‘‘(v) RECORDS.—A repackager shall 
keep records of the disposition of an illegit-
imate prescription drug product for not 
less than 3 years after the conclusion of 
the disposition. 
‘‘(C) ELECTRONIC DATABASE.—A repack-
ager may satisfy the requirements of this para-
graph through the use of a secure electronic 
database developed and operated by the manu-
facturer or another entity. The owner of such 
database shall establish the requirements and 
processes to respond to requests and may pro-
vide for data access to other members of the 
pharmaceutical distribution supply chain, as ap-
propriate. The development and operation of 
such a database shall not relieve a repackager 
of the requirement under this paragraph to re-
spond to a verification request submitted by 
means other than a secure electronic database. 
‘‘(D) RETURNED
PRESCRIPTION
DRUG 
PRODUCT.—Beginning not later than 6 years 
after the date of the enactment of the Safe-
guarding America’s Pharmaceuticals Act of 
2013, upon receipt of a returned prescription 
drug product that the repackager intends to
further distribute, before further distributing 
such prescription drug product, the repackager 
shall— 
‘‘(i) verify the prescription drug prod-
uct identifier for each sealed homogeneous 
case of such prescription drug product; or 
‘‘(ii) if such prescription drug product 
is not in a sealed homogeneous case, verify 
the prescription drug product identifier on 
each package. 
‘‘(f) THIRD-PARTY LOGISTICS PROVIDER REQUIRE-
MENTS.— 
‘‘(1) AUTHORIZED
TRADING
PARTNERS.—Be-
ginning on January 1, 2015, a third-party logistics 
provider shall ensure that each of its trading part-
ners is authorized. 
‘‘(2) VERIFICATION.—Beginning not later than 
January 1, 2015, a third-party logistics provider 
shall implement systems to enable the third-party lo-
gistics provider to comply with the following require-
ments: 
‘‘(A) SUSPECT PRESCRIPTION DRUG PROD-
UCT.— 
‘‘(i) IN
GENERAL.—Upon making a 
determination that a prescription drug
product in the possession or control of a 
third-party logistics provider is a suspect 
prescription drug product, a third-party lo-
gistics provider shall promptly notify the 
owner of such prescription drug product of 
the need to conduct an investigation to de-
termine whether the prescription drug 
product is an illegitimate prescription drug 
product. 
‘‘(ii) CLEARED
PRESCRIPTION
DRUG 
PRODUCT.—If the owner of the prescrip-
tion drug product notifies the third-party 
logistics provider of the determination that 
a suspect prescription drug product is not 
an illegitimate prescription drug product, 
such prescription drug product may be fur-
ther distributed. 
‘‘(iii) RECORDS.—A third-party logis-
tics provider shall keep records of the ac-
tivities described in clauses (i) and (ii) 
with respect to a suspect prescription drug 
product for not less than 3 years after the 
conclusion of the investigation. 
‘‘(B) ILLEGITIMATE PRESCRIPTION DRUG 
PRODUCT.—
‘‘(i) IN
GENERAL.—Upon receiving 
notice that a manufacturer of a prescrip-
tion drug product has determined that a 
prescription drug product in the possession 
or control of a third-party logistics pro-
vider is an illegitimate prescription drug 
product, the third-party logistics provider 
shall— 
‘‘(I) quarantine such prescription 
drug product within the possession or 
control of the third-party logistics pro-
vider from prescription drug product 
intended for distribution; 
‘‘(II) promptly notify the owner 
of such prescription drug product of 
the need to provide for the disposition 
of such prescription drug product; and 
‘‘(III) promptly transfer posses-
sion of the prescription drug product 
to the owner of such prescription drug 
product to provide for the disposition 
of the prescription drug product. 
‘‘(ii) 
MAKING
A
NOTIFICATION.— 
Upon determining that a prescription drug 
product in the possession or control of the
third-party logistics provider is an illegit-
imate prescription drug product, the third- 
party logistics provider shall notify the 
Secretary not later than 24 hours after 
making such determination. The Secretary 
shall determine whether additional trading 
partner notification is appropriate. 
‘‘(iii) RESPONDING
TO
A
NOTIFICA-
TION.—Upon the receipt of a notification 
from the Secretary, a third-party logistics 
provider shall— 
‘‘(I) identify all illegitimate pre-
scription drug products subject to 
such notification that are in the pos-
session or control of the third-party 
logistics provider, including any such 
prescription drug product that is sub-
sequently received; and 
‘‘(II) perform the activities de-
scribed in clause (i). 
