TITLE I—INSURANCE REFORM 
Sec. 101. Restoring application of antitrust laws to insurers. 
Sec. 102. Premiums and prohibitions on exclusions. 
Sec. 103. Guaranteed coverage availability and continuation. 
Sec. 104. Increasing the medical loss ratio. 
Sec. 105. Limitation of abortion funding. 
Sec. 106. Access limited to lawful residents. 
Sec. 107. Enforcement and treatment of Medicare, Medicaid, CHIP, and 
Tricare. 
TITLE II—MEDICARE AND MEDICAID REFORM 
Sec. 201. Medicare Advantage reforms. 
Sec. 202. Medicare disparities. 
Sec. 203. Establishment of Medicare operated prescription drug plan option. 
Sec. 204. Application to pharmacies and pharmacists of the eligible professional 
exemption from certain Medicare accreditation requirements. 
Sec. 205. Providing adequate pharmacy reimbursement. 
TITLE III—PRESCRIPTION DRUG IMPORTATION 
Sec. 301. Repeal of certain section regarding importation of prescription drugs. 
Sec. 302. Importation of prescription drugs; waiver of certain import restric-
tions. 
Sec. 303. Disposition of certain drugs denied admission into United States. 
Sec. 304. Wholesale distribution of drugs; statements regarding prior sale, pur-
chase, or trade. 
Sec. 305. Internet sales of prescription drugs. 
Sec. 306. Prohibiting payments to unregistered foreign pharmacies. 
Sec. 307. Importation exemption under Controlled Substances Import and Ex-
port Act. 
Sec. 308. Severability. 
TITLE IV—ADDITIONAL PRESCRIPTION DRUGS PROVISIONS 
Sec. 401. Disallowance of deduction for advertising and promotional expenses 
for prescription pharmaceuticals. 
Sec. 402. Integrity for Pharmacy benefit managers. 
Sec. 403. Price information under Medicaid. 
SEC. 2. DEFINITIONS. 
For purposes of titles I and IV: 
(1) HEALTH
BENEFITS
PLAN.—The term 
‘‘health benefits plan’’ means health insurance cov-
erage and an employment-based health plan and in-
cludes the public health insurance option. 
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(2) HEALTH BENEFITS PLAN OFFERING ENTI-
TY.—The term ‘‘health benefits plan offering entity’’ 
means, with respect to a health benefits plan that 
is— 
(A) a group health plan, the plan sponsor 
in relation to such group health plan, except 
that, in the case of a plan maintained jointly by 
1 or more employers and 1 or more employee 
organizations and with respect to which an em-
ployer is the primary source of financing, such 
term means such employer; 
(B) health insurance coverage, the health 
insurance issuer offering the coverage; 
(C) a non-Federal governmental plan, the 
State or political subdivision of a State (or 
agency or instrumentality of such State or sub-
division) which establishes or maintains such 
plan; or 
(D) a Federal governmental plan, the ap-
propriate Federal official. 
(3) TERMS
FROM
ERISA.—The terms ‘‘em-
ployer’’, ‘‘employer’’, ‘‘participant’’, ‘‘beneficiary’’, 
‘‘person’’, ‘‘plan sponsor’’, and ‘‘governmental plan’’ 
have the meaning given such terms in section 3 of 
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the Employee Retirement Income Security Act of 
1974. 
(4) TERMS
FROM
PHSA.—The terms ‘‘group 
health plan’’, ‘‘health insurance coverage’’, ‘‘health 
insurance issuer’’, ‘‘group health insurance cov-
erage’’, ‘‘applicable State authority’’, ‘‘Federal gov-
ernmental plan’’, ‘‘non-Federal governmental plan’’, 
‘‘State’’, ‘‘individual market’’, ‘‘large group market’’, 
and ‘‘small group market’’ have the meaning given 
such terms in section 2971 of the Public Health 
Service Act. 
(5) ADDITIONAL TERMS.— 
(A) FAMILY.—The term ‘‘family’’ means 
an individual and includes the individual’s de-
pendents 
(B) SECRETARY.—The term ‘‘Secretary’’ 
means the Secretary of Health and Human 
Services. 
(C) DEPENDENT.—The term ‘‘dependent’’ 
has the meaning given such term by the Sec-
retary and includes a spouse. 
(D) PLAN YEAR.—The term ‘‘plan year’’ 
means— 
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(i) with respect to an employment- 
based health plan, a plan year as specified 
under such plan; or 
(ii) with respect to a health benefits 
plan other than an employment-based 
health plan, a 12-month period as specified 
by the Secretary. 
TITLE I—INSURANCE REFORM 
SEC. 101. RESTORING APPLICATION OF ANTITRUST LAWS 
TO INSURERS. 
(a) IN GENERAL.—Section 3 of the Act of March 9, 
1945 (15 U.S.C. 1013), commonly known as the 
McCarran-Ferguson Act, is amended by adding at the end 
the following: 
‘‘(c)(1) Nothing contained in this Act shall modify, 
impair, or supersede the operation of any of the antitrust 
laws with respect to price fixing, market allocation, or mo-
nopolization (or attempting to monopolize) by a person en-
gaged in the business of insurance. 
‘‘(2) For purposes of this subsection the term ‘anti-
trust laws’ has the meaning given it in subsection (a) of 
the 1st section of the Clayton Act, except that such term 
includes section 5 of the Federal Trade Commission Act 
to the extent that such section 5 applies to unfair methods 
of competition.’’. 
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(b) RELATED PROVISION.—For purposes of section 
5 of the Federal Trade Commission Act (15 U.S.C. 45) 
to the extent such section applies to unfair methods of 
competition, section 3(c) of the McCarran-Ferguson Act 
shall apply with respect to the business of insurance with-
out regard to whether such business is carried on for prof-
it, notwithstanding the definition of ‘‘Corporation’’ con-
tained in section 4 of the Federal Trade Commission Act. 
(c) 
RELATED
PRESERVATION
OF
ANTITRUST 
LAWS.—Except as provided in subsections (a) and (b), 
nothing in this Act, or in the amendments made by this 
Act, shall be construed to modify, impair, or supersede 
the operation of any of the antitrust laws. For purposes 
of the preceding sentence, the term ‘‘antitrust laws’’ has 
the meaning given it in subsection (a) of the 1st section 
of the Clayton Act, except that it includes section 5 of 
the Federal Trade commission Act to the extent that such 
section 5 applies to unfair methods of competition. 
SEC. 102. PREMIUMS AND PROHIBITIONS ON EXCLUSIONS. 
(a) PREMIUM RATE VARIATION.—The premium rate 
charged for a health benefits plan may not vary except 
as follows: 
(1) By geographic premium rating area (as per-
mitted by State insurance regulators). 
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(2) By family enrollment (such as variations 
within categories and compositions of families) so 
long as the ratio of the premium for family enroll-
ment (or enrollments) to the premium for individual 
enrollment is uniform, as specified under State law. 
(b) PROHIBITION OF PREEXISTING CONDITION EX-
CLUSIONS.—A health benefits plan may not impose any 
preexisting condition exclusion (as defined in section 
2701(b)(1)(A) of the Public Health Service Act) or other-
wise impose any limit or condition on the coverage under 
the plan with respect to an individual or dependent based 
on any of the following: health status, medical condition, 
claims experience, receipt of health care, medical history, 
genetic information, evidence of insurability, disability, or 
source of injury (including conditions arising out of acts 
of domestic violence) or any similar factors. 
SEC. 103. GUARANTEED COVERAGE AVAILABILITY AND 
CONTINUATION. 
(a) AVAILABILITY OF COVERAGE.— 
(1) IN GENERAL.—Subject to paragraph (2), 
each health benefits plan issuer that offers health in-
surance coverage in the individual or group market 
in a State must accept every employer and indi-
vidual in the State that applies for such coverage. 
(2) ENROLLMENT.— 
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(A) RESTRICTION.—A health benefits plan 
issuer described in paragraph (1) may restrict 
enrollment in coverage described in such sub-
section to open or special enrollment periods. 
(B) ESTABLISHMENT.—A health benefits 
plan issuer described in paragraph (1) shall, in 
accordance with the regulations promulgated 
under subparagraph (C), establish special en-
rollment periods for qualifying events (under 
section 603 of the Employee Retirement Income 
Security Act of 1974). 
(C) REGULATIONS.—The Secretary shall 
promulgate regulations with respect to enroll-
ment periods under subparagraphs (A) and (B). 
(b) GUARANTEED RENEWABILITY OF COVERAGE.— 
If a health benefits plan issuer offers health insurance cov-
erage in the individual or group market, the issuer must 
renew or continue in force such coverage at the option of 
the plan sponsor or the individual, as applicable. 
(c) PROHIBITION
OF RESCISSION.—Rescissions of 
health insurance coverage offered by a health benefits plan 
issuer shall be prohibited except in cases of fraud as de-
fined in section 2712(b)(2) of the Public Health Service 
Act. 
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SEC. 104. INCREASING THE MEDICAL LOSS RATIO. 
Each health benefits plan issuer that offers health in-
surance coverage in the small or large group market shall 
provide that for any plan year in which the coverage has 
a medical loss ratio below 92 percent, the issuer shall pro-
vide for rebates to enrollees of the amount by which the 
issuer’s medical loss ratio is less than the level so speci-
fied. 
SEC. 105. LIMITATION OF ABORTION FUNDING. 
(a) IN GENERAL.—No Federal funds may be used 
to pay for any abortion or to cover any part of the costs 
of any health plan that includes coverage of abortion, ex-
cept in the case where a woman suffers from a physical 
disorder, physical injury, or physical illness that would, as 
certified by a physician, place the woman in danger of 
death unless an abortion is performed, including a life- 
endangering physical condition caused by or arising from 
the pregnancy itself, or unless the pregnancy is the result 
of an act of rape or incest. 
(b) OPTION TO PURCHASE SEPARATE SUPPLE-
MENTAL COVERAGE OR PLAN.—Nothing in this section 
shall be construed as prohibiting any nonfederal entity (in-
cluding an individual, a State government, and a local gov-
ernment) from purchasing separate supplemental coverage 
for abortions for which funding is prohibited under this 
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section, or a plan that includes such abortions, so long 
as— 
(1) such coverage or plan is paid for entirely 
using only nonfederal funds; and 
(2) such coverage or plan is not purchased 
using nonfederal funds that are required to receive 
a federal payment, including a State’s or locality’s 
contribution of Medicaid matching funds. 
(c) OPTION TO OFFER SEPARATE SUPPLEMENTAL 
COVERAGE OR PLAN.—Nothing in this section shall re-
strict any nonfederal health benefits plan offering entity 
from offering separate supplemental coverage for abor-
tions for which funding is prohibited under this section, 
or a plan that includes such abortions, so long as— 
(1) premiums for such separate supplemental 
coverage or plan are paid for entirely with non-
federal funds; and 
(2) administrative costs and all services offered 
through such supplemental coverage or plan are paid 
for using only premiums collected for such coverage 
or plan. 
