days after each fiscal year in which fees 
are assessed and collected under this section, the Sec-
retary shall submit a report to the Committee on Health, 
Education, Labor, and Pensions of the Senate and the 
Committee on Energy and Commerce of the House of 
Representatives, to include a description of fees assessed 
and collected for such year, a summary description of enti-
ties paying the fees, a description of the hiring and place-
ment of new staff, a description of the use of fee resources 
to support inspecting outsourcing facilities, and the num-
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ber of inspections and reinspections of such facilities per-
formed each year. 
‘‘(i) AUTHORIZATION OF APPROPRIATIONS.—For fis-
cal year 2015 and each subsequent fiscal year, there is 
authorized to be appropriated for fees under this sub-
section an amount equivalent to the total amount of fees 
assessed for such fiscal year under this section.’’. 
SEC. 4. PROHIBITED ACTS. 
(a) INTENTIONAL FALSIFICATION OF PRESCRIPTION 
ORDER
FOR COMPOUNDED DRUG PRODUCT.—Section 
301 of the Federal Food, Drug, and Cosmetic Act (21 
U.S.C. 331) is amended by inserting after paragraph 
(bbb) the following: 
‘‘(ccc) With respect to a drug product to be com-
pounded under section 503A or 503B, the intentional fal-
sification of a prescription, a purchase order, or patient 
name required under section 503A or 503B.’’. 
(b) INTENTIONAL FAILURE OF OUTSOURCING FACIL-
ITY TO REGISTER.—Section 301 of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 331), as amended by 
subsection (a), is further amended by inserting after para-
graph (ccc) (as added by such subsection), the following: 
‘‘(ddd) With respect to any year in which an out-
sourcing facility is required to register with the Secretary 
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under section 503B(b), the intentional failure of the out-
sourcing facility to so register.’’. 
Æ 
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