‘‘(iv) RECORDS.—A third-party logis-
tics provider shall keep records of the ac-
tivities described in clauses (i) and (ii) 
with respect to an illegitimate prescription
drug product for not less than 3 years 
after the conclusion of the disposition. 
‘‘(g) DROP SHIPMENTS.—This section does not apply 
to any entity, notwithstanding its status as a wholesale 
distributor or repackager, or other status that is not in-
volved in the physical handling, distribution, or storage of 
a prescription drug product. For purposes of this sub-
section, facilitating the distribution of a prescription drug 
product by providing various administrative services, in-
cluding processing of orders and payments, shall not, by 
itself, be construed as being involved in the handling, dis-
tribution, or storage of a prescription drug product.’’. 
SEC. 3. ENHANCED DRUG DISTRIBUTION SECURITY. 
(a) PILOT PROJECTS.— 
(1) IN GENERAL.—Not later than 2 years after 
the date of the enactment of this Act, the Secretary 
shall establish one or more pilot projects in coordi-
nation with manufacturers, repackagers, wholesale 
distributors, third-party logistics providers, and dis-
pensers to explore and evaluate methods to enhance 
the safety and security of the pharmaceutical dis-
tribution supply chain. 
(2) CONTENT.—
(A) IN GENERAL.—The Secretary shall en-
sure that the pilot projects under paragraph (1) 
collectively— 
(i) reflect the diversity of the pharma-
ceutical distribution supply chain; and 
(ii) include participants representative 
of every sector within the pharmaceutical 
distribution supply chain, including partici-
pants representative of small businesses. 
(B) PROJECT DESIGN.—The pilot projects 
shall be designed to— 
(i) utilize the prescription drug prod-
uct identifier for tracing of a prescription 
drug product, which utilization may in-
clude— 
(I) verification of the prescription 
drug product identifier of a prescrip-
tion drug product; and 
(II) the use of aggregation and 
inference; 
(ii) improve the technical capabilities 
of each sector within the pharmaceutical 
supply chain to comply with systems and 
processes needed to utilize the prescription
drug product identifiers to enhance tracing 
of a prescription drug product; and 
(iii) conduct such other activities as 
the Secretary determines appropriate to 
explore and evaluate methods to enhance 
the safety and security of the pharma-
ceutical distribution supply chain. 
(b) PUBLIC MEETINGS.— 
(1) IN
GENERAL.—Not later than 6 months 
after the date of the enactment of this Act, and at 
least every 6 months thereafter until the submission 
of the report required by subsection (e)(2), the Sec-
retary shall hold a public meeting to enhance the 
safety and security of the pharmaceutical distribu-
tion supply chain. In conducting such meetings, the 
Secretary shall take all measures reasonable and 
practicable to ensure the protection of confidential 
commercial information and trade secrets. 
(2) CONTENT.—In conducting meetings under 
this subsection, the Secretary shall seek to address, 
in at least one such meeting, each of the following 
topics: 
(A) Best practices in each of the sectors 
within the pharmaceutical distribution supply 
chain to implement the requirements of section
582 of the Federal Food, Drug, and Cosmetic 
Act, as added by section 2. 
(B) The costs and benefits of implementa-
tion of such section 582, including the impact 
on each pharmaceutical distribution supply 
chain sector and on public health. 
(C) 
Whether 
additional 
electronic 
traceability requirements, including tracing of 
prescription drug product at the package level, 
are feasible, cost effective, overly burdensome 
on small businesses, and needed to protect pub-
lic health. 
(D) The systems and processes needed to 
utilize the prescription drug product identifiers 
to enhance tracing of prescription drug product 
at the package level, including allowing for 
verification, aggregation, and inference by each 
sector within the pharmaceutical distribution 
supply chain for cases, pallets, totes, and other 
containers of aggregated prescription drug 
product as necessary. 
(E) The technical capabilities and legal au-
thorities, if any, needed to establish an elec-
tronic system that provides for enhanced trac-
ing of prescription drug product at the package 
level. 
(F) The impact that the requirements, sys-
tems, processes, capabilities, and legal authori-
ties referred to in subparagraphs (C), (D), and 
(E) would have on patient safety, the drug sup-
ply, cost and regulatory burden, the timeliness 
of patient access to prescription drugs, and 
small businesses. 
(c) STUDY OF THE PHARMACEUTICAL DISTRIBUTION 
SUPPLY CHAIN.— 
(1) IN GENERAL.—The Comptroller General of 
the United States shall conduct a study to examine 
implementation of the requirements established 
under subchapter H of chapter V of the Federal 
Food, Drug, and Cosmetic Act, as added by section 
2, in order to inform the regulations promulgated 
under this section. 
(2) CONSIDERATION.—In conducting the study 
under this subsection, the Comptroller General shall 
provide for stakeholder input and shall consider the 
following: 
(A) The implementation of the require-
ments established under such subchapter H 
with respect to—
(ii) the impact, feasibility, and cost ef-
fectiveness that additional requirements 
pursuant to this section would have on 
each pharmaceutical distribution supply 
chain sector and the public health; and 
(iii) the systems and processes needed 
to enhance interoperability among trading 
partners. 
(C) Risks to the security and privacy of 
data collected, maintained, or exchanged pursu-
ant to the requirements established under such 
subchapter H. 
(d) SMALL DISPENSERS.— 
(1) IN
GENERAL.—Not later than 10 years 
after the date of the enactment of this Act, the Sec-
retary shall enter into a contract with a private, 
independent consulting firm with relevant expertise 
to conduct a technology and software study on the 
feasibility of dispensers that have 25 or fewer full- 
time employees conducting interoperable, electronic 
tracing of prescription drug products at the package 
level. 
(2) CONDITION.—As a condition of the award 
of a contract under paragraph (1), the private inde-
pendent consulting firm awarded such contract shall
agree to consult with dispensers that have 25 or 
fewer full-time employees when conducting the study 
under such subparagraph. 
(3) STUDY
CONTENT.—The study conducted 
under paragraph (1) shall assess whether, with re-
spect to conducting interoperable, electronic tracing 
of prescription drug products at the package level, 
the necessary hardware and software— 
(A) is readily accessible to such dispensers; 
(B) is not prohibitively expensive to obtain, 
install, and maintain for such dispensers; and 
(C) can be integrated into business prac-
tices, such as interoperability with wholesale 
distributors, for such dispensers. 
(4) PUBLICATION.—The Secretary shall pub-
lish— 
(A) the statement of work for the study 
conducted under paragraph (1) for public com-
ment not later than 30 days before commencing 
the study; and 
(B) the final version of such study for pub-
lic comment not later than 30 days after such 
study is completed. 
(5) REPORT TO CONGRESS.—Not later than 30 
days after the date on which the study conducted
under paragraph (1) is completed, the Secretary 
shall submit to the Committee on Energy and Com-
merce of the House of Representatives and the Com-
mittee on Health, Education, Labor, and Pensions 
of the Senate, a report on the findings of the study 
and any recommendations to improve the technology 
and software available to small dispensers for pur-
poses of conducting electronic, interoperable tracing 
of prescription drug products at the package level. 
(6) PUBLIC
MEETING.—Not later than 180 
days after the date on which the study conducted 
under paragraph (1) is completed, the Secretary 
shall hold a public meeting at which members of the 
public, including stakeholders, may present their 
views on the study. 
(e) REPORTS.— 
(1) GAO REPORT.—Not later than 12 years 
after the date of the enactment of this Act, the 
Comptroller General shall submit to the Committee 
on Energy and Commerce of the House of Rep-
resentatives and the Committee on Health, Edu-
cation, Labor, and Pensions of the Senate a report 
on the results of the study conducted under sub-
section (c).
(2) FDA REPORT.—Not later than 12 years 
after the date of the enactment of this Act, the Sec-
retary shall submit to the Committee on Energy and 
Commerce of the House of Representatives and the 
Committee on Health, Education, Labor, and Pen-
sions of the Senate a report on the results of the 
pilot program conducted under subsection (a), tak-
ing into consideration— 
(A) the comments received during the pub-
lic meetings conducted under subsection (b); 
and 
(B) the results of the study conducted, and 
the public comments received during the public 
meeting held, under subsection (d). 
(f) ESTABLISHMENT
OF
ADDITIONAL
REQUIRE-
MENTS.— 
(1) IN GENERAL.—Notwithstanding any other 
provision of this Act, including the amendments 
made by this Act, not earlier than January 1, 2027, 
and not later than March 1, 2027, the Secretary 
shall issue proposed regulations that establish addi-
tional requirements to prevent a suspect product, il-
legitimate product, or a product that is counterfeit, 
stolen, diverted, or otherwise unfit for distribution
from entering into or being further distributed in 
the supply chain, including— 
(A) requirements related to the use of 
interoperable electronic systems and tech-
nologies for enhanced tracing of prescription 
drug product at the package level, which may 
include verification of the prescription drug 
product identifier of a package of prescription 
drug product and enhanced verification of sale-
able returns; 
(B) requirements related to the use of ad-
ditional prescription drug product identifiers or 
prescription drug product identifier technology 
that meet the standards developed under sec-
tion 582(a)(2) of the Federal Food, Drug, and 
Cosmetic Act, as added by section 2; 
(C) requirements related to the use of ag-
gregation, inference, and other methods, which 
shall permit the use of aggregation and infer-
ence for cases, pallets, totes, and other con-
tainers of aggregated prescription drug prod-
ucts by each sector of the pharmaceutical dis-
tribution supply chain, if determined to be nec-
essary components of the systems and tech-
nologies referred to in subparagraph (A); and
(D) other data transmission and mainte-
nance requirements and interoperability stand-
ards. 
(2) FLEXIBILITY.—The requirements described 
in paragraph (1) shall provide for flexibility for a 
member of the pharmaceutical supply chain, by— 
(A) with respect to dispensers, allowing a 
dispenser to enter into a written agreement 
with a third party, including an authorized 
wholesale distributor, under which— 
(i) the third party confidentially main-
tains any information required to be main-
tained under such requirements for the 
dispenser; and 
(ii) the dispenser maintains a copy of 
the written agreement and is not relieved 
of the other obligations of the dispenser 
under such requirements; 
(B) establishing a process by which an au-
thorized manufacturer, repackager, wholesale 
distributor, or dispenser may request a waiver 
from any such requirements if the Secretary de-
termines that such requirements would result in 
an undue economic hardship on the manufac-
turer, wholesale distributor, or dispenser;
(C) not requiring the adoption of specific 
business systems by a member of the pharma-
ceutical supply chain for the maintenance and 
transmission of prescription drug product trac-
ing data; and 
(D) prescribing alternative methods of 
compliance for small businesses, as specified in 
paragraph (4). 
(3) CONSIDERATIONS.—In issuing proposed 
regulations under paragraph (1), the Secretary shall 
consider— 
(A) the results of, and public comments re-
sulting from, the pilot project conducted under 
subsection (a); 
(B) the public meetings held under sub-
section (b) and public comments from such 
meetings; 
(C) the studies conducted under sub-
sections (c) and (d); 
(D) the reports submitted under subsection 
(e); 
(E) the public health benefits of such regu-
lations compared with the cost of compliance 
with the requirements contained in such regula-
tions, including with respect to entities of vary-
ing sizes and capabilities; and 
(F) the diversity of the pharmaceutical dis-
tribution supply chain by providing appropriate 
flexibility for each sector in the supply chain, 
including small businesses. 
(4) SMALL BUSINESS PROTECTION.—The Sec-
retary, taking into consideration the study conducted 
under paragraph (d), shall, if the Secretary deter-
mines that the requirements established pursuant to 
paragraph (1) would result in an undue economic 
hardship on small businesses, provide for alternative 
methods of compliance with any such requirement by 
small businesses, including— 
(A) establishing timelines for such compli-
ance (including compliance by dispensers with 
25 or fewer full-time employees) that do not im-
pose undue economic hardship for small busi-
nesses, including dispensers with respect to 
which the study concluded has insufficient 
hardware and software to conduct interoper-
able, electronic tracing of prescription drug 
products at the package level; and
(B) establishing a process by which a dis-
penser may request a waiver from any such re-
quirement. 
(5) REGULATIONS.—In issuing regulations to 
carry out this subsection, the Secretary shall— 
(A) issue a notice of proposed rulemaking 
that includes a copy of the proposed rule; 
(B) provide for a period of not less than 
60 days for comments on the proposed rule; 
and 
(C) provide for an effective date of the 
final rule that is 2 years after the date on 
which such final rule is published. 
(6) SUNSET.—The requirements regarding the 
provision and receipt of transaction history and 
transaction statements under section 582 of the 
Federal Food, Drug, and Cosmetic Act, as added by 
section 2, shall cease to be effective on the date on 
which the regulations issued under this section are 
fully implemented. 
(g) DEFINITIONS.—In this section: 
(1) The terms defined in section 581 of the 
Federal Food, Drug, and Cosmetic Act, as added by 
section 2, shall have the same meanings in this sec-
tion as such terms are given in such section 581.
(2) The term ‘‘Secretary’’ means the Secretary 
of Health and Human Services, acting through the 
Commissioner of Food and Drugs. 
SEC. 4. NATIONAL STANDARDS FOR WHOLESALE DISTRIBU-
TORS. 
(a) STANDARDS.—Chapter V of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 351 et seq.) is amend-
ed— 
(1) in section 503 (21 U.S.C. 353), by striking 
‘‘(e)(1)(A)’’ and all that follows through ‘‘(3) For 
the purposes of this subsection and subsection (d)— 
’’ and inserting the following: 
‘‘(e) For purposes of subsection (d)—’’; 
(2) in section 503(e) (21 U.S.C. 353(e)), by re-
designating subparagraphs (A) and (B) as para-
graphs (1) and (2), respectively; and 
(3) in subchapter H, as added by section 2, by 
adding at the end the following: 
‘‘SEC. 583. NATIONAL STANDARDS FOR WHOLESALE DIS-
TRIBUTORS. 
‘‘(a) STANDARDS.— 
‘‘(1) IN GENERAL.—The Secretary shall estab-
lish, by regulation, standards for the licensing of 
persons that make wholesale distributions.
‘‘(2) REQUIREMENTS.—The standards under 
paragraph (1) shall, with respect to wholesale dis-
tributions, include requirements for— 
‘‘(A) the storage and handling of drugs 
subject to section 503(b)(1), including facility 
requirements; 
‘‘(B) the establishment and maintenance of 
records of the distributions of such drugs; 
‘‘(C) the furnishing of a bond or other 
equivalent means of security in accordance with 
paragraph (3); 
‘‘(D) mandatory background checks and 
fingerprinting of facility managers or des-
ignated representatives; 
‘‘(E) the establishment and implementa-
tion of qualifications for key personnel; 
‘‘(F) the mandatory physical inspection of 
any facility to be used in wholesale distribution 
within a reasonable timeframe from the initial 
application for licensure of the wholesale dis-
tributor; and 
‘‘(G) in accordance with paragraph (5), the 
prohibition of certain persons from engaging in 
wholesale distribution.
‘‘(3) BOND OR OTHER SECURITY.—The require-
ments under paragraph (2)(C) shall provide for the 
following: 
‘‘(A) An applicant that is not a govern-
ment-owned-and-operated wholesale distributor, 
for the issuance or renewal of a wholesale dis-
tributor license, shall submit a surety bond of 
$100,000 or other equivalent means of security 
acceptable to the applicable licensing authority. 
‘‘(B) For purposes of subparagraph (A), 
the applicable licensing authority may accept a 
surety bond of less than $100,000 if the annual 
gross receipts of the previous tax year for the 
wholesale distributor is $10,000,000 or less, in 
which case the surety bond may not be less 
than $25,000. 
‘‘(C) If a wholesale distributor can provide 
evidence that it possesses the required bond in 
a State, the requirement for a bond in another 
State is waived. 
‘‘(4) INSPECTIONS.—To satisfy the inspection 
requirement under paragraph (2)(F), the Secretary 
may conduct the inspection, or may accept an in-
spection by—
‘‘(A) the government of the State in which 
the facility is located; or 
‘‘(B) a third-party accreditation or inspec-
tion service approved by the Secretary. 
‘‘(5) PROHIBITED PERSONS.—The requirements 
under paragraph (2) shall include requirements to 
prohibit a person from receiving or maintaining li-
censure for wholesale distribution if the person— 
‘‘(A) has been convicted of— 
‘‘(i) any felony for conduct relating to 
wholesale distribution; 
‘‘(ii) any felony violation of section 
301(i) or 301(k); or 
‘‘(iii) any felony violation of section 
1365 of title 18, United States Code, relat-
ing to prescription drug product tam-
pering; or 
‘‘(B) has engaged in a pattern of violating 
the requirements of this section that presents a 
threat of serious adverse health consequences or 
death to humans. 
‘‘(b) REPORTING BY LICENSED WHOLESALE DIS-
TRIBUTORS.— 
‘‘(1) ANNUAL
REPORT.—Beginning not later 
than 1 year after the date of the enactment of this