‘‘(v) RECORDS.—A dispenser shall 
keep records of the disposition of an illegit-
imate prescription drug product for not 
less than 3 years after the conclusion of 
the disposition. 
‘‘(C) ELECTRONIC
DATABASE.—A dis-
penser may satisfy the requirements of this 
paragraph through the use of a secure elec-
tronic database developed and operated by the 
manufacturer or another entity. The owner of 
such database shall establish the requirements 
and processes to enable responding to requests 
and may provide for data access to other mem-
bers of the pharmaceutical distribution supply 
chain, as appropriate. The development and op-
eration of such a database shall not relieve a 
dispenser of the requirement under this para-
graph to respond to a verification request sub-
mitted by means other than a secure electronic 
database. 
‘‘(e) REPACKAGER REQUIREMENTS.— 
‘‘(1) PRESCRIPTION
DRUG
PRODUCT
TRAC-
ING.— 
‘‘(A) IN
GENERAL.—Beginning not later 
than January 1, 2015, a repackager shall— 
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‘‘(i) not accept ownership of a pre-
scription drug product unless the previous 
owner, prior to, or at the time of, the 
transaction, provides transaction history 
and a transaction statement for the pre-
scription drug product; 
‘‘(ii) prior to, or at the time of, each 
transaction in which the repackager trans-
fers ownership of a prescription drug prod-
uct, provide the subsequent owner with 
transaction history and a transaction state-
ment; 
‘‘(iii) maintain the transaction infor-
mation for each transaction described in 
clause (i) or (ii) for not less than 3 years 
after the transaction; and 
‘‘(iv) maintain records that allow the 
repackager to associate the prescription 
drug product identifier the repackager af-
fixes or imprints with the prescription drug 
product identifier assigned by the original 
manufacturer of the prescription drug 
product. 
‘‘(B) NONSALEABLE RETURNS.—A repack-
ager may return a nonsaleable prescription 
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drug product to the manufacturer or repack-
ager, to the wholesale distributor from whom 
such prescription drug product was purchased, 
or to a person acting on behalf of such a per-
son, including a returns processor, without pro-
viding the information required under subpara-
graph (A)(ii). 
‘‘(C) REQUESTS
FOR
INFORMATION.— 
Upon a request by the Secretary or other ap-
propriate Federal or State official, in the event 
of a recall or for the purpose of investigating a 
suspect prescription drug product or an illegit-
imate prescription drug product, a repackager 
shall, not later than 2 business days after re-
ceiving the request or in such other reasonable 
time as determined by the Secretary, provide 
the applicable transaction history and trans-
action statement for the prescription drug prod-
uct. 
‘‘(2) PRESCRIPTION
DRUG
PRODUCT
IDENTI-
FIER.—Beginning not later than 6 years after the 
date of the enactment of the Safeguarding America’s 
Pharmaceuticals Act of 2013, a repackager— 
‘‘(A) shall affix or imprint a prescription 
drug product identifier to each package and ho-
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mogenous case of prescription drug product in-
tended to be introduced in a transaction; 
‘‘(B) shall maintain the prescription drug 
product identifier for such prescription drug 
product for not less than 3 years after the date 
of the transaction; and 
‘‘(C) may engage in transactions involving 
a prescription drug product only if such pre-
scription drug product is encoded with a pre-
scription drug product identifier except as pro-
vided in subsection (a)(4). 
‘‘(3) AUTHORIZED
TRADING
PARTNERS.—Be-
ginning on January 1, 2015, a repackager shall en-
sure that each of its trading partners is authorized. 
‘‘(4) VERIFICATION.—Beginning not later than 
January 1, 2015, a repackager shall implement sys-
tems to enable the repackager to comply with the 
following requirements: 
‘‘(A) SUSPECT PRESCRIPTION DRUG PROD-
UCT.— 
‘‘(i) IN
GENERAL.—Upon making a 
determination that a prescription drug 
product in the possession or control of the 
repackager is a suspect prescription drug 
product, or upon receiving a request for 
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verification from the Secretary that a pre-
scription drug product within the posses-
sion or control of a repackager is a suspect 
prescription drug product, a repackager 
shall promptly conduct an investigation to 
determine whether the prescription drug 
product is an illegitimate prescription drug 
product, including— 
‘‘(I) beginning not later than 6 
years after the date of the enactment 
of the Safeguarding America’s Phar-
maceuticals Act of 2013, verifying the 
prescription drug product at the pack-
age level; 
‘‘(II) validating any applicable 
transaction information in the posses-
sion of the repackager; and 
‘‘(III) otherwise investigating to 
determine whether the prescription 
drug product is an illegitimate pre-
scription drug product. 
‘‘(ii) CLEARED
PRESCRIPTION
DRUG 
PRODUCT.—If the repackager determines 
that a suspect prescription drug product is 
not an illegitimate prescription drug prod-
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uct, the repackager shall promptly notify 
the Secretary of such determination and 
such prescription drug product may be fur-
ther distributed. 
‘‘(iii) RECORDS.—A repackager shall 
keep records of its investigation of a sus-
pect prescription drug product for not less 
than 3 years after the conclusion of the in-
vestigation. 
‘‘(B) ILLEGITIMATE PRESCRIPTION DRUG 
PRODUCT.— 
‘‘(i) IN
GENERAL.—Upon receiving 
notice that a manufacturer of a prescrip-
tion drug product has determined that a 
prescription drug product in the possession 
or control of a repackager is an illegitimate 
prescription drug product, the repackager 
shall— 
‘‘(I) quarantine such prescription 
drug product within the possession or 
control of the repackager from pre-
scription drug product intended for 
distribution; and 
‘‘(II) provide for the disposition 
of the illegitimate prescription drug 
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product within the possession or con-
trol of the repackager. 
‘‘(ii) TRADING
PARTNER.—Upon de-
termining that a prescription drug product 
in the possession or control of a trading 
partner is an illegitimate prescription drug 
product, the repackagers shall take reason-
able steps to assist the trading partner to 
provide for the disposition of the illegit-
imate prescription drug product. 
‘‘(iii) MAKING
A
NOTIFICATION.— 
Upon determining that a prescription drug 
product in the possession or control of the 
repackager is an illegitimate prescription 
drug product, the repackager shall notify 
the Secretary of such determination not 
later than 24 hours after making such de-
termination. The Secretary shall determine 
whether additional trading partner notifi-
cation is appropriate. 
‘‘(iv) RESPONDING
TO
A
NOTIFICA-
TION.—Upon the receipt of a notification 
from the Secretary that a determination 
has been made that a prescription drug 
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product is an illegitimate prescription drug 
product, a repackager shall— 
‘‘(I) identify all illegitimate pre-
scription drug products that are sub-
ject to such notification and in the 
possession or control of the repack-
ager, including any prescription drug 
product that is subsequently received; 
and 
‘‘(II) perform the activities de-
scribed in clause (i). 
‘‘(v) RECORDS.—A repackager shall 
keep records of the disposition of an illegit-
imate prescription drug product for not 
less than 3 years after the conclusion of 
the disposition. 
‘‘(C) ELECTRONIC DATABASE.—A repack-
ager may satisfy the requirements of this para-
graph through the use of a secure electronic 
database developed and operated by the manu-
facturer or another entity. The owner of such 
database shall establish the requirements and 
processes to respond to requests and may pro-
vide for data access to other members of the 
pharmaceutical distribution supply chain, as ap-
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propriate. The development and operation of 
such a database shall not relieve a repackager 
of the requirement under this paragraph to re-
spond to a verification request submitted by 
means other than a secure electronic database. 
‘‘(D) RETURNED
PRESCRIPTION
DRUG 
PRODUCT.—Beginning not later than 6 years 
after the date of the enactment of the Safe-
guarding America’s Pharmaceuticals Act of 
2013, upon receipt of a returned prescription 
drug product that the repackager intends to 
further distribute, before further distributing 
such prescription drug product, the repackager 
shall— 
‘‘(i) verify the prescription drug prod-
uct identifier for each sealed homogeneous 
case of such prescription drug product; or 
‘‘(ii) if such prescription drug product 
is not in a sealed homogeneous case, verify 
the prescription drug product identifier on 
each package. 
‘‘(f) THIRD-PARTY LOGISTICS PROVIDER REQUIRE-
MENTS.— 
‘‘(1) AUTHORIZED
TRADING
PARTNERS.—Be-
ginning on January 1, 2015, a third-party logistics 
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provider shall ensure that each of its trading part-
ners is authorized. 
‘‘(2) VERIFICATION.—Beginning not later than 
January 1, 2015, a third-party logistics provider 
shall implement systems to enable the third-party lo-
gistics provider to comply with the following require-
ments: 
‘‘(A) SUSPECT PRESCRIPTION DRUG PROD-
UCT.— 
‘‘(i) IN
GENERAL.—Upon making a 
determination that a prescription drug 
product in the possession or control of a 
third-party logistics provider is a suspect 
prescription drug product, a third-party lo-
gistics provider shall promptly notify the 
owner of such prescription drug product of 
the need to conduct an investigation to de-
termine whether the prescription drug 
product is an illegitimate prescription drug 
product. 
‘‘(ii) CLEARED
PRESCRIPTION
DRUG 
PRODUCT.—If the owner of the prescrip-
tion drug product notifies the third-party 
logistics provider of the determination that 
a suspect prescription drug product is not 
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an illegitimate prescription drug product, 
such prescription drug product may be fur-
ther distributed. 
‘‘(iii) RECORDS.—A third-party logis-
tics provider shall keep records of the ac-
tivities described in clauses (i) and (ii) 
with respect to a suspect prescription drug 
product for not less than 3 years after the 
conclusion of the investigation. 
‘‘(B) ILLEGITIMATE PRESCRIPTION DRUG 
PRODUCT.— 
‘‘(i) IN
GENERAL.—Upon receiving 
notice that a manufacturer of a prescrip-
tion drug product has determined that a 
prescription drug product in the possession 
or control of a third-party logistics pro-
vider is an illegitimate prescription drug 
product, the third-party logistics provider 
shall— 
‘‘(I) quarantine such prescription 
drug product within the possession or 
control of the third-party logistics pro-
vider from prescription drug product 
intended for distribution; 
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‘‘(II) promptly notify the owner 
of such prescription drug product of 
the need to provide for the disposition 
of such prescription drug product; and 
‘‘(III) promptly transfer posses-
sion of the prescription drug product 
to the owner of such prescription drug 
product to provide for the disposition 
of the prescription drug product. 
‘‘(ii) 
MAKING
A
NOTIFICATION.— 
Upon determining that a prescription drug 
product in the possession or control of the 
third-party logistics provider is an illegit-
imate prescription drug product, the third- 
party logistics provider shall notify the 
Secretary not later than 24 hours after 
making such determination. The Secretary 
shall determine whether additional trading 
partner notification is appropriate. 
‘‘(iii) RESPONDING
TO
A
NOTIFICA-
TION.—Upon the receipt of a notification 
from the Secretary, a third-party logistics 
provider shall— 
‘‘(I) identify all illegitimate pre-
scription drug product subject to such 
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notification that is in the possession 
or control of the third-party logistics 
provider, including any prescription 
drug product that is subsequently re-
ceived; and 
‘‘(II) perform the activities de-
scribed in clause (i). 
‘‘(iv) RECORDS.—A third-party logis-
tics provider shall keep records of the ac-
tivities described in clauses (i) and (ii) 
with respect to an illegitimate prescription 
drug product for not less than 3 years 
after the conclusion of the disposition. 
‘‘(g) DROP SHIPMENTS.—This section does not apply 
to any entity, notwithstanding its status as a wholesale 
distributor or repackager, or other status that is not in-
volved in the physical handling, distribution, or storage of 
a prescription drug product. For purposes of this sub-
section, facilitating the distribution of a prescription drug 
product by providing various administrative services, in-
cluding processing of orders and payments, shall not, by 
itself, be construed as being involved in the handling, dis-
tribution, or storage of a prescription drug product.’’. 
SEC. 3. ENHANCED DRUG DISTRIBUTION SECURITY. 
(a) PILOT PROJECTS.— 
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(1) IN GENERAL.—Not later than 2 years after 
the date of the enactment of this Act, the Secretary 
shall establish one or more pilot projects in coordi-
nation with manufacturers, repackagers, wholesale 
distributors, third-party logistics providers, and dis-
pensers to explore and evaluate methods to enhance 
the safety and security of the pharmaceutical dis-
tribution supply chain. 
(2) CONTENT.— 
(A) IN GENERAL.—The Secretary shall en-
sure that the pilot projects under paragraph (1) 
collectively— 
(i) reflect the diversity of the pharma-
ceutical distribution supply chain; and 
(ii) include participants representative 
of every sector within the pharmaceutical 
distribution supply chain, including partici-
pants representative of small businesses. 
(B) PROJECT DESIGN.—The pilot projects 
shall be designed to— 
(i) utilize the prescription drug prod-
uct identifier for tracing of a prescription 
drug product, which utilization may in-
clude— 
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(I) verification of the prescription 
drug product identifier of a prescrip-
tion drug product; and 
(II) the use of aggregation and 
inference; 
(ii) improve the technical capabilities 
of each sector within the pharmaceutical 
supply chain to comply with systems and 
processes needed to utilize the prescription 
drug product identifiers to enhance tracing 
of a prescription drug product; and 
(iii) conduct such other activities as 
the Secretary determines appropriate to 
explore and evaluate methods to enhance 
the safety and security of the pharma-
ceutical distribution supply chain. 
(b) PUBLIC MEETINGS.— 
(1) IN
GENERAL.—Not later than 6 months 
after the date of the enactment of this Act, and at 
least every 6 months thereafter until the submission 
of the report required by subsection (d)(2), the Sec-
retary shall hold a public meeting to enhance the 
safety and security of the pharmaceutical distribu-
tion supply chain. In conducting such meetings, the 
Secretary shall take all measures reasonable and 
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practicable to ensure the protection of confidential 
commercial information and trade secrets. 
(2) CONTENT.—In conducting meetings under 
this subsection, the Secretary shall seek to address, 
in at least one such meeting, each of the following 
topics: 
(A) Best practices in each of the sectors 
within the pharmaceutical distribution supply 
chain to implement the requirements of section 
582 of the Federal Food, Drug, and Cosmetic 
Act, as added by section 2. 
(B) The costs and benefits of implementa-
tion of such section 582, including the impact 
on each pharmaceutical distribution supply 
chain sector and on public health. 
(C) 
Whether 
additional 
electronic 
traceability requirements, including tracing of 
prescription drug product at the package level, 
are feasible, cost effective, overly burdensome 
on small businesses, and needed to protect pub-
lic health. 
(D) The systems and processes needed to 
utilize the prescription drug product identifiers 
to enhance tracing of prescription drug product 
at the package level. 
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(E) The technical capabilities and legal au-
thorities, if any, needed to establish an elec-
tronic system that provides for enhanced trac-
ing of prescription drug product at the package 
level. 
(F) The impact that the requirements, sys-
tems, processes, capabilities, and legal authori-
ties referred to in subparagraphs (C), (D), and 
(E) would have on patient safety, the drug sup-
ply, cost and regulatory burden, the timeliness 
of patient access to prescription drugs, and 
small businesses. 
(c) STUDY OF THE PHARMACEUTICAL DISTRIBUTION 
SUPPLY CHAIN.— 
(1) IN GENERAL.—The Comptroller General of 
the United States shall conduct a study to examine 
implementation of the requirements established 
under subchapter H of chapter V of the Federal 
Food, Drug, and Cosmetic Act, as added by section 
2, in order to inform the regulations promulgated 
under this section. 
(2) CONSIDERATION.—In conducting the study 
under this subsection, the Comptroller General shall 
provide for stakeholder input and shall consider the 
following: 
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(A) The implementation of the require-
ments established under such subchapter H 
with respect to— 
(i) the ability of the health care sys-
tem collectively to maintain patient access 
to medicines; 
(ii) the scalability of such require-
ments, including with respect to prescrip-
tion drug product lines; and 
(iii) the capability of different sectors 
within the pharmaceutical distribution sup-
ply chain, including small businesses, to 
affix and utilize the prescription drug 
product identifier. 
(B) The need for additional legal authori-
ties and activities to address additional gaps in 
the pharmaceutical distribution supply chain, if 
any, after the implementation of the require-
ments established under such subchapter H 
with respect to— 
(i) the systems and processes needed 
to enhance tracing of prescription drug 
product at the package level; 
(ii) the impact, feasibility, and cost ef-
fectiveness that additional requirements 
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pursuant to this section would have on 
each pharmaceutical distribution supply 
chain sector and the public health; and 
(iii) the systems and processes needed 
to enhance interoperability among trading 
partners. 
(C) Risks to the security and privacy of 
data collected, maintained, or exchanged pursu-
ant to the requirements established under such 
subchapter H. 
(d) SMALL DISPENSERS.— 
(1) IN
GENERAL.—Not later than 10 years 
after the date of the enactment of this Act, the Sec-
retary shall enter into a contract with a private, 
independent consulting firm with relevant expertise 
to conduct a technology and software study on the 
feasibility of dispensers that have 25 or fewer full- 
time employees conducting interoperable, electronic 
tracing of prescription drug products at the package 
level. 
(2) CONDITION.—As a condition of the award 
of a contract under paragraph (1), the private inde-
pendent consulting firm awarded such contract shall 
agree to consult with dispensers that have 25 or 
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fewer full-time employees when conducting the study 
under such subparagraph. 
(3) STUDY
CONTENT.—The study conducted 
under paragraph (1) shall assess whether, with re-
spect to conducting interoperable, electronic tracing 
of prescription drug products at the package level, 
the necessary hardware and software— 
(A) is readily accessible to such dispensers; 
(B) is not prohibitively expensive to obtain, 
install and maintain for such dispensers; and 
(C) can be integrated into business prac-
tices, such as interoperability with wholesale 
distributors, for such dispensers. 
(4) PUBLICATION.—The Secretary shall pub-
lish— 
(A) the statement of work for the study 
conducted under paragraph (1) for public com-
ment not later than 30 days before commencing 
the study; and 
(B) the final version of such study for pub-
lic comment not later than 30 days after such 
study is completed. 
(5) REPORT TO CONGRESS.—Not later than 30 
days after the date on which the study conducted 
under paragraph (1) is completed, the Secretary 
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shall submit to the Committee on Energy and Com-
merce of the House of Representatives and the Com-
mittee on Health, Education, Labor, and Pensions 
of the Senate, a report on the findings of the study 
and any recommendations to improve the technology 
and software available to small dispensers for pur-
poses of conducting electronic, interoperable tracing 
of prescription drug products at the package level. 
(6) PUBLIC
MEETING.—Not later than 180 
days after the date on which the study conducted 
under paragraph (1) is completed, the Secretary 
shall hold a public meeting at which members of the 
public, including stakeholders, may present their 
views on the study. 
(e) REPORTS.— 
(1) GAO REPORT.—Not later than 12 years 
after the date of the enactment of this Act, the 
Comptroller General shall submit to the Committee 
on Energy and Commerce of the House of Rep-
resentatives and the Committee on Health, Edu-
cation, Labor, and Pensions of the Senate a report 
on the results of the study conducted under sub-
section (c). 
(2) FDA REPORT.—Not later than 12 years 
after the date of the enactment of this Act, the Sec-
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retary shall submit to the Committee on Energy and 
Commerce of the House of Representatives and the 
Committee on Health, Education, Labor, and Pen-
sions of the Senate a report on the results of the 
pilot program conducted under subsection (a), tak-
ing into consideration— 
(A) the comments received during the pub-
lic meetings conducted under subsection (b); 
and 
(B) the results of the study conducted, and 
the public comments received during the public 
meeting held, under subsection (d). 
(f) ESTABLISHMENT
OF
ADDITIONAL
REQUIRE-
MENTS.— 
(1) IN GENERAL.—Notwithstanding any other 
provision of this Act, including the amendments 
made by this Act, not earlier than January 1, 2027, 
and not later than March 1, 2027, the Secretary 
shall issue proposed regulations that establish addi-
tional requirements to prevent a suspect product, il-
legitimate product, or a product that is counterfeit, 
stolen, diverted, or otherwise unfit for distribution 
from entering into or being further distributed in 
the supply chain, including— 
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(A) requirements related to the use of 
interoperable electronic systems and tech-
nologies for enhanced tracing of prescription 
drug product at the package level, which may 
include verification of the prescription drug 
product identifier of a package of prescription 
drug product and enhanced verification of sale-
able returns; 
(B) requirements related to the use of ad-
ditional prescription drug product identifiers or 
prescription drug product identifier technology 
that meet the standards developed under sec-
tion 582(a)(2) of the Federal Food, Drug, and 
Cosmetic Act, as added by section 2; 
(C) requirements related to the use of ag-
gregation, inference, and other methods, if de-
termined to be necessary components of the 
systems and technologies referred to in sub-
paragraph (A); and 
(D) other data transmission and mainte-
nance requirements and interoperability stand-
ards. 
(2) FLEXIBILITY.—The requirements described 
in paragraph (1) shall provide for flexibility for a 
member of the pharmaceutical supply chain, by— 
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(A) with respect to dispensers, allowing a 
dispenser to enter into a written agreement 
with a third party, including an authorized 
wholesale distributor, under which— 
(i) the third party confidentially main-
tains any information required to be main-
tained under such requirements for the 
dispenser; and 
(ii) the dispenser maintains a copy of 
the written agreement and is not relieved 
of the other obligations of the dispenser 
under such requirements; 
(B) establishing a process by which an au-
thorized manufacturer, repackager, wholesale 
distributor, or dispenser may request a waiver 
from any such requirements if the Secretary de-
termines that such requirements would result in 
an undue economic hardship on the manufac-
turer, wholesale distributor, or dispenser; 
(C) not requiring the adoption of specific 
business systems by a member of the pharma-
ceutical supply chain for the maintenance and 
transmission of prescription drug product trac-
ing data; and 
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(D) prescribing alternative methods of 
compliance for small businesses, as specified in 
paragraph (4). 
(3) CONSIDERATIONS.—In issuing proposed 
regulations under paragraph (1), the Secretary shall 
consider— 
(A) the results of the pilot project con-
ducted under subsection (a); 
(B) the public meetings held under sub-
section (b); 
(C) the studies conducted under sub-
sections (c) and (d); 
(D) the reports submitted under subsection 
(e); 
(E) the public health benefits of such regu-
lations compared with the cost of compliance 
with the requirements contained in such regula-
tions, including with respect to entities of vary-
ing sizes and capabilities; and 
(F) the diversity of the pharmaceutical dis-
tribution supply chain by providing appropriate 
flexibility for each sector in the supply chain, 
including small businesses. 
(4) SMALL BUSINESS PROTECTION.—The Sec-
retary, taking into consideration the study conducted 
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under paragraph (d), shall, if the Secretary deter-
mines that the requirements established pursuant to 
paragraph (1) would result in an undue economic 
hardship on small businesses, provide for alternative 
methods of compliance with any such requirement by 
small businesses, including— 
(A) establishing timelines for such compli-
ance (including compliance by dispensers with 
25 or fewer full-time employees) that do not im-
pose undue economic hardship for small busi-
nesses, including dispensers with respect to 
which the study concluded has insufficient 
hardware and software to conduct interoper-
able, electronic tracing of prescription drug 
products at the package level; and 
(B) establishing a process by which a dis-
penser may request a waiver from any such re-
quirement. 
(5) REGULATIONS.—In issuing regulations to 
carry out this subsection, the Secretary shall— 
(A) issue a notice of proposed rulemaking 
that includes a copy of the proposed rule; 
(B) provide for a period of not less than 
60 days for comments on the proposed rule; 
and 
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(C) provide for an effective date of the 
final rule that is 2 years after the date on 
which such final rule is published. 
(6) SUNSET.—The requirements regarding the 
provision and receipt of transaction history and 
transaction statements under section 582 of the 
Federal Food, Drug, and Cosmetic Act, as added by 
section 2, shall cease to be effective on the date on 
which the regulations issued under this section are 
fully implemented. 
(g) DEFINITIONS.—In this section: 
(1) The terms defined in section 581 of the 
Federal Food, Drug, and Cosmetic Act, as added by 
section 2, shall have the same meanings in this sec-
tion as such terms are given in such section 581. 
(2) The term ‘‘Secretary’’ means the Secretary 
of Health and Human Services, acting through the 
Commissioner of Food and Drugs. 
SEC. 4. NATIONAL STANDARDS FOR WHOLESALE DISTRIBU-
TORS. 
(a) STANDARDS.—Chapter V of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 351 et seq.) is amend-
ed— 
(1) in section 503 of such Act (21 U.S.C. 353), 
by striking ‘‘(e)(1)(A)’’ and all that follows through 
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‘‘(3) For purposes of this subsection and subsection 
(d)—’’ and inserting the following: 
‘‘(e) For purposes of subsection (d)—’’; and 
(2) in subchapter H of chapter V of the Federal 
Food, Drug, and Cosmetic Act, as added by section 
2, by adding at the end the following: 
‘‘SEC. 583. NATIONAL STANDARDS FOR WHOLESALE DIS-
TRIBUTORS. 
‘‘(a) STANDARDS.— 
‘‘(1) IN GENERAL.—The Secretary shall estab-
lish, by regulation, standards for the licensing of 
persons that make wholesale distributions. 
‘‘(2) REQUIREMENTS.—The standards under 
paragraph (1) shall, with respect to wholesale dis-
tributions, include requirements for— 
‘‘(A) the storage and handling of drugs 
subject to section 503(b)(1), including facility 
requirements; 
‘‘(B) the establishment and maintenance of 
records of the distributions of such drugs; 
‘‘(C) the furnishing of a bond or other 
equivalent means of security in accordance with 
paragraph (3); 
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‘‘(D) mandatory background checks and 
fingerprinting of facility managers or des-
ignated representatives; 
‘‘(E) the establishment and implementa-
tion of qualifications for key personnel; 
‘‘(F) the mandatory physical inspection of 
any facility to be used in wholesale distribution 
within a reasonable timeframe from the initial 
application for licensure of the wholesale dis-
tributor; and 
‘‘(G) in accordance with paragraph (5), the 
prohibition of certain persons from engaging in 
wholesale distribution. 
‘‘(3) BOND OR OTHER SECURITY.—The require-
ments under paragraph (2)(C) shall provide for the 
following: 
‘‘(A) An applicant that is not a govern-
ment-owned-and-operated wholesale distributor, 
for the issuance or renewal of a wholesale dis-
tributor license, shall submit a surety bond of 
$100,000 or other equivalent means of security 
acceptable to the applicable licensing authority. 
‘‘(B) For purposes of subparagraph (A), 
the applicable licensing authority may accept a 
surety bond less than $100,000 if the annual 
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gross receipts of the previous tax year for the 
wholesale distributor is $10,000,000 or less, in 
which case the surety bond may not be less 
than $25,000. 
‘‘(C) If a wholesale distributor can provide 
evidence that it possesses the required bond in 
a State, the requirement for a bond in another 
State is waived. 
‘‘(4) INSPECTIONS.—To satisfy the inspection 
requirement under paragraph (2)(F), the Secretary 
may conduct the inspection, or may accept an in-
spection by— 
‘‘(A) the government of the State in which 
the facility is located; or 
‘‘(B) a third-party accreditation or inspec-
tion service approved by the Secretary. 
‘‘(5) PROHIBITED PERSONS.—The requirements 
under paragraph (2) shall include requirements to 
prohibit a person from receiving or maintaining li-
censure for wholesale distribution if the person— 
‘‘(A) has been convicted of any felony for 
conduct relating to wholesale distribution; any 
felony violation of section 301(i) or 301(k); or 
any felony violation of section 1365 of title 18, 
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United States Code, relating to prescription 
drug product tampering; or 
‘‘(B) has engaged in a pattern of violating 
the requirements of this section that presents a 
threat of serious adverse health consequences or 
death to humans. 
‘‘(b) REPORTING BY LICENSED WHOLESALE DIS-
TRIBUTORS.— 
‘‘(1) ANNUAL
REPORT.—Beginning not later 
than 1 year after the date of the enactment of this 
section, each person engaged in wholesale distribu-
tion in interstate commerce shall submit on an an-
nual basis, and update as necessary, a report to the 
Secretary including— 
‘‘(A) the wholesale distributor’s name; 
‘‘(B) the wholesale distributor’s address; 
‘‘(C) a listing of each State in which the 
wholesale distributor is licensed for wholesale 
distribution; and 
‘‘(D) any disciplinary actions taken by a 
State, the Federal Government, or a foreign 
government during the reporting period against 
the wholesale distributor. 
‘‘(2) POSTING ON INTERNET.—The Secretary 
shall post on the public Internet Website of the 
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Food and Drug Administration the name of each 
wholesale distributor, and the State in which each 
such distributor is licensed, based on reports under 
paragraph (1). 
‘‘(c) PRESERVATION OF STATE AUTHORITY.—This 
subchapter does not prohibit a State from— 
‘‘(1) licensing wholesale distributors for the 
conduct of wholesale distribution activities in the 
State in accordance with this subchapter; and 
‘‘(2) collecting fees from wholesale distributors 
in connection with such licensing, 
so long as the State does not require such licensure to 
the extent to which an entity is engaged in third-party 
logistics provider activities. 
‘‘(d) DEFINITION.—In this section, the term ‘whole-
sale distribution’ means the distribution of a drug subject 
to section 503(b)(1) to a person other than a consumer 
or patient, but does not include— 
‘‘(1) intracompany distribution of any drug be-
tween members of an affiliated group (as defined in 
section 1504(a) of the Internal Revenue Code of 
1986); 
‘‘(2) the distribution of a drug, or an offer to 
distribute a drug among hospitals or other health 
care entities which are under common control; 
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‘‘(3) the distribution of a drug or an offer to 
distribute a drug for emergency medical reasons, in-
cluding a public health emergency declaration pursu-
ant to section 319 of the Public Health Service Act, 
except that a drug shortage not caused by a public 
health emergency shall not constitute such an emer-
gency medical reason; 
‘‘(4) dispensing of a drug pursuant to a valid 
prescription executed in accordance with subsection 
503(b)(1); 
‘‘(5) the distribution of minimal quantities of 
drug by a licensed retail pharmacy to a licensed 
practitioner for office use; 
‘‘(6) 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; 
‘‘(7) the purchase or other acquisition by a dis-
penser, hospital, or other health care entity of a 
drug for use by such dispenser, hospital, or other 
health care entity; 
‘‘(8) the distribution of a drug by the manufac-
turer of such drug; 
‘‘(9) the receipt or transfer of a drug by an au-
thorized third-party logistics provider provided that 
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such third-party logistics provider does not take 
ownership of the drug; 
‘‘(10) the transport of a drug by a common car-
rier, provided that the common carrier does not take 
ownership of the drug; 
‘‘(11) the distribution of a drug, or an offer to 
distribute a drug, by an authorized repackager that 
has taken ownership of the drug and repacked it in 
accordance with section 582(e); 
‘‘(12) saleable drug returns when conducted by 
a dispenser in accordance with section 203.23 of 
title 21, Code of Federal Regulations (or any suc-
cessor regulation); 
‘‘(13) the distribution of a combination pre-
scription 
drug 
product 
described 
in 
section 
581(20)(B)(xiii); 
‘‘(14) the distribution of a medical convenience 
kit described in section 581(21)(B)(xiv); 
‘‘(15) the distribution of an intravenous drug 
that, by its formulation, is intended for the replen-
ishment of fluids and electrolytes (such as sodium, 
chloride, and potassium) or calories (such as dex-
trose and amino acids); 
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‘‘(16) the distribution of an intravenous drug 
used to maintain the equilibrium of water and min-
erals in the body, such as dialysis solutions; 
‘‘(17) the distribution of a drug that is intended 
for irrigation or reconstitution, or sterile water, 
whether intended for such purposes or for injection; 
‘‘(18) the distribution of compressed medical 
gas (as defined in section 581(21)(C)); or 
‘‘(19) facilitating the distribution of a prescrip-
tion drug product by providing administrative serv-
ices, such as processing of orders and payments, 
without physical handling, distribution, or storage of 
a prescription drug product. 
‘‘(e) EFFECTIVE DATE.—The standards required by 
subsection (a) shall take effect not later than 2 years after 
the date of the enactment of this section. The Secretary 
shall issue the regulations required by subsection (a) not 
later than 1 year after the date of the enactment of this 
Act.’’. 
(b) 
CONFORMING
AMENDMENT.—Section 
804(a)(5)(A) of the Federal Food, Drug, and Cosmetic 
Act (21 U.S.C. 384(a)(5)(A)) is amended by striking 
‘‘503(e)(2)(A)’’ and inserting ‘‘583(a)’’. 
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SEC. 5. NATIONAL LICENSURE STANDARDS FOR THIRD- 
PARTY LOGISTICS PROVIDERS. 
Subchapter H of chapter V of the Federal Food, 
Drug, and Cosmetic Act, as amended by section 4, is fur-
ther amended by adding at the end the following: 
‘‘SEC. 584. NATIONAL LICENSURE STANDARDS FOR THIRD- 
PARTY LOGISTICS PROVIDERS. 
‘‘(a) LICENSE REQUIREMENT.—No facility may en-
gage in the activities of a third-party logistics provider in 
any State unless— 
‘‘(1) the facility is licensed— 
‘‘(A) by the State from which the drug is 
distributed by the third-party logistics provider 
in accordance with a qualified licensing pro-
gram, if the State has such a program; or 
‘‘(B) by the Secretary under this section, if 
the State from which the drug is distributed 
does not have such a program; and 
‘‘(2) if the drug is distributed interstate and 
the facility is not licensed by the Secretary under 
paragraph (1)(B), registers with the State into 
which the drug is distributed if such State requires 
such registration. 
‘‘(b) REPORTING BY LICENSED THIRD-PARTY LOGIS-
TICS PROVIDERS.— 
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‘‘(1) ANNUAL
REPORT.—Beginning not later 
than 1 year after the date of the enactment of this 
section, each facility engaged in the activities of a 
third-party logistics provider shall submit on an an-
nual basis, and update as necessary, a report to the 
Secretary including— 
‘‘(A) the facility’s name; 
‘‘(B) the facility’s address; 
‘‘(C) a listing of each jurisdiction (whether 
State or Federal) in which the facility is li-
censed for third-party logistics provider activi-
ties; and 
‘‘(D) any disciplinary actions taken by a 
State or Federal licensing authority during the 
reporting period against the facility. 
‘‘(2) POSTING ON INTERNET.—The Secretary 
shall post on the public Internet Website of the 
Food and Drug Administration the name of each 
third party logistics provider, and each jurisdiction 
(whether State or Federal) in which the provider is 
licensed, based on reports under paragraph (1). 
‘‘(c) PRESERVATION OF STATE AUTHORITY.—This 
subchapter does not prohibit a State from— 
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‘‘(1) licensing third-party logistic providers for 
the conduct of third-party logistics provider activities 
in the State in accordance with this subchapter; and 
‘‘(2) collecting fees from third-party logistics 
providers in connection with such licensing, 
so long as the State does not require such licensure to 
the extent to which an entity is engaged in wholesale dis-
tribution. 
‘‘(d) COSTS.— 
‘‘(1) AUTHORIZED
LICENSURE
FEES.—In the 
case of a facility engaging in the activities of a 
third-party logistics provider licensed by the Sec-
retary under this section, the Secretary may assess 
and collect a reasonable fee in an amount equal to 
the costs to the Federal Government of establishing 
and administering the licensure program established, 
and conducting period inspections, under this sec-
tion. 
‘‘(2) ADJUSTMENT.—The Secretary shall adjust 
the amount of the fee under paragraph (1) on an 
annual basis, if necessary, to generate an amount of 
revenue equal to the costs referred to in such para-
graph. 
‘‘(3) AVAILABILITY.—Fees assessed and col-
lected under this subsection shall be available for ob-
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ligation only to the extent and in the amount pro-
vided in advance in appropriations Acts. Such fees 
shall remain available until expended. 
‘‘(e) LICENSE REGULATIONS.— 
‘‘(1) IN GENERAL.—The Secretary shall estab-
lish, by regulation, standards, terms, and conditions 
for licensing persons to engage in third-party logis-
tics provider activities. 
‘‘(2) CONTENT.—The regulations under para-
graph (1) shall— 
‘‘(A) include standards relating to eligi-
bility for, and revocation and reissuance of, li-
censes; 
‘‘(B) establish a process by which the ap-
plicable licensing authority will, upon request by 
a third-party logistics provider that is accred-
ited by a third-party accreditation program ap-
proved by the Secretary, issue a license to the 
provider; 
‘‘(C) establish a process by which the Sec-
retary shall issue a license to a third-party lo-
gistics provider if the Secretary is not able to 
approve a third-party accreditation program be-
cause no such program meets the Secretary’s 
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requirements necessary for approval of such a 
third-party accreditation program; 
‘‘(D) require that the third-party logistics 
provider comply with storage practices, as de-
termined by the Secretary, at the provider’s fa-
cilities, including— 
‘‘(i) maintaining access to warehouse 
space of suitable size to facilitate safe op-
erations, including a suitable area to quar-
antine suspect prescription drug product; 
‘‘(ii) maintaining adequate security; 
and 
‘‘(iii) having written policies and pro-
cedures to— 
‘‘(I) address receipt, security, 
storage, inventory, shipment, and dis-
tribution of a prescription drug prod-
uct; 
‘‘(II) identify, record, and report 
confirmed losses or thefts in the 
United States; 
‘‘(III) correct errors and inac-
curacies in inventories; 
‘‘(IV) provide support for manu-
facturer recalls; 
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‘‘(V) prepare for, protect against, 
and address any reasonably foresee-
able crisis that affects security or op-
eration at the facility, such as a 
strike, fire, or flood; 
‘‘(VI) ensure that any expired 
prescription drug product is seg-
regated from other prescription drug 
products and returned to the manu-
facturer or repackager or destroyed; 
‘‘(VII) maintain the capability to 
electronically trace the receipt and 
outbound distribution of a prescrip-
tion drug product, and supplies and 
records of inventory; and 
‘‘(VIII) quarantine or destroy a 
suspect prescription drug product if 
directed to do so by the respective 
manufacturer, wholesale distributor, 
dispenser, or an authorized govern-
ment agency; 
‘‘(E) provide for periodic inspection, as de-
termined by the Secretary, of such facility ware-
house space to ensure compliance with this sec-
tion; 
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‘‘(F) prohibit a facility from having as a 
manager or designated representative anyone 
convicted of any felony violation of section 
301(i) or 301(k) or any felony violation of sec-
tion 1365 of title 18, United States Code, relat-
ing to prescription drug product tampering; 
‘‘(G) 
perform 
mandatory 
background 
checks of the provider’s facility managers or 
designated representatives of such managers; 
‘‘(H) require a third-party logistics pro-
vider to provide to the applicable licensing au-
thority, upon the authority’s request, a list of 
all prescription drug product manufacturers, 
wholesale distributors, and dispensers for whom 
the third-party logistics provider provides serv-
ices at the provider’s facilities; and 
‘‘(I) include procedures under which any 
third-party logistics provider license— 
‘‘(i) will expire on the date that is 3 
years after issuance of the license; and 
‘‘(ii) may be renewed for additional 3- 
year periods. 
‘‘(f) VALIDITY OF LICENSE.—A license issued under 
this section shall remain valid as long as such third-party 
logistics provider remains accredited by the Secretary, 
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subject to renewal under subsection (d). If the Secretary 
finds that the third-party accreditation program dem-
onstrates that all applicable requirements for licensure 
under this section are met, the Secretary shall issue a li-
cense under this section to a third-party logistics provider 
receiving accreditation. 
‘‘(g) QUALIFIED LICENSING PROGRAM DEFINED.— 
In this section, the term ‘qualified licensing program’ 
means a program meeting the requirements of this section 
and the regulations thereunder. 
‘‘(h) EFFECTIVE DATE.—The requirements of this 
section shall take effect not later than 1 year after the 
date of the enactment of this section. The Secretary shall 
issue the regulations required by subsection (d) not later 
than 180 days after the date of the enactment of this sec-
tion.’’. 
SEC. 6. PENALTIES. 
(a) PROHIBITED ACTS.—Section 301(t) of the Fed-
eral Food, Drug, and Cosmetic Act (21 U.S.C. 331(t)) is 
amended— 
(1) by striking ‘‘or’’ after ‘‘the requirements of 
section 503(d)’’; and 
(2) by striking ‘‘or the distribution of drugs in 
violation of section 503(e) or the failure to otherwise 
comply with the requirements of section 503(e)’’ and 
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TKELLEY on DSK3SPTVN1PROD with BILLS
inserting ‘‘the failure to comply with any require-
ment of section 582, engaging in the wholesale dis-
tribution of a drug in violation of section 583 or the 
failure to otherwise comply with the requirements of 
section 583, or engaging in the activities of a third- 
party logistics provider in violation of section 584 or 
the failure to otherwise comply with the require-
ments of section 584’’. 
(b) ENHANCED PENALTY
FOR KNOWING UNLI-
CENSED ACTIVITIES.—Section 303(b)(1)(D) of the Fed-
eral Food, Drug, and Cosmetic Act (21 U.S.C. 
333(b)(1)(D)) is amended by striking ‘‘503(e)(2)(A)’’ and 
inserting ‘‘583 or 584’’. 
(c) MISBRANDING.—Section 502 of the Federal 
Food, Drug, and Cosmetic Act (21 U.S.C. 352) is amend-
ed by adding at the end the following: 
‘‘(bb) If it is a drug and it fails to bear a prescription 
drug product identifier as required by section 582.’’. 
SEC. 7. UNIFORM NATIONAL POLICY. 
Subchapter H of chapter V of the Federal Food, 
Drug, and Cosmetic Act, as amended by section 5, is fur-
ther amended by adding at the end the following: 
‘‘SEC. 585. UNIFORM NATIONAL POLICY. 
‘‘(a) PREEMPTION OF STATE PRESCRIPTION DRUG 
PRODUCT TRACING AND OTHER REQUIREMENTS.—Be-
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ginning on the date of the enactment of the Safeguarding 
America’s Pharmaceuticals Act of 2013, no State or polit-
ical subdivision of a State may establish or continue in 
effect any requirements for tracing drugs through the dis-
tribution system (including any requirements with respect 
to paper or electronic pedigrees, track and trace, state-
ments of distribution history, transaction history, or 
transaction statements, or verification, investigation, dis-
position, alerts, or recordkeeping relating to the pharma-
ceutical distribution supply chain system) that— 
‘‘(1) are inconsistent with, more stringent than, 
or in addition to any requirements applicable under 
this Act; or 
‘‘(2) are inconsistent with any applicable waiv-
er, exception, or exemption issued by the Secretary 
under section 582(a). 
‘‘(b) STANDARDS OR LICENSURE.— 
‘‘(1) IN GENERAL.—Beginning on the date of 
the enactment of Safeguarding America’s Pharma-
ceuticals Act of 2013, no State or political subdivi-
sion of a State may establish or continue any stand-
ards, requirements, or regulations with respect to 
wholesale drug distributor or third-party logistics 
provider licensure which are inconsistent with, less 
stringent than, in addition to, or more stringent 
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than, the standards and requirements under this 
Act. 
‘‘(2) LICENSING
FEES.—Paragraph (1) does 
not affect the authority of a State to collect fees 
from wholesale drug distributors or third-party logis-
tics providers in connection with State licensing 
under section 583 or 584 pursuant to a licensing 
program meeting the requirements of such sections. 
‘‘(3) ENFORCEMENT, SUSPENSION, AND
REV-
OCATION OF LICENSES.—Notwithstanding paragraph 
(1), a State— 
‘‘(A) may take administrative action, in-
cluding fines, to enforce a licensure requirement 
promulgated by the State in accordance with 
this Act; 
‘‘(B) may provide for the suspension or 
revocation of licenses issued by the State for 
violations of the laws of such State; 
‘‘(C) upon conviction of a person for a vio-
lation of Federal, State, or local controlled sub-
stance laws or regulations, may provide for 
fines, imprisonment, or civil penalties; and 
‘‘(D) may regulate activities of entities li-
censed pursuant to section 583 or 584 in a 
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manner that is consistent with the provisions of 
this subchapter.’’. 
SEC. 8. ELECTRONIC LABELING REQUIREMENT. 
Section 502(f) of the Federal Food, Drug, and Cos-
metic Act (21 U.S.C. 352(f)) is amended by adding at the 
end the following new sentence: ‘‘Required labeling, other 
than immediate container or carton labels, for a drug may 
be made available by manufacturers and distributors solely 
by electronic means, provided that the labeling complies 
with all applicable requirements of law and the manufac-
turer or distributor, as applicable, affords health care pro-
fessionals and authorized dispensers (as defined in section 
581) the opportunity to request the labeling in paper form, 
and after such request, promptly provides the requested 
information without additional cost.’’. 
Æ 
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