SEC. 106. ACCESS LIMITED TO LAWFUL RESIDENTS. 
(a) SALE OF INSURANCE.—A health benefits plan 
issuer may not sell health insurance coverage under a 
health benefits plan, if, at the time of such sale, a partici-
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pant or beneficiary of such plan is not, or is not reasonably 
expected to be for the entire period for which enrollment 
is sought, a citizen or national of the United States or 
an alien lawfully present in the United States. 
(b) ENROLLMENT.—A health benefits plan issuer 
may not enroll a participant or beneficiary in a health ben-
efits plan, if, at the time of such enrollment, such partici-
pant or beneficiary is not, or is not reasonably expected 
to be for the entire period for which enrollment is sought, 
a citizen or national of the United States or an alien law-
fully present in the United States. 
SEC. 107. ENFORCEMENT AND TREATMENT OF MEDICARE, 
MEDICAID, CHIP, AND TRICARE. 
(a) ENFORCEMENT.—For purposes of enforcement, 
the provisions of this title shall be treated as if included 
such provisions were included in title XXVII of the Public 
Health Service Act, title VII of the Employee Retirement 
Income Security Act of 1974, and chapter 89 of title 5, 
United States Code. 
(b) TREATMENT OF MEDICARE, MEDICAID, CHIP, 
AND TRICARE.—The provisions of sections 102, 103, and 
104 shall not apply to the Medicare, Medicaid, and CHIP 
programs under titles XVIII, XIX, and XXI of the Social 
Security Act, respectively, or to Tricare. 
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TITLE II—MEDICARE AND 
MEDICAID REFORM 
SEC. 201. MEDICARE ADVANTAGE REFORMS. 
(a) PHASE-IN OF PAYMENT BASED ON FEE-FOR- 
SERVICE COSTS.—Section 1853 of the Social Security Act 
(42 U.S.C. 1395w–23) is amended— 
(1) in subsection (j)(1)(A)— 
(A) by striking ‘‘beginning with 2007’’ and 
inserting ‘‘for 2007, 2008, 2009, and 2010’’; 
and— 
(B) by inserting after ‘‘(k)(1)’’ the fol-
lowing: ‘‘, or, beginning with 2011, 1⁄12 of the 
blended benchmark amount determined under 
subsection (n)(1)’’; and 
(2) by adding at the end the following new sub-
section: 
‘‘(n) DETERMINATION
OF BLENDED BENCHMARK 
AMOUNT.— 
‘‘(1) IN GENERAL.—For purposes of subsection 
(j), subject to paragraphs (3) and (4), the term 
‘blended benchmark amount’ means for an area— 
‘‘(A) for 2011 the sum of— 
‘‘(i) 2⁄3 of the applicable amount (as 
defined in subsection (k)) for the area and 
year; and 
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‘‘(ii) 1⁄3 of the amount specified in 
paragraph (2) for the area and year; 
‘‘(B) for 2012 the sum of— 
‘‘(i) 1⁄3 of the applicable amount for 
the area and year; and 
‘‘(ii) 2⁄3 of the amount specified in 
paragraph (2) for the area and year; and 
‘‘(C) for a subsequent year the amount 
specified in paragraph (2) for the area and 
year. 
‘‘(2) SPECIFIED AMOUNT.—The amount speci-
fied in this paragraph for an area and year is the 
amount specified in subsection (c)(1)(D)(i) for the 
area and year adjusted (in a manner specified by the 
Secretary) to take into account the phase-out in the 
indirect costs of medical education from capitation 
rates described in subsection (k)(4). 
‘‘(3) FEE-FOR-SERVICE
PAYMENT
FLOOR.—In 
no case shall the blended benchmark amount for an 
area and year be less than the amount specified in 
paragraph (2). 
‘‘(4) EXCEPTION FOR PACE PLANS.—This sub-
section shall not apply to payments to a PACE pro-
gram under section 1894.’’. 
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(b) ELIMINATION OF MEDICARE ADVANTAGE RE-
GIONAL STABILIZATION PLAN.— 
(1) IN GENERAL.—Section 1858 of the Social 
Security Act (42 U.S.C. 1395w–27a) is amended by 
striking subsection (e). 
(2) TRANSITION.—Any amount contained in the 
MA Regional Plan Stabilization Fund as of the date 
of the enactment of this Act shall be transferred to 
the Federal Supplementary Medical Insurance Trust 
Fund. 
SEC. 202. MEDICARE DISPARITIES. 
(a) FLOOR
ON
THE MEDICARE HOSPITAL AREA 
WAGE INDEX.— 
(1) IN
GENERAL.—Section 1886(d)(3)(E) of 
the 
Social 
Security 
Act 
(42 
U.S.C. 
1395ww(d)(3)(E)) is amended— 
(A) in clause (i), by striking ‘‘clause (ii)’’ 
and inserting ‘‘clause (ii) or (iii)’’; and— 
(B) by adding at the end of the following 
new clause: 
‘‘(iii) 
FLOOR
ON
AREA
WAGE 
INDEX.—For discharges occurring on or 
after October 1, 2010, the area wage index 
applicable under this subparagraph to any 
hospital may not be less than 1.00.’’. 
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(b) INCREASE
THE
PHYSICIAN
FEE
SCHEDULE 
PRACTICE EXPENSE GEOGRAPHIC ADJUSTMENT.—Sec-
tion 1848(e)(1) is amended by adding after subparagraph 
(E) the following new subparagraph: 
‘‘(F) FLOOR FOR PRACTICE EXPENSE GEO-
GRAPHIC INDEX.—After calculating the practice 
expense geographic index in subparagraph 
(A)(i), for purposes of payment for services fur-
nished on or after October 1, 2010, the Sec-
retary shall increase the practice expense geo-
graphic index to 1.00 for any locality for which 
such practice expense geographic index is less 
than 1.00.’’. 
SEC. 203. ESTABLISHMENT OF MEDICARE OPERATED PRE-
SCRIPTION DRUG PLAN OPTION. 
(a) IN GENERAL.—Subpart 2 of part D of the Social 
Security Act is amended by inserting after section 1860D– 
11 (42 U.S.C. 1395w–111) the following new section: 
‘‘MEDICARE OPERATED PRESCRIPTION DRUG PLAN 
OPTION 
‘‘SEC. 1860D–11A. (a) IN
GENERAL.—Notwith-
standing any other provision of this part, for each year 
(beginning with 2011), in addition to any plans offered 
under section 1860D–11, the Secretary— 
‘‘(1) shall offer one or more Medicare operated 
prescription drug plans (as defined in subsection (c)) 
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with a service area that consists of the entire United 
States; and 
‘‘(2) shall enter into negotiations, in accordance 
with subsection (b), with pharmaceutical manufac-
turers to reduce the purchase cost of covered part D 
drugs for eligible part D individuals who enroll in 
such a plan. 
‘‘(b) 
NEGOTIATIONS.—Notwithstanding 
section 
1860D–11(i), for purposes of offering a medicare operated 
prescription drug plan under this section, the Secretary 
shall negotiate with pharmaceutical manufacturers with 
respect to the purchase price of covered part D drugs for 
a Medicare operated prescription drug plan and shall en-
courage the use of more affordable therapeutic equivalents 
to the extent such practices do not override medical neces-
sity as determined by the prescribing physician. To the 
extent practicable and consistent with the previous sen-
tence, the Secretary shall implement strategies similar to 
those used by other Federal purchasers of prescription 
drugs, and other strategies, including the use of a for-
mulary and formulary incentives in subsection (e), to re-
duce the purchase cost of covered part D drugs. 
‘‘(c) MEDICARE OPERATED PRESCRIPTION DRUG 
PLAN DEFINED.—For purposes of this part, the term 
‘medicare operated prescription drug plan’ means a pre-
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scription drug plan that offers qualified prescription drug 
coverage and access to negotiated prices described in sec-
tion 1860D–2(a)(1)(A). Such a plan may offer supple-
mental prescription drug coverage in the same manner as 
other qualified prescription drug coverage offered by other 
prescription drug plans. 
‘‘(d) MONTHLY BENEFICIARY PREMIUM.— 
‘‘(1) QUALIFIED
PRESCRIPTION
DRUG
COV-
ERAGE.—The monthly beneficiary premium for 
qualified prescription drug coverage and access to 
negotiated prices described in section 1860D– 
2(a)(1)(A) to be charged under a medicare operated 
prescription drug plan shall be uniform nationally. 
Such premium for months in 2010 and each suc-
ceeding year shall be based on the average monthly 
per capita actuarial cost of offering the medicare op-
erated prescription drug plan for the year involved, 
including administrative expenses. 
‘‘(2) SUPPLEMENTAL PRESCRIPTION DRUG COV-
ERAGE.—Insofar as a medicare operated prescrip-
tion drug plan offers supplemental prescription drug 
coverage, the Secretary may adjust the amount of 
the premium charged under paragraph (1). 
‘‘(e) USE OF A FORMULARY AND FORMULARY INCEN-
TIVES.— 
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‘‘(1) IN GENERAL.—With respect to the oper-
ation of a medicare operated prescription drug plan, 
the Secretary shall establish and apply a formulary 
(and may include formulary incentives described in 
paragraph (2)(C)(ii)) in accordance with this sub-
section in order to— 
‘‘(A) increase patient safety; 
‘‘(B) increase appropriate use and reduce 
inappropriate use of drugs; and 
‘‘(C) reward value. 
‘‘(2) DEVELOPMENT OF INITIAL FORMULARY.— 
‘‘(A) IN
GENERAL.—In selecting covered 
part D drugs for inclusion in a formulary, the 
Secretary shall consider clinical benefit and 
price of such drug. 
‘‘(B) ROLE OF AHRQ.—The Director of the 
Agency for Healthcare Research and Quality 
shall be responsible for assessing the clinical 
benefit of covered part D drugs and making 
recommendations to the Secretary regarding 
which drugs should be included in the for-
mulary. In conducting such assessments and 
making such recommendations, the Director 
shall— 
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‘‘(i) consider safety concerns, includ-
ing those identified by the Federal Food 
and Drug Administration; 
‘‘(ii) use available data and evalua-
tions, with priority given to randomized 
controlled trials, to examine clinical effec-
tiveness, comparative effectiveness, safety, 
and enhanced compliance with a drug regi-
men; 
‘‘(iii) use the same classes of drugs 
developed by United States Pharmacopeia 
for this part; 
‘‘(iv) consider evaluations made by— 
‘‘(I) the Director under section 
1013 of Medicare Prescription Drug, 
Improvement, and Modernization Act 
of 2003; 
‘‘(II) other Federal entities, such 
as the Secretary of Veterans Affairs; 
and 
‘‘(III) other private and public 
entities, such as the Drug Effective-
ness Review Project and Medicaid 
programs; and 
‘‘(v) recommend to the Secretary— 
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‘‘(I) have a lower cost and pro-
vide a greater clinical benefit than 
other drugs; 
‘‘(II) have a lower cost than 
other drugs with same or similar clin-
ical benefit; and 
‘‘(III) drugs that have the same 
cost but provide greater clinical ben-
efit than other drugs. 
