no such authorized distributor of 
record, back to the manufacturer of 
such drug. 
‘‘(D) RETURNS.— 
‘‘(i) IN
GENERAL.—Subject to the 
succeeding provisions of this subparagraph, 
a wholesale distributor or dispenser may 
return prescription drugs to a wholesale 
distributor, manufacturer, or a person act-
ing on behalf of the wholesale distributor 
or the manufacturer. 
‘‘(ii) DRUGS.—Any return of a drug 
to a distributor, manufacturer, or other 
person under clause (i) shall be docu-
mented on the same pedigree as the trans-
action that resulted in the receipt of the 
drug by the wholesale distributor or dis-
penser returning it. 
‘‘(iii) EXCEPTION.—Clause (i) shall 
not apply to the sale or transfer from a re-
tail pharmacy, mail order pharmacy, or 
non-wholesaling pharmacy warehouse of 
expired, damaged, returned, or recalled 
prescription drugs to the original manufac-
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turer, the originating wholesaler, or to a 
third party returns processor. 
‘‘(iv) TERMS
AND
CONDITIONS.—A 
wholesaler or manufacturer shall receive 
prescription drug returns from a pharmacy 
or other person authorized to administer or 
dispense drugs or non-wholesaling phar-
macy warehouse pursuant to the terms and 
condition of the agreement between the 
wholesaler or manufacturer and the phar-
macy or non-wholesaling pharmacy ware-
house. Returns of expired, damaged, re-
called, or otherwise non-saleable pharma-
ceutical products shall be distributed by 
the receiving wholesaler only to either the 
original manufacturer or a third party re-
turns processor. Returns of prescription 
drugs, saleable or otherwise, shall not be 
subject to clause (ii) so long as they are 
also exempt from the pedigree requirement 
of the most current applicable prescription 
drug marketing guidance of the Food and 
Drug Administration. Both licensees under 
this Act and pharmacies or other persons 
authorized to administer or dispense pre-
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scription drugs shall be accountable for ad-
ministering their returns process and en-
suring that the aspects of this operation 
are secure and do not permit the entry of 
unadulterated, counterfeit, or misbranded 
product into the prescription drug supply 
chain. 
‘‘(E) LIST OF AUTHORIZED DISTRIBUTORS 
OF RECORD.—Each manufacturer described in 
subclause (I) or (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-
quirement under paragraph (3) for an effective 
drug identification and tracking system based 
on standardized numerical identifiers.’’. 
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(b) EFFECTIVE DATE.—The amendments 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) ANNOUNCEMENT OF DEVELOPMENT 
OF STANDARDIZED NUMERICAL IDENTIFIER.— 
Not later than March 27, 2012, the Secretary 
shall announce the development of a standard-
ized 
numerical 
identifier 
under 
section 
505D(b)(2) by means of a notice published in 
the Federal Register. 
‘‘(B) REQUIREMENT.— 
‘‘(i) IN
GENERAL.—Except as pro-
vided in subparagraph (C), each manufac-
turer or repackager of a prescription drug 
shall apply in accordance with this sub-
paragraph a standardized numerical identi-
fier that is unique to each unit (namely, a 
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package from which the drug may be re-
packaged or dispensed) of the drug— 
‘‘(I) to at least 50 percent of its 
drugs not later than January 1, 2015; 
and 
‘‘(II) to all of its drugs not later 
than January 1, 2016. 
‘‘(ii) APPLICATION OF IDENTIFIER.— 
The identifier shall be applied by the man-
ufacturer or repackager (in which case the 
serialized number shall be linked to the nu-
merical identifiers applied by the manufac-
turer). Each manufacturer shall notify the 
Food and Drug Administration of the seri-
alized drugs and the measures used in des-
ignating its drugs to be serialized and shall 
include in the notification the technology 
to be used for the standardized numerical 
identifier. 
‘‘(iii) METHODOLOGY FOR APPLYING 
50 PERCENT TEST.—The manufacturer or 
repackager shall elect, and notify the Sec-
retary, of which of the following 3 methods 
the manufacturer or repackager will use 
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for applying the 50 percent requirement of 
clause (i)(I): 
‘‘(I) Unit volume. 
‘‘(II) Product package (SKU) 
type. 
‘‘(III) Drug product family. 
‘‘(C) EXCEPTION.—The requirement of 
subparagraph (B) shall not apply to the fol-
lowing classes of prescription drugs: 
‘‘(i) Radioactive drugs or radioactive 
biological products (as defined in section 
600.3(ee) of title 21, Code of Federal Reg-
ulations) which are regulated by the Nu-
clear Regulatory Commission. 
‘‘(ii) Intravenous products used to 
maintain the equilibrium of water and min-
erals in the body. 
‘‘(iii) Drugs that are placed in a 
sealed package with a medical device or 
medical supplies at the point of first ship-
ment into commerce by the manufacturer 
if— 
‘‘(I) the package remains sealed 
until the drug or device is used; and 
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‘‘(II) the drugs and the device or 
supplies are used only for surgical 
purposes. 
‘‘(iv) Products that are intended for 
irrigation or reconstitution, as well as ster-
ile water, whether intended for those pur-
poses or for injection. 
‘‘(v) Intravenous products that, by 
their formulation, are intended for the re-
plenishment of fluids and electrolytes, such 
as sodium, chloride, and potassium, cal-
ories, such as dextrose and amino acids, or 
both. 
‘‘(D) SECRETARIAL WAIVER AUTHORITY IN 
CASE OF PUBLIC HEALTH EMERGENCIES.—The 
Secretary of Health and Human Services may 
waive the application of the requirement of sub-
paragraph (B) in the case of a public health 
emergency.’’. 
(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,’’. 
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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 
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 
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under paragraph (2), while maintaining 
the proprietary information of each entity; 
‘‘(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; 
‘‘(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; and 
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‘‘(vi) define the circumstances under 
which participants in the pharmaceutical 
supply chain may infer the contents of a 
case, pallet, or other aggregate of indi-
vidual units, packages, or containers of 
drugs, from a unique identifier associated 
with the case, pallet, or other aggregate, 
without opening each case, pallet, or other 
aggregate or otherwise individually authen-
ticating each unit. 
‘‘(C) ISSUANCE OF REGULATIONS.— 
‘‘(i) TIMING.—The Secretary shall 
issue proposed regulations under subpara-
graph (A) not later than 18 months after 
the date of the enactment of this para-
graph. In determining such regulations, 
the Secretary shall provide sufficient time 
for inventory conversion across the supply 
chain. 
‘‘(ii) REQUIREMENTS.—With regard 
to any drug, the regulations under sub-
paragraph (A) shall be required for— 
‘‘(I) any wholesaler or repackager 
beginning on July 1, 2016; and 
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‘‘(II) for any pharmacy beginning 
on July 1, 2017. 
‘‘(D) EXCEPTION.—The tracking system 
under subparagraph (A) shall not apply to 
drugs that are transferred between Federal, 
State, or local governments which are author-
ized by Federal law to distribute such drugs. 
‘‘(E) PRESIDENTIAL
WAIVER
AUTHORITY 
IN CASE OF PUBLIC HEALTH EMERGENCIES.— 
The President may waive the application of the 
tracking system under subparagraph (A) in the 
case of a public health emergency.’’. 
SEC. 7. 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 
2011, 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-
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ing systems for prescription drugs that is different 
from, or in addition to, any requirement under this 
subsection.’’. 
SEC. 8. 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)(3) 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; 
‘‘(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; and 
‘‘(vi) in accordance with subparagraph (D), the 
prohibition of certain persons from receiving or 
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maintaining licensure for wholesale distribution.’’; 
and 
(2) by adding at the end the following: 
‘‘(C) 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 
regulations are promulgated. 
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SEC. 9. 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) through 
(9) as paragraphs (6) through (10), respectively; 
(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 
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— 
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‘‘(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 2012 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.’’; 
(3) in paragraph (6), as so redesignated, by 
striking the term ‘‘paragraph (1), (2), (3), (4),’’ 
each place such term appears and inserting ‘‘para-
graph (1), (2), (3), (4), (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)’’. 
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SEC. 10. 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)— 
‘‘(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 
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or formal enforcement action pertaining to such vio-
lation.’’. 
SEC. 11. 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 2011, 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 
(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-
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branded, adulterated, and counterfeit drugs and 
drugs in violation of section 505 are destroyed at the 
Nation’s international mail facilities and express car-
rier 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 
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 
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(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. 
(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 
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Security, shall consult with technology developers, drug 
manufacturers, and other interested parties. 
Æ 
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