‘‘(i) IN GENERAL.—Not later than 60 
days before the beginning of each fiscal 
year beginning after September 30, 2004, 
the Secretary shall determine the licensing 
fee for that fiscal year. 
‘‘(ii) 
PUBLICATION
OF
FEE 
AMOUNT.—Not later than 60 days before 
each fiscal year, the Secretary shall publish 
the licensing fee under this section for that 
fiscal year and provide for a period of 30 
days for the public to provide written com-
ments on the fee. 
‘‘(D) USE OF FEES.—The licensing fees 
collected under this section shall be used, with-
out further appropriation, to carry out this sec-
tion. 
‘‘(E) FAILURE TO PAY FEE.—
‘‘(i) DUE DATE.—A licensing fee pay-
able under this section shall be paid by the 
date that is 30 days after the date on 
which the fee is due. 
‘‘(ii) FAILURE TO PAY.—If an Inter-
net pharmacy subject to a fee under this 
section fails to pay the fee by the date 
specified under clause (i), the Secretary
shall not permit the Internet pharmacy to 
engage in the dispensing of drugs as de-
scribed under this section until all such 
fees owed by the Internet pharmacy are 
paid. 
‘‘(F) REPORTS.—Beginning with fiscal 
year 2005, not later than 60 days after the end 
of each fiscal year during which licensing fees 
are collected under this section, the Secretary 
shall submit to the Committee on Health, Edu-
cation, Labor, and Pensions of the Senate and 
the Committee on Energy and Commerce of the 
House of Representatives a report that de-
scribes—
‘‘(i) implementation of the licensing 
fee authority during the fiscal year; and 
‘‘(ii) the use by the Secretary of the 
licensing fees collected during the fiscal 
year for which the report is made. 
‘‘(6) TERMINATION
OF
LICENSE.—The Sec-
retary, upon the initiative of the Secretary, may ter-
minate a license issued under subsection (c), after 
notice to the Internet pharmacy and an opportunity 
for a hearing, and if the Secretary determines that 
an Internet pharmacy—
‘‘(A) has demonstrated a pattern of non-
compliance with this section; 
‘‘(B) has made an untrue statement of ma-
terial fact in its license application; or 
‘‘(C) is in violation of any applicable Fed-
eral or State law relating to the dispensing of 
a prescription drug. 
‘‘(7) RENEWAL EVALUATION.—
‘‘(A) IN GENERAL.—Before renewing a li-
cense of an Internet pharmacy under this sub-
section pursuant to the submission of a renewal 
application, the Secretary shall conduct an eval-
uation to determine whether the Internet phar-
macy is in compliance with this section. 
‘‘(B) EVALUATION.—At the discretion of 
the Secretary and as applicable, an evaluation 
under subparagraph (A) may include testing of 
the Internet pharmacy website or other systems 
through which the Internet pharmacy commu-
nicates with consumers, and a physical inspec-
tion of the records and premises of the phar-
macy. 
‘‘(8) CONTRACT
FOR
OPERATION
OF
PRO-
GRAM.—
‘‘(A) IN
GENERAL.—The Secretary may 
award a contract under this subsection for the 
operation of the licensing program. 
‘‘(B) TERM.—The duration of a contract 
under subparagraph (A) shall not exceed 5 
years and may be renewable. 
‘‘(C) PERFORMANCE
REVIEW.—The Sec-
retary shall annually review performance under 
a contract under subparagraph (A). 
‘‘(d) PROVIDERS OF INTERACTIVE COMPUTER SERV-
ICES OR ADVERTISING SERVICES.—A provider of inter-
active computer services (as defined in section 230(f) of 
the Communications Act of 1934 (47 U.S.C. 230(f))) or 
an advertising service provider shall be liable under this 
section for dispensing or selling prescription drugs in vio-
lation of this section on account of another person’s selling 
or dispensing of a prescription drug if the provider of the 
service—
‘‘(1) accepts advertising for a prescription drug 
from an unlicensed Internet pharmacy; or 
‘‘(2) accepts advertising stating that an indi-
vidual does not need a physician’s prescription to ob-
tain a prescription drug.
‘‘(e) POLICIES
AND PROCEDURES REQUIRED
TO 
PREVENT PAYMENTS FOR UNLAWFUL INTERNET PHAR-
MACY REQUESTS.—
‘‘(1) REGULATIONS.—Not later than 1 year 
after the date of enactment of this section, the Fed-
eral functional regulators shall promulgate regula-
tions requiring a person described in subsection 
(a)(2) to prevent restricted transactions by estab-
lishing policies and procedures that—
‘‘(A)(i) are reasonably designed to allow 
the payment system and any person involved in 
the payment system to identify restricted trans-
actions by means of codes in authorization mes-
sages or by other means; and 
‘‘(ii) are reasonably designed to block re-
stricted transactions identified as a result of the 
policies and procedures developed under clause 
(i); or 
‘‘(B) prevent the acceptance of the prod-
ucts or services of the payment system in con-
nection with a restricted transaction. 
‘‘(2) REQUIREMENTS FOR POLICIES AND PRO-
CEDURES.—In promulgating regulations under para-
graph (1), the Federal functional regulators shall—