SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Prescription Drug 
Abuse Elimination Act of 2004’’. 
SEC. 2. PRESCRIPTION DRUG MONITORING PROGRAM. 
Part P of title III of the Public Health Service Act 
(42 U.S.C. 280g et seq.) is amended by adding after sec-
tion 399N the following: 
‘‘SEC. 399O. PRESCRIPTION DRUG MONITORING PROGRAM. 
‘‘(a) PRESCRIPTION DRUG.—For purposes of this 
section, the term ‘prescription drug’ means—
‘‘(1) a drug that is included in schedule II, III, 
or IV of section 202(c) of the Controlled Substances 
Act; or 
‘‘(2) a drug that is—
‘‘(A) subject to section 503(b) of the Fed-
eral Food, Drug, and Cosmetic Act; and 
‘‘(B) identified for purposes of this section 
by the Secretary as potentially subject to abuse, 
diversion, and misuse. 
‘‘(b) GRANTS.—The Secretary shall make a grant to 
each State that submits an application in accordance with 
subsection (k) for the purpose of establishing a prescrip-
tion drug monitoring program described in this section. 
‘‘(c) REPORTING REQUIREMENTS.—A funding agree-
ment for a grant under this section is that the State in-
volved shall comply with the following:
‘‘(1) The State shall require dispensers to re-
port each dispensing in the State of a prescription 
drug to an ultimate user or research subject. 
‘‘(2) A State may exclude from the reporting 
requirement of this section—
‘‘(A) the direct application of a prescrip-
tion drug to the body of an ultimate user or re-
search subject; 
‘‘(B) the dispensing of a prescription drug 
in a quantity limited to an amount adequate to 
treat the ultimate user or research subject in-
volved for 48 hours or less; or 
‘‘(C) the application or dispensing of a pre-
scription drug in accordance with an exclusion 
identified by the Secretary under subsection 
(i)(2). 
‘‘(3) Subject to paragraph (5), the information 
to be reported under this section with respect to the 
dispensing of a prescription drug shall include the 
following: 
‘‘(A) Drug Enforcement Administration 
Registration Number of the dispenser. 
‘‘(B) Drug Enforcement Administration 
Registration Number and name of the practi-
tioner who prescribed the drug.
‘‘(C) Name, address, and telephone num-
ber of the ultimate user or research subject. 
‘‘(D) Identification of the drug by a na-
tional drug code number. 
‘‘(E) Quantity dispensed. 
‘‘(F) Estimated number of days for which 
such quantity should last. 
‘‘(G) Number of refills ordered. 
‘‘(H) Whether the drug was dispensed as 
a refill of a prescription or as a first-time re-
quest. 
‘‘(I) Date of the dispensing. 
‘‘(J) Date of origin of the prescription. 
‘‘(4) The State shall specify an electronic for-
mat for the reporting of information under this sec-
tion and may waive the requirement of such format 
with respect to an individual dispenser. 
‘‘(5) The State may meet the requirements of 
paragraphs (3) and (4) by requiring that informa-
tion be reported under this section in accordance 
with the current version of the telecommunications 
format for controlled substances of the American So-
ciety for Automation in Pharmacy.
‘‘(d) DATABASE.—A funding agreement for a grant 
under this section is that the State involved shall comply 
with the following: 
‘‘(1) The State shall establish and maintain an 
electronic database containing the information re-
ported to the State under this section. 
‘‘(2) The database must be searchable by any 
field or combination of fields. 
‘‘(3) The State shall include reported informa-
tion in the database in a timely and efficient man-
ner, with appropriate safeguards for ensuring the 
accuracy and completeness of the database. 
‘‘(4) The State shall take appropriate security 
measures to protect the integrity of, and access to, 
the database. 
‘‘(e) REQUIRED AVAILABILITY OF INFORMATION.—
Subject to subsection (g), a funding agreement for a grant 
under this section is that the State involved, with respect 
to the database established by the State under subsection 
(d), shall comply with the following: 
‘‘(1) The State, taking into consideration the 
criteria established by the Secretary under sub-
section (i)(1), shall notify appropriate authorities re-
sponsible for drug diversion investigation if informa-
tion in the database indicates a potential unlawful 
diversion or misuse of a prescription drug. 
‘‘(2) The State shall provide for sharing of in-
formation on a specific individual in the database 
with each State that—
‘‘(A) maintains a database established 
under subsection (d); and 
‘‘(B) agrees to use the information in ac-
cordance with the requirements of this section. 
‘‘(3) The State shall automatically share infor-
mation reported to the State under this section with 
another State if—
‘‘(A) such other State maintains a data-
base under subsection (d); and 
‘‘(B) the information concerns—
‘‘(i) the dispensing of a prescription 
drug to an ultimate consumer or research 
subject who resides in such other State; or 
‘‘(ii) the dispensing of a prescription 
drug prescribed by a practitioner whose 
principal place of business is located in 
such other State. 
‘‘(f) OPTIONAL AVAILABILITY OF INFORMATION.—
Subject to subsection (g), a funding agreement for a grant 
under this section is that the State involved, with respect
to the database established by the State under subsection 
(d), may choose to comply with any of the following: 
‘‘(1) On request, the State may make available 
information on a specific individual from the data-
base to any dispenser or practitioner who certifies 
that the requested information is for the purpose of 
providing pharmaceutical or medical treatment, or 
evaluating the need for such treatment, with respect 
to a bona fide patient. 
‘‘(2) On request, the State may make available 
information on a specific individual from the data-
base to any local, State, or Federal law enforcement 
authority responsible for prescription drug diversion 
investigation that requests the information and cer-
tifies that—
‘‘(A) the requested information relates to 
an active criminal investigation or proceeding 
involving the unlawful diversion or misuse of a 
prescription drug; and 
‘‘(B) the authority has reasonable cause to 
conclude that such information will further the 
purpose of the investigation or assist in the pro-
ceeding. 
‘‘(3) On request, the State may make available 
information on a specific individual from the data-
base to any health care professional licensing au-
thority that requests the information and certifies 
that the requested information relates to an active 
investigation or proceeding involving the unlawful di-
version or misuse of a prescription drug, and the au-
thority has reasonable cause to conclude that such 
information will further the purpose of the investiga-
tion or assist in the proceeding. Information made 
available to a health care professional licensing au-
thority under this paragraph shall be limited to 
those individuals licensed, regulated, or disciplined 
by the authority. 
‘‘(4) The State may make available information 
on a specific individual from the database to dis-
pensers, practitioners, law enforcement authorities 
responsible for prescription drug diversion investiga-
tion, and health care professional licensing authori-
ties in accordance with paragraphs (1), (2), and (3), 
irrespective of whether such dispensers, practi-
tioners, or authorities are from another State. 
‘‘(5) On request, the State may make available 
information on a specific individual from the data-
base to that specific individual with appropriate 
identification and procedures.
‘‘(g) LIMITATION.—With respect to information in a 
database established under subsection (d), a funding 
agreement for a grant under this section is that—
‘‘(1) the State involved shall limit the release of 
information pursuant to subsections (e) and (f) to 
the minimum necessary to accomplish the intended 
purpose of such release; 
‘‘(2) after the passage of 18 months from the 
date of the dispensing of a drug, the State involved 
will make information on such dispensing available 
only to the extent required by court order; and 
‘‘(3) except as inconsistent with the provisions 
of this section, the State involved will comply with 
section 264(c) of the Health Insurance Portability 
and Accountability Act of 1996 (Public Law 104–
191; 110 Stat. 2033) (concerning the confidentiality 
of individually identifiable health information) and 
any regulation promulgated under such section. 
‘‘(h) QUALITY IMPROVEMENT PROGRAM.—A funding 
agreement for a grant under this section is that the State 
involved shall operate a continuous quality improvement 
program to ensure the State’s compliance with this section 
and to improve the State’s prescription drug monitoring 
program. 
‘‘(i) AUTHORITY OF SECRETARY.—
‘‘(1) NATIONAL CRITERIA.—The Secretary shall 
establish criteria for determining whether informa-
tion in a database established under subsection (d) 
indicates a potential unlawful diversion or misuse of 
a prescription drug. 
‘‘(2) EXCLUSIONS.—The Secretary may identify 
instances (in addition to those described in subpara-
graphs (A) and (B) of subsection (c)(2)) in which a 
State may exclude from the reporting requirement of 
this section the application or dispensing of a pre-
scription drug. 
‘‘(j) ADVISORY COUNCIL.—A funding agreement for 
a grant under this section is that the State involved shall 
comply with the following: 
‘‘(1) The State shall establish an advisory coun-
cil to assist in the establishment and implementation 
of a prescription drug monitoring program under 
this section. 
‘‘(2) The State shall ensure that the member-
ship of the advisory council includes the following: 
‘‘(A) A representative of the primary State 
agency responsible for law enforcement. 
‘‘(B) A representative of the primary State 
agency responsible for health care.
‘‘(C) A health care practitioner with a spe-
cialty in pain medicine licensed in the State to 
prescribe drugs. 
‘‘(D) A pharmacist licensed in the State. 
‘‘(E) A prosecutor experienced in criminal 
prosecution of drug diversion cases. 
‘‘(F) A member representing the public at 
large. 
‘‘(k) APPLICATION.—For purposes of subsection (b), 
an application is in accordance with this subsection if—
‘‘(1) the application contains each funding 
agreement in this section; 
‘‘(2) with respect to such funding agreements, 
the application provides assurances of compliance 
satisfactory to the Secretary; and 
‘‘(3) the application is in such form, is made in 
such manner, and contains such information as the 
Secretary determines to be necessary to carry out 
this section. 
‘‘(l) DEFINITIONS.—For purposes of this section: 
‘‘(1) The term ‘bona fide patient’ means an in-
dividual who is a patient of the dispenser or practi-
tioner involved. 
‘‘(2) The term ‘dispense’ means to deliver a 
prescription drug to an ultimate user or research
subject by, or pursuant to the lawful order of, a 
practitioner, irrespective of whether the dispenser 
uses the Internet or other means to effect such deliv-
ery. 
‘‘(3) The term ‘dispenser’ means a physician, 
pharmacist, or other individual who dispenses a pre-
scription drug to an ultimate user or research sub-
ject. 
‘‘(4) The term ‘ultimate user’ means a person 
who has lawfully obtained, and who possesses, a pre-
scription drug for his or her own use, for the use of 
a member of his or her household, or for the use of 
an animal owned by him or her or by a member of 
his or her household. 
‘‘(m) AUTHORIZATION OF APPROPRIATIONS.—
‘‘(1) IN GENERAL.—There is authorized to be 
appropriated to carry out this section $10,000,000 
for fiscal year 2005 and each subsequent fiscal year. 
‘‘(2) STARTUP
GRANTS.—For the purpose of 
awarding grants under this section to assist with the 
initial costs of establishing a prescription drug moni-
toring program, there is authorized to be appro-
priated $25,000,000 for the period of fiscal years 
2005 through 2009. Such authorization of appro-
priations is in addition to the authorization of ap-
propriations in paragraph (1).’’. 
SEC. 3. INTERNET PHARMACIES. 
(a) IN GENERAL.—Chapter V of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 351 et seq.) is amend-
ed by inserting after section 503A the following: 
‘‘SEC. 503B. INTERNET SALE OF PRESCRIPTION DRUGS. 
‘‘(a) IN GENERAL.—
‘‘(1) PROHIBITIONS.—Subject to paragraph (2), 
it is a violation of this section—
‘‘(A) for any person to sell a prescription 
drug in interstate commerce through an Inter-
net site—
‘‘(i) if the Internet site is an illegal 
Internet pharmacy under subsection (b); 
‘‘(ii) if the person fails to comply with 
the treating provider verification require-
ments of subsection (c); 
‘‘(iii) if the person fails to submit the 
notices required by subsection (d); or 
‘‘(iv) if the person fails to comply with 
the reporting requirements applicable to 
the person under a State prescription drug 
monitoring program established with a
grant under section 399O of the Public 
Health Service Act; or 
‘‘(B) for any person to own or operate an 
illegal Internet pharmacy in interstate com-
merce. 
‘‘(2) EXCEPTION.—Any person who sells a pre-
scription drug through an Internet site, or who owns 
or operates an Internet pharmacy, is deemed to meet 
the requirements of this section for purposes of such 
sale, ownership, or operation if the Internet site or 
Internet pharmacy is certified by the National Asso-
ciation of Boards of Pharmacy’s Verified Internet 
Pharmacy Practice Sites program. 
‘‘(b) INTERNET PHARMACY REQUIREMENTS.—
‘‘(1) IN GENERAL.—For purposes of this sec-
tion: 
‘‘(A) The term ‘Internet pharmacy’ means 
an Internet site that is used primarily to sell 
prescription drugs in interstate commerce. 
‘‘(B) The term ‘illegal Internet pharmacy’ 
means an Internet pharmacy that fails to com-
ply with this subsection. 
‘‘(2) REQUIREMENTS.—An Internet pharmacy 
shall provide to any individual who accesses the 
pharmacy the following information: