I 
108TH CONGRESS 
2D SESSION 
H. R. 4612 
To amend the Federal Food, Drug, and Cosmetic Act to create a uniform 
certification standard for Internet pharmacies and to prohibit Internet 
pharmacies from engaging in certain advertising activities, to prohibit 
the use of certain bank instruments for purchases associated with illegal 
Internet pharmacies, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 18, 2004 
Mr. WALDEN of Oregon (for himself and Mr. DAVIS of Florida) introduced 
the following bill; which was referred to the Committee on Energy and 
Commerce, and in addition to the Committee on Financial Services, for 
a period to be subsequently determined by the Speaker, in each case for 
consideration of such provisions as fall within the jurisdiction of the com-
mittee concerned 
A BILL 
To amend the Federal Food, Drug, and Cosmetic Act to 
create a uniform certification standard for Internet phar-
macies and to prohibit Internet pharmacies from engag-
ing in certain advertising activities, to prohibit the use 
of certain bank instruments for purchases associated 
with illegal Internet pharmacies, and for other purposes. 
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 ‘‘Safe Online Drug Act 
of 2004’’. 
SEC. 2. INTERNET SALES OF PRESCRIPTION DRUGS. 
(a) IN GENERAL.—Chapter 5 of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 351 et seq.) is amend-
ed by inserting after section 503A the following: 
‘‘SEC. 503B. INTERNET SALES OF PRESCRIPTION DRUGS. 
‘‘(a) UNIFORM
CERTIFICATION
STANDARD
FOR 
INTERNET PHARMACIES.— 
‘‘(1) IN GENERAL.— 
‘‘(A) PROHIBITIONS.—Subject to subpara-
graph (B), it is a violation of this section— 
‘‘(i) for any person to sell or offer for 
sale a prescription drug or a restricted de-
vice through an Internet site— 
‘‘(I) if the Internet site fails to 
meet the standards established under 
paragraph (2); or 
‘‘(II) if the Internet site fails to 
comply with all State and Federal 
regulations for operating as an Inter-
net pharmacy; and 
‘‘(ii) for any person to own or operate 
an illegal Internet pharmacy.
‘‘(B) EXCEPTION.—Any person who sells 
or offers to sell a prescription drug or restricted 
device through an Internet site, or who owns or 
operates an Internet pharmacy, is deemed to 
meet the requirements of this section for pur-
poses of such sale, ownership, or operation if 
the Internet site or Internet pharmacy meets 
the certification standards adopted by the Sec-
retary under paragraph (2). 
‘‘(2) ESTABLISHMENT OF UNIFORM STANDARD 
FOR INTERNET PHARMACY CERTIFICATION.— 
‘‘(A) IN GENERAL.—The Secretary, acting 
through the Commissioner of the Food and 
Drug Administration, shall establish a program 
under which all Internet pharmacies operating 
in the United States are certified by the Sec-
retary as meeting the requirements of this sec-
tion for certification. 
‘‘(B) CONDITIONS FOR CERTIFICATION.— 
As a condition of certifying an Internet phar-
macy under subparagraph (A), the Secretary 
shall require the following with respect to such 
pharmacy: 
‘‘(i) Verification that, in each State in 
which the pharmacy engages in pharma-
ceutical activities, the pharmacy, and all 
the employees and agents of the pharmacy, 
are in compliance with applicable laws re-
garding— 
‘‘(I) the practice of pharmacy, in-
cluding licensing laws and inspection 
requirements; and 
‘‘(II) the manufacturing and dis-
tribution of controlled substances, in-
cluding with respect to mailing or 
shipping such substances to con-
sumers. 
‘‘(ii) Verification of controls to ensure 
that a prescription drug or restricted de-
vice is dispensed by the pharmacy only 
pursuant to a valid prescription, including 
circumstance in which the drug is shipped 
or mailed from a country under whose laws 
the drug is not a prescription drug. 
‘‘(iii) An agreement by the pharmacy 
that, upon certification under subpara-
graph (A), the facilities and business prac-
tices of the pharmacy will be subject to in-
spection by the Secretary to the extent ap-
propriate to determine whether the phar-
macy is in compliance with conditions 
under this subsection. 
‘‘(iv) The prominent display of contact 
information for the pharmacy, including a 
telephone number, an electronic mail ad-
dress, a mailing address, and (if different 
from the mailing address) the address for 
the physical location of the principal place 
of business of the pharmacy. 
‘‘(v) The prominent display of com-
plete and accurate information concerning 
the ownership and management of the 
pharmacy, including addresses and contact 
information. 
‘‘(vi) The prominent display of the 
seal provided for under subparagraph (C). 
‘‘(vii) The prominent display of a 
statement that the Internet pharmacy will 
dispense prescription drugs only upon a 
showing of a prescription. 
‘‘(viii) A certification from the person 
who owns or manages the pharmacy that a 
certification under subparagraph (A) for 
the pharmacy has not previously been ter-
minated by the Secretary, and that no
other Internet pharmacy owned or man-
aged by such person has received a certifi-
cation under subparagraph (A) that has 
been terminated by the Secretary. 
‘‘(ix) Meaningful and accessible oppor-
tunities for a consumer to consult with a 
licensed pharmacist regarding a drug prior 
to the time at which the pharmacy dis-
penses the drug to the consumer. 
‘‘(x) Controls to ensure that the Inter-
net pharmacy provides for authentication 
and security of prescription orders. 
‘‘(xi) Effective, accessible systems for 
communication with consumers, including 
systems for consumer reporting of adverse 
drug reactions and errors, systems by 
which consumers can effectively track and 
report problems with unfulfilled orders, 
systems for the investigation and redress 
of consumer complaints, and systems facili-
tating effective communication between the 
pharmacy and consumers concerning drug 
recalls. 
‘‘(xii) Controls to ensure the protec-
tion of patient privacy and confidentiality,
including but not limited to the prevention 
of unauthorized internal and external use 
of personally-identifiable patient informa-
tion. 
‘‘(xiii) Adherence to a quality assur-
ance policy meeting standards established 
by the Secretary. 
‘‘(xiv) An agreement by the pharmacy 
that the pharmacy will notify the Secretary 
within 10 days concerning any change in 
information submitted under this sub-
section as a condition of certification under 
subparagraph (A). 
‘‘(xv) Such additional criteria as the 
Secretary determines, after notice and op-
portunity for comment, to be appropriate 
for the sound operation of certified phar-
macies or the protection of consumers. 
‘‘(C) SEAL.—The Secretary shall provide 
for a seal that Internet pharmacies certified 
under subparagraph (A) are required to display 
for purposes of indicating to the public the fact 
of such certification. 
‘‘(D) ANNUAL APPLICATION; DURATION OF 
CERTIFICATION.—
‘‘(i) IN
GENERAL.—The Secretary 
may certify an Internet pharmacy under 
subparagraph (A) only if the pharmacy 
submits to the Secretary an application for 
such certification that demonstrates com-
pliance with the conditions under subpara-
graph (B) and is in such form, and is 
made in such manner, as the Secretary 
may require. The Secretary shall establish 
an application form for purposes of the 
preceding sentence, including an electronic 
application form. 
‘‘(ii) DURATION
OF
CERTIFICATION; 
RENEWAL.— 
‘‘(I) IN
GENERAL.—A certifi-
cation under subparagraph (A) is ef-
fective for the two-year period begin-
ning on the date on which the applica-
tion under clause (i) for such certifi-
cation is approved by the Secretary. 
The Secretary may renew the certifi-
cation, pursuant to the submission of 
an additional application under clause 
(i), and the number of renewals of the 
certification is not limited. The Sec-
retary may establish an abbreviated 
process for such renewal applications. 
‘‘(II) RENEWAL
EVALUATION.— 
Before renewing a certification under 
subparagraph (A), the Secretary shall 
conduct an evaluation to determine 
whether the pharmacy involved is in 
compliance with the conditions under 
subparagraph (B). The evaluation, at 
the Secretary’s discretion and as ap-
plicable, may include testing of the 
Internet site of the pharmacy or other 
systems through which the pharmacy 
communicates with consumers, and 
may include physical inspection of the 
records and premises of the pharmacy 
pursuant to subparagraph (B). 
‘‘(iii) FEES.—The Secretary may im-
pose a fee on the submission of an applica-
tion under subparagraph (D). Any such fee 
is due upon the submission of the applica-
tion. To the extent provided in appropria-
tions Acts, such fees are available to the 
Secretary for carrying out this section.
‘‘(iv) INFORMATION CAMPAIGN.—The 
Secretary shall carry out activities to in-
form the public of the program under sub-
paragraph (A), including information on 
the significance of the seal under subpara-
graph (C) when displayed by an Internet 
pharmacy, and including information on 
the benefits of doing business with a phar-
macy certified under subparagraph (A) as 
compared to an illegal Internet pharmacy. 
‘‘(v) 
TERMINATION
OF
CERTIFI-
CATION.—The Secretary, upon the own ini-
tiative of the Secretary or a petition by an 
interested person, may terminate a certifi-
cation under subparagraph (A), after no-
tice to the Internet pharmacy involved and 
an opportunity for a hearing, after a find-
ing by the Secretary that an Internet 
Pharmacy is not in compliance with the 
provisions of this section, or has made an 
untrue statement of material fact in its 
certification application; or is in violation 
of any applicable federal statute or regula-
tion related to the sale and distribution of 
a pharmacy product.
‘‘(3) DEEMING
AUTHORITY.—The Secretary 
may provide that an Internet pharmacy is deemed to 
meet the requirements of this section if the Internet 
pharmacy is certified by the National Association of 
Boards of Pharmacy’s Verified Internet Pharmacy 
Practice Sites program. 
‘‘(4) INTERSTATE
COMMERCE.—For purposes 
of this section, Internet pharmacies are deemed to 
operate in interstate commerce. 
‘‘(b) PROHIBITION ON CERTAIN ADVERTISING AC-
TIVITIES BY INTERNET PHARMACIES.— 
‘‘(1) SALES WITHOUT PRESCRIPTION.—It is a 
violation of this section for an Internet pharmacy to 
represent, by advertisement, sales presentation, di-
rect communication (including telephone, facsimile, 
or electronic mail), or otherwise, that prescription 
drugs may be obtained from the Internet pharmacy 
without a prescription. 
‘‘(2) ADVERTISEMENTS FROM ILLEGAL PHAR-
MACIES.—It is a violation of this section for provider 
of an interactive computer service to accept adver-
tisement from or provide links to any illegal Internet 
pharmacy. An interactive computer service will be 
deemed in compliance with this section if the phar-
macy has obtained a copy of the certification issued 
to the Internet pharmacy under this section. 
‘‘(c) DEFINITIONS.—For purposes of this section: 
‘‘(1) The term ‘illegal Internet pharmacy’ 
means an Internet pharmacy that fails to comply 
with the standards established by this section. 
‘‘(2) The term ‘Internet’ means collectively the 
myriad of computer and telecommunications facili-
ties, including equipment and operating software, 
which comprise the interconnected world-wide net-
work of networks that employ the transmission con-
trol protocol/internet protocol, or any predecessor or 
successor protocols to such protocol, to communicate 
information of all kinds by wire or radio. 
‘‘(3) The term ‘Internet pharmacy’ means an 
Internet site that is used primarily to sell prescrip-
tion drugs in interstate commerce, regardless of 
whether the physical location of the principal place 
of business of the Internet pharmacy is the United 
States or in another country. 
‘‘(4) The term ‘link,’ with respect to the Inter-
net, means one or more letters, words, numbers, 
symbols, or graphic items that appear on a page of 
an Internet site for the purpose of serving, when ac-
(1) identify types of policies and procedures, in-
cluding nonexclusive examples, which would be 
deemed to be ‘‘reasonably designed to identify’’ and 
‘‘reasonably designed to block’’ or to ‘‘prevent the 
acceptance of the products or services’’ with respect 
to each type of transaction, such as, should credit 
card transactions be so designated, identifying trans-
actions by a code or codes in the authorization mes-
sage and denying authorization of a credit card 
transaction in response to an authorization message; 
(2) to the extent practical, permit any partici-
pant in a payment system to choose among alter-
native means of identifying and blocking, or other-
wise preventing the acceptance of the products or 
services of the payment system or participant in con-
nection with, restricted transactions; and 
(3) consider exempting restricted transactions 
from any requirement under subsection (a) if the 
Federal functional regulators find that it is not rea-
sonably practical to identify and block, or otherwise 
prevent, such transactions. 
(c) COMPLIANCE WITH PAYMENT SYSTEM POLICIES 
AND PROCEDURES.—A creditor, credit card issuer, finan-
cial institution, operator of a terminal at which an elec-
tronic fund transfer may be initiated, money transmitting
business, or international, national, regional, or local net-
work utilized to effect a credit transaction, electronic fund 
transfer, or money transmitting service, or a participant 
in such network, meets the requirement of subsection (a) 
if— 
(1) such person relies on and complies with the 
policies and procedures of a designated payment sys-
tem of which it is a member or participant to— 
(A) identify and block restricted trans-
actions; or 
(B) otherwise prevent the acceptance of 
the products or services of the payment system, 
member, or participant in connection with re-
stricted transactions; and 
(2) such policies and procedures of the des-
ignated payment system comply with the require-
ments of regulations prescribed under subsection 
(a). 
(d) ENFORCEMENT.— 
(1) IN
GENERAL.—This section shall be en-
forced by the Federal functional regulators and the 
Federal Trade Commission under applicable law in 
the manner provided in section 505(a) of the 
Gramm-Leach-Bliley Act.
(2) FACTORS TO BE CONSIDERED.—In consid-
ering any enforcement action under this subsection 
against any payment system, or any participant in 
a payment system that is a creditor, credit card 
issuer, financial institution, operator of a terminal at 
which an electronic fund transfer may be initiated, 
money transmitting business, or international, na-
tional, regional, or local network utilized to effect a 
credit transaction, electronic fund transfer, or money 
transmitting service, or a participant in such net-
work, the Federal functional regulators and the Fed-
eral Trade Commission shall consider the following 
factors: 
(A) The extent to which such person is ex-
tending credit or transmitting funds knowing 
the transaction is in connection with illegal 
Internet pharmacies. 
(B) The history of such person in extend-
ing credit or transmitting funds knowing the 
transaction is in connection with illegal Internet 
pharmacies. 
(C) The extent to which such person has 
established and is maintaining policies and pro-
cedures in compliance with regulations pre-
scribed under this paragraph.
(D) The feasibility that any specific rem-
edy prescribed can be implemented by such per-
son without substantial deviation from normal 
business practice. 
(E) The costs and burdens the specific 
remedy will have on such person. 
(e) DEFINITIONS.—For purposes of this section: 
(1) The terms ‘‘credit,’’ ‘‘creditor,’’ and ‘‘credit 
card’’ have the meanings given such terms in section 
103 of the Truth in Lending Act. 
(2) The term ‘‘designated payment system’’ 
means any system utilized by any creditor, credit 
card issuer, financial institution, operator of a ter-
minal at which an electronic fund transfer may be 
initiated, money transmitting business, or inter-
national, national, regional, or local network utilized 
to effect a credit transaction, electronic fund trans-
fer, or money transmitting service, or any partici-
pant in such network, that the Federal functional 
regulators determine, by regulation or order, could 
be utilized in connection with, or to facilitate, any 
restricted transaction. 
(3) The term ‘‘electronic fund transfer’’—
(A) has the meaning given such term in 
section 903 of the Electronic Fund Transfer 
Act; and 
(B) includes any fund transfer covered by 
Article 4A of the Uniform Commercial Code, as 
in effect in any State. 
(4) The term ‘‘Federal functional regulator’’ 
has the same meaning as in section 509(2) of the 
Gramm-Leach-Bliley Act. 
(5) The term ‘‘financial institution’’— 
(A) has the meaning given such term in 
section 903 of the Electronic Fund Transfer 
Act; and 
(B) includes any financial institution, as 
defined in section 509(3) of the Gramm-Leach- 
Bliley Act. 
(6) The term ‘‘illegal Internet pharmacy’’ 
means an Internet pharmacy that fails to comply 
with the standards established by section 503B of 
the Federal Food, Drug, and Cosmetic Act. 
(7) The terms ‘‘money transmitting business’’ 
and ‘‘money transmitting service’’ have the mean-
ings given such terms in section 5330(d) of title 31, 
United States Code.