I 
110TH CONGRESS 
2D SESSION 
H. R. 5839 
To amend the Federal Food, Drug, and Cosmetic Act to improve the safety 
of drugs. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 17, 2008 
Mr. BUYER (for himself, Mr. MATHESON, Mr. ROGERS of Michigan, and Mr. 
GENE GREEN of Texas) introduced the following bill; which was referred 
to the Committee on Energy and Commerce 
A BILL 
To amend the Federal Food, Drug, and Cosmetic Act to 
improve the safety of drugs. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Safeguarding Amer-
ica’s Pharmaceuticals Act of 2008’’. 
SEC. 2. TABLE OF CONTENTS. 
The table of contents of this Act is as follows: 
Sec. 1. Short title. 
Sec. 2. Table of contents. 
Sec. 3. Destruction of counterfeit drugs offered for import. 
Sec. 4. Interim provisions to assure the safety of the wholesale distribution of 
prescription drugs. 
Sec. 5. Unique standardized numerical identifiers for each prescription drug. 
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Sec. 6. Prescription drug identification and tracking system. 
Sec. 7. Facilitating prescription drug identification and tracking system for 
small pharmacies. 
Sec. 8. Uniform national standards. 
Sec. 9. Report to Congress. 
Sec. 10. Requirements for licensure of wholesale distributors. 
Sec. 11. Injunctions; civil penalties. 
Sec. 12. State enforcement of Federal requirements. 
Sec. 13. Study on threats to domestic prescription drug supply chain. 
SEC. 3. DESTRUCTION OF COUNTERFEIT DRUGS OFFERED 
FOR IMPORT. 
Section 801(a) of the Federal Food, Drug, and Cos-
metic Act (21 U.S.C. 381(a)) is amended— 
(1) in the third sentence— 
(A) by striking ‘‘or (3) such’’ and inserting 
‘‘(3) such’’; and 
(B) by inserting ‘‘, or (4) such article is a 
counterfeit drug,’’ before ‘‘then such article 
shall be refused admission’’; and 
(2) by striking ‘‘Clause (2) of the third sen-
tence of this paragraph’’ and inserting ‘‘Notwith-
standing the preceding sentence, the Secretary of 
the Treasury shall cause the destruction of any such 
article refused admission if (1) the article is a drug, 
the article appears to be adulterated, misbranded, or 
in violation of section 505, and the article has a 
value less than $2,000 or such amount as the Sec-
retary of Health and Human Services may deter-
mine by regulation; or (2) the article appears to be 
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a counterfeit drug. Clause (2) of the third sentence 
of this subsection’’. 
SEC. 4. INTERIM PROVISIONS TO ASSURE THE SAFETY OF 
THE WHOLESALE DISTRIBUTION OF PRE-
SCRIPTION DRUGS. 
(a) IN GENERAL.—Subsection (e) of section 503 of 
the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
353) is amended— 
(1) by striking paragraphs (1) and (3); 
(2) by redesignating paragraph (2) as para-
graph (4); and 
(3) by inserting before paragraph (4), as so re-
designated by paragraph (2) of this subsection, the 
following: 
‘‘(e) REGULATION OF WHOLESALE DISTRIBUTORS 
OF PRESCRIPTION DRUGS.— 
‘‘(1) INTERIM PROVISIONS.— 
‘‘(A) DEFINITIONS.—Except as otherwise 
noted, for purposes of this subsection— 
‘‘(i) for purposes of this paragraph 
and subsection (d) only, the term ‘author-
ized distributor of record’ with respect to 
a prescription drug means a wholesale dis-
tributor that has a written agreement for 
such drug currently in effect with the 
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drug’s manufacturer (as defined in clause 
(iv)(I) or (II)) to distribute such drug; 
‘‘(ii) the term ‘co-licensed partner’ 
means one of two or more persons who has 
the right to engage in the manufacturing 
or marketing of a prescription drug; 
‘‘(iii) the term ‘dispenser’ means a re-
tail pharmacy, hospital pharmacy, or any 
other person authorized by law to dispense 
or administer prescription drugs; 
‘‘(iv) for purposes of this paragraph 
and subsection (d) only, the term ‘manu-
facturer’ means, with respect to a prescrip-
tion drug— 
‘‘(I) the person that holds the ap-
plication approved under section 505 
or the license issued under section 
351 of the Public Health Service Act 
for the drug, or if the drug is not the 
subject of an approved application or 
license, the person identified on the 
original label of the drug as the man-
ufacturer, distributor, or both; 
‘‘(II) a co-licensed partner of the 
person identified in subclause (I) that 
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obtains the drug directly from the 
person identified in subclause (I) or 
(III); 
‘‘(III) a person that manufac-
tures the prescription drug for the 
person identified in subclause (I) or 
(II); 
‘‘(IV) a third-party logistics pro-
vider operating on behalf of the per-
son identified in subclause (I) or (II) 
that obtains the drug directly from 
the person identified in subclause (I), 
(II), or (III); or 
‘‘(V) the exclusive distributor of 
the person identified in subclause (I) 
or (II) that obtains the drug directly 
from the person identified in sub-
clause (I), (II), or (III); 
‘‘(v) the term ‘exclusive distributor’ 
means any person who contracts with an-
other person to provide or coordinate 
warehousing, distribution, or other services 
on behalf of such person and who takes 
title to that person’s prescription drug, but 
who does not have general responsibility to 
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‘‘(VI) the sale, purchase, or trade 
of a drug, an offer to sell, purchase, 
or trade a drug, or the dispensing of 
a drug under a prescription executed 
in accordance with subsection (b); 
‘‘(VII) the distribution of drug 
samples by a manufacturer’s rep-
resentative or an authorized dis-
tributor of record’s representative; 
‘‘(VIII) the sale, purchase, or 
trade of blood or blood components in-
tended for transfusion; 
‘‘(IX) drug returns, when con-
ducted by a dispenser or wholesale 
distributor in accordance with the re-
quirements of subparagraph (D); 
‘‘(X) the sale of minimal quan-
tities of drugs by retail pharmacies to 
licensed practitioners for office use; or 
‘‘(XI) the sale, purchase, or trade 
of prescription drugs when such drugs 
are contained in sealed medical or 
surgical kits that have been assembled 
in a facility registered with the Food 
and Drug Administration as a device 
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manufacturer under section 510(c) 
and such drug was purchased by the 
kit assembler directly from the manu-
facturer of such drug; and 
‘‘(ix) the term ‘wholesale distributor’ 
means any person engaged in wholesale 
distribution, except a common carrier. 
‘‘(B) MANUFACTURER
PACKING
LIST.— 
The manufacturer of a prescription drug shall 
provide to each wholesale distributor or dis-
penser to whom it delivers such drug a packing 
list or comparable document, in paper or elec-
tronic form, that identifies the proprietary and 
established names of the drug, the National 
Drug Code number of the drug, the strength of 
the drug, the container size of the drug, the 
number of containers of the drug, the lot num-
ber or numbers of the drug, the date of the 
transaction, and the names and addresses of 
the manufacturer and the person to whom the 
drug is being delivered. 
‘‘(C) STATEMENT OF DISTRIBUTION HIS-
TORY.—Each person engaged in wholesale dis-
tribution of a prescription drug (except a manu-
facturer that is engaged in the wholesale dis-
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tribution of a prescription drug, or a wholesale 
distributor on whose behalf a manufacturer de-
livers a prescription drug directly to a dis-
penser) shall provide to each wholesale dis-
tributor or dispenser to whom such person de-
livers such a drug before, or at the time of, 
each wholesale distribution, one of the fol-
lowing: 
‘‘(i) DIRECT PURCHASE PEDIGREE.— 
‘‘(I) If the person providing the 
statement is an authorized distributor 
of record for such drug and purchased 
such drug directly from the manufac-
turer, a statement on the invoice, 
whether in paper or electronic form, 
stating that such person is an author-
ized distributor of record for such 
drug; and such person purchased the 
specific unit of the prescription drug 
directly from the manufacturer. 
‘‘(II) If the person providing the 
statement is a member of the affili-
ated group (as that term is defined in 
section 1504 of the Internal Revenue 
Code) of an authorized distributor of 
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record that purchased such drug di-
rectly from the manufacturer, and 
such person obtained such drug from 
such authorized distributor of record 
directly or by means of one or more 
transactions involving only members 
of such affiliated group, a statement 
on the invoice, whether in paper or 
electronic form, identifying such au-
thorized distributor of record; stating 
that such person is a member of the 
affiliated group (as that term is de-
fined in section 1504 of the Internal 
Revenue Code) of such authorized dis-
tributor of record; and stating that 
such authorized distributor of record 
purchased the specific unit of the pre-
scription drug directly from the manu-
facturer. 
‘‘(ii) STANDARD PEDIGREE.—For all 
situations not described in clause (i), a 
statement, whether in paper or electronic 
form, identifying each wholesale distribu-
tion of such drug, back to the authorized 
distributor of record for such drug or a 
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member of the affiliated group (as that 
term is defined in section 1504 of the In-
ternal Revenue Code) of such authorized 
distributor of record that provided one of 
the statements described in clause (i), or, 
if there is no such authorized distributor of 
record, back to the manufacturer of such 
drug, and including the following: 
‘‘(I) The proprietary and estab-
lished names of the drug. 
‘‘(II) The drug’s National Drug 
Code number. 
‘‘(III) Strength. 
‘‘(IV) Container size. 
‘‘(V) Number of containers. 
‘‘(VI) The drug’s lot or control 
number or numbers. 
‘‘(VII) The business name and 
address of all parties to each prior 
transaction involving the drug, start-
ing with the authorized distributor of 
record who provided the original 
statement of distribution history re-
quired under clause (i) or, if there is 
no such authorized distributor of 
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record, back to the manufacturer of 
such drug. 
‘‘(VIII) The date of each pre-
vious transaction involving such drug, 
back to the authorized distributor of 
record who provided the original 
statement of distribution history re-
quired under clause (i) or, if there is 
no such authorized distributor of 
record, back to the manufacturer of 
such drug. 
‘‘(D) RETURNS.— 
‘‘(i) IN GENERAL.—A wholesale dis-
tributor or dispenser may return prescrip-
tion drugs to a wholesale distributor, man-
ufacturer, or a person acting on behalf of 
the wholesale distributor or the manufac-
turer, provided the requirements of clauses 
(ii) and (iii) are met. 
‘‘(ii) SALEABLE RETURNS.— 
‘‘(I) 
MISTAKEN
ORDERS.—A 
wholesale distributor or dispenser may 
return to the selling wholesale dis-
tributor prescription drugs that are 
the result of a mistake in ordering or 
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shipment. For subsequent sales or 
trades of such returned drugs, the re-
turn of such prescription drugs is not 
required to be reflected in the state-
ment pursuant to clause (i) or (ii) of 
subparagraph (C) provided— 
‘‘(aa) a return authorization 
is requested by the returning 
wholesale distributor or dispenser 
within 7 days of receipt of such 
mistaken order or shipment; and 
‘‘(bb) the return is accom-
panied by a certified statement, 
in written or electronic form, that 
such drug was received from the 
wholesale distributor to which it 
is being returned by mistake or 
ordered in error and that such 
drug was stored and handled 
under proper conditions while in 
the possession and control of the 
returning party. 
‘‘(II) OTHER RETURNS.—For re-
turns not described in subclause (I), a 
wholesale distributor or dispenser may 
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‘‘(bb) If a prescription drug 
was delivered to a person with a 
statement pursuant to subpara-
graph (C)(ii), the drug may be 
returned to the wholesaler from 
which it was purchased provided 
the return is accompanied by the 
statement that was received pur-
suant to subparagraph (C)(ii) 
and a certified statement that 
such drug was purchased from 
the wholesale distributor and was 
stored and handled under proper 
conditions while in the possession 
and control of the returning 
party. For subsequent sales or 
trades of such returned drugs, 
the return of such prescription 
drugs shall be reflected in the 
statement of distribution history 
required 
under 
subparagraph 
(C)(ii). 
‘‘(iii) NON-SALEABLE
RETURNS.—A 
wholesale distributor, manufacturer, or a 
person acting on behalf of the wholesale 
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distributor or manufacturer may accept a 
return of a non-saleable prescription drug 
including, but not limited to, recalled, ex-
pired, or damaged drugs without the state-
ment required under subparagraph (C)(i) 
or (C)(ii). However, such drugs may not be 
resold and a wholesale distributor, manu-
facturer, or a person acting on behalf of 
the wholesale distributor or manufacturer 
must destroy the drug. 
‘‘(E) LIST OF AUTHORIZED DISTRIBUTORS 
OF RECORD.—The manufacturer (as defined in 
subclauses (I) and (II) of subparagraph (A)(iv)) 
of a prescription drug shall— 
‘‘(i) maintain a list of the authorized 
distributors of record of such drug at its 
corporate offices; 
‘‘(ii) make such list publicly available, 
including 
placement 
on 
its 
Internet 
website; and 
‘‘(iii) update such list not less than 
once a month. 
‘‘(F) APPLICABILITY.—The requirements 
of this paragraph shall not apply with respect 
to any prescription drug that is subject to a re-
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quirement under paragraph (3) for an effective 
drug identification and tracking system based 
on standardized numerical identifiers.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall take effect 180 days after the date 
of enactment of this Act. 
SEC. 5. UNIQUE STANDARDIZED NUMERICAL IDENTIFIERS 
FOR EACH PRESCRIPTION DRUG. 
(a) IN GENERAL.—Subsection (e) of section 503 of 
the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
353), as amended by section 4, is amended by inserting 
after paragraph (1) the following: 
‘‘(2) STANDARDIZED DRUG IDENTIFIERS.— 
‘‘(A) REPORT; DEVELOPMENT.— 
‘‘(i) REPORT ON PROMISING SECURITY 
TECHNOLOGIES.—Not 
later 
than 
months after the date of enactment of the 
Safeguarding America’s Pharmaceuticals 
Act of 2008, the Secretary shall submit to 
the Committee on Energy and Commerce 
of the House of Representatives and the 
Committee on Health, Education, Labor, 
and Pensions of the Senate a report evalu-
ating the feasibility and operational effi-
ciencies of adopting the security tech-
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nologies including barcodes, Radio-Fre-
quency Identification Tags, nanotechnol-
ogy, or other promising track and trace 
technology throughout the prescription 
drug supply chain. The report shall assess 
the cost-effectiveness and benefits of apply-
ing such technologies at the pallet, case, 
unit, and tablet levels, including the ability 
to defeat repackaging, enhance product 
identification or validation, and improve 
the overall security of the prescription drug 
supply chain. 
‘‘(ii) CONSIDERATION.—The Secretary 
shall consider the findings made in the re-
port submitted under clause (i) when de-
veloping a standard numerical identifier 
under section 505D(b)(2). 
‘‘(iii) ANNOUNCEMENT OF DEVELOP-
MENT
OF
STANDARDIZED
NUMERICAL 
IDENTIFIER.—Not later than March 27, 
2010, the Secretary shall announce the de-
velopment of a standardized numerical 
identifier under section 505D(b)(2) by 
means of a notice published in the Federal 
Register. 
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‘‘(B) HIGH-RISK DRUGS.— 
‘‘(i) CRITERIA; LIST.—Not later than 
March 27, 2010, and periodically there-
after, the Secretary shall develop, and shall 
notify members of the supply chain regard-
ing, the following: 
‘‘(I) Criteria the Secretary will 
use to determine whether a drug is at 
high risk for counterfeiting or diver-
sion. 
‘‘(II) A list identifying prescrip-
tion drugs that are at high risk of di-
version or counterfeiting. In devel-
oping or updating such list, the Sec-
retary shall consult with the manufac-
turer of each drug involved, as well as 
with members of the supply chain and 
relevant Federal enforcement agen-
cies, and, at least 1 year before in-
cluding any drug in the list, provide 
the manufacturer of the drug and 
members of the supply chain notice of 
the Secretary’s intent to include the 
drug in the list. 
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‘‘(ii) REQUIREMENT.—Not later than 
18 months after the date of notice in the 
Federal Register described in subpara-
graph (A)(iii), each manufacturer or re-
packager of a prescription drug that ap-
pears on the list of high risk drugs estab-
lished under clause (i) shall apply a stand-
ardized numerical identifier that is unique 
to each unit (namely, a package from 
which the drug may be repackaged or dis-
pensed) of the drug. The identifier shall be 
applied by the manufacturer or repackager 
(in which case the serialized number shall 
be linked to the numerical identifiers ap-
plied by the manufacturer). 
‘‘(C) OTHER DRUGS.— 
‘‘(i) IN
GENERAL.—Each manufac-
turer or repackager of a prescription drug 
not described in subparagraph (B) shall 
apply a standardized numerical identifier 
that is unique to each unit of the drug, in 
accordance with a compliance timetable es-
tablished by the Secretary through rule-
making under section 553 of title 5, 
United States Code. Such timetable may 
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establish different compliance dates for dif-
ferent types of drugs. The identifier shall 
be applied by the manufacturer or repack-
ager (in which case the serialized number 
shall be linked to the numerical identifiers 
applied by the manufacturer). 
‘‘(ii) REGULATIONS.—The Secretary 
shall issue proposed regulations to imple-
ment this subparagraph not later than the 
date that is 1 year after the date of the 
notice in the Federal Register described in 
subparagraph (A)(iii), and promulgate 
final regulations not later than 2 years 
after the date of such Federal Register no-
tice. In proposing or promulgating such 
regulations, the Secretary shall consult 
with members of the supply chain and take 
into account the economic and technical 
feasibility of compliance by manufacturers, 
repackagers, wholesale distributors, and 
dispensers and for different types of drugs. 
Such regulations shall not establish a com-
pliance date for any drug that is earlier 
than the date that is 3 years after the date 
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of the Federal Register notice described in 
subparagraph (A)(iii). 
‘‘(iii) EXEMPTION FROM IDENTIFICA-
TION
REQUIREMENT.—The 
regulations 
under clause (ii) shall include a process 
under which a manufacturer or repackager 
may request an exemption from the identi-
fication requirement if it can demonstrate 
to the Secretary’s satisfaction that— 
‘‘(I) the requirement would ad-
versely affect the safety, effectiveness, 
purity, or potency of the drug or 
would not be technologically feasible; 
and 
‘‘(II) the concerns underlying the 
request could not reasonably be ad-
dressed by measures such as package 
redesign or use of overwraps.’’. 
(b) VALIDATION.—Paragraph (2) of section 505D(b) 
of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
355e) is amended by striking ‘‘validation,’’. 
SEC. 6. PRESCRIPTION DRUG IDENTIFICATION AND TRACK-
ING SYSTEM. 
Subsection (e) of section 503 of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 353), as amended by 
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section 5, is amended by inserting after paragraph (2) the 
following: 
‘‘(3) EFFECTIVE
DRUG
IDENTIFICATION
AND 
TRACKING SYSTEM.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
issue regulations to establish an effective drug 
identification and tracking system through 
which drug manufacturers, repackagers, whole-
sale distributors, and dispensers may authen-
ticate the wholesale distribution history of any 
prescription drug that is subject to a require-
ment for a standardized numerical identifier 
under paragraph (2). 
‘‘(B) CONTENT
OF
REGULATIONS.—The 
regulations under subparagraph (A) shall— 
‘‘(i) establish standards for electroni-
cally accessible and interoperable databases 
through which drug manufacturers, re-
packagers, wholesale distributors, and dis-
pensers may authenticate the wholesale 
distribution history of prescription drugs 
using the numerical identifiers required 
under paragraph (2), while maintaining 
the proprietary information of each entity; 
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‘‘(ii) require the manufacturer or re-
packager of a prescription drug to apply 
such numerical identifier in at least 1 
standardized form that is electronically 
readable; 
‘‘(iii) require the repackager of a pre-
scription drug to link electronically within 
such databases the numerical identifier ap-
plied to the drug by the repackager to the 
numerical identifiers applied to the drug 
by the manufacturer or previous repack-
ager; 
‘‘(iv) require each person that receives 
a prescription drug in wholesale distribu-
tion to authenticate the transaction history 
of the drug by authenticating the numer-
ical identifier with the appropriate data-
base; and 
‘‘(v) require protections to ensure pa-
tient privacy, in compliance with the regu-
lations promulgated under section 264(c) 
of the Health Insurance Portability and 
Accountability Act of 1996. 
‘‘(C) ISSUANCE OF REGULATIONS.— 
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‘‘(i) CONSIDERATIONS.—In developing 
the regulations under subparagraph (A), 
the Secretary shall consider the technical 
feasibility of compliance— 
‘‘(I) by manufacturers, repack-
agers, wholesale distributors, and dis-
pensers, including small businesses; 
and 
‘‘(II) for different types of drugs. 
‘‘(ii) TIMING.—The Secretary shall 
issue proposed regulations under subpara-
graph (A) not later than March 31, 2010, 
and shall issue final regulations not later 
than the date that is 1 year after the date 
of such proposed regulations. 
‘‘(iii) COMPLIANCE
DATE.—With re-
gard to any drug, the regulations under 
subparagraph (A) shall not require compli-
ance on a date that is— 
‘‘(I) earlier than 18 months or 
later than 2 years after the date on 
which such drug is subject to a re-
quirement for the application of a 
standardized 
numerical 
identifier 
under paragraph (2)(B); or 
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‘‘(II) earlier than 6 months or 
later than 9 months after the date on 
which such drug is subject to a re-
quirement for the application of a 
standardized 
numerical 
identifier 
under paragraph (2)(C). 
In determining the compliance dates of 
such regulations, the Secretary shall take 
into consideration operational and tech-
nical feasibility and provide sufficient time 
for inventory conversion across the supply 
chain. 
‘‘(D) GAO STUDY
AND
REPORT.—The 
Comptroller General of the United States shall 
conduct a study on the availability and cost of 
technologies to dispensers to comply with this 
subsection during the 12-month period begin-
ning on the date of the Secretary’s notice of 
proposed regulations under subsection (C)(ii). 
Not later than the end of such 12-month pe-
riod, the Comptroller General shall submit to 
the Secretary and to the Congress a report on 
such study and shall include in the report rec-
ommendations to facilitate the adoption of iden-
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tification and tracking system technology by 
dispensers.’’. 
SEC. 7. FACILITATING PRESCRIPTION DRUG IDENTIFICA-
TION AND TRACKING SYSTEM FOR SMALL 
PHARMACIES. 
(a) GRANTS FOR ADOPTION OF TECHNOLOGY.— 
(1) IN GENERAL.—The Secretary of Health and 
Human Services shall award grants to eligible enti-
ties to facilitate the purchase and enhance the utili-
zation of a drug identification and tracking system 
to ensure the security and integrity of the drug sup-
ply chain. 
(2) ELIGIBILITY.—To be eligible to receive a 
grant under paragraph (1), an entity shall— 
(A) submit to the Secretary an application 
at such time, in such manner, and containing 
such information as the Secretary may require; 
(B) agree to provide matching funds in ac-
cordance with paragraph (4); and 
(C) be an independent pharmacy. 
(3) USE OF FUNDS.—Amounts received under a 
grant under this subsection shall be used to facili-
tate the purchase of qualified identification and 
tracking technology systems required to comply with 
section 503(e) of the Federal Food, Drug, and Cos-
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metic Act, as amended by sections 4, 5, and 6 of 
this Act. 
(4) MATCHING REQUIREMENT.—To be eligible 
for a grant under this subsection, an entity shall 
contribute non-Federal contributions to the costs of 
carrying out the activities for which the grant is 
awarded in an amount equal to $1 for each $3 of 
Federal funds provided under the grant. 
(5) PREFERENCE IN AWARDING GRANTS.—In 
awarding grants under this subsection, the Secretary 
shall give preference to independent pharmacies that 
meet the definition of a small business concern in 
section 3 of the Small Business Act (15 U.S.C. 632) 
by having annual gross revenues of $6,500,000 or 
less. 
(b) AMOUNT OF GRANTS.—Upon receiving the report 
required by section 503(e)(3)(D) of the Federal Food, 
Drug, and Cosmetic Act, as amended by sections 4, 5, and 
6 of this Act, the Secretary shall assess the findings of 
the report and provide grants to independent pharmacies 
in an amount deemed appropriate by the Secretary and 
based on the information provided by the Comptroller 
General. 
(c) REPORTS.—Not later than 1 year after receiving 
a grant under this section, an entity that receives such 
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grant shall submit to the Secretary a report on the impact 
of the grant. Each such report shall include— 
(1) a description of the financial costs and ben-
efits of the technology system implemented and of 
the entities to which such costs and benefits accrue; 
(2) an analysis of the impact of the grant on 
acquiring technology necessary to comply with sec-
tion 503(e)(3) of the Federal Food, Drug, and Cos-
metic Act, as amended by sections 4, 5, and 6 of 
this Act; 
(3) a description of the use of the grant; and 
(4) such other information as may be required 
by the Secretary. 
(d) DEFINITIONS.— 
(1) 
INDEPENDENT
PHARMACY.—The 
term 
‘‘independent pharmacy’’ means a pharmacy which 
is not owned (or operated) by a publicly traded com-
pany. 
(2) PUBLICLY
TRADED
COMPANY.—The term 
‘‘publicly traded company’’ means a company that is 
an issuer within the meaning of section 2(a)(7) of 
the Sarbanes-Oxley Act of 2002 (15 U.S.C. 
7201(a)(7)). 
(3) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Health and Human Services. 
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(e) AUTHORIZATION OF APPROPRIATIONS.— 
(1) IN GENERAL.—There are authorized to be 
appropriated such sums as may be necessary to 
carry out this section. 
(2) AVAILABILITY.—Amounts appropriated pur-
suant to paragraph (1) shall remain available 
throughout the 2-year period following the date of 
issuance 
of 
final 
regulations 
under 
section 
503(e)(3)(A) of the Federal Food, Drug, and Cos-
metic Act, as amended by sections 4, 5, and 6 of 
this Act. 
SEC. 8. UNIFORM NATIONAL STANDARDS. 
Subsection (e) of section 503 of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 353), as amended by 
sections 4, 5, and 6 of this Act, is amended by adding 
at the end the following: 
‘‘(5) UNIFORM NATIONAL STANDARDS.—Effec-
tive 180 days after the date of enactment of the 
Safeguarding America’s Pharmaceuticals Act of 
2008, no State or political subdivision of a State 
may establish or continue in effect any requirement 
with respect to statements of distribution history, 
manufacturer packing lists, unique standardized nu-
merical identifiers, or drug identification and track-
ing systems for prescription drugs that is different 
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from, or in addition to, any requirement under this 
subsection.’’. 
SEC. 9. REPORT TO CONGRESS. 
If the Secretary of Health and Human Services does 
not issue any proposed or final regulations by the dates 
described in paragraphs (2) and (3) of section 503(e) of 
the Federal Food, Drug, and Cosmetic Act, as amended 
by sections 4, 5, and 6 of this Act, the Secretary shall 
provide the Committee on Energy and Commerce of the 
House of Representatives and the Committee on Health, 
Education, Labor, and Pensions of the Senate a report 
explaining the reasons why action on the proposed or final 
regulations did not occur and specifying the date by which 
the Secretary will issue such regulations. 
SEC. 10. REQUIREMENTS FOR LICENSURE OF WHOLESALE 
DISTRIBUTORS. 
(a) REQUIREMENTS.—Section 503(e)(4) of the Fed-
eral Food, Drug, and Cosmetic Act, as so redesignated 
by section 4(a)(2) of this Act is amended— 
(1) in subparagraph (B), by striking the second 
sentence and inserting the following: ‘‘Such guide-
lines shall prescribe requirements for— 
‘‘(i) the storage and handling of such drugs; 
‘‘(ii) the establishment and maintenance of 
records of the distributions of such drugs; 
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‘‘(iii) the payment to the State of a bond or 
other equivalent means of security in an amount 
deemed appropriate by the State; 
‘‘(iv) the conduct of mandatory background 
checks and fingerprinting of facility manager and 
his or her designated representative; 
‘‘(v) the establishment and implementation of 
qualifications for key personnel; 
‘‘(vi) in accordance with subparagraph (C), the 
mandatory physical inspection prior to licensure of 
any facility to be used in the wholesale distribution; 
and 
‘‘(vii) in accordance with subparagraph (D), the 
prohibition of certain persons from receiving or 
maintaining licensure for wholesale distribution.’’; 
and 
(2) by adding at the end the following: 
‘‘(C) The guidelines under subparagraph (B) shall in-
clude requirements for the mandatory physical inspection 
prior to licensure of any facility to be used, pursuant to 
such licensure, in wholesale distribution. Such require-
ments shall allow a State to accept a satisfactory inspec-
tion report from a relevant State or Federal inspection 
authority, or from a third party inspection or accreditation 
program that meets criteria and standards developed by 
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an advisory group consisting of representatives of the 
State, distributors, manufacturers, pharmacies and other 
stakeholders, in place of the State conducting the inspec-
tion. 
‘‘(D) The guidelines under subparagraph (B) shall in-
clude requirements to prohibit a person from receiving or 
maintaining licensure for wholesale distribution if the per-
son— 
‘‘(i) has been convicted of any felony for con-
duct relating to wholesale distribution, any felony 
violation of sections 301(i) or (k) of this Act, or any 
felony violation of 18 U.S.C. 1365 involving a drug 
or biologic (relating to product tampering); or 
‘‘(ii) the person has engaged in a pattern of vio-
lating the requirements of this section, or State re-
quirements for licensure, that presents a threat of 
serious adverse health consequences or death to hu-
mans.’’. 
(b) EFFECTIVE DATE.—The Secretary of Health and 
Human Services shall by regulation issue the guidelines 
required by section 503(e)(4) of the Federal Food, Drug, 
and Cosmetic Act, as amended by subsection (a), not later 
than 180 days after the date of the enactment of this Act. 
Section 503(e)(4) of such Act, as so amended, shall take 
effect upon the expiration of 2 years after the date such 
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regulations are promulgated. The Secretary shall by regu-
lation establish conditions under which a person who is 
licensed by a State to engage in wholesale distribution pur-
suant to guidelines set forth in part 205 of title 21 of 
the Code of Federal Regulations, as it existed on the date 
of amendment of this act, may continue such wholesale 
distribution if such person is unable to obtain a timely 
State inspection under section 503(e)(4)(C) of the Federal 
Food, Drug, and Cosmetic Act, as amended by subsection 
(a), solely because of the State’s resource limitations. 
SEC. 11. INJUNCTIONS; CIVIL PENALTIES. 
(a) INJUNCTION PROCEEDINGS.—Subsection (a) of 
section 302 of the Federal Food, Drug, and Cosmetic Act 
(21 U.S.C. 332) is amended by deleting ‘‘paragraphs (h), 
(i), and (j)’’ and inserting ‘‘paragraphs (h) and (j)’’. 
(b) CIVIL PENALTY.—Subsection (f) of section 303 
of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
333) is amended— 
(1) by redesignating paragraphs (5), (6), and 
(7) as paragraphs (6), (7), and (8); 
(2) by inserting after paragraph (4) the fol-
lowing: 
‘‘(5)(A) Any person who violates paragraph (2) or (3) 
of section 301(i) shall be subject to a civil monetary pen-
alty of not more than $50,000 in the case of an individual 
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and $250,000 in the case of any other person for such 
violation, not to exceed $500,000 for all such violations 
adjudicated in a single proceeding. 
‘‘(B) A civil monetary penalty under this paragraph 
shall be paid to the United States, except that, in a pro-
ceeding brought by a State under section 310(c)(1), 50 
percent of a civil monetary penalty under this paragraph 
shall be paid to the State. 
‘‘(C) Amounts paid to the United States under this 
paragraph shall be— 
‘‘(i) deposited in the account providing appro-
priations for salaries and expenses of the Food and 
Drug Administration; and 
‘‘(ii) subject to the availability of appropria-
tions, used by the Secretary to prevent and address 
unlawful counterfeiting and diversion of drugs, in-
cluding through enforcement of paragraphs (2) and 
(3) of section 301(i) and investigation of potential 
violations of such paragraphs. 
‘‘(D) For fiscal year 2009 and each subsequent fiscal 
year, there is authorized to be appropriated to the Sec-
retary for the programs and activities described in sub-
paragraph (C)(ii) an amount equal to the total amount 
paid to the United States under this paragraph during the 
preceding fiscal year, to remain available until expended.’’; 
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(3) in paragraph (6), as so redesignated, by 
striking the term ‘‘paragraph (1), (2), (3), or (4)’’ 
each place such term appears and inserting ‘‘para-
graph (1), (2), (3), (4), or (5)’’; 
(4) in paragraph (7), as so redesignated, by 
striking ‘‘paragraph (5)(A)’’ and inserting ‘‘para-
graph (6)(A)’’; and 
(5) in paragraph (8), as so redesignated, by 
striking the term ‘‘paragraph (6)’’ each place such 
term appears and inserting ‘‘paragraph (7)’’. 
SEC. 12. STATE ENFORCEMENT OF FEDERAL REQUIRE-
MENTS. 
Section 310 of the Federal Food, Drug, and Cosmetic 
Act (21 U.S.C. 337) is amended by adding at the end the 
following: 
‘‘(c)(1) A State may bring in its own name and within 
its jurisdiction proceedings for the civil enforcement, or 
to restrain violations, of paragraph (2) or (3) of section 
301(i) or paragraph (1), (2), and (3) of section 503(e) 
if the drug or person that is the subject of the proceedings 
is located in the State. 
‘‘(2) No proceeding may be commenced by a State 
under paragraph (1)— 
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‘‘(A) before 30 days after the State has given 
written notice to the Secretary that the State in-
tends to bring such proceeding; 
‘‘(B) before 90 days after the State has given 
written notice to the Secretary of such intent if the 
Secretary has, within such 30 days, commenced an 
informal or formal enforcement action pertaining to 
the violation which would be the subject of such pro-
ceeding; or 
‘‘(C) if the Secretary is diligently prosecuting a 
proceeding in court pertaining to the violation, has 
settled such proceeding, or has settled the informal 
or formal enforcement action pertaining to such vio-
lation.’’. 
SEC. 13. STUDY ON THREATS TO DOMESTIC PRESCRIPTION 
DRUG SUPPLY CHAIN. 
(a) IN GENERAL.—Not later than 18 months after 
the date of the enactment of the Safeguarding America’s 
Pharmaceuticals Act of 2008, the Secretary of Health and 
Human Services, in consultation with Federal health and 
security agencies including the Department of Homeland 
Security and the Department of Justice, shall— 
(1) complete a study on threats to the domestic 
prescription drug supply chain; and 
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(2) submit a report to the Congress describing 
the results of the study and making recommenda-
tions for improvement. 
(b) ISSUES TO BE STUDIED.—The study conducted 
under this section shall address the following: 
(1) How to improve coordination between the 
Food and Drug Administration (including the Office 
of Criminal Investigations) and the Department of 
Homeland Security including at the Nation’s 12 
international mail facilities and express carrier hubs. 
(2) Any additional authorities needed by the 
Food and Drug Administration and the Department 
of Homeland Security in order to ensure mis-
branded, adulterated, counterfeit, and unauthorized 
drugs are destroyed at the Nation’s international 
mail facilities and express carrier hubs. 
(3) New and emerging technologies to assist 
with screening drug imports in a more efficient man-
ner. 
(4) The adequacy of the number of personnel 
within the Food and Drug Administration and the 
Department of Homeland Security and room for 
growth and improvement, including the need for ad-
ditional personnel and how such additional personnel 
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should be employed at the Nation’s international 
mail facilities and express carrier hubs. 
(5) The potential interface among the Depart-
ment of Homeland Security targeting systems (in-
cluding the Automated Targeting System), the Food 
and Drug Administration targeting system (includ-
ing the Oasis System), and express carrier targeting 
systems to create a unified system that— 
(A) tracks all illegal drug imports arriving 
at the Nation’s 12 international mail facilities 
and express carrier hubs; and 
(B) provides for consultation by manufac-
turers and other private entities actively in-
volved in tracking counterfeit drug enterprises. 
(6) Any additional authorities which the Food 
and Drug Administration and the Department of 
Homeland Security need to provide greater security 
at the Nation’s borders and within the Nation 
against counterfeit and unapproved prescription 
drugs. 
(7) How the Food and Drug Administration 
and the Department of Homeland Security can bet-
ter coordinate with the private sector to provide 
greater enforcement against counterfeit prescription 
drugs. 
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(8) Statistically significant data calculating the 
percentage of drugs entering the Nation, including 
those entering through the Nation’s 12 international 
mail facilities and express carrier hubs, that are 
counterfeit, misbranded, adulterated, or otherwise 
inadmissible. 
(c) CONSULTATION.—In conducting the study re-
quired by this section, the Secretary of Health and Human 
Services, in consultation with the Secretary of Homeland 
Security, shall consult with technology developers, drug 
manufacturers, and other interested parties. 
Æ 
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