‘‘(ii) FORMULARY
INCENTIVES.—The 
formulary incentives under clause (i) may 
be in the form of one or more of the fol-
lowing: 
‘‘(I) Tiered copayments. 
‘‘(II) Reference pricing. 
‘‘(III) Prior authorization. 
‘‘(IV) Step therapy. 
‘‘(V) Medication therapy manage-
ment. 
‘‘(VI) Generic drug substitution. 
‘‘(iii) FLEXIBILITY.—In applying such 
formulary incentives the Secretary may de-
cide not to impose any cost-sharing for a 
covered part D drug for which— 
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‘‘(I) the elimination of cost shar-
ing would be expected to increase 
compliance with a drug regimen; and 
‘‘(II) compliance would be ex-
pected to produce savings under part 
A or B or both. 
‘‘(3) LIMITATIONS
ON
FORMULARY.—In any 
formulary established under this subsection, the for-
mulary may not be changed during a year, except— 
‘‘(A) to add a generic version of a covered 
part D drug that entered the market; 
‘‘(B) to remove a drug for which a safety 
problem is found; and 
‘‘(C) to add a drug that the Secretary 
identifies as a drug which treats a condition for 
which there has not previously been a treatment 
option or for which a clear and significant ben-
efit has been demonstrated over other covered 
part D drugs. 
‘‘(4) ADDING
DRUGS
TO
THE
INITIAL
FOR-
MULARY.— 
‘‘(A) USE OF ADVISORY COMMITTEE.—The 
Secretary shall establish and appoint an advi-
sory committee (in this paragraph referred to 
as the ‘advisory committee’)— 
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‘‘(i) to review petitions from drug 
manufacturers, health care provider orga-
nizations, patient groups, and other enti-
ties for inclusion of a drug in, or other 
changes to, such formulary; and 
‘‘(ii) to recommend any changes to the 
formulary established under this sub-
section. 
‘‘(B) COMPOSITION.—The advisory com-
mittee shall be composed of 9 members and 
shall include representatives of physicians, 
pharmacists, and consumers and others with ex-
pertise in evaluating prescription drugs. The 
Secretary shall select members based on their 
knowledge of pharmaceuticals and the Medicare 
population. Members shall be deemed to be spe-
cial Government employees for purposes of ap-
plying the conflict of interest provisions under 
section 208 of title 18, United States Code, and 
no waiver of such provisions for such a member 
shall be permitted. 
‘‘(C) CONSULTATION.—The advisory com-
mittee shall consult, as necessary, with physi-
cians who are specialists in treating the disease 
for which a drug is being considered. 
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‘‘(D) REQUEST FOR STUDIES.—The advi-
sory committee may request the Agency for 
Healthcare Research and Quality or an aca-
demic or research institution to study and make 
a report on a petition described in subpara-
graph (A)(ii) in order to assess— 
‘‘(i) clinical effectiveness; 
‘‘(ii) comparative effectiveness; 
‘‘(iii) safety; and 
‘‘(iv) enhanced compliance with a 
drug regimen. 
‘‘(E) RECOMMENDATIONS.—The advisory 
committee shall make recommendations to the 
Secretary regarding— 
‘‘(i) whether a covered part D drug is 
found to provide a greater clinical benefit, 
including fewer safety concerns or less risk 
of side-effects, than another drug in the 
same class that is currently included in the 
formulary and should be included in the 
formulary; 
‘‘(ii) whether a covered part D drug is 
found to provide less clinical benefit, in-
cluding greater safety concerns or a great-
er risk of side-effects, than another drug in 
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the same class that is currently included in 
the formulary and should not be included 
in the formulary; and 
‘‘(iii) whether a covered part D drug 
has the same or similar clinical benefit to 
a drug in the same class that is currently 
included in the formulary and whether the 
drug should be included in the formulary. 
‘‘(F) LIMITATIONS ON REVIEW OF MANU-
FACTURER
PETITIONS.—The advisory com-
mittee shall not review a petition of a drug 
manufacturer under subparagraph (A)(ii) with 
respect to a covered part D drug unless the pe-
tition is accompanied by the following: 
‘‘(i) Raw data from clinical trials on 
the safety and effectiveness of the drug. 
‘‘(ii) Any data from clinical trials con-
ducted using active controls on the drug or 
drugs that are the current standard of 
care. 
‘‘(iii) Any available data on compara-
tive effectiveness of the drug. 
‘‘(iv) Any other information the Sec-
retary requires for the advisory committee 
to complete its review. 
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‘‘(G) RESPONSE TO RECOMMENDATIONS.— 
The Secretary shall review the recommenda-
tions of the advisory committee and if the Sec-
retary accepts such recommendations the Sec-
retary shall modify the formulary established 
under this subsection accordingly. Nothing in 
this section shall preclude the Secretary from 
adding to the formulary a drug for which the 
Director of the Agency for Healthcare Research 
and Quality or the advisory committee has not 
made a recommendation. 
‘‘(H) NOTICE
OF
CHANGES.—The Sec-
retary shall provide timely notice to bene-
ficiaries and health professionals about changes 
to the formulary or formulary incentives. 
‘‘(f) INFORMING
BENEFICIARIES.—The Secretary 
shall take steps to inform beneficiaries about the avail-
ability of a Medicare operated drug plan or plans including 
providing information in the annual handbook distributed 
to all beneficiaries and adding information to the official 
public Medicare website related to prescription drug cov-
erage available through this part. 
‘‘(g) APPLICATION OF ALL OTHER REQUIREMENTS 
FOR PRESCRIPTION DRUG PLANS.—Except as specifically 
provided in this section, any Medicare operated drug plan 
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shall meet the same requirements as apply to any other 
prescription drug plan, including the requirements of sec-
tion 1860D–4(b)(1) relating to assuring pharmacy ac-
cess).’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 1860D–3(a) of the Social Security 
Act (42 U.S.C. 1395w–103(a)) is amended by add-
ing at the end the following new paragraph: 
‘‘(4) AVAILABILITY OF THE MEDICARE OPER-
ATED PRESCRIPTION DRUG PLAN.—A medicare oper-
ated prescription drug plan (as defined in section 
1860D–11A(c)) shall be offered nationally in accord-
ance with section 1860D–11A.’’. 
(2)(A) Section 1860D–3 of the Social Security 
Act (42 U.S.C. 1395w–103) is amended by adding 
at the end the following new subsection: 
‘‘(c) PROVISIONS ONLY APPLICABLE IN 2006, 2007, 
2008, AND 2009.—The provisions of this section shall only 
apply with respect to 2006, 2007, 2008, and 2009.’’. 
(B) Section 1860D–11(g) of such Act (42 
U.S.C. 1395w–111(g)) is amended by adding at the 
end the following new paragraph: 
‘‘(8) NO
AUTHORITY
FOR
FALLBACK
PLANS 
AFTER 2009.—A fallback prescription drug plan shall 
not be available after December 31, 2009.’’. 
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(3) Section 1860D–13(c)(3) of such Act (42 
U.S.C. 1395w–113(c)(3)) is amended— 
(A) in the heading, by inserting ‘‘AND 
MEDICARE
OPERATED
PRESCRIPTION
DRUG 
PLANS’’ after ‘‘FALLBACK PLANS’’; and 
(B) by inserting ‘‘or a medicare operated 
prescription drug plan’’ after ‘‘a fallback pre-
scription drug plan’’. 
(4) Section 1860D–16(b)(1) of such Act (42 
U.S.C.1395w–116(b)(1)) is amended— 
(A) in subparagraph (C), by striking 
‘‘and’’ after the semicolon at the end; 
(B) in subparagraph (D), by striking the 
period at the end and inserting ‘‘; and’’; and 
(C) by adding at the end the following new 
subparagraph: 
‘‘(E) payments for expenses incurred with 
respect to the operation of medicare operated 
prescription drug plans under section 1860D– 
11A.’’. 
(5) Section 1860D–41(a) of such Act (42 
U.S.C. 1395w–151(a)) is amended by adding at the 
end the following new paragraph: 
‘‘(19) MEDICARE
OPERATED
PRESCRIPTION 
DRUG PLAN.—The term ‘medicare operated prescrip-
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tion drug plan’ has the meaning given such term in 
section 1860D–11A(c).’’. 
(c) IMPROVED APPEALS PROCESS UNDER THE MEDI-
CARE OPERATED PRESCRIPTION DRUG PLAN.—Section 
1860D–4(h) of the Social Security Act (42 U.S.C. 1305w– 
104(h)) is amended by adding at the end the following 
new paragraph: 
‘‘(4) APPEALS PROCESS FOR MEDICARE OPER-
ATED PRESCRIPTION DRUG PLAN.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
develop a well-defined process for appeals for 
denials of benefits under this part under the 
Medicare operated prescription drug plan. Such 
process shall be efficient, impose minimal ad-
ministrative burdens, and ensure the timely 
procurement of non-formulary drugs or exemp-
tion from formulary incentives when medically 
necessary. Medical necessity shall be based on 
professional medical judgment, the medical con-
dition of the beneficiary, and other medical evi-
dence. Such appeals process shall include— 
‘‘(i) an initial review and determina-
tion made by the Secretary; and 
‘‘(ii) for appeals denied during the ini-
tial review and determination, the option of 
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an external review and determination by 
an independent entity selected by the Sec-
retary. 
‘‘(B) CONSULTATION IN DEVELOPMENT OF 
PROCESS.—In developing the appeals process 
under subparagraph (A), the Secretary shall 
consult with consumer and patient groups, as 
well as other key stakeholders to ensure the 
goals described in subparagraph (A) are 
achieved.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on January 1, 2011. 
SEC. 204. APPLICATION TO PHARMACIES AND PHAR-
MACISTS OF THE ELIGIBLE PROFESSIONAL 
EXEMPTION FROM CERTAIN MEDICARE AC-
CREDITATION REQUIREMENTS. 
Section 1834(a)(20)(F)(ii) of the Social Security Act 
(42 U.S.C. 1395m(a)(20)(F)(ii)) is amended— 
(1) by inserting ‘‘pharmacies, and phar-
macists,’’ after ‘‘eligible professionals (as defined in 
section 1848(k)(3)(B)),’’; and 
(2) by inserting ‘‘, pharmacies, pharmacists,’’ 
after ‘‘such professionals’’ each place it appears. 
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SEC. 205. PROVIDING ADEQUATE PHARMACY REIMBURSE-
MENT. 
(a) PHARMACY REIMBURSEMENT LIMITS.— 
(1) IN GENERAL.—Section 1927(e) of the So-
cial Security Act (42 U.S.C. 1396r–8(e)) is amend-
ed— 
(A) in paragraph (4), by striking ‘‘(or, ef-
fective January 1, 2007, two or more)’’; and 
(B) by striking paragraph (5) and insert-
ing the following: 
‘‘(5) USE OF AMP IN UPPER PAYMENT LIM-
ITS.—The Secretary shall calculate the Federal 
upper reimbursement limit established under para-
graph (4) as no less than 300 percent of the weight-
ed average (determined on the basis of utilization) of 
the most recently reported monthly average manu-
facturer prices for pharmaceutically and therapeuti-
cally equivalent multiple source drug products that 
are available for purchase by retail community phar-
macies on a nationwide basis. The Secretary shall 
implement a process using rolling averages to cal-
culate average manufacturer prices. Such process 
shall be similar to the process used in determining 
the average sales price of a drug or biological under 
section 1847A(c)(5)(A).’’. 
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(2) DEFINITION OF AMP.—Section 1927(k)(1) 
of such Act (42 U.S.C. 1396r–8(k)(1)) is amend-
ed— 
(A) in subparagraph (A), by striking ‘‘by’’ 
and all that follows through the period and in-
serting ‘‘by—’’ 
‘‘(i) wholesalers for drugs distributed 
to retail community pharmacies; and 
‘‘(ii) retail community pharmacies 
that purchase drugs directly from the man-
ufacturer.’’; 
(B) by striking subparagraph (B) and in-
serting the following: 
‘‘(B) EXCLUSION OF CUSTOMARY PROMPT 
PAY DISCOUNTS AND OTHER PAYMENTS.— 
‘‘(i) IN GENERAL.—The average man-
ufacturer price for a covered outpatient 
drug shall exclude— 
‘‘(I) customary prompt pay dis-
counts extended to wholesalers; 
‘‘(II) bona fide service fees paid 
by manufacturers to wholesalers or re-
tail community pharmacies, including 
(but not limited to) distribution serv-
ice fees, inventory management fees, 
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product stocking allowances, and fees 
associated with administrative services 
agreements and patient care programs 
(such as medication compliance pro-
grams and patient education pro-
grams); 
‘‘(III) reimbursement by manu-
facturers for recalled, damaged, ex-
pired, or otherwise unsalable returned 
goods, including (but not limited to) 
reimbursement for the cost of the 
goods and any reimbursement of costs 
associated with return goods handling 
and processing, reverse logistics, and 
drug destruction; and 
‘‘(IV) payments received from, 
and rebates or discounts provided to, 
pharmacy benefit managers, managed 
care organizations, health mainte-
nance organizations, insurers, hos-
pitals, clinics, mail order pharmacies, 
long term care providers, manufactur-
ers, or any other entity that does not 
conduct business as a wholesaler or a 
retail community pharmacy. 
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‘‘(ii) INCLUSION
OF
OTHER
DIS-
COUNTS
AND
PAYMENTS.—Notwith-
standing clause (i), any other discounts, 
rebates, payments, or other financial trans-
actions that are received by, paid by, or 
passed through to, retail community phar-
macies shall be included in the average 
manufacturer price for a covered out-
patient drug.’’; and 
(C) in subparagraph (C), by striking ‘‘the 
retail pharmacy class of trade’’ and inserting 
‘‘retail community pharmacies’’. 
(3) DEFINITION
OF
A
MULTIPLE
SOURCE 
DRUG.—Section 1927(k)(7) of such Act (42 U.S.C. 
1396r–8(k)(7)) is amended— 
(A) in subparagraph (A)(i)(III), by strik-
ing ‘‘the State’’ and inserting ‘‘the United 
States’’; and 
(B) in subparagraph (C)— 
(i) in clause (i), by inserting ‘‘and’’ 
after the semicolon; 
(ii) in clause (ii), by striking ‘‘; and’’ 
and inserting a period; and 
(iii) by striking clause (iii). 
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(4) DEFINITION OF RETAIL COMMUNITY PHAR-
MACY.—Section 1927(k) of such Act (42 U.S.C. 
1396r–8(k)) is amended by adding at the end the 
following new paragraphs: 
‘‘(10) RETAIL
COMMUNITY
PHARMACY.—The 
term ‘retail community pharmacy’ means an inde-
pendent pharmacy, a chain pharmacy, a super-
market pharmacy, or a mass merchandiser phar-
macy that is licensed as a pharmacy by the State 
and that dispenses medications to the general public 
at retail prices. Such term does not include a phar-
macy that dispenses prescription medications to pa-
tients primarily through the mail, nursing home 
pharmacies, long-term care facility pharmacies, hos-
pital pharmacies, clinics, charitable or not-for-profit 
pharmacies, government pharmacies, or pharmacy 
benefit managers. 
‘‘(11) WHOLESALER.—The term ‘wholesaler’ 
means a drug wholesaler that is engaged in whole-
sale distribution of prescription drugs to retail com-
munity pharmacies, including (but not limited to) 
manufacturers, repackers, distributors, own-label 
distributors, private-label distributors, jobbers, bro-
kers, warehouses (including manufacturer’s and dis-
tributor’s warehouses, chain drug warehouses, and 
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wholesale drug warehouses) independent wholesale 
drug traders, and retail community pharmacies that 
conduct wholesale distributions.’’. 
TITLE III—PRESCRIPTION DRUG 
IMPORTATION 
SEC. 301. REPEAL OF CERTAIN SECTION REGARDING IM-
PORTATION OF PRESCRIPTION DRUGS. 
Chapter VIII of the Federal Food, Drug, and Cos-
metic Act (21 U.S.C. 381 et seq.) is amended by striking 
section 804. 
SEC. 302. IMPORTATION OF PRESCRIPTION DRUGS; WAIVER 
OF CERTAIN IMPORT RESTRICTIONS. 
(a) IN GENERAL.—Chapter VIII of the Federal 
Food, Drug, and Cosmetic Act (21 U.S.C. 381 et seq.), 
as amended by section 301, is further amended by insert-
ing after section 803 the following: 
‘‘SEC. 804. COMMERCIAL AND PERSONAL IMPORTATION OF 
PRESCRIPTION DRUGS. 
‘‘(a) IMPORTATION OF PRESCRIPTION DRUGS.— 
‘‘(1) IN GENERAL.—In the case of qualifying 
drugs imported or offered for import into the United 
States from registered exporters or by registered im-
porters— 
‘‘(A) the limitation on importation that is 
established in section 801(d)(1) is waived; and 
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‘‘(B) the standards referred to in section 
801(a) regarding admission of the drugs are 
subject to subsection (g) of this section (includ-
ing with respect to qualifying drugs to which 
section 801(d)(1) does not apply). 
‘‘(2) IMPORTERS.—A qualifying drug may not 
be imported under paragraph (1) unless— 
‘‘(A) the drug is imported by a pharmacy, 
group of pharmacies, or a wholesaler that is a 
registered importer; or 
‘‘(B) the drug is imported by an individual 
for personal use or for the use of a family mem-
ber of the individual (not for resale) from a reg-
istered exporter. 
‘‘(3) RULE
OF
CONSTRUCTION.—This section 
shall apply only with respect to a drug that is im-
ported or offered for import into the United 
States— 
‘‘(A) by a registered importer; or 
‘‘(B) from a registered exporter to an indi-
vidual. 
‘‘(4) DEFINITIONS.— 
‘‘(A) 
REGISTERED
EXPORTER; 
REG-
ISTERED IMPORTER.—For purposes of this sec-
tion: 
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‘‘(i) The term ‘registered exporter’ 
means an exporter for which a registration 
under subsection (b) has been approved 
and is in effect. 
‘‘(ii) The term ‘registered importer’ 
means a pharmacy, group of pharmacies, 
or a wholesaler for which a registration 
under subsection (b) has been approved 
and is in effect. 
‘‘(iii) The term ‘registration condition’ 
means a condition that must exist for a 
registration under subsection (b) to be ap-
proved. 
‘‘(B) QUALIFYING DRUG.—For purposes of 
this section, the term ‘qualifying drug’ means a 
drug for which there is a corresponding U.S. 
label drug. 
‘‘(C) U.S. LABEL DRUG.—For purposes of 
this section, the term ‘U.S. label drug’ means 
a prescription drug that— 
‘‘(i) with respect to a qualifying drug, 
has the same active ingredient or ingredi-
ents, route of administration, dosage form, 
and strength as the qualifying drug; 
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‘‘(ii) with respect to the qualifying 
drug, is manufactured by or for the person 
that manufactures the qualifying drug; 
‘‘(iii) 
is 
approved 
under 
section 
505(c); and 
‘‘(iv) is not— 
‘‘(I) a controlled substance, as 
defined in section 102 of the Con-
trolled Substances Act (21 U.S.C. 
802); 
‘‘(II) a biological product, as de-
fined in section 351 of the Public 
Health Service Act (42 U.S.C. 262), 
including— 
‘‘(aa) a therapeutic DNA 
plasmid product; 
‘‘(bb) a therapeutic synthetic 
peptide product; 
‘‘(cc) a monoclonal antibody 
product for in vivo use; and 
‘‘(dd) a therapeutic recom-
binant DNA-derived product; 
‘‘(III) an infused drug, including 
a peritoneal dialysis solution; 
‘‘(IV) an injected drug; 
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‘‘(V) a drug that is inhaled dur-
ing surgery; 
‘‘(VI) a drug that is the listed 
drug referred to in 2 or more abbre-
viated new drug applications under 
which the drug is commercially mar-
keted; or 
‘‘(VII) a sterile opthlamic drug 
intended for topical use on or in the 
eye. 
‘‘(D) OTHER DEFINITIONS.—For purposes 
of this section: 
‘‘(i)(I) The term ‘exporter’ means a 
person that is in the business of exporting 
a drug to individuals in the United States 
from Canada or from a permitted country 
designated by the Secretary under sub-
clause (II), or that, pursuant to submitting 
a registration under subsection (b), seeks 
to be in such business. 
‘‘(II) The Secretary shall designate a 
permitted country under subparagraph (E) 
(other than Canada) as a country from 
which an exporter may export a drug to in-
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dividuals in the United States if the Sec-
retary determines that— 
‘‘(aa) the country has statutory 
or regulatory standards that are 
equivalent to the standards in the 
United States and Canada with re-
spect to— 
‘‘(AA) the training of phar-
macists; 
‘‘(BB) the practice of phar-
macy; and 
‘‘(CC) the protection of the 
privacy of personal medical infor-
mation; and 
‘‘(bb) the importation of drugