H. R. 3204—28 
processor, without providing the information required 
under subparagraph (A)(i). 
‘‘(C) REQUESTS FOR INFORMATION.—Upon a request by 
the Secretary or other appropriate Federal or State official, 
in the event of a recall or for the purpose of investigating 
a suspect product or an illegitimate product, a wholesale 
distributor shall, not later than 1 business day, and not 
to exceed 48 hours, after receiving the request or in other 
such reasonable time as determined by the Secretary, based 
on the circumstances of the request, provide the applicable 
transaction information, transaction history, and trans-
action statement for the product. 
‘‘(D) TRADING
PARTNER
AGREEMENTS.—Beginning 6 
years after the date of enactment of the Drug Supply 
Chain Security Act, a wholesale distributor may disclose 
the transaction information, including lot level information, 
transaction history, or transaction statement of a product 
to the subsequent purchaser of the product, pursuant to 
a written agreement between such wholesale distributor 
and such subsequent purchaser. Nothing in this subpara-
graph shall be construed to limit the applicability of sub-
paragraphs (A) through (C). 
‘‘(2) PRODUCT IDENTIFIER.—Beginning 6 years after the date 
of enactment of the Drug Supply Chain Security Act, a whole-
sale distributor may engage in transactions involving a product 
only if such product is encoded with a product identifier (except 
as provided pursuant to subsection (a)(5)). 
‘‘(3) AUTHORIZED TRADING PARTNERS.—Beginning not later 
than January 1, 2015, the trading partners of a wholesale 
distributor may be only authorized trading partners. 
‘‘(4) VERIFICATION.—Beginning not later than January 1, 
2015, a wholesale distributor shall have systems in place to 
enable the wholesale distributor to comply with the following 
requirements: 
‘‘(A) SUSPECT PRODUCT.— 
‘‘(i) IN GENERAL.—Upon making a determination 
that a product in the possession or control of a whole-
sale distributor is a suspect product, or upon receiving 
a request for verification from the Secretary that has 
made a determination that a product within the posses-
sion or control of a wholesale distributor is a suspect 
product, a wholesale distributor shall— 
‘‘(I) quarantine such product within the posses-
sion or control of the wholesale distributor from 
product intended for distribution until such 
product is cleared or dispositioned; and 
‘‘(II) promptly conduct an investigation in 
coordination with trading partners, as applicable, 
to determine whether the product is an illegitimate 
product, which shall include validating any 
applicable transaction history and transaction 
information in the possession of the wholesale dis-
tributor and otherwise investigating to determine 
whether the product is an illegitimate product, 
and, beginning 6 years after the date of enactment 
of the Drug Supply Chain Security Act (except 
as 
provided 
pursuant 
to 
subsection 
(a)(5)),
H. R. 3204—29 
verifying the product at the package level, 
including the standardized numerical identifier. 
‘‘(ii) CLEARED
PRODUCT.—If the wholesale dis-
tributor determines that a suspect product is not an 
illegitimate product, the wholesale distributor shall 
promptly notify the Secretary, if applicable, of such 
determination and such product may be further distrib-
uted. 
‘‘(iii) RECORDS.—A wholesale distributor shall keep 
records of the investigation of a suspect product for 
not less than 6 years after the conclusion of the inves-
tigation. 
‘‘(B) ILLEGITIMATE PRODUCT.— 
‘‘(i) IN GENERAL.—Upon determining, in coordina-
tion with the manufacturer, that a product in the 
possession or control of a wholesale distributor is an 
illegitimate product, the wholesale distributor shall, 
in a manner that is consistent with the systems and 
processes of such wholesale distributor— 
‘‘(I) quarantine such product within the posses-
sion or control of the wholesale distributor from 
product intended for distribution until such 
product is dispositioned; 
‘‘(II) disposition the illegitimate product within 
the possession or control of the wholesale dis-
tributor; 
‘‘(III) take reasonable and appropriate steps 
to assist a trading partner to disposition an illegit-
imate product not in the possession or control of 
the wholesale distributor; and 
‘‘(IV) retain a sample of the product for further 
physical examination or laboratory analysis of the 
product by the manufacturer or Secretary (or other 
appropriate Federal or State official) upon request 
by the manufacturer or Secretary (or other appro-
priate Federal or State official), as necessary and 
appropriate. 
‘‘(ii) MAKING A NOTIFICATION.—Upon determining 
that a product in the possession or control of the whole-
sale distributor is an illegitimate product, the whole-
sale distributor shall notify the Secretary and all imme-
diate trading partners that the wholesale distributor 
has reason to believe may have received such illegit-
imate product of such determination not later than 
24 hours after making such determination. 
‘‘(iii) RESPONDING TO A NOTIFICATION.—Upon the 
receipt of a notification from the Secretary or a trading 
partner that a determination has been made that a 
product is an illegitimate product, a wholesale dis-
tributor shall identify all illegitimate product subject 
to such notification that is in the possession or control 
of the wholesale distributor, including any product that 
is subsequently received, and shall perform the activi-
ties described in subparagraph (A). 
‘‘(iv) TERMINATING A NOTIFICATION.—Upon making 
a determination, in consultation with the Secretary, 
that a notification is no longer necessary, a wholesale
H. R. 3204—30 
distributor shall promptly notify immediate trading 
partners that the wholesale distributor notified pursu-
ant to clause (ii) that such notification has been termi-
nated. 
‘‘(v) RECORDS.—A wholesale distributor shall keep 
records of the disposition of an illegitimate product 
for not less than 6 years after the conclusion of the 
disposition. 
‘‘(C) ELECTRONIC DATABASE.—A wholesale distributor 
may satisfy the requirements of this paragraph by devel-
oping a secure electronic database or utilizing a secure 
electronic database developed or operated by another 
entity. The owner of such database shall establish the 
requirements and processes to respond to requests and 
may provide for data access to other members of the 
pharmaceutical distribution supply chain, as appropriate. 
The development and operation of such a database shall 
not relieve a wholesale distributor of the requirement under 
this paragraph to respond to a verification request sub-
mitted by means other than a secure electronic database. 
‘‘(D) VERIFICATION OF SALEABLE RETURNED PRODUCT.— 
Beginning 6 years after the date of enactment of the Drug 
Supply Chain Security Act, upon receipt of a returned 
product that the wholesale distributor intends to further 
distribute, before further distributing such product, the 
wholesale distributor shall verify the product identifier, 
including the standardized numerical identifier, for each 
sealed homogeneous case of such product or, if such product 
is not in a sealed homogeneous case, verify the product 
identifier, including the standardized numerical identifier, 
on each package. 
‘‘(d) DISPENSER REQUIREMENTS.— 
‘‘(1) PRODUCT TRACING.— 
‘‘(A) IN
GENERAL.—Beginning July 1, 2015, a dis-
penser— 
‘‘(i) shall not accept ownership of a product, unless 
the previous owner prior to, or at the time of, the 
transaction, provides transaction history, transaction 
information, and a transaction statement; 
‘‘(ii) prior to, or at the time of, each transaction 
in which the dispenser transfers ownership of a product 
(but not including dispensing to a patient or returns) 
shall provide the subsequent owner with transaction 
history, transaction information, and a transaction 
statement for the product, except that the require-
ments of this clause shall not apply to sales by a 
dispenser to another dispenser to fulfill a specific 
patient need; and 
‘‘(iii) 
shall 
capture 
transaction 
information 
(including lot level information, if provided), trans-
action history, and transaction statements, as nec-
essary to investigate a suspect product, and maintain 
such information, history, and statements for not less 
than 6 years after the transaction. 
‘‘(B) AGREEMENTS WITH THIRD PARTIES.—A dispenser 
may enter into a written agreement with a third party, 
including an authorized wholesale distributor, under which
H. R. 3204—31 
the third party confidentially maintains the transaction 
information, transaction history, and transaction state-
ments required to be maintained under this subsection 
on behalf of the dispenser. If a dispenser enters into such 
an agreement, the dispenser shall maintain a copy of the 
written agreement and shall not be relieved of the obliga-
tions of the dispenser under this subsection. 
‘‘(C) RETURNS.— 
‘‘(i) SALEABLE RETURNS.—A dispenser may return 
product to the trading partner from which the dis-
penser obtained the product without providing the 
information required under subparagraph (A). 
‘‘(ii) NONSALEABLE
RETURNS.—A dispenser may 
return a nonsaleable product to the manufacturer or 
repackager, to the wholesale distributor from whom 
such product was purchased, to a returns processor, 
or to a person acting on behalf of such a person without 
providing the information required under subpara-
graph (A). 
‘‘(D) REQUESTS FOR INFORMATION.—Upon a request by 
the Secretary or other appropriate Federal or State official, 
in the event of a recall or for the purpose of investigating 
a suspect or an illegitimate product, a dispenser shall, 
not later than 2 business days after receiving the request 
or in another such reasonable time as determined by the 
Secretary, based on the circumstances of the request, pro-
vide the applicable transaction information, transaction 
statement, and transaction history which the dispenser 
received from the previous owner, which shall not include 
the lot number of the product, the initial transaction date, 
or the initial shipment date from the manufacturer unless 
such information was included in the transaction informa-
tion, transaction statement, and transaction history pro-
vided by the manufacturer or wholesale distributor to the 
dispenser. The dispenser may respond to the request by 
providing the applicable information in either paper or 
electronic format. Until the date that is 4 years after the 
date of enactment of the Drug Supply Chain Security Act, 
the Secretary or other appropriate Federal or State official 
shall grant a dispenser additional time, as necessary, only 
with respect to a request to provide lot level information 
described in subparagraph (F) of section 581(26) that was 
provided to the dispenser in paper format, limit the request 
time period to the 6 months preceding the request or other 
relevant date, and, in the event of a recall, the Secretary, 
or other appropriate Federal or State official may request 
information only if such recall involves a serious adverse 
health consequence or death to humans. 
‘‘(2) PRODUCT
IDENTIFIER.—Beginning not later than 7 
years after the date of enactment of the Drug Supply Chain 
Security Act, a dispenser may engage in transactions involving 
a product only if such product is encoded with a product identi-
fier (except as provided pursuant to subsection (a)(5)). 
‘‘(3) AUTHORIZED TRADING PARTNERS.—Beginning not later 
than January 1, 2015, the trading partners of a dispenser 
may be only authorized trading partners.
H. R. 3204—32 
‘‘(4) VERIFICATION.—Beginning not later than January 1, 
2015, a dispenser shall have systems in place to enable the 
dispenser to comply with the following requirements: 
‘‘(A) SUSPECT PRODUCT.— 
‘‘(i) IN GENERAL.—Upon making a determination 
that a product in the possession or control of the dis-
penser is a suspect product, or upon receiving a request 
for verification from the Secretary that has made a 
determination that a product within the possession 
or control of a dispenser is a suspect product, a dis-
penser shall— 
‘‘(I) quarantine such product within the posses-
sion or control of the dispenser from product 
intended for distribution until such product is 
cleared or dispositioned; and 
‘‘(II) promptly conduct an investigation in 
coordination with trading partners, as applicable, 
to determine whether the product is an illegitimate 
product. 
‘‘(ii) INVESTIGATION.—An investigation conducted 
under clause (i)(II) shall include— 
‘‘(I) beginning 7 years after the date of enact-
ment of the Drug Supply Chain Security Act, 
verifying whether the lot number of a suspect 
product corresponds with the lot number for such 
product; 
‘‘(II) beginning 7 years after the date of enact-
ment of such Act, verifying that the product identi-
fier, including the standardized numerical identi-
fier, of at least 3 packages or 10 percent of such 
suspect product, whichever is greater, or all pack-
ages, if there are fewer than 3, corresponds with 
the product identifier for such product; 
‘‘(III) validating any applicable transaction his-
tory and transaction information in the possession 
of the dispenser; and 
‘‘(IV) otherwise investigating to determine 
whether the product is an illegitimate product. 
‘‘(iii) CLEARED PRODUCT.—If the dispenser makes 
the determination that a suspect product is not an 
illegitimate product, the dispenser shall promptly 
notify the Secretary, if applicable, of such determina-
tion and such product may be further distributed or 
dispensed. 
‘‘(iv) RECORDS.—A dispenser shall keep records of 
the investigation of a suspect product for not less than 
6 years after the conclusion of the investigation. 
‘‘(B) ILLEGITIMATE PRODUCT.— 
‘‘(i) IN GENERAL.—Upon determining, in coordina-
tion with the manufacturer, that a product in the 
possession or control of a dispenser is an illegitimate 
product, the dispenser shall— 
‘‘(I) disposition the illegitimate product within 
the possession or control of the dispenser;
H. R. 3204—33 
‘‘(II) take reasonable and appropriate steps to 
assist a trading partner to disposition an illegit-
imate product not in the possession or control of 
the dispenser; and 
‘‘(III) retain a sample of the product for further 
physical examination or laboratory analysis of the 
product by the manufacturer or Secretary (or other 
appropriate Federal or State official) upon request 
by the manufacturer or Secretary (or other appro-
priate Federal or State official), as necessary and 
appropriate. 
‘‘(ii) MAKING A NOTIFICATION.—Upon determining 
that a product in the possession or control of the dis-
penser is an illegitimate product, the dispenser shall 
notify the Secretary and all immediate trading part-
ners that the dispenser has reason to believe may 
have received such illegitimate product of such deter-
mination not later than 24 hours after making such 
determination. 
‘‘(iii) RESPONDING TO A NOTIFICATION.—Upon the 
receipt of a notification from the Secretary or a trading 
partner that a determination has been made that a 
product is an illegitimate product, a dispenser shall 
identify all illegitimate product subject to such notifica-
tion that is in the possession or control of the dispenser, 
including any product that is subsequently received, 
and shall perform the activities described in subpara-
graph (A). 
‘‘(iv) TERMINATING A NOTIFICATION.—Upon making 
a determination, in consultation with the Secretary, 
that a notification is no longer necessary, a dispenser 
shall promptly notify immediate trading partners that 
the dispenser notified pursuant to clause (ii) that such 
notification has been terminated. 
‘‘(v) RECORDS.—A dispenser shall keep records of 
the disposition of an illegitimate product for not less 
than 6 years after the conclusion of the disposition. 
‘‘(C) ELECTRONIC DATABASE.—A dispenser may satisfy 
the requirements of this paragraph by developing a secure 
electronic database or utilizing a secure electronic database 
developed or operated by another entity. 
‘‘(5) EXCEPTION.—Notwithstanding any other provision of 
law, the requirements under paragraphs (1) and (4) shall not 
apply to licensed health care practitioners authorized to pre-
scribe or administer medication under State law or other 
licensed individuals under the supervision or direction of such 
practitioners who dispense or administer product in the usual 
course of professional practice. 
‘‘(e) REPACKAGER REQUIREMENTS.— 
‘‘(1) PRODUCT TRACING.— 
‘‘(A) IN GENERAL.—Beginning not later than January 
1, 2015, a repackager described in section 581(16)(A) 
shall— 
‘‘(i) not accept ownership of a product unless the 
previous owner, prior to, or at the time of, the trans-
action, 
provides 
transaction 
history, 
transaction
H. R. 3204—34 
information, and a transaction statement for the 
product; 
‘‘(ii) prior to, or at the time of, each transaction 
in which the repackager transfers ownership of a 
product, provide the subsequent owner with trans-
action history, transaction information, and a trans-
action statement for the product; and 
‘‘(iii) 
capture 
the 
transaction 
information 
(including lot level information), transaction history, 
and 
transaction 
statement 
for 
each 
transaction 
described in clauses (i) and (ii) and maintain such 
information, history, and statement for not less than 
6 years after the transaction. 
‘‘(B) RETURNS.— 
‘‘(i) 
NONSALEABLE
PRODUCT.—A 
repackager 
described in section 581(16)(A) may return a nonsale-
able product to the manufacturer or repackager, or 
to the wholesale distributor from whom such product 
was purchased, or to a person acting on behalf of 
such a person, including a returns processor, without 
providing the information required under subpara-
graph (A)(ii). 
‘‘(ii) SALEABLE OR NONSALEABLE PRODUCT.—A re-
packager described in section 581(16)(B) may return 
a saleable or nonsaleable product to the manufacturer, 
repackager, or to the wholesale distributor from whom 
such product was received without providing the 
information required under subparagraph (A)(ii) on 
behalf of the hospital or other health care entity that 
took ownership of such product pursuant to the terms 
and conditions of any agreement between such repack-
ager and the entity that owns the product. 
‘‘(C) REQUESTS FOR INFORMATION.—Upon a request by 
the Secretary or other appropriate Federal or State official, 
in the event of a recall or for the purpose of investigating 
a suspect product or an illegitimate product, a repackager 
described in section 581(16)(A) shall, not later than 1 busi-
ness day, and not to exceed 48 hours, after receiving the 
request or in other such reasonable time as determined 
by the Secretary, provide the applicable transaction 
information, transaction history, and transaction statement 
for the product. 
‘‘(2) PRODUCT IDENTIFIER.— 
‘‘(A) IN GENERAL.—Beginning not later than 5 years 
after the date of enactment of the Drug Supply Chain 
Security Act, a repackager described in section 581(16)(A)— 
‘‘(i) shall affix or imprint a product identifier to 
each package and homogenous case of product intended 
to be introduced in a transaction in commerce; 
‘‘(ii) shall maintain the product identifier informa-
tion for such product for not less than 6 years after 
the date of the transaction; 
‘‘(iii) may engage in transactions involving a 
product only if such product is encoded with a product 
identifier (except as provided pursuant to subsection 
(a)(5)); and
H. R. 3204—35 
‘‘(iv) shall maintain records for not less than 6 
years to allow the repackager to associate the product 
identifier the repackager affixes or imprints with the 
product identifier assigned by the original manufac-
turer of the product. 
‘‘(B) EXCEPTION.—A package that is required to have 
a standardized numerical identifier is not required to have 
a unique device identifier. 
‘‘(3) AUTHORIZED TRADING PARTNERS.—Beginning January 
1, 2015, the trading partners of a repackager described in 
section 581(16) may be only authorized trading partners. 
‘‘(4) VERIFICATION.—Beginning not later than January 1, 
2015, a repackager described in section 581(16)(A) shall have 
systems in place to enable the repackager to comply with the 
following requirements: 
‘‘(A) SUSPECT PRODUCT.— 
‘‘(i) IN GENERAL.—Upon making a determination 
that a product in the possession or control of the re-
packager is a suspect product, or upon receiving a 
request for verification from the Secretary that has 
made a determination that a product within the posses-
sion or control of a repackager is a suspect product, 
a repackager shall— 
‘‘(I) quarantine such product within the posses-
sion or control of the repackager from product 
intended for distribution until such product is 
cleared or dispositioned; and 
‘‘(II) promptly conduct an investigation in 
coordination with trading partners, as applicable, 
to determine whether the product is an illegitimate 
product, which shall include validating any 
applicable transaction history and transaction 
information in the possession of the repackager 
and otherwise investigating to determine whether 
the product is an illegitimate product, and, begin-
ning 5 years after the date of enactment of the 
Drug Supply Chain Security Act (except as pro-
vided pursuant to subsection (a)(5)), verifying the 
product at the package level, including the 
standardized numerical identifier. 
‘‘(ii) CLEARED PRODUCT.—If the repackager makes 
the determination that a suspect product is not an 
illegitimate product, the repackager shall promptly 
notify the Secretary, if applicable, of such determina-
tion and such product may be further distributed. 
‘‘(iii) RECORDS.—A repackager shall keep records 
of the investigation of a suspect product for not less 
than 6 years after the conclusion of the investigation. 
‘‘(B) ILLEGITIMATE PRODUCT.— 
‘‘(i) IN GENERAL.—Upon determining, in coordina-
tion with the manufacturer, that a product in the 
possession or control of a repackager is an illegitimate 
product, the repackager shall, in a manner that is 
consistent with the systems and processes of such re-
packager— 
‘‘(I) quarantine such product within the posses-
sion or control of the repackager from product
H. R. 3204—36 
intended for distribution until such product is 
dispositioned; 
‘‘(II) disposition the illegitimate product within 
the possession or control of the repackager; 
‘‘(III) take reasonable and appropriate steps 
to assist a trading partner to disposition an illegit-
imate product not in the possession or control of 
the repackager; and 
‘‘(IV) retain a sample of the product for further 
physical examination or laboratory analysis of the 
product by the manufacturer or Secretary (or other 
appropriate Federal or State official) upon request 
by the manufacturer or Secretary (or other appro-
priate Federal or State official), as necessary and 
appropriate. 
‘‘(ii) MAKING A NOTIFICATION.—Upon determining 
that a product in the possession or control of the re-
packager is an illegitimate product, the repackager 
shall notify the Secretary and all immediate trading 
partners that the repackager has reason to believe 
may have received the illegitimate product of such 
determination not later than 24 hours after making 
such determination. 
‘‘(iii) RESPONDING TO A NOTIFICATION.—Upon the 
receipt of a notification from the Secretary or a trading 
partner, a repackager shall identify all illegitimate 
product subject to such notification that is in the 
possession or control of the repackager, including any 
product that is subsequently received, and shall per-
form the activities described in subparagraph (A). 
‘‘(iv) TERMINATING A NOTIFICATION.—Upon making 
a determination, in consultation with the Secretary, 
that a notification is no longer necessary, a repackager 
shall promptly notify immediate trading partners that 
the repackager notified pursuant to clause (ii) that 
such notification has been terminated. 
‘‘(v) RECORDS.—A repackager shall keep records 
of the disposition of an illegitimate product for not 
less than 6 years after the conclusion of the disposition. 
‘‘(C) REQUESTS FOR VERIFICATION.—Beginning 5 years 
after the date of enactment of the Drug Supply Chain 
Security Act, upon receiving a request for verification from 
an authorized manufacturer, wholesale distributor, or dis-
penser that is in possession or control of a product they 
believe to be repackaged by such repackager, a repackager 
shall, not later than 24 hours after receiving the verification 
request or in other such reasonable time as determined 
by the Secretary, based on the circumstances of the request, 
notify the person making the request whether the product 
identifier, including the standardized numerical identifier, 
that is the subject of the request corresponds to the product 
identifier affixed or imprinted by the repackager. If a re-
packager responding to a verification request identifies a 
product identifier that does not correspond to that affixed 
or imprinted by the repackager, the repackager shall treat 
such product as suspect product and conduct an investiga-
tion as described in subparagraph (A). If the repackager
H. R. 3204—37 
has reason to believe the product is an illegitimate product, 
the repackager shall advise the person making the request 
of such belief at the time such repackager responds to 
the verification request. 
‘‘(D) ELECTRONIC DATABASE.—A repackager may satisfy 
the requirements of paragraph (4) by developing a secure 
electronic database or utilizing a secure electronic database 
developed or operated by another entity. The owner of 
such database shall establish the requirements and proc-
esses to respond to requests and may provide for data 
access to other members of the pharmaceutical distribution 
supply chain, as appropriate. The development and oper-
ation of such a database shall not relieve a repackager 
of the requirement under subparagraph (C) to respond 
to a verification request submitted by means other than 
a secure electronic database. 
‘‘(E) VERIFICATION OF SALEABLE RETURNED PRODUCT.— 
Beginning 5 years after the date of enactment of the Drug 
Supply Chain Security Act, upon receipt of a returned 
product that the repackager intends to further distribute, 
before further distributing such product, the repackager 
shall verify the product identifier for each sealed homo-
geneous case of such product or, if such product is not 
in a sealed homogeneous case, verify the product identifier 
on each package. 
‘‘(f) DROP SHIPMENTS.— 
‘‘(1) IN GENERAL.—A wholesale distributor that does not 
physically handle or store product shall be exempt from the 
provisions of this section, except the notification requirements 
under clauses (ii), (iii), and (iv) of subsection (c)(4)(B), provided 
that the manufacturer, repackager, or other wholesale dis-
tributor that distributes the product to the dispenser by means 
of a drop shipment for such wholesale distributor includes 
on the transaction information and transaction history to the 
dispenser the contact information of such wholesale distributor 
and provides the transaction information, transaction history, 
and transaction statement directly to the dispenser. 
‘‘(2) CLARIFICATION.—For purposes of this subsection, pro-
viding administrative services, including processing of orders 
and payments, shall not by itself, be construed as being involved 
in the handling, distribution, or storage of a product.’’. 
SEC. 203. ENHANCED DRUG DISTRIBUTION SECURITY. 
Section 582, as added by section 202, is amended by adding 
at the end the following: 
‘‘(g) ENHANCED DRUG DISTRIBUTION SECURITY.— 
‘‘(1) IN GENERAL.—On the date that is 10 years after the 
date of enactment of the Drug Supply Chain Security Act, 
the following interoperable, electronic tracing of product at 
the package level requirements shall go into effect: 
‘‘(A) The transaction information and the transaction 
statements as required under this section shall be 
exchanged in a secure, interoperable, electronic manner 
in accordance with the standards established under the 
guidance issued pursuant to paragraphs (3) and (4) of 
subsection (h), including any revision of such guidance 
issued in accordance with paragraph (5) of such subsection.
H. R. 3204—38 
‘‘(B) The transaction information required under this 
section shall include the product identifier at the package 
level for each package included in the transaction. 
‘‘(C) Systems and processes for verification of product 
at the package level, including the standardized numerical 
identifier, shall be required in accordance with the stand-
ards established under the guidance issued pursuant to 
subsection (a)(2) and the guidances issued pursuant to 
paragraphs (2), (3), and (4) of subsection (h), including 
any revision of such guidances issued in accordance with 
paragraph (5) of such subsection, which may include the 
use of aggregation and inference as necessary. 
‘‘(D) The systems and processes necessary to promptly 
respond with the transaction information and transaction 
statement for a product upon a request by the Secretary 
(or other appropriate Federal or State official) in the event 
of a recall or for the purposes of investigating a suspect 
product or an illegitimate product shall be required. 
‘‘(E) The systems and processes necessary to promptly 
facilitate gathering the information necessary to produce 
the transaction information for each transaction going back 
to the manufacturer, as applicable, shall be required— 
‘‘(i) in the event of a request by the Secretary 
(or other appropriate Federal or State official), on 
account of a recall or for the purposes of investigating 
a suspect product or an illegitimate product; or 
‘‘(ii) in the event of a request by an authorized 
trading partner, in a secure manner that ensures the 
protection of confidential commercial information and 
trade secrets, for purposes of investigating a suspect 
product or assisting the Secretary (or other appropriate 
Federal or State official) with a request described in 
clause (i). 
‘‘(F) Each person accepting a saleable return shall have 
systems and processes in place to allow acceptance of such 
product and may accept saleable returns only if such person 
can associate the saleable return product with the trans-
action information and transaction statement associated 
with that product. 
‘‘(2) COMPLIANCE.— 
‘‘(A) INFORMATION MAINTENANCE AGREEMENT.—A dis-
penser may enter into a written agreement with a third 
party, including an authorized wholesale distributor, under 
which the third party shall confidentially maintain any 
information and statements required to be maintained 
under this section. If a dispenser enters into such an agree-
ment, the dispenser shall maintain a copy of the written 
agreement and shall not be relieved of the obligations 
of the dispenser under this subsection. 
‘‘(B) ALTERNATIVE
METHODS.—The Secretary, taking 
into consideration the assessment conducted under para-
graph (3), shall provide for alternative methods of compli-
ance with any of the requirements set forth in paragraph 
(1), including— 
‘‘(i) establishing timelines for compliance by small 
businesses (including small business dispensers with
H. R. 3204—39 
25 or fewer full-time employees) with such require-
ments, in order to ensure that such requirements do 
not impose undue economic hardship for small 
businesses, including small business dispensers for 
whom the criteria set forth in the assessment under 
paragraph (3) is not met, if the Secretary determines 
that such requirements under paragraph (1) would 
result in undue economic hardship; and 
‘‘(ii) establishing a process by which a dispenser 
may request a waiver from any of the requirements 
set forth in paragraph (1) if the Secretary determines 
that such requirements would result in an undue eco-
nomic hardship, which shall include a process for the 
biennial review and renewal of any such waiver. 
‘‘(3) ASSESSMENT.— 
‘‘(A) IN
GENERAL.—Not later than the date that is 
18 months after the Secretary issues the final guidance 
required under subsection (h), the Secretary shall enter 
into a contract with a private, independent consulting firm 
with expertise to conduct a technology and software assess-
ment that looks at the feasibility of dispensers with 25 
or fewer full-time employees conducting interoperable, elec-
tronic tracing of products at the package level. Such assess-
ment shall be completed not later than 81⁄2 years after 
the date of enactment of the Drug Supply Chain Security 
Act. 
‘‘(B) CONDITION.—As a condition of the award of the 
contract under subparagraph (A), the private, independent 
consulting firm shall agree to consult with dispensers with 
25 or fewer full-time employees when conducting the 
assessment under such subparagraph. 
‘‘(C) CONTENT.—The assessment under subparagraph 
(A) shall assess whether— 
‘‘(i) the necessary software and hardware is readily 
accessible to such dispensers; 
‘‘(ii) the necessary software and hardware is 
prohibitively expensive to obtain, install, and maintain 
for such dispensers; and 
‘‘(iii) the necessary hardware and software can be 
integrated into business practices, such as interoper-
ability with wholesale distributors, for such dispensers. 
‘‘(D) PUBLICATION.—The Secretary shall— 
‘‘(i) publish the statement of work for the assess-
ment under subparagraph (A) for public comment prior 
to beginning the assessment; 
‘‘(ii) publish the final assessment for public com-
ment not later than 30 calendar days after receiving 
such assessment; and 
‘‘(iii) hold a public meeting not later than 180 
calendar days after receiving the final assessment at 
which public stakeholders may present their views on 
the assessment. 
‘‘(4) PROCEDURE.—Notwithstanding section 553 of title 5, 
United States Code, the Secretary, in promulgating any regula-
tion pursuant to this section, shall— 
‘‘(A) provide appropriate flexibility by—
H. R. 3204—40 
‘‘(i) not requiring the adoption of specific business 
systems for the maintenance and transmission of data; 
‘‘(ii) prescribing alternative methods of compliance 
for any of the requirements set forth in paragraph 
(1) or set forth in regulations implementing such 
requirements, including— 
‘‘(I) timelines for small businesses to comply 
with the requirements set forth in the regulations 
in order to ensure that such requirements do not 
impose 
undue 
economic 
hardship 
for 
small 
businesses (including small business dispensers for 
whom the criteria set forth in the assessment 
under paragraph (3) is not met), if the Secretary 
determines that such requirements would result 
in undue economic hardship; and 
‘‘(II) the establishment of a process by which 
a dispenser may request a waiver from any of 
the requirements set forth in such regulations if 
the Secretary determines that such requirements 
would result in an undue economic hardship; and 
‘‘(iii) taking into consideration— 
‘‘(I) the results of pilot projects, including pilot 
projects pursuant to this section and private sector 
pilot projects, including those involving the use 
of aggregation and inference; 
‘‘(II) the public meetings held and related guid-
ance documents issued under this section; 
‘‘(III) the public health benefits of any addi-
tional regulations in comparison to the cost of 
compliance with such requirements, including on 
entities of varying sizes and capabilities; 
‘‘(IV) the diversity of the pharmaceutical dis-
tribution supply chain by providing appropriate 
flexibility for each sector, including both large and 
small businesses; and 
‘‘(V) the assessment pursuant to paragraph 
(3) with respect to small business dispensers, 
including related public comment and the public 
meeting, and requirements under this section; 
‘‘(B) issue a notice of proposed rulemaking that includes 
a copy of the proposed regulation; 
‘‘(C) provide a period of not less than 60 days for 
comments on the proposed regulation; and 
‘‘(D) publish in the Federal Register the final regulation 
not less than 2 years prior to the effective date of the 
regulation. 
‘‘(h) GUIDANCE DOCUMENTS.— 
‘‘(1) IN
GENERAL.—For the purposes of facilitating the 
successful and efficient adoption of secure, interoperable 
product tracing at the package level in order to enhance drug 
distribution security and further protect the public health, the 
Secretary shall issue the guidance documents as provided for 
in this subsection. 
‘‘(2) SUSPECT AND ILLEGITIMATE PRODUCT.— 
‘‘(A) IN GENERAL.—Not later than 180 days after the 
date of enactment of the Drug Supply Chain Security Act, 
the Secretary shall issue a guidance document to aid
H. R. 3204—41 
trading partners in the identification of a suspect product 
and notification termination. Such guidance document 
shall— 
‘‘(i) identify specific scenarios that could signifi-
cantly increase the risk of a suspect product entering 
the pharmaceutical distribution supply chain; 
‘‘(ii) provide recommendation on how trading part-
ners may identify such product and make a determina-
tion on whether the product is a suspect product as 
soon as practicable; and 
‘‘(iii) set forth the process by which manufacturers, 
repackagers, wholesale distributors, and dispensers 
shall terminate notifications in consultation with the 
Secretary regarding illegitimate product pursuant to 
subsections (b)(4)(B), (c)(4)(B), (d)(4)(B), and (e)(4)(B). 
‘‘(B) REVISED GUIDANCE.—If the Secretary revises the 
guidance issued under subparagraph (A), the Secretary 
shall follow the procedure set forth in paragraph (5). 
‘‘(3) UNIT LEVEL TRACING.— 
‘‘(A) IN GENERAL.—In order to enhance drug distribu-
tion security at the package level, not later than 18 months 
after conducting a public meeting on the system attributes 
necessary to enable secure tracing of product at the package 
level, including allowing for the use of verification, 
inference, and aggregation, as necessary, the Secretary 
shall issue a final guidance document that outlines and 
makes recommendations with respect to the system 
attributes necessary to enable secure tracing at the package 
level as required under the requirements established under 
subsection (g). Such guidance document shall— 
‘‘(i) define the circumstances under which the sec-
tors within the pharmaceutical distribution supply 
chain may, in the most efficient manner practicable, 
infer the contents of a case, pallet, tote, or other aggre-
gate of individual packages or containers of product, 
from a product identifier associated with the case, 
pallet, tote, or other aggregate, without opening each 
case, pallet, tote, or other aggregate or otherwise 
individually scanning each package; 
‘‘(ii) identify methods and processes to enhance 
secure tracing of product at the package level, such 
as secure processes to facilitate the use of inference, 
enhanced verification activities, the use of aggregation 
and inference, processes that utilize the product identi-
fiers to enhance tracing of product at the package 
level, including the standardized numerical identifier, 
or package security features; and 
‘‘(iii) ensure the protection of confidential commer-
cial information and trade secrets. 
‘‘(B) PROCEDURE.—In issuing the guidance under 
subparagraph (A), and in revising such guidance, if 
applicable, the Secretary shall follow the procedure set 
forth in paragraph (5). 
‘‘(4) STANDARDS FOR INTEROPERABLE DATA EXCHANGE.— 
‘‘(A) IN GENERAL.—In order to enhance secure tracing 
of a product at the package level, the Secretary, not later 
than 18 months after conducting a public meeting on the
H. R. 3204—42 
interoperable standards necessary to enhance the security 
of the pharmaceutical distribution supply chain, shall 
update the guidance issued pursuant to subsection (a)(2), 
as necessary and appropriate, and finalize such guidance 
document so that the guidance document— 
‘‘(i) identifies and makes recommendations with 
respect to the standards necessary for adoption in order 
to support the secure, interoperable electronic data 
exchange among the pharmaceutical distribution 
supply chain that comply with a form and format devel-
oped by a widely recognized international standards 
development organization; 
‘‘(ii) takes into consideration standards established 
pursuant to subsection (a)(2) and section 505D; 
‘‘(iii) facilitates the creation of a uniform process 
or methodology for product tracing; and 
‘‘(iv) ensures the protection of confidential commer-
cial information and trade secrets. 
‘‘(B) PROCEDURE.—In issuing the guidance under 
subparagraph (A), and in revising such guidance, if 
applicable, the Secretary shall follow the procedure set 
forth in paragraph (5). 
‘‘(5) PROCEDURE.—In issuing or revising any guidance 
issued pursuant to this subsection or subsection (g), except 
the initial guidance issued under paragraph (2)(A), the Sec-
retary shall— 
‘‘(A) publish a notice in the Federal Register for a 
period not less than 30 days announcing that the draft 
or revised draft guidance is available; 
‘‘(B) post the draft guidance document on the Internet 
Web site of the Food and Drug Administration and make 
such draft guidance document available in hard copy; 
‘‘(C) provide an opportunity for comment and review 
and take into consideration any comments received; 
‘‘(D) revise the draft guidance, as appropriate; 
‘‘(E) publish a notice in the Federal Register for a 
period not less than 30 days announcing that the final 
guidance or final revised guidance is available; 
‘‘(F) post the final guidance document on the Internet 
Web site of the Food and Drug Administration and make 
such final guidance document available in hard copy; and 
‘‘(G) provide for an effective date of not earlier than 
1 year after such guidance becomes final. 
‘‘(i) PUBLIC MEETINGS.— 
‘‘(1) IN GENERAL.—The Secretary shall hold not less than 
5 public meetings to enhance the safety and security of the 
pharmaceutical distribution supply chain and provide for com-
ment. The Secretary may hold the first such public meeting 
not earlier than 1 year after the date of enactment of the 
Drug Supply Chain Security Act. In carrying out the public 
meetings described in this paragraph, the Secretary shall— 
‘‘(A) prioritize topics necessary to inform the issuance 
of the guidance described in paragraphs (3) and (4) of 
subsection (h); and 
‘‘(B) take all measures reasonable and practicable to 
ensure the protection of confidential commercial informa-
tion and trade secrets.
H. R. 3204—43 
‘‘(2) CONTENT.—Each of the following topics shall be 
addressed in at least one of the public meetings described 
in paragraph (1): 
‘‘(A) An assessment of the steps taken under sub-
sections (b) through (e) to build capacity for a unit-level 
system, including the impact of the requirements of such 
subsections on— 
‘‘(i) the ability of the health care system collectively 
to maintain patient access to medicines; 
‘‘(ii) the scalability of such requirements, including 
as it relates to product lines; and 
‘‘(iii) the capability of different sectors and subsec-
tors, including both large and small businesses, to 
affix and utilize the product identifier. 
‘‘(B) The system attributes necessary to support the 
requirements set forth under subsection (g), including the 
standards necessary for adoption in order to support the 
secure, interoperable electronic data exchange among sec-
tors within the pharmaceutical distribution supply chain. 
‘‘(C) Best practices in each of the different sectors 
within the pharmaceutical distribution supply chain to 
implement the requirements of this section. 
‘‘(D) The costs and benefits of the implementation of 
this section, including the impact on each pharmaceutical 
distribution supply chain sector and on public health. 
‘‘(E) Whether electronic tracing requirements, including 
tracing of product at the package level, are feasible, cost 
effective, and needed to protect the public health. 
‘‘(F) The systems and processes needed to utilize the 
product identifiers to enhance tracing of product at the 
package level, including allowing for verification, aggrega-
tion, and inference, as necessary. 
‘‘(G) The technical capabilities and legal authorities, 
if any, needed to establish an interoperable, electronic 
system that provides for tracing of product at the package 
level. 
‘‘(H) The impact that such additional requirements 
would have on patient safety, the drug supply, cost and 
regulatory burden, and timely patient access to prescription 
drugs. 
‘‘(I) Other topics, as determined appropriate by the 
Secretary. 
‘‘(j) PILOT PROJECTS.— 
‘‘(1) IN GENERAL.—The Secretary shall establish 1 or more 
pilot projects, in coordination with authorized manufacturers, 
repackagers, wholesale distributors, and dispensers, to explore 
and evaluate methods to enhance the safety and security of 
the pharmaceutical distribution supply chain. Such projects 
shall build upon efforts, in existence as of the date of enactment 
of the Drug Supply Chain Security Act, to enhance the safety 
and security of the pharmaceutical distribution supply chain, 
take into consideration any pilot projects conducted prior to 
such date of enactment, including any pilot projects that use 
aggregation and inference, and inform the draft and final guid-
ance under paragraphs (3) and (4) of subsection (h). 
‘‘(2) CONTENT.—
H. R. 3204—44 
‘‘(A) IN GENERAL.—The Secretary shall ensure that the 
pilot projects under paragraph (1) reflect the diversity of 
the pharmaceutical distribution supply chain and that the 
pilot projects, when taken as a whole, include participants 
representative of every sector, including both large and 
small businesses. 
‘‘(B) PROJECT DESIGN.—The pilot projects under para-
graph (1) shall be designed to— 
‘‘(i) utilize the product identifier for tracing of a 
product, which may include verification of the product 
identifier of a product, including the use of aggregation 
and inference; 
‘‘(ii) improve the technical capabilities of each 
sector and subsector to comply with systems and proc-
esses needed to utilize the product identifiers to 
enhance tracing of a product; 
‘‘(iii) identify system attributes that are necessary 
to implement the requirements established under this 
section; and 
‘‘(iv) complete other activities as determined by 
the Secretary. 
‘‘(k) SUNSET.—The following requirements shall have no force 
or effect beginning on the date that is 10 years after the date 
of enactment of the Drug Supply Chain Security Act: 
‘‘(1) The provision and receipt of transaction history under 
this section. 
‘‘(2) The requirements set forth for returns under sub-
sections (b)(4)(E), (c)(1)(B)(i), (d)(1)(C)(i), and (e)(4)(E). 
‘‘(3) The requirements set forth under subparagraphs 
(A)(v)(II) and (D) of subsection (c)(1), as applied to lot level 
information only. 
‘‘(l) RULE OF CONSTRUCTION.—The requirements set forth in 
subsections (g)(4), (i), and (j) shall not be construed as a condition, 
prohibition, or precedent for precluding or delaying the provisions 
becoming effective pursuant to subsection (g). 
‘‘(m) REQUESTS
FOR INFORMATION.—On the date that is 10 
years after the date of enactment of the Drug Supply Chain Security 
Act, the timeline for responses to requests for information from 
the Secretary, or other appropriate Federal or State official, as 
applicable, under subsections (b)(1)(B), (c)(1)(C), and (e)(1)(C) shall 
be not later than 24 hours after receiving the request from the 
Secretary or other appropriate Federal or State official, as 
applicable, or in such other reasonable time as determined by 
the Secretary based on the circumstances of the request.’’. 
SEC. 204. NATIONAL STANDARDS FOR PRESCRIPTION DRUG WHOLE-
SALE DISTRIBUTORS. 
(a) AMENDMENTS.— 
(1) REQUIREMENT.—Section 503(e) (21 U.S.C. 353(e)) is 
amended by striking paragraphs (1), (2), and (3) and inserting 
the following: 
‘‘(1) REQUIREMENT.—Subject to section 583: 
‘‘(A) IN GENERAL.—No person may engage in wholesale 
distribution of a drug subject to subsection (b)(1) in any 
State unless such person— 
‘‘(i)(I) is licensed by the State from which the drug 
is distributed; or
H. R. 3204—45 
‘‘(II) if the State from which the drug is distributed 
has not established a licensure requirement, is licensed 
by the Secretary; and 
‘‘(ii) if the drug is distributed interstate, is licensed 
by the State into which the drug is distributed if the 
State into which the drug is distributed requires the 
licensure of a person that distributes drugs into the 
State. 
‘‘(B) STANDARDS.—Each Federal and State license 
described in subparagraph (A) shall meet the standards, 
terms, and conditions established by the Secretary under 
section 583. 
‘‘(2) REPORTING AND DATABASE.— 
‘‘(A) REPORTING.—Beginning January 1, 2015, any per-
son who owns or operates an establishment that engages 
in wholesale distribution shall— 
‘‘(i) report to the Secretary, on an annual basis 
pursuant to a schedule determined by the Secretary— 
‘‘(I) each State by which the person is licensed 
and the appropriate identification number of each 
such license; and 
‘‘(II) the name, address, and contact informa-
tion of each facility at which, and all trade names 
under which, the person conducts business; and 
‘‘(ii) report to the Secretary within a reasonable 
period of time and in a reasonable manner, as deter-
mined by the Secretary, any significant disciplinary 
actions, such as the revocation or suspension of a 
wholesale distributor license, taken by a State or the 
Federal Government during the reporting period 
against the wholesale distributor. 
‘‘(B) DATABASE.—Not later than January 1, 2015, the 
Secretary shall establish a database of authorized whole-
sale distributors. Such database shall— 
‘‘(i) identify each authorized wholesale distributor 
by name, contact information, and each State where 
such wholesale distributor is appropriately licensed to 
engage in wholesale distribution; 
‘‘(ii) be available to the public on the Internet 
Web site of the Food and Drug Administration; and 
‘‘(iii) be regularly updated on a schedule deter-
mined by the Secretary. 
‘‘(C) COORDINATION.—The Secretary shall establish a 
format and procedure for appropriate State officials to 
access the information provided pursuant to subparagraph 
(A) in a prompt and secure manner. 
‘‘(D) CONFIDENTIALITY.—Nothing in this paragraph 
shall be construed as authorizing the Secretary to disclose 
any information that is a trade secret or confidential 
information subject to section 552(b)(4) of title 5, United 
States Code, or section 1905 of title 18, United States 
Code. 
‘‘(3) COSTS.— 
‘‘(A) AUTHORIZED FEES OF SECRETARY.—If a State does 
not establish a licensing program for persons engaged in 
the wholesale distribution of a drug subject to subsection
H. R. 3204—46 
(b), the Secretary shall license a person engaged in whole-
sale distribution located in such State and may collect 
a reasonable fee in such amount necessary to reimburse 
the Secretary for costs associated with establishing and 
administering the licensure program and conducting peri-
odic inspections under this section. The Secretary shall 
adjust fee rates as needed on an annual basis to generate 
only the amount of revenue needed to perform this service. 
Fees authorized under this paragraph shall be collected 
and available 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 
appropriation account without fiscal year limitation to such 
appropriation account for salaries and expenses with such 
fiscal year limitation. 
‘‘(B) STATE LICENSING FEES.—Nothing in this Act shall 
prohibit States from collecting fees from wholesale distribu-
tors in connection with State licensing of such distribu-
tors.’’. 
(2) WHOLESALE DISTRIBUTION.—Section 503(e) (21 U.S.C. 
353(e)), as amended by paragraph (1), is further amended by 
adding at the end the following: 
‘‘(4) For the purposes of this subsection and subsection 
(d), the term ‘wholesale distribution’ means the distribution 
of a drug subject to subsection (b) to a person other than 
a consumer or patient, or receipt of a drug subject to subsection 
(b) by a person other than the consumer or patient, but does 
not include— 
‘‘(A) intracompany distribution of any drug between 
members of an affiliate or within a manufacturer; 
‘‘(B) the distribution of a drug, or an offer to distribute 
a drug among hospitals or other health care entities which 
are under common control; 
‘‘(C) the distribution of a drug or an offer to distribute 
a drug for emergency medical reasons, including a public 
health emergency declaration pursuant to section 319 of 
the Public Health Service Act, except that, for purposes 
of this paragraph, a drug shortage not caused by a public 
health emergency shall not constitute an emergency med-
ical reason; 
‘‘(D) the dispensing of a drug pursuant to a prescription 
executed in accordance with subsection (b)(1); 
‘‘(E) the distribution of minimal quantities of drug 
by a licensed retail pharmacy to a licensed practitioner 
for office use; 
‘‘(F) the distribution of a drug or an offer to distribute 
a drug by a charitable organization to a nonprofit affiliate 
of the organization to the extent otherwise permitted by 
law; 
‘‘(G) the purchase or other acquisition by a dispenser, 
hospital, or other health care entity of a drug for use 
by such dispenser, hospital, or other health care entity; 
‘‘(H) the distribution of a drug by the manufacturer 
of such drug;
H. R. 3204—47 
‘‘(I) the receipt or transfer of a drug by an authorized 
third-party logistics provider provided that such third-party 
logistics provider does not take ownership of the drug; 
‘‘(J) a common carrier that transports a drug, provided 
that the common carrier does not take ownership of the 
drug; 
‘‘(K) the distribution of a drug, or an offer to distribute 
a drug by an authorized repackager that has taken owner-
ship or possession of the drug and repacks it in accordance 
with section 582(e); 
‘‘(L) salable drug returns when conducted by a dis-
penser; 
‘‘(M) the distribution of a collection of finished medical 
devices, which may include a product or biological product, 
assembled in kit form strictly for the convenience of the 
purchaser or user (referred to in this subparagraph as 
a ‘medical convenience kit’) if— 
‘‘(i) the medical convenience kit is assembled in 
an establishment that is registered with the Food and 
Drug Administration as a device manufacturer in 
accordance with section 510(b)(2); 
‘‘(ii) the medical convenience kit does not contain 
a controlled substance that appears in a schedule con-
tained in the Comprehensive Drug Abuse Prevention 
and Control Act of 1970; 
‘‘(iii) in the case of a medical convenience kit that 
includes a product, the person that manufacturers the 
kit— 
‘‘(I) purchased such product directly from the 
pharmaceutical manufacturer or from a wholesale 
distributor that purchased the product directly 
from the pharmaceutical manufacturer; and 
‘‘(II) does not alter the primary container or 
label of the product as purchased from the manu-
facturer or wholesale distributor; and 
‘‘(iv) in the case of a medical convenience kit that 
includes a product, the product is— 
‘‘(I) an intravenous solution intended for the 
replenishment of fluids and electrolytes; 
‘‘(II) a product intended to maintain the equi-
librium of water and minerals in the body; 
‘‘(III) a product intended for irrigation or 
reconstitution; 
‘‘(IV) an anesthetic; 
‘‘(V) an anticoagulant; 
‘‘(VI) a vasopressor; or 
‘‘(VII) a sympathomimetic; 
‘‘(N) the distribution of an intravenous drug that, by 
its formulation, is intended for the replenishment of fluids 
and electrolytes (such as sodium, chloride, and potassium) 
or calories (such as dextrose and amino acids); 
‘‘(O) the distribution of an intravenous drug used to 
maintain the equilibrium of water and minerals in the 
body, such as dialysis solutions; 
‘‘(P) the distribution of a drug that is intended for 
irrigation, or sterile water, whether intended for such pur-
poses or for injection;
H. R. 3204—48 
‘‘(Q) the distribution of medical gas, as defined in sec-
tion 575; 
‘‘(R) facilitating the distribution of a product by pro-
viding solely administrative services, including processing 
of orders and payments; or 
‘‘(S) the transfer of a product by a hospital or other 
health care entity, or by a wholesale distributor or manu-
facturer operating at the direction of the hospital or other 
health care entity, to a repackager described in section 
581(16)(B) and registered under section 510 for the purpose 
of repackaging the drug for use by that hospital, or other 
health care entity and other health care entities that are 
under common control, if ownership of the drug remains 
with the hospital or other health care entity at all times.’’. 
(3) THIRD-PARTY LOGISTICS PROVIDERS.—Section 503(e) (21 
U.S.C. 353(e)), as amended by paragraph (2), is further 
amended by adding at the end the following: 
‘‘(5) THIRD-PARTY LOGISTICS PROVIDERS.—Notwithstanding 
paragraphs (1) through (4), each entity that meets the definition 
of a third-party logistics provider under section 581(22) shall 
obtain a license as a third-party logistics provider as described 
in section 584(a) and is not required to obtain a license as 
a wholesale distributor if the entity never assumes an owner-
ship interest in the product it handles.’’. 
(4) AFFILIATE.—Section 503(e) (21 U.S.C. 353(e)), as 
amended by paragraph (3), is further amended by adding at 
the end the following: 
‘‘(6) AFFILIATE.—For purposes of this subsection, the term 
‘affiliate’ means a business entity that has a relationship with 
a second business entity if, directly or indirectly— 
‘‘(A) one business entity controls, or has the power 
to control, the other business entity; or 
‘‘(B) a third party controls, or has the power to control, 
both of the business entities.’’. 
(5) STANDARDS.—Subchapter H of chapter V, as added by 
section 202, is amended by adding at the end the following: 
‘‘SEC. 583. NATIONAL STANDARDS FOR PRESCRIPTION DRUG WHOLE-
SALE DISTRIBUTORS. 
‘‘(a) IN GENERAL.—The Secretary shall, not later than 2 years 
after the date of enactment of the Drug Supply Chain Security 
Act, establish by regulation standards for the licensing of persons 
under section 503(e)(1) (as amended by the Drug Supply Chain 
Security Act), including the revocation, reissuance, and renewal 
of such license. 
‘‘(b) CONTENT.—For the purpose of ensuring uniformity with 
respect to standards set forth in this section, the standards estab-
lished under subsection (a) shall apply to all State and Federal 
licenses described under section 503(e)(1) (as amended by the Drug 
Supply Chain Security Act) and shall include standards for the 
following: 
‘‘(1) The storage and handling of prescription drugs, 
including facility requirements. 
‘‘(2) The establishment and maintenance of records of the 
distributions of such drugs. 
‘‘(3) The furnishing of a bond or other equivalent means 
of security, as follows:
H. R. 3204—49 
‘‘(A)(i) For the issuance or renewal of a wholesale dis-
tributor license, an applicant that is not a government 
owned and operated wholesale distributor shall submit a 
surety bond of $100,000 or other equivalent means of secu-
rity acceptable to the State. 
‘‘(ii) For purposes of clause (i), the State or other 
applicable authority may accept a surety bond in the 
amount of $25,000 if the annual gross receipts of the pre-
vious tax year for the wholesaler is $10,000,000 or less. 
‘‘(B) If a wholesale distributor can provide evidence 
that it possesses the required bond in a State, the require-
ment for a bond in another State shall be waived. 
‘‘(4) Mandatory background checks and fingerprinting of 
facility managers or designated representatives. 
‘‘(5) The establishment and implementation of qualifica-
tions for key personnel. 
‘‘(6) The mandatory physical inspection of any facility to 
be used in wholesale distribution within a reasonable time 
frame from the initial application of the facility and to be 
conducted by the licensing authority or by the State, consistent 
with subsection (c). 
‘‘(7) In accordance with subsection (d), the prohibition of 
certain persons from receiving or maintaining licensure for 
wholesale distribution. 
‘‘(c) INSPECTIONS.—To satisfy the inspection requirement under 
subsection (b)(6), the Federal or State licensing authority may con-
duct the inspection or may accept an inspection by the State in 
which the facility is located, or by a third-party accreditation or 
inspection service approved by the Secretary or the State licensing 
such wholesale distributor. 
‘‘(d) PROHIBITED PERSONS.—The standards established under 
subsection (a) shall include requirements to prohibit a person from 
receiving or maintaining licensure for wholesale distribution if the 
person— 
‘‘(1) has been convicted of any felony for conduct relating 
to wholesale distribution, any felony violation of subsection 
(i) or (k) of section 301, or any felony violation of section 
1365 of title 18, United States Code, relating to product tam-
pering; or 
‘‘(2) has engaged in a pattern of violating the requirements 
of this section, or State requirements for licensure, that pre-
sents a threat of serious adverse health consequences or death 
to humans. 
‘‘(e) REQUIREMENTS.—The Secretary, in promulgating any regu-
lation pursuant to this section, shall, notwithstanding section 553 
of title 5, United States Code— 
‘‘(1) issue a notice of proposed rulemaking that includes 
a copy of the proposed regulation; 
‘‘(2) provide a period of not less than 60 days for comments 
on the proposed regulation; and 
‘‘(3) provide that the final regulation take effect on the 
date that is 2 years after the date such final regulation is 
published.’’. 
(b) AUTHORIZED DISTRIBUTORS OF RECORD.—Section 503(d) (21 
U.S.C. 353(d)) is amended by adding at the end the following: 
‘‘(4) In this subsection, the term ‘authorized distributors 
of record’ means those distributors with whom a manufacturer
H. R. 3204—50 
has established an ongoing relationship to distribute such 
manufacturer’s products.’’. 
(c) EFFECTIVE DATE.—The amendments made by subsections 
(a) and (b) shall take effect on January 1, 2015. 
SEC. 205. NATIONAL STANDARDS FOR THIRD-PARTY LOGISTICS PRO-
VIDERS; UNIFORM NATIONAL POLICY. 
Subchapter H of chapter V, as amended by section 204, is 
further amended by adding at the end the following: 
‘‘SEC. 584. NATIONAL STANDARDS FOR THIRD-PARTY LOGISTICS PRO-
VIDERS. 
‘‘(a) REQUIREMENTS.—No third-party logistics provider in any 
State may conduct activities in any State unless each facility of 
such third-party logistics provider— 
‘‘(1)(A) is licensed by the State from which the drug is 
distributed by the third-party logistics provider, in accordance 
with the regulations promulgated under subsection (d); or 
‘‘(B) if the State from which the drug distributed by the 
third-party logistics provider has not established a licensure 
requirement, is licensed by the Secretary, in accordance with 
the regulations promulgated under subsection (d); and 
‘‘(2) if the drug is distributed interstate, is licensed by 
the State into which the drug is distributed by the third- 
party logistics provider if such State licenses third-party logis-
tics providers that distribute drugs into the State and the 
third-party logistics provider is not licensed by the Secretary 
as described in paragraph (1)(B). 
‘‘(b) REPORTING.—Beginning 1 year after the date of enactment 
of the Drug Supply Chain Security Act, a facility of a third-party 
logistics provider shall report to the Secretary, on an annual basis 
pursuant to a schedule determined by the Secretary— 
‘‘(1) the State by which the facility is licensed and the 
appropriate identification number of such license; and 
‘‘(2) the name and address of the facility and all trade 
names under which such facility conducts business. 
‘‘(c) COSTS.— 
‘‘(1) AUTHORIZED FEES OF SECRETARY.—If a State does not 
establish a licensing program for a third-party logistics pro-
vider, the Secretary shall license the third-party logistics pro-
vider located in such State and may collect a reasonable fee 
in such amount necessary to reimburse the Secretary for costs 
associated with establishing and administering the licensure 
program and conducting periodic inspections under this section. 
The Secretary shall adjust fee rates as needed on an annual 
basis to generate only the amount of revenue needed to perform 
this service. Fees authorized under this paragraph shall be 
collected and available 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 appropriation 
account for salaries and expenses with such fiscal year limita-
tion. 
‘‘(2) STATE LICENSING FEES.— 
‘‘(A) STATE ESTABLISHED PROGRAM.—Nothing in this 
Act shall prohibit a State that has established a program
H. R. 3204—51 
to license a third-party logistics provider from collecting 
fees from a third-party logistics provider for such a license. 
‘‘(B) NO STATE ESTABLISHED PROGRAM.—A State that 
does not establish a program to license a third-party logis-
tics provider in accordance with this section shall be prohib-
ited from collecting a State licensing fee from a third- 
party logistics provider. 
‘‘(d) REGULATIONS.— 
‘‘(1) IN GENERAL.—Not later than 2 years after the date 
of enactment of the Drug Supply Chain Security Act, the Sec-
retary shall issue regulations regarding the standards for 
licensing under subsection (a), including the revocation and 
reissuance of such license, to third-party logistics providers 
under this section. 
‘‘(2) CONTENT.—Such regulations shall— 
‘‘(A) establish a process by which a third-party accredi-
tation program approved by the Secretary shall, upon 
request by a third-party logistics provider, issue a license 
to each third-party logistics provider that meets the 
requirements set forth in this section; 
‘‘(B) establish a process by which the Secretary shall 
issue a license to each third-party logistics provider that 
meets the requirements set forth in this section if the 
Secretary is not able to approve a third-party accreditation 
program because no such program meets the Secretary’s 
requirements necessary for approval of such a third-party 
accreditation program; 
‘‘(C) require that the entity complies with storage prac-
tices, as determined by the Secretary for such facility, 
including— 
‘‘(i) maintaining access to warehouse space of suit-
able size to facilitate safe operations, including a suit-
able area to quarantine suspect product; 
‘‘(ii) maintaining adequate security; and 
‘‘(iii) having written policies and procedures to— 
‘‘(I) address receipt, security, storage, inven-
tory, shipment, and distribution of a product; 
‘‘(II) identify, record, and report confirmed 
losses or thefts in the United States; 
‘‘(III) correct errors and inaccuracies in inven-
tories; 
‘‘(IV) provide support for manufacturer recalls; 
‘‘(V) prepare for, protect against, and address 
any reasonably foreseeable crisis that affects secu-
rity or operation at the facility, such as a strike, 
fire, or flood; 
‘‘(VI) ensure that any expired product is seg-
regated from other products and returned to the 
manufacturer or repackager or destroyed; 
‘‘(VII) maintain the capability to trace the 
receipt and outbound distribution of a product, 
and supplies and records of inventory; and 
‘‘(VIII) quarantine or destroy a suspect product 
if directed to do so by the respective manufacturer, 
wholesale distributor, dispenser, or an authorized 
government agency;