617
time frame by the Centers for Medicare & Medicaid 
Services for use in computing payments for inpatient 
hospital services. The study may include an evalua-
tion of the feasibility and appropriateness of using 
of quarterly samples or special surveys or any other 
methods. The study shall include an analysis of 
whether other executive agencies, such as the Bu-
reau of Labor Statistics in the Department of Com-
merce, are best suited to collect this information. 
(2) REPORT.—By not later than October 1, 
2004, the Comptroller General shall submit a report 
to Congress on the study under paragraph (1). 
(d) PROCESS
FOR ADOPTION
OF ICD CODES
AS 
DATA STANDARD.—Section 1172(f) (42 U.S.C. 1320d–
1(f)) is amended by inserting after the first sentence the 
following: ‘‘Notwithstanding the first sentence of this sub-
section, if the National Committee on Vital and Health 
Statistics has not made a recommendation to the Sec-
retary, within 1 year after the date of the enactment of 
this sentence, with respect to the adoption of the Inter-
national Classification of Diseases, 10th Revision, Proce-
dure Coding System (‘ICD–10–PCS’) and the Inter-
national Classification of Diseases, 10th Revision, Clinical 
Modification (‘ICD–10–CM’) as a standard under this
618
part, then the Secretary may adopt ICD–10–PCS and 
ICD–10–CM as such a standard.’’. 
SEC. 943. TREATMENT OF HOSPITALS FOR CERTAIN SERV-
ICES UNDER MEDICARE SECONDARY PAYOR 
(MSP) PROVISIONS. 
(a) IN GENERAL.—The Secretary shall not require 
a hospital (including a critical access hospital) to ask ques-
tions (or obtain information) relating to the application 
of section 1862(b) of the Social Security Act (relating to 
medicare secondary payor provisions) in the case of ref-
erence laboratory services described in subsection (b), if 
the Secretary does not impose such requirement in the 
case of such services furnished by an independent labora-
tory. 
(b) 
REFERENCE
LABORATORY
SERVICES
DE-
SCRIBED.—Reference laboratory services described in this 
subsection are clinical laboratory diagnostic tests (or the 
interpretation of such tests, or both) furnished without a 
face-to-face encounter between the individual entitled to 
benefits under part A or enrolled under part B, or both, 
and the hospital involved and in which the hospital sub-
mits a claim only for such test or interpretation. 
SEC. 944. EMTALA IMPROVEMENTS. 
(a) PAYMENT FOR EMTALA-MANDATED SCREEN-
ING AND STABILIZATION SERVICES.—
619
(1) IN
GENERAL.—Section 1862 (42 U.S.C. 
1395y) is amended by inserting after subsection (c) 
the following new subsection: 
‘‘(d) For purposes of subsection (a)(1)(A), in the case 
of any item or service that is required to be provided pur-
suant to section 1867 to an individual who is entitled to 
benefits under this title, determinations as to whether the 
item or service is reasonable and necessary shall be made 
on the basis of the information available to the treating 
physician or practitioner (including the patient’s pre-
senting symptoms or complaint) at the time the item or 
service was ordered or furnished by the physician or prac-
titioner (and not on the patient’s principal diagnosis). 
When making such determinations with respect to such 
an item or service, the Secretary shall not consider the 
frequency with which the item or service was provided to 
the patient before or after the time of the admission or 
visit.’’. 
(2) EFFECTIVE DATE.—The amendment made 
by paragraph (1) shall apply to items and services 
furnished on or after January 1, 2004. 
(b) NOTIFICATION OF PROVIDERS WHEN EMTALA 
INVESTIGATION CLOSED.—Section 1867(d) (42 U.S.C. 42 
U.S.C. 1395dd(d)) is amended by adding at the end the 
following new paragraph:
620
‘‘(4) NOTICE
UPON
CLOSING
AN
INVESTIGA-
TION.—The Secretary shall establish a procedure to 
notify hospitals and physicians when an investigation 
under this section is closed.’’. 
(c) PRIOR REVIEW BY PEER REVIEW ORGANIZA-
TIONS IN EMTALA CASES INVOLVING TERMINATION OF 
PARTICIPATION.—
(1) IN
GENERAL.—Section 1867(d)(3) (42 
U.S.C. 1395dd(d)(3)) is amended—
(A) in the first sentence, by inserting ‘‘or 
in terminating a hospital’s participation under 
this title’’ after ‘‘in imposing sanctions under 
paragraph (1)’’; and 
(B) by adding at the end the following new 
sentences: ‘‘Except in the case in which a delay 
would jeopardize the health or safety of individ-
uals, the Secretary shall also request such a re-
view before making a compliance determination 
as part of the process of terminating a hos-
pital’s participation under this title for viola-
tions related to the appropriateness of a med-
ical screening examination, stabilizing treat-
ment, or an appropriate transfer as required by 
this section, and shall provide a period of 5 
days for such review. The Secretary shall pro-
621
vide a copy of the organization’s report to the 
hospital or physician consistent with confiden-
tiality requirements imposed on the organiza-
tion under such part B.’’. 
(2) EFFECTIVE DATE.—The amendments made 
by paragraph (1) shall apply to terminations of par-
ticipation initiated on or after the date of the enact-
ment of this Act.
(d) MODIFICATION OF REQUIRMENT FOR MEDICAL 
SCREENING EXAMINATIONS
FOR PATIENTS NOT RE-
QUESTING EMERGENCY DEPARTMENT SERVICES.—
(1) IN GENERAL.—Section 1867(a) (42 U.S.C. 
1395dd(a)) is amended—
(A) by designating all that follows ‘‘(a) 
MEDICAL
SCREENING
REQUIREMENT.—’’ as 
paragraph (1) with the heading ‘‘IN
GEN-
ERAL.—’’; 
(B) by aligning such paragraph with the 
paragraph added by paragraph (3); and 
(C) by adding at the end the following new 
paragraph: 
‘‘(2) EXCEPTION FOR CERTAIN CASES.—The re-
quirement for an appropriate medical screening ex-
amination under paragraph (1) shall not apply in 
the case of an individual who comes to the emer-
622
gency department and neither the individual, nor an-
other person on the individual’s behalf, requests ex-
amination or treatment for an emergency medical 
condition (such as a request solely for preventive 
services, such as blood pressure screening or non-
emergency laboratory and diagnostic tests).’’. 
(2) EFFECTIVE DATE.—The amendments made 
by paragraph (1) shall apply to terminations of par-
ticipation initiated on or after the date of the enact-
ment of this Act. 
SEC. 945. EMERGENCY MEDICAL TREATMENT AND ACTIVE 
LABOR ACT (EMTALA) TECHNICAL ADVISORY 
GROUP. 
(a) ESTABLISHMENT.—The Secretary shall establish 
a Technical Advisory Group (in this section referred to 
as the ‘‘Advisory Group’’) to review issues related to the 
Emergency 
Medical 
Treatment 
and 
Labor 
Act 
(EMTALA) and its implementation. In this section, the 
term ‘‘EMTALA’’ refers to the provisions of section 1867 
of the Social Security Act (42 U.S.C. 1395dd). 
(b) MEMBERSHIP.—The Advisory Group shall be 
composed of 19 members, including the Administrator of 
the Centers for Medicare & Medicaid Services and the In-
spector General of the Department of Health and Human 
Services and of which—
623
(1) 4 shall be representatives of hospitals, in-
cluding at least one public hospital, that have experi-
ence with the application of EMTALA and at least 
2 of which have not been cited for EMTALA viola-
tions; 
(2) 7 shall be practicing physicians drawn from 
the fields of emergency medicine, cardiology or 
cardiothoracic surgery, orthopedic surgery, neuro-
surgery, pediatrics or a pediatric subspecialty, ob-
stetrics-gynecology, and psychiatry, with not more 
than one physician from any particular field; 
(3) 2 shall represent patients; 
(4) 2 shall be staff involved in EMTALA inves-
tigations from different regional offices of the Cen-
ters for Medicare & Medicaid Services; and 
(5) 1 shall be from a State survey office in-
volved in EMTALA investigations and 1 shall be 
from a peer review organization, both of whom shall 
be from areas other than the regions represented 
under paragraph (4). 
In selecting members described in paragraphs (1) through 
(3), the Secretary shall consider qualified individuals nom-
inated by organizations representing providers and pa-
tients.
624
(c) GENERAL
RESPONSIBILITIES.—The Advisory 
Group—
(1) shall review EMTALA regulations; 
(2) may provide advice and recommendations to 
the Secretary with respect to those regulations and 
their application to hospitals and physicians; 
(3) shall solicit comments and recommendations 
from hospitals, physicians, and the public regarding 
the implementation of such regulations; and 
(4) may disseminate information on the applica-
tion of such regulations to hospitals, physicians, and 
the public. 
(d) ADMINISTRATIVE MATTERS.—
(1) CHAIRPERSON.—The members of the Advi-
sory Group shall elect a member to serve as chair-
person of the Advisory Group for the life of the Ad-
visory Group. 
(2) MEETINGS.—The Advisory Group shall first 
meet at the direction of the Secretary. The Advisory 
Group shall then meet twice per year and at such 
other times as the Advisory Group may provide. 
(e) TERMINATION.—The Advisory Group shall termi-
nate 30 months after the date of its first meeting. 
(f) WAIVER OF ADMINISTRATIVE LIMITATION.—The 
Secretary shall establish the Advisory Group notwith-
625
standing any limitation that may apply to the number of 
advisory committees that may be established (within the 
Department of Health and Human Services or otherwise). 
SEC. 946. AUTHORIZING USE OF ARRANGEMENTS TO PRO-
VIDE CORE HOSPICE SERVICES IN CERTAIN 
CIRCUMSTANCES. 
(a) IN GENERAL.—Section 1861(dd)(5) (42 U.S.C. 
1395x(dd)(5)) is amended by adding at the end the fol-
lowing: 
‘‘(D) In extraordinary, exigent, or other non-routine 
circumstances, such as unanticipated periods of high pa-
tient loads, staffing shortages due to illness or other 
events, or temporary travel of a patient outside a hospice 
program’s service area, a hospice program may enter into 
arrangements with another hospice program for the provi-
sion by that other program of services described in para-
graph 
(2)(A)(ii)(I). 
The 
provisions 
of 
paragraph 
(2)(A)(ii)(II) shall apply with respect to the services pro-
vided under such arrangements. 
‘‘(E) A hospice program may provide services de-
scribed in paragraph (1)(A) other than directly by the pro-
gram if the services are highly specialized services of a 
registered professional nurse and are provided non-rou-
tinely and so infrequently so that the provision of such
626
services directly would be impracticable and prohibitively 
expensive.’’. 
(b) CONFORMING
PAYMENT
PROVISION.—Section 
1814(i) (42 U.S.C. 1395f(i)) is amended by adding at the 
end the following new paragraph: 
‘‘(4) In the case of hospice care provided by a hospice 
program 
under 
arrangements 
under 
section 
1861(dd)(5)(D) made by another hospice program, the 
hospice program that made the arrangements shall bill 
and be paid for the hospice care.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to hospice care provided on or after 
the date of the enactment of this Act. 
SEC. 947. APPLICATION OF OSHA BLOODBORNE PATHO-
GENS STANDARD TO CERTAIN HOSPITALS. 
(a) IN GENERAL.—Section 1866 (42 U.S.C. 1395cc) 
is amended—
(1) in subsection (a)(1)—
(A) in subparagraph (R), by striking 
‘‘and’’ at the end; 
(B) in subparagraph (S), by striking the 
period at the end and inserting ‘‘, and’’; and 
(C) by inserting after subparagraph (S) 
the following new subparagraph:
627
‘‘(T) in the case of hospitals that are not other-
wise subject to the Occupational Safety and Health 
Act of 1970, to comply with the Bloodborne Patho-
gens standard under section 1910.1030 of title 29 of 
the Code of Federal Regulations (or as subsequently 
redesignated).’’; and 
(2) by adding at the end of subsection (b) the 
following new paragraph: 
‘‘(4)(A) A hospital that fails to comply with the re-
quirement of subsection (a)(1)(T) (relating to the 
Bloodborne Pathogens standard) is subject to a civil 
money penalty in an amount described in subparagraph 
(B), but is not subject to termination of an agreement 
under this section. 
‘‘(B) The amount referred to in subparagraph (A) is 
an amount that is similar to the amount of civil penalties 
that may be imposed under section 17 of the Occupational 
Safety and Health Act of 1970 for a violation of the 
Bloodborne Pathogens standard referred to in subsection 
(a)(1)(T) by a hospital that is subject to the provisions 
of such Act. 
‘‘(C) A civil money penalty under this paragraph shall 
be imposed and collected in the same manner as civil 
money penalties under subsection (a) of section 1128A are 
imposed and collected under that section.’’.
628
(b) EFFECTIVE DATE.—The amendments made by 
this subsection (a) shall apply to hospitals as of July 1, 
2004. 
SEC. 948. BIPA-RELATED TECHNICAL AMENDMENTS AND 
CORRECTIONS. 
(a) TECHNICAL AMENDMENTS RELATING TO ADVI-
SORY COMMITTEE UNDER BIPA SECTION 522.—(1) Sub-
section (i) of section 1114 (42 U.S.C. 1314)—
(A) is transferred to section 1862 and added at 
the end of such section; and 
(B) is redesignated as subsection (j). 
(2) Section 1862 (42 U.S.C. 1395y) is amended—
(A) in the last sentence of subsection (a), by 
striking ‘‘established under section 1114(f)’’; and 
(B) in subsection (j), as so transferred and re-
designated—
(i) by striking ‘‘under subsection (f)’’; and 
(ii) by striking ‘‘section 1862(a)(1)’’ and 
inserting ‘‘subsection (a)(1)’’. 
(b) 
TERMINOLOGY
CORRECTIONS.—(1) 
Section 
1869(c)(3)(I)(ii) (42 U.S.C. 1395ff(c)(3)(I)(ii)), as 
amended by section 521 of BIPA, is amended—
(A) in subclause (III), by striking ‘‘policy’’ and 
inserting ‘‘determination’’; and
629
(B) in subclause (IV), by striking ‘‘medical re-
view policies’’ and inserting ‘‘coverage determina-
tions’’. 
(2) Section 1852(a)(2)(C) (42 U.S.C. 1395w–
22(a)(2)(C)) is amended by striking ‘‘policy’’ and ‘‘POL-
ICY’’ and inserting ‘‘determination’’ each place it appears 
and ‘‘DETERMINATION’’, respectively. 
(c) REFERENCE CORRECTIONS.—Section 1869(f)(4) 
(42 U.S.C. 1395ff(f)(4)), as added by section 522 of 
BIPA, is amended—
(1) in subparagraph (A)(iv), by striking ‘‘sub-
clause (I), (II), or (III)’’ and inserting ‘‘clause (i), 
(ii), or (iii)’’; 
(2) in subparagraph (B), by striking ‘‘clause 
(i)(IV)’’ and ‘‘clause (i)(III)’’ and inserting ‘‘sub-
paragraph (A)(iv)’’ and ‘‘subparagraph (A)(iii)’’, re-
spectively; and 
(3) in subparagraph (C), by striking ‘‘clause 
(i)’’, ‘‘subclause (IV)’’ and ‘‘subparagraph (A)’’ and 
inserting ‘‘subparagraph (A)’’, ‘‘clause (iv)’’ and 
‘‘paragraph (1)(A)’’, respectively each place it ap-
pears. 
(d) OTHER CORRECTIONS.—Effective as if included 
in the enactment of section 521(c) of BIPA, section
630
1154(e) (42 U.S.C. 1320c–3(e)) is amended by striking 
paragraph (5). 
(e) EFFECTIVE DATE.—Except as otherwise pro-
vided, the amendments made by this section shall be effec-
tive as if included in the enactment of BIPA. 
SEC. 949. CONFORMING AUTHORITY TO WAIVE A PROGRAM 
EXCLUSION. 
The first sentence of section 1128(c)(3)(B) (42 
U.S.C. 1320a–7(c)(3)(B)) is amended to read as follows: 
‘‘Subject to subparagraph (G), in the case of an exclusion 
under subsection (a), the minimum period of exclusion 
shall be not less than five years, except that, upon the 
request of the administrator of a Federal health care pro-
gram (as defined in section 1128B(f)) who determines 
that the exclusion would impose a hardship on individuals 
entitled to benefits under part A of title XVIII or enrolled 
under part B of such title, or both, the Secretary may 
waive the exclusion under subsection (a)(1), (a)(3), or 
(a)(4) with respect to that program in the case of an indi-
vidual or entity that is the sole community physician or 
sole source of essential specialized services in a commu-
nity.’’.
631
SEC. 950. TREATMENT OF CERTAIN DENTAL CLAIMS. 
(a) IN GENERAL.—Section 1862 (42 U.S.C. 1395y) 
is amended by adding after subsection (g) the following 
new subsection: 
‘‘(h)(1) Subject to paragraph (2), a group health plan 
(as defined in subsection (a)(1)(A)(v)) providing supple-
mental or secondary coverage to individuals also entitled 
to services under this title shall not require a medicare 
claims determination under this title for dental benefits 
specifically excluded under subsection (a)(12) as a condi-
tion of making a claims determination for such benefits 
under the group health plan. 
‘‘(2) A group health plan may require a claims deter-
mination under this title in cases involving or appearing 
to involve inpatient dental hospital services or dental serv-
ices expressly covered under this title pursuant to actions 
taken by the Secretary.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall take effect on the date that is 60 days 
after the date of the enactment of this Act. 
SEC. 951. FURNISHING HOSPITALS WITH INFORMATION TO 
COMPUTE DSH FORMULA. 
Beginning not later than 1 year after the date of the 
enactment of this Act, the Secretary shall arrange to fur-
nish to subsection (d) hospitals (as defined in section 
1886(d)(1)(B) of the Social Security Act, 42 U.S.C.
632
1395ww(d)(1)(B)) the data necessary for such hospitals 
to compute the number of patient days used in computing 
the disproportionate patient percentage under such section 
for that hospital for the current cost reporting year. Such 
data shall also be furnished to other hospitals which would 
qualify for additional payments under part A of title 
XVIII of the Social Security Act on the basis of such data. 
SEC. 952. REVISIONS TO REASSIGNMENT PROVISIONS. 
(a) IN GENERAL.—Section 1842(b)(6)(A) (42 U.S.C. 
1395u(b)(6)(A)) is amended by striking ‘‘or (ii) (where 
the service was provided in a hospital, critical access hos-
pital, clinic, or other facility) to the facility in which the 
service was provided if there is a contractual arrangement 
between such physician or other person and such facility 
under which such facility submits the bill for such serv-
ice,’’ and inserting ‘‘or (ii) where the service was provided 
under a contractual arrangement between such physician 
or other person and an entity (as defined by the Sec-
retary), to the entity if, under the contractual arrange-
ment, the entity submits the bill for the service and the 
contractual arrangement meets such other program integ-
rity and other safeguards as the Secretary may determine 
to be appropriate,’’. 
(b) CONFORMING AMENDMENT.—The second sen-
tence of section 1842(b)(6) (42 U.S.C. 1395u(b)(6)) is
633
amended by striking ‘‘except to an employer or facility’’ 
and inserting ‘‘except to an employer, entity, or other per-
son’’. 
(c) EFFECTIVE DATE.—The amendments made by 
section shall apply to payments made on or after the date 
of the enactment of this Act. 
SEC. 953. OTHER PROVISIONS. 
(a) GAO REPORTS ON THE PHYSICIAN COMPENSA-
TION.—
(1) SUSTAINABLE GROWTH RATE
AND UP-
DATES.—Not later than 6 months after the date of 
the enactment of this Act, the Comptroller General 
of the United States shall submit to Congress a re-
port on the appropriateness of the updates in the 
conversion factor under subsection (d)(3) of section 
1848 of the Social Security Act (42 U.S.C. 1395w–
4), including the appropriateness of the sustainable 
growth rate formula under subsection (f) of such 
section for 2002 and succeeding years. Such report 
shall examine the stability and predictability of such 
updates and rate and alternatives for the use of such 
rate in the updates. 
(2) PHYSICIAN COMPENSATION GENERALLY.—
Not later than 12 months after the date of the en-
actment of this Act, the Comptroller General shall
634
submit to Congress a report on all aspects of physi-
cian compensation for services furnished under title 
XVIII of the Social Security Act, and how those as-
pects interact and the effect on appropriate com-
pensation for physician services. Such report shall 
review alternatives for the physician fee schedule 
under section 1848 of such title (42 U.S.C. 1395w–
4). 
(b) ANNUAL PUBLICATION OF LIST OF NATIONAL 
COVERAGE DETERMINATIONS.—The Secretary shall pro-
vide, in an appropriate annual publication available to the 
public, a list of national coverage determinations made 
under title XVIII of the Social Security Act in the pre-
vious year and information on how to get more informa-
tion with respect to such determinations. 
(c) GAO REPORT
ON FLEXIBILITY
IN APPLYING 
HOME HEALTH CONDITIONS OF PARTICIPATION TO PA-
TIENTS WHO ARE NOT MEDICARE BENEFICIARIES.—Not 
later than 6 months after the date of the enactment of 
this Act, the Comptroller General of the United States 
shall submit to Congress a report on the implications if 
there were flexibility in the application of the medicare 
conditions of participation for home health agencies with 
respect to groups or types of patients who are not medi-
care beneficiaries. The report shall include an analysis of
635
the potential impact of such flexible application on clinical 
operations and the recipients of such services and an anal-
ysis of methods for monitoring the quality of care provided 
to such recipients. 
(d) OIG REPORT ON NOTICES RELATING TO USE OF 
HOSPITAL LIFETIME RESERVE DAYS.—Not later than 1 
year after the date of the enactment of this Act, the In-
spector General of the Department of Health and Human 
Services shall submit a report to Congress on—
(1) the extent to which hospitals provide notice 
to medicare beneficiaries in accordance with applica-
ble requirements before they use the 60 lifetime re-
serve days described in section 1812(a)(1) of the So-
cial Security Act (42 U.S.C. 1395d(a)(1)); and 
(2) the appropriateness and feasibility of hos-
pitals providing a notice to such beneficiaries before 
they completely exhaust such lifetime reserve days. 
SEC. 954. TEMPORARY SUSPENSION OF OASIS REQUIRE-
MENT FOR COLLECTION OF DATA ON NON-
MEDICARE AND NON-MEDICAID PATIENTS. 
(a) IN GENERAL.—During the period described in 
subsection (b), the Secretary may not require, under sec-
tion 4602(e) of the Balanced Budget Act of 1997 or other-
wise under OASIS, a home health agency to gather or sub-
mit information that relates to an individual who is not
636
eligible for benefits under either title XVIII or title XIX 
of the Social Security Act (such information in this section 
referred to as ‘‘non-medicare/medicaid OASIS informa-
tion’’). 
(b) PERIOD OF SUSPENSION.—The period described 
in this subsection—
(1) begins on the date of the enactment of this 
Act; and 
(2) ends on the last day of the 2nd month be-
ginning after the date as of which the Secretary has 
published final regulations regarding the collection 
and use by the Centers for Medicare & Medicaid 
Services of non-medicare/medicaid OASIS informa-
tion following the submission of the report required 
under subsection (c). 
(c) REPORT.—
(1) STUDY.—The Secretary shall conduct a 
study on how non-medicare/medicaid OASIS infor-
mation is and can be used by large home health 
agencies. Such study shall examine—
(A) whether there are unique benefits from 
the analysis of such information that cannot be 
derived from other information available to, or 
collected by, such agencies; and
637
(B) the value of collecting such informa-
tion by small home health agencies compared to 
the administrative burden related to such collec-
tion. 
In conducting the study the Secretary shall obtain 
recommendations from quality assessment experts in 
the use of such information and the necessity of 
small, as well as large, home health agencies col-
lecting such information. 
(2) REPORT.—The Secretary shall submit to 
Congress a report on the study conducted under 
paragraph (1) by not later than 18 months after the 
date of the enactment of this Act. 
(d) CONSTRUCTION.—Nothing in this section shall be 
construed as preventing home health agencies from col-
lecting non-medicare/medicaid OASIS information for 
their own use. 
TITLE X—MEDICAID 
SEC. 1001. MEDICAID DISPROPORTIONATE SHARE HOS-
PITAL (DSH) PAYMENTS. 
Section 1923(f)(3) (42 U.S.C. 1396r–4(f)(3)) is 
amended—
(1) in subparagraph (A), by striking ‘‘subpara-
graph (B)’’ and inserting ‘‘subparagraphs (B) and 
(C)’’; and
638
(2) by adding at the end the following new sub-
paragraphs: 
‘‘(C) SPECIAL, TEMPORARY INCREASE IN 
ALLOTMENTS
ON
A
ONE-TIME, NON-CUMU-
LATIVE
BASIS.—The DSH allotment for any 
State—
‘‘(i) for fiscal year 2004 is equal to 
120 percent of the DSH allotment for the 
State for fiscal year 2003 under this para-
graph, notwithstanding subparagraph (B); 
and 
‘‘(ii) for each succeeding fiscal year is 
equal to the DSH allotment for the State 
for fiscal year 2004 or, in the case of fiscal 
years beginning with the fiscal year speci-
fied in subparagraph (D) for that State, 
the percentage change in the consumer 
price index for all urban consumers (all 
items; U.S. city average), for the previous 
fiscal year. 
‘‘(D) FISCAL YEAR SPECIFIED.—For pur-
poses of subparagraph (C)(ii), the fiscal year 
specified in this subparagraph for a State is the 
first fiscal year for which the Secretary esti-
mates that the DSH allotment for that State
639
will equal (or no longer exceed) the DSH allot-
ment for that State under the law as in effect 
before the date of the enactment of this sub-
paragraph.’’. 
SEC. 1002. CLARIFICATION OF INCLUSION OF INPATIENT 
DRUG PRICES CHARGED TO CERTAIN PUBLIC 
HOSPITALS IN THE BEST PRICE EXEMPTIONS 
FOR THE MEDICAID DRUG REBATE PRO-
GRAM. 
(a) IN GENERAL.—Section 1927(c)(1)(C)(i)(I) (42 
U.S.C. 1396r–8(c)(1)(C)(i)(I)) is amended by inserting 
before the semicolon the following: ‘‘(including inpatient 
prices 
charged 
to 
hospitals 
described 
in 
section 
340B(a)(4)(L) of the Public Health Service Act)’’. 
(b) 
ANTI-DIVERSION
PROTECTION.—Section 
1927(c)(1)(C) (42 U.S.C. 1396r–8(c)(1)(C)) is amended 
by adding at the end the following: 
‘‘(iii) APPLICATION OF AUDITING AND 
RECORDKEEPING
REQUIREMENTS.—With 
respect to a covered entity described in 
section 340B(a)(4)(L) of the Public Health 
Service Act, any drug purchased for inpa-
tient use shall be subject to the auditing 
and recordkeeping requirements described
640
in section 340B(a)(5)(C) of the Public 
Health Service Act.’’.
TITLE XI—ACCESS TO AFFORD-
ABLE PHARMACEUTICALS 
Subtitle A—Access to Affordable 
Pharmaceuticals 
SEC. 1101. 30-MONTH STAY-OF-EFFECTIVENESS PERIOD. 
(a) ABBREVIATED NEW DRUG APPLICATIONS.—Sec-
tion 505(j) of the Federal Food, Drug, and Cosmetic Act 
(21 U.S.C. 355(j)) is amended— 
(1) in paragraph (2)—
(A) by striking subparagraph (B) and in-
serting the following: 
‘‘(B) NOTICE OF OPINION THAT PATENT IS INVALID 
OR WILL NOT BE INFRINGED.—
‘‘(i) AGREEMENT TO GIVE NOTICE.—An appli-
cant that makes a certification described in subpara-
graph (A)(vii)(IV) shall include in the application a 
statement that the applicant will give notice as re-
quired by this subparagraph. 
‘‘(ii) TIMING OF NOTICE.—An applicant that 
makes a certification described in subparagraph 
(A)(vii)(IV) shall give notice as required under this 
subparagraph—
641
‘‘(I) if the certification is in the applica-
tion, not later than 20 days after the date of 
the postmark on the notice with which the Sec-
retary informs the applicant that the applica-
tion has been filed; or 
‘‘(II) if the certification is in an amend-
ment or supplement to the application, at the 
time at which the applicant submits the amend-
ment or supplement, regardless of whether the 
applicant has already given notice with respect 
to another such certification contained in the 
application or in an amendment or supplement 
to the application. 
‘‘(iii) RECIPIENTS
OF
NOTICE.—An applicant 
required under this subparagraph to give notice shall 
give notice to—
‘‘(I) each owner of the patent that is the 
subject of the certification (or a representative 
of the owner designated to receive such a no-
tice); and 
‘‘(II) the holder of the approved applica-
tion under subsection (b) for the drug that is 
claimed by the patent or a use of which is 
claimed by the patent (or a representative of 
the holder designated to receive such a notice).
642
‘‘(iv) CONTENTS OF NOTICE.—A notice required 
under this subparagraph shall—
‘‘(I) state that an application that contains 
data from bioavailability or bioequivalence stud-
ies has been submitted under this subsection for 
the drug with respect to which the certification 
is made to obtain approval to engage in the 
commercial manufacture, use, or sale of the 
drug before the expiration of the patent re-
ferred to in the certification; and 
‘‘(II) include a detailed statement of the 
factual and legal basis of the opinion of the ap-
plicant that the patent is invalid or will not be 
infringed.’’; and 
(B) by adding at the end the following sub-
paragraph: 
‘‘(D)(i) An applicant may not amend or supplement 
an application to seek approval of a drug referring to a 
different listed drug from the listed drug identified in the 
application as submitted to the Secretary. 
‘‘(ii) With respect to the drug for which an applica-
tion is submitted, nothing in this subsection prohibits an 
applicant from amending or supplementing the application 
to seek approval of a different strength.’’; and 
(2) in paragraph (5)—
643
(A) in subparagraph (B)—
(i) by striking ‘‘under the following’’ 
and inserting ‘‘by applying the following to 
each certification made under paragraph 
(2)(A)(vii)’’; and 
(ii) in clause (iii)—
(I) in the first sentence, by strik-
ing ‘‘unless’’ and all that follows and 
inserting ‘‘unless, before the expira-
tion of 45 days after the date on 
which the notice described in para-
graph (2)(B) is received, an action is 
brought for infringement of the patent 
that is the subject of the certification 
and for which information was sub-
mitted to the Secretary under sub-
section (b)(1) or (c)(2) before the date 
on which the application (excluding an 
amendment or supplement to the ap-
plication), which the Secretary later 
determines to be substantially com-
plete, was submitted.’’; and 
(II) in the second sentence—
(aa) by striking subclause 
(I) and inserting the following:
644
‘‘(I) if before the expiration of such period 
the district court decides that the patent is in-
valid or not infringed (including any substantive 
determination that there is no cause of action 
for patent infringement or invalidity), the ap-
proval shall be made effective on—
‘‘(aa) the date on which the court en-
ters judgment reflecting the decision; or 
‘‘(bb) the date of a settlement order 
or consent decree signed and entered by 
the court stating that the patent that is 
the subject of the certification is invalid or 
not infringed;’’; 
(bb) by striking subclause 
(II) and inserting the following: 
‘‘(II) if before the expiration of such period 
the district court decides that the patent has 
been infringed—
‘‘(aa) if the judgment of the district 
court is appealed, the approval shall be 
made effective on—
‘‘(AA) the date on which the 
court of appeals decides that the pat-
ent is invalid or not infringed (includ-
ing any substantive determination
645
that there is no cause of action for 
patent infringement or invalidity); or 
‘‘(BB) the date of a settlement 
order or consent decree signed and 
entered by the court of appeals stat-
ing that the patent that is the subject 
of the certification is invalid or not in-
fringed; or 
‘‘(bb) if the judgment of the district 
court is not appealed or is affirmed, the 
approval shall be made effective on the 
date specified by the district court in a 
court order under section 271(e)(4)(A) of 
title 35, United States Code;’’; 
(cc) in subclause (III), by 
striking ‘‘on the date of such 
court decision.’’ and inserting ‘‘as 
provided in subclause (I); or’’; 
(dd) by inserting after sub-
clause (III) the following: 
‘‘(IV) if before the expiration of such pe-
riod the court grants a preliminary injunction 
prohibiting the applicant from engaging in the 
commercial manufacture or sale of the drug 
until the court decides the issues of patent va-
646
lidity and infringement and if the court decides 
that such patent has been infringed, the ap-
proval shall be made effective as provided in 
subclause (II).’’; and 
(ee) in the matter after and 
below subclause (IV) (as added 
by item (dd)), by striking ‘‘Until 
the expiration’’ and all that fol-
lows; 
(B) by redesignating subparagraphs (C) 
and (D) as subparagraphs (E) and (F), respec-
tively; and 
(C) by inserting after subparagraph (B) 
the following: 
‘‘(C) CIVIL
ACTION
TO
OBTAIN
PATENT 
CERTAINTY.—
‘‘(i) DECLARATORY
JUDGMENT
AB-
SENT INFRINGEMENT ACTION.—
‘‘(I) IN
GENERAL.—No action 
may be brought under section 2201 of 
title 28, United States Code, by an 
applicant under paragraph (2) for a 
declaratory judgment with respect to 
a patent which is the subject of the 
certification referred to in subpara-
647
graph (B)(iii) unless the forty-five day 
period referred to in such subpara-
graph has expired, and unless, if the 
notice 
provided 
under 
paragraph 
(2)(B) relates to noninfringement, the 
notice was accompanied by a docu-
ment described in subclause (II). Any 
such action shall be brought in the ju-
dicial district where the defendant has 
its principal place of business or a 
regular and established place of busi-
ness. 
‘‘(II) RIGHT
OF
CONFIDENTIAL 
ACCESS
TO
APPLICATION.—For pur-
poses of subclause (I), the document 
described in this subclause is a docu-
ment providing a right of confidential 
access to the application of the appli-
cant under paragraph (2) for the pur-
pose of determining whether an action 
referred to in subparagraph (B)(iii) 
should be brought. The document pro-
viding the right of confidential access 
shall contain such restrictions as to 
persons entitled to access, and on the
648
use and disposition of any information 
accessed, as would apply had a protec-
tive order been entered for the pur-
pose of protecting trade secrets and 
other confidential business informa-
tion. Any person provided a right of 
confidential access shall review the ap-
plication for the sole and limited pur-
pose of evaluating possible infringe-
ment of the patent that is the subject 
of the certification under paragraph 
(2)(A)(vii)(IV) and for no other pur-
pose, and may not disclose informa-
tion of no relevance to any issue of 
patent infringement to any person 
other than a person provided a right 
of confidential access. Further, the 
application may be redacted by the 
applicant to remove any information 
of no relevance to any issue of patent 
infringement. 
‘‘(ii) COUNTERCLAIM
TO
INFRINGE-
MENT ACTION.—
‘‘(I) IN GENERAL.—If an owner 
of the patent or the holder of the ap-
649
proved application under subsection 
(b) for the drug that is claimed by the 
patent or a use of which is claimed by 
the patent brings a patent infringe-
ment action against the applicant, the 
applicant may assert a counterclaim 
seeking an order requiring the holder 
to correct or delete the patent infor-
mation submitted by the holder under 
subsection (b) or (c) on the ground 
that the patent does not claim ei-
ther—
‘‘(aa) the drug for which the 
application was approved; or 
‘‘(bb) an approved method 
of using the drug. 
‘‘(II) NO
INDEPENDENT
CAUSE 
OF ACTION.—Subclause (I) does not 
authorize the assertion of a claim de-
scribed in subclause (I) in any civil 
action or proceeding other than a 
counterclaim described in subclause 
(I). 
‘‘(iii) NO
DAMAGES.—An applicant 
shall not be entitled to damages in a civil
650
action under subparagraph (i) or a coun-
terclaim under subparagraph (ii).’’. 
(b) APPLICATIONS GENERALLY.—Section 505 of the 
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355) 
is amended—
(1) in subsection (b)—
(A) by striking paragraph (3) and insert-
ing the following: 
‘‘(3) NOTICE OF OPINION THAT PATENT IS INVALID 
OR WILL NOT BE INFRINGED.—
‘‘(A) AGREEMENT TO GIVE NOTICE.—An appli-
cant that makes a certification described in para-
graph (2)(A)(iv) shall include in the application a 
statement that the applicant will give notice as re-
quired by this paragraph. 
‘‘(B) TIMING OF NOTICE.—An applicant that 
makes a certification described in paragraph 
(2)(A)(iv) shall give notice as required under this 
paragraph—
‘‘(i) if the certification is in the applica-
tion, not later than 20 days after the date of 
the postmark on the notice with which the Sec-
retary informs the applicant that the applica-
tion has been filed; or
651
‘‘(ii) if the certification is in an amend-
ment or supplement to the application, at the 
time at which the applicant submits the amend-
ment or supplement, regardless of whether the 
applicant has already given notice with respect 
to another such certification contained in the 
application or in an amendment or supplement 
to the application. 
‘‘(C) RECIPIENTS
OF
NOTICE.—An applicant 
required under this paragraph to give notice shall 
give notice to—
‘‘(i) each owner of the patent that is the 
subject of the certification (or a representative 
of the owner designated to receive such a no-
tice); and 
‘‘(ii) the holder of the approved application 
under this subsection for the drug that is 
claimed by the patent or a use of which is 
claimed by the patent (or a representative of 
the holder designated to receive such a notice). 
‘‘(D) CONTENTS
OF
NOTICE.—A notice re-
quired under this paragraph shall—
‘‘(i) state that an application that contains 
data from bioavailability or bioequivalence stud-
ies has been submitted under this subsection for
652
the drug with respect to which the certification 
is made to obtain approval to engage in the 
commercial manufacture, use, or sale of the 
drug before the expiration of the patent re-
ferred to in the certification; and 
‘‘(ii) include a detailed statement of the 
factual and legal basis of the opinion of the ap-
plicant that the patent is invalid or will not be 
infringed.’’; and 
(B)(i) by redesignating paragraph (4) as 
paragraph (5); and 
(ii) by inserting after paragraph (3) the 
following paragraph: 
‘‘(4)(A) An applicant may not amend or supplement 
an application referred to in paragraph (2) to seek ap-
proval of a drug that is a different drug than the drug 
identified in the application as submitted to the Secretary. 
‘‘(B) With respect to the drug for which such an ap-
plication is submitted, nothing in this subsection or sub-
section (c)(3) prohibits an applicant from amending or 
supplementing the application to seek approval of a dif-
ferent strength.’’; and 
(2) in subsection (c)(3)—
(A) in the first sentence, by striking 
‘‘under the following’’ and inserting ‘‘by apply-
653
ing the following to each certification made 
under subsection (b)(2)(A)(iv)’’; 
(B) in subparagraph (C)—
(i) in the first sentence, by striking 
‘‘unless’’ and all that follows and inserting 
‘‘unless, before the expiration of 45 days 
after the date on which the notice de-
scribed in subsection (b)(3) is received, an 
action is brought for infringement of the 
patent that is the subject of the certifi-
cation and for which information was sub-
mitted to the Secretary under paragraph 
(2) or subsection (b)(1) before the date on 
which the application (excluding an amend-
ment or supplement to the application) was 
submitted.’’; 
(ii) in the second sentence—
(I) 
by 
striking 
‘‘paragraph 
(3)(B)’’ and inserting ‘‘subsection 
(b)(3)’’; 
(II) by striking clause (i) and in-
serting the following: 
‘‘(i) if before the expiration of such period 
the district court decides that the patent is in-
valid or not infringed (including any substantive
654
determination that there is no cause of action 
for patent infringement or invalidity), the ap-
proval shall be made effective on—
‘‘(I) the date on which the court en-
ters judgment reflecting the decision; or 
‘‘(II) the date of a settlement order or 
consent decree signed and entered by the 
court stating that the patent that is the 
subject of the certification is invalid or not 
infringed;’’; 
(III) by striking clause (ii) and 
inserting the following: 
‘‘(ii) if before the expiration of such period 
the district court decides that the patent has 
been infringed—
‘‘(I) if the judgment of the district 
court is appealed, the approval shall be 
made effective on—
‘‘(aa) the date on which the court 
of appeals decides that the patent is 
invalid or not infringed (including any 
substantive determination that there 
is no cause of action for patent in-
fringement or invalidity); or
655
‘‘(bb) the date of a settlement 
order or consent decree signed and 
entered by the court of appeals stat-
ing that the patent that is the subject 
of the certification is invalid or not in-
fringed; or 
‘‘(II) if the judgment of the district 
court is not appealed or is affirmed, the 
approval shall be made effective on the 
date specified by the district court in a 
court order under section 271(e)(4)(A) of 
title 35, United States Code;’’; 
(IV) in clause (iii), by striking 
‘‘on the date of such court decision.’’ 
and inserting ‘‘as provided in clause 
(i); or’’; 
(V) by inserting after clause (iii), 
the following: 
‘‘(iv) if before the expiration of such period 
the court grants a preliminary injunction pro-
hibiting the applicant from engaging in the 
commercial manufacture or sale of the drug 
until the court decides the issues of patent va-
lidity and infringement and if the court decides 
that such patent has been infringed, the ap-
656
proval shall be made effective as provided in 
clause (ii).’’; and 
(VI) in the matter after and 
below clause (iv) (as added by sub-
clause (V)), by striking ‘‘Until the ex-
piration’’ and all that follows; and 
(iii) in the third sentence, by striking 
‘‘paragraph (3)(B)’’ and inserting ‘‘sub-
section (b)(3)’’; 
(C) by redesignating subparagraph (D) as 
subparagraph (E); and 
(D) by inserting after subparagraph (C) 
the following: 
‘‘(D) CIVIL
ACTION
TO
OBTAIN
PATENT 
CERTAINTY.—
‘‘(i) DECLARATORY
JUDGMENT
AB-
SENT INFRINGEMENT ACTION.—
‘‘(I) IN
GENERAL.—No action 
may be brought under section 2201 of 
title 28, United States Code, by an 
applicant referred to in subsection 
(b)(2) for a declaratory judgment with 
respect to a patent which is the sub-
ject of the certification referred to in 
subparagraph (C) unless the forty-five
657
day period referred to in such sub-
paragraph has expired, and unless, if 
the notice the applicant provided 
under subsection (b)(3) relates to 
noninfringement, the notice was ac-
companied by a document described in 
subclause (II). Any such action shall 
be brought in the judicial district 
where the defendant has its principal 
place of business or a regular and es-
tablished place of business. 
‘‘(II) RIGHT
OF
CONFIDENTIAL 
ACCESS
TO
APPLICATION.—For pur-
poses of subclause (I), the document 
described in this subclause is a docu-
ment providing a right of confidential 
access to the application of the appli-
cant referred to in subsection (b)(2) 
for the purpose of determining wheth-
er an action referred to in subpara-
graph (C) should be brought. The 
document providing the right of con-
fidential access shall contain such re-
strictions as to persons entitled to ac-
cess, and on the use and disposition of
658
any information accessed, as would 
apply had a protective order been en-
tered for the purpose of protecting 
trade secrets and other confidential 
business information. Any person pro-
vided a right of confidential access 
shall review the application for the 
sole and limited purpose of evaluating 
possible infringement of the patent 
that is the subject of the certification 
under subsection (b)(2)(A)(iv) and for 
no other purpose, and may not dis-
close information of no relevance to 
any issue of patent infringement to 
any person other than a person pro-
vided a right of confidential access. 
Further, the application may be re-
dacted by the applicant to remove any 
information of no relevance to any 
issue of patent infringement. 
‘‘(ii) COUNTERCLAIM
TO
INFRINGE-
MENT ACTION.—
‘‘(I) IN GENERAL.—If an owner 
of the patent or the holder of the ap-
proved application under subsection
659
(b) for the drug that is claimed by the 
patent or a use of which is claimed by 
the patent brings a patent infringe-
ment action against the applicant, the 
applicant may assert a counterclaim 
seeking an order requiring the holder 
to correct or delete the patent infor-
mation submitted by the holder under 
subsection (b) or this subsection on 
the ground that the patent does not 
claim either—
‘‘(aa) the drug for which the 
application was approved; or 
‘‘(bb) an approved method 
of using the drug. 
‘‘(II) NO
INDEPENDENT
CAUSE 
OF ACTION.—Subclause (I) does not 
authorize the assertion of a claim de-
scribed in subclause (I) in any civil 
action or proceeding other than a 
counterclaim described in subclause 
(I). 
‘‘(iii) NO
DAMAGES.—An applicant 
shall not be entitled to damages in a civil
660
action under clause (i) or a counterclaim 
under clause (ii).’’. 
(c) APPLICABILITY.—
(1) IN GENERAL.—Except as provided in para-
graphs (2) and (3), the amendments made by sub-
sections (a), (b), and (c) apply to any proceeding 
under section 505 of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 355) that is pending on or 
after the date of enactment of this Act regardless of 
the date on which the proceeding was commenced or 
is commenced. 
(2) NOTICE OF OPINION THAT PATENT IS IN-
VALID OR WILL NOT BE INFRINGED.—The amend-
ments made by subsections (a)(1) and (b)(1) apply 
with respect to any certification under subsection 
(b)(2)(A)(iv) or (j)(2)(A)(vii)(IV) of section 505 of 
the Federal Food, Drug, and Cosmetic Act (21 
U.S.C. 355) after the date of enactment of this Act 
in an application filed under subsection (b)(2) or (j) 
of that section or in an amendment or supplement 
to an application filed under subsection (b)(2) or (j) 
of that section. 
(3) EFFECTIVE
DATE
OF
APPROVAL.—The 
amendments made by subsections (a)(2)(A)(ii)(I) 
and (b)(2)(B)(i) apply with respect to any patent in-
661
formation submitted under subsection (b)(1) or 
(c)(2) of section 505 of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 355) made after the date 
of enactment of this Act. 
SEC. 1102. FORFEITURE OF 180-DAY EXCLUSIVITY PERIOD. 
(a) IN GENERAL.—Section 505(j)(5) of the Federal 
Food, Drug, and Cosmetic Act (21 U.S.C. 355(j)(5)) (as 
amended by section 1101) is amended—
(1) in subparagraph (B), by striking clause (iv) 
and inserting the following: 
‘‘(iv) 180-DAY EXCLUSIVITY PERIOD.—
‘‘(I) DEFINITIONS.—In this paragraph: 
‘‘(aa) 
180-DAY
EXCLUSIVITY
PE-
RIOD.—The term ‘180-day exclusivity pe-
riod’ means the 180-day period ending on 
the day before the date on which an appli-
cation submitted by an applicant other 
than a first applicant could become effec-
tive under this clause. 
‘‘(bb) FIRST APPLICANT.—As used in 
this subsection, the term ‘first applicant’ 
means an applicant that, on the first day 
on which a substantially complete applica-
tion containing a certification described in 
paragraph (2)(A)(vii)(IV) is submitted for
662
approval of a drug, submits a substantially 
complete application containing a certifi-
cation 
described 
in 
paragraph 
(2)(A)(vii)(IV) for the drug. 
‘‘(cc) SUBSTANTIALLY COMPLETE AP-
PLICATION.—As used in this subsection, 
the term ‘substantially complete applica-
tion’ means an application under this sub-
section that on its face is sufficiently com-
plete to permit a substantive review and 
contains all the information required by 
paragraph (2)(A). 
‘‘(dd) TENTATIVE APPROVAL.—
‘‘(AA) IN GENERAL.—The term 
‘tentative approval’ means notification 
to an applicant by the Secretary that 
an application under this subsection 
meets the requirements of paragraph 
(2)(A), but cannot receive effective 
approval because the application does 
not meet the requirements of this sub-
paragraph, there is a period of exclu-
sivity for the listed drug under sub-
paragraph (E) or section 505A, or
663
there is a 7-year period of exclusivity 
for the listed drug under section 527. 
‘‘(BB) 
LIMITATION.—A 
drug 
that is granted tentative approval by 
the Secretary is not an approved drug 
and shall not have an effective ap-
proval until the Secretary issues an 
approval after any necessary addi-
tional review of the application. 
‘‘(II) EFFECTIVENESS OF APPLICATION.—
Subject to subparagraph (D), if the application 
contains a certification described in paragraph 
(2)(A)(vii)(IV) and is for a drug for which a 
first applicant has submitted an application 
containing such a certification, the application 
shall be made effective on the date that is 180 
days after the date of the first commercial mar-
keting of the drug (including the commercial 
marketing of the listed drug) by any first appli-
cant.’’; and 
(2) by inserting after subparagraph (C) the fol-
lowing: 
‘‘(D) FORFEITURE
OF
180-DAY
EXCLU-
SIVITY PERIOD.—
664
‘‘(i) DEFINITION
OF
FORFEITURE 
EVENT.—In this subparagraph, the term 
‘forfeiture event’, with respect to an appli-
cation under this subsection, means the oc-
currence of any of the following: 
‘‘(I) FAILURE TO MARKET.—The 
first applicant fails to market the 
drug by the later of—
‘‘(aa) the earlier of the date 
that is— 
‘‘(AA) 75 days after the 
date on which the approval 
of the application of the first 
applicant is made effective 
under subparagraph (B)(iii); 
or 
‘‘(BB) 30 months after 
the date of submission of 
the application of the first 
applicant; or 
‘‘(bb) with respect to the 
first applicant or any other appli-
cant (which other applicant has 
received tentative approval), the 
date that is 75 days after the
665
date as of which, as to each of 
the patents with respect to which 
the first applicant submitted a 
certification qualifying the first 
applicant for the 180-day exclu-
sivity period under subparagraph 
(B)(iv), at least 1 of the fol-
lowing has occurred: 
‘‘(AA) In an infringe-
ment action brought against 
that applicant with respect 
to the patent or in a declar-
atory 
judgment 
action 
brought by that applicant 
with respect to the patent, a 
court enters a final decision 
from which no appeal (other 
than a petition to the Su-
preme Court for a writ of 
certiorari) has been or can 
be taken that the patent is 
invalid or not infringed. 
‘‘(BB) In an infringe-
ment action or a declaratory 
judgment action described in
666
subitem (AA), a court signs 
a settlement order or con-
sent decree that enters a 
final judgment that includes 
a finding that the patent is 
invalid or not infringed. 
‘‘(CC) The patent ex-
pires. 
‘‘(DD) The patent is 
withdrawn by the holder of 
the 
application 
approved 
under subsection (b). 
‘‘(II) WITHDRAWAL OF APPLICA-
TION.—The first applicant withdraws 
the application or the Secretary con-
siders the application to have been 
withdrawn as a result of a determina-
tion by the Secretary that the applica-
tion does not meet the requirements 
for approval under paragraph (4). 
‘‘(III) AMENDMENT OF CERTIFI-
CATION.—The first applicant amends 
or withdraws the certification for all 
of the patents with respect to which 
that applicant submitted a certifi-
667
cation qualifying the applicant for the 
180-day exclusivity period. 
‘‘(IV) FAILURE TO OBTAIN TEN-
TATIVE
APPROVAL.—The first appli-
cant fails to obtain tentative approval 
of the application within 30 months 
after the date on which the applica-
tion is filed, unless the failure is 
caused by a change in or a review of 
the requirements for approval of the 
application imposed after the date on 
which the application is filed. 
‘‘(V) 
AGREEMENT
WITH
AN-
OTHER APPLICANT, THE LISTED DRUG 
APPLICATION HOLDER, OR A PATENT 
OWNER.—The first applicant enters 
into an agreement with another appli-
cant under this subsection for the 
drug, the holder of the application for 
the listed drug, or an owner of the 
patent that is the subject of the cer-
tification 
under 
paragraph 
(2)(A)(vii)(IV), the Federal Trade 
Commission or the Attorney General 
files a complaint, and there is a final
668
decision of the Federal Trade Com-
mission or the court with regard to 
the complaint from which no appeal 
(other than a petition to the Supreme 
Court for a writ of certiorari) has 
been or can be taken that the agree-
ment has violated the antitrust laws 
(as defined in section 1 of the Clayton 
Act (15 U.S.C. 12), except that the 
term includes section 5 of the Federal 
Trade Commission Act (15 U.S.C. 45) 
to the extent that that section applies 
to unfair methods of competition). 
‘‘(VI) EXPIRATION OF ALL PAT-
ENTS.—All of the patents as to which 
the applicant submitted a certification 
qualifying it for the 180-day exclu-
sivity period have expired. 
‘‘(ii) FORFEITURE.—The 180-day ex-
clusivity period described in subparagraph 
(B)(iv) shall be forfeited by a first appli-
cant if a forfeiture event occurs with re-
spect to that first applicant.
669
‘‘(iii) SUBSEQUENT
APPLICANT.—If 
all first applicants forfeit the 180-day ex-
clusivity period under clause (ii)—
‘‘(I) approval of any application 
containing a certification described in 
paragraph (2)(A)(vii)(IV) shall be 
made effective in accordance with sub-
paragraph (B)(iii); and 
‘‘(II) no applicant shall be eligi-
ble for a 180-day exclusivity period.’’. 
(b) EFFECTIVE DATE.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendment made by subsection (a) 
shall be effective only with respect to an application 
filed under section 505(j) of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 355(j)) after the 
date of enactment of this Act for a listed drug for 
which 
no 
certification 
under 
section 
505(j)(2)(A)(vii)(IV) of that Act was made before 
the date of enactment of this Act. 
(2) COLLUSIVE AGREEMENTS.—If a forfeiture 
event described in section 505(j)(5)(D)(i)(V) of that 
Act occurs in the case of an applicant, the applicant 
shall forfeit the 180-day period under section 
505(j)(5)(B)(iv) of that Act without regard to when
670
the 
first 
certification 
under 
section 
505(j)(2)(A)(vii)(IV) of that Act for the listed drug 
was made. 
(3) DECISION OF A COURT WHEN THE 180-DAY 
EXCLUSIVITY PERIOD HAS NOT BEEN TRIGGERED.—
With respect to an application filed before, on, or 
after the date of enactment of this Act for a listed 
drug for which a certification under section 
505(j)(2)(A)(vii)(IV) of that Act was made before 
the date of enactment of this Act and for which nei-
ther of the events described in subclause (I) or (II) 
of section 505(j)(5)(B)(iv) of that Act (as in effect 
on the day before the date of enactment of this Act) 
has occurred on or before the date of enactment of 
this Act, the term ‘‘decision of a court’’ as used in 
clause (iv) of section 505(j)(5)(B) of that Act means 
a final decision of a court from which no appeal 
(other than a petition to the Supreme Court for a 
writ of certiorari) has been or can be taken. 
SEC. 1103. BIOAVAILABILITY AND BIOEQUIVALENCE. 
(a) IN GENERAL.—Section 505(j)(8) of the Federal 
Food, Drug, and Cosmetic Act (21 U.S.C. 355(j)(8)) is 
amended—
(1) by striking subparagraph (A) and inserting 
the following:
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‘‘(A)(i) The term ‘bioavailability’ means the 
rate and extent to which the active ingredient or 
therapeutic ingredient is absorbed from a drug and 
becomes available at the site of drug action. 
‘‘(ii) For a drug that is not intended to be ab-
sorbed into the bloodstream, the Secretary may as-
sess bioavailability by scientifically valid measure-
ments intended to reflect the rate and extent to 
which the active ingredient or therapeutic ingredient 
becomes available at the site of drug action.’’; and 
(2) by adding at the end the following: 
‘‘(C) For a drug that is not intended to be ab-
sorbed into the bloodstream, the Secretary may es-
tablish alternative, scientifically valid methods to 
show bioequivalence if the alternative methods are 
expected to detect a significant difference between 
the drug and the listed drug in safety and thera-
peutic effect.’’. 
(b) EFFECT
OF
AMENDMENT.—The amendment 
made by subsection (a) does not alter the standards for 
approval of drugs under section 505(j) of the Federal 
Food, Drug, and Cosmetic Act (21 U.S.C. 355(j)). 
SEC. 1104. CONFORMING AMENDMENTS. 
Section 505A of the Federal Food, Drug, and Cos-
metic Act (21 U.S.C. 355a) is amended—
672
(1) in subsections (b)(1)(A)(i) and (c)(1)(A)(i), 
by striking ‘‘(j)(5)(D)(ii)’’ each place it appears and 
inserting ‘‘(j)(5)(F)(ii)’’; 
(2) 
in 
subsections 
(b)(1)(A)(ii) 
and 
(c)(1)(A)(ii), by striking ‘‘(j)(5)(D)’’ each place it 
appears and inserting ‘‘(j)(5)(F)’’; and 
(3) in subsections (e) and (l), by striking 
‘‘505(j)(5)(D)’’ each place it appears and inserting 
‘‘505(j)(5)(F)’’. 
Subtitle B—Federal Trade 
Commission Review 
SEC. 1111. DEFINITIONS. 
In this subtitle: 
(1) ANDA.—The term ‘‘ANDA’’ means an ab-
breviated drug application, as defined under section 
201(aa) of the Federal Food, Drug, and Cosmetic 
Act. 
(2) BRAND
NAME
DRUG.—The term ‘‘brand 
name drug’’ means a drug for which an application 
is approved under section 505(c) of the Federal 
Food, Drug, and Cosmetic Act, including an applica-
tion referred to in section 505(b)(2) of such Act. 
(3) BRAND NAME DRUG COMPANY.—The term 
‘‘brand name drug company’’ means the party that 
holds the approved application referred to in para-
673
graph (2) for a brand name drug that is a listed 
drug in an ANDA, or a party that is the owner of 
a patent for which information is submitted for such 
drug under subsection (b) or (c) of section 505 of 
the Federal Food, Drug, and Cosmetic Act. 
(4) COMMISSION.—The term ‘‘Commission’’ 
means the Federal Trade Commission. 
(5) GENERIC DRUG.—The term ‘‘generic drug’’ 
means a drug for which an application under section 
505(j) of the Federal Food, Drug, and Cosmetic Act 
is approved. 
(6) GENERIC
DRUG
APPLICANT.—The term 
‘‘generic drug applicant’’ means a person who has 
filed or received approval for an ANDA under sec-
tion 505(j) of the Federal Food, Drug, and Cosmetic 
Act. 
(7) LISTED
DRUG.—The term ‘‘listed drug’’ 
means a brand name drug that is listed under sec-
tion 505(j)(7) of the Federal Food, Drug, and Cos-
metic Act. 
SEC. 1112. NOTIFICATION OF AGREEMENTS. 
(a) AGREEMENT WITH BRAND NAME DRUG COM-
PANY.—
(1) REQUIREMENT.—A generic drug applicant 
that has submitted an ANDA containing a certifi-
674
cation under section 505(j)(2)(A)(vii)(IV) of the 
Federal Food, Drug, and Cosmetic Act and a brand 
name drug company that enter into an agreement 
described in paragraph (2) shall each file the agree-
ment in accordance with subsection (c). The agree-
ment shall be filed prior to the date of the first com-
mercial marketing of the generic drug that is the 
subject of the ANDA. 
(2) SUBJECT
MATTER
OF
AGREEMENT.—An 
agreement described in this paragraph between a ge-
neric drug applicant and a brand name drug com-
pany is an agreement regarding—
(A) the manufacture, marketing or sale of 
the brand name drug that is the listed drug in 
the ANDA involved; 
(B) the manufacture, marketing, or sale of 
the generic drug for which the ANDA was sub-
mitted; or 
(C) the 180-day period referred to in sec-
tion 505(j)(5)(B)(iv) of the Federal Food, 
Drug, and Cosmetic Act as it applies to such 
ANDA or to any other ANDA based on the 
same brand name drug. 
(b) AGREEMENT WITH ANOTHER GENERIC DRUG 
APPLICANT.—
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(1) REQUIREMENT.—A generic drug applicant 
that has submitted an ANDA containing a certifi-
cation under section 505(j)(2)(A)(vii)(IV) of the 
Federal Food, Drug, and Cosmetic Act with respect 
to a listed drug and another generic drug applicant 
that has submitted an ANDA containing such a cer-
tification for the same listed drug shall each file the 
agreement in accordance with subsection (c). The 
agreement shall be filed prior to the date of the first 
commercial marketing of either of the generic drugs 
for which such ANDAs were submitted. 
(2) SUBJECT
MATTER
OF
AGREEMENT.—An 
agreement described in this paragraph between two 
generic drug applicants is an agreement regarding 
the 
180-day 
period 
referred 
to 
in 
section 
505(j)(5)(B)(iv) of the Federal Food, Drug, and 
Cosmetic Act as it applies to the ANDAs with which 
the agreement is concerned. 
(c) FILING.—
(1) AGREEMENT.—The parties that are re-
quired in subsection (a) or (b) to file an agreement 
in accordance with this subsection shall file with the 
Commission the text of any such agreement, except 
that such parties are not required to file an agree-
ment that solely concerns—
676
(A) purchase orders for raw material sup-
plies; 
(B) equipment and facility contracts; 
(C) employment or consulting contracts; or 
(D) packaging and labeling contracts. 
(2) OTHER
AGREEMENTS.—The parties that 
are required in subsection (a) or (b) to file an agree-
ment in accordance with this subsection shall file 
with the Commission the text of any agreements be-
tween the parties that are not described in such sub-
sections and are contingent upon, provide a contin-
gent condition for, or are otherwise related to an 
agreement that is required in subsection (a) or (b) 
to be filed in accordance with this subsection. 
(3) DESCRIPTION.—In the event that any 
agreement required in subsection (a) or (b) to be 
filed in accordance with this subsection has not been 
reduced to text, each of the parties involved shall file 
written descriptions of such agreement that are suf-
ficient to disclose all the terms and conditions of the 
agreement. 
SEC. 1113. FILING DEADLINES. 
Any filing required under section 1112 shall be filed 
with the Commission not later than 10 business days after 
the date the agreements are executed.
677
SEC. 1114. DISCLOSURE EXEMPTION. 
Any information or documentary material filed with 
the Commission pursuant to this subtitle shall be exempt 
from disclosure under section 552 of title 5, United States 
Code, and no such information or documentary material 
may be made public, except as may be relevant to any 
administrative or judicial action or proceeding. Nothing in 
this section is intended to prevent disclosure to either body 
of Congress or to any duly authorized committee or sub-
committee of the Congress. 
SEC. 1115. ENFORCEMENT. 
(a) CIVIL PENALTY.—Any brand name drug com-
pany or generic drug applicant which fails to comply with 
any provision of this subtitle shall be liable for a civil pen-
alty of not more than $11,000, for each day during which 
such entity is in violation of this subtitle. Such penalty 
may be recovered in a civil action brought by the United 
States, or brought by the Commission in accordance with 
the procedures established in section 16(a)(1) of the Fed-
eral Trade Commission Act (15 U.S.C. 56(a)). 
(b) COMPLIANCE AND EQUITABLE RELIEF.—If any 
brand name drug company or generic drug applicant fails 
to comply with any provision of this subtitle, the United 
States district court may order compliance, and may grant 
such other equitable relief as the court in its discretion
679
(1) take effect 30 days after the date of enact-
ment of this Act; and 
(2) shall apply to agreements described in sec-
tion 1112 that are entered into 30 days after the 
date of enactment of this Act. 
Subtitle C—Importation of 
Prescription Drugs 
SEC. 1121. IMPORTATION OF PRESCRIPTION DRUGS. 
(a) IN GENERAL.—Chapter VIII of the Federal 
Food, Drug, and Cosmetic Act (21 U.S.C. 381 et seq.) 
is amended by striking section 804 and inserting the fol-
lowing: 
‘‘SEC. 804. IMPORTATION OF PRESCRIPTION DRUGS. 
‘‘(a) DEFINITIONS.—In this section: 
‘‘(1) IMPORTER.—The term ‘importer’ means a 
pharmacist or wholesaler. 
‘‘(2) PHARMACIST.—The term ‘pharmacist’ 
means a person licensed by a State to practice phar-
macy, including the dispensing and selling of pre-
scription drugs. 
‘‘(3) PRESCRIPTION
DRUG.—The term ‘pre-
scription drug’ means a drug subject to section 
503(b), other than—
680
‘‘(A) a controlled substance (as defined in 
section 102 of the Controlled Substances Act 
(21 U.S.C. 802)); 
‘‘(B) a biological product (as defined in 
section 351 of the Public Health Service Act 
(42 U.S.C. 262)); 
‘‘(C) an infused drug (including a peri-
toneal dialysis solution); 
‘‘(D) an intravenously injected drug; 
‘‘(E) a drug that is inhaled during surgery; 
or 
‘‘(F) a drug which is a parenteral drug, 
the importation of which pursuant to subsection 
(b) is determined by the Secretary to pose a 
threat to the public health, in which case sec-
tion 801(d)(1) shall continue to apply. 
‘‘(4) QUALIFYING
LABORATORY.—The term 
‘qualifying laboratory’ means a laboratory in the 
United States that has been approved by the Sec-
retary for the purposes of this section. 
‘‘(5) WHOLESALER.—
‘‘(A) IN GENERAL.—The term ‘wholesaler’ 
means a person licensed as a wholesaler or dis-
tributor of prescription drugs in the United 
States under section 503(e)(2)(A).
681
‘‘(B) EXCLUSION.—The term ‘wholesaler’ 
does not include a person authorized to import 
drugs under section 801(d)(1). 
‘‘(b) REGULATIONS.—The Secretary shall promul-
gate regulations permitting pharmacists and wholesalers 
to import prescription drugs from Canada into the United 
States. 
‘‘(c) LIMITATION.—The regulations under subsection 
(b) shall—
‘‘(1) require that each prescription drug im-
ported under the regulations complies with section 
505 (including with respect to being safe and effec-
tive for the intended use of the prescription drug), 
with sections 501 and 502, and with all other appli-
cable requirements of this Act; 
‘‘(2) require that an importer of a prescription 
drug under the regulations comply with subsections 
(d)(1) and (e); 
‘‘(3) require that any prescription drug from 
Canada imported by a domestic pharmacist or 
wholesaler under this section be contained in pack-
aging which the Secretary has determined to be rea-
sonably certain to be tamper-resistant and not capa-
ble of counterfeiting;
682
‘‘(4) require that all prescription drugs from 
Canada imported by a domestic pharmacist or a 
wholesaler under this section contain a statement 
designed to inform the end-user of such drug that 
such drug has been imported from a foreign seller 
other than a manufacturer; 
‘‘(5) require that only prescription drugs which 
have not left the possession of the first Canadian re-
cipient of such prescription drugs after receipt from 
the manufacturer of such prescription drugs be eligi-
ble for importation into the United States under this 
section; 
‘‘(6) require, if determined appropriate by the 
Secretary, that all prescription drugs imported from 
Canada under this section by domestic pharmacists 
and wholesalers enter the United States through 
ports of entry designated by the Secretary for pur-
poses of this section; 
‘‘(7) contain any additional provisions deter-
mined by the Secretary to be appropriate to protect 
the public health; and 
‘‘(8) contain any additional provisions deter-
mined by the Secretary to be appropriate to facili-
tate the importation of prescription drugs that do 
not jeopardize the public health.
683
‘‘(d) INFORMATION AND RECORDS.—
‘‘(1) IN GENERAL.—The regulations under sub-
section (b) shall require an importer of a prescrip-
tion drug under subsection (b) to submit to the Sec-
retary the following information and documentation: 
‘‘(A) The name and quantity of the active 
ingredient of the prescription drug. 
‘‘(B) A description of the dosage form of 
the prescription drug. 
‘‘(C) The date on which the prescription 
drug is shipped. 
‘‘(D) The quantity of the prescription drug 
that is shipped. 
‘‘(E) The point of origin and destination of 
the prescription drug. 
‘‘(F) The price paid and the price charged 
by the importer for the prescription drug. 
‘‘(G) Documentation from the foreign sell-
er specifying—
‘‘(i) the original source of the pre-
scription drug; and 
‘‘(ii) the quantity of each lot of the 
prescription drug originally received by the 
seller from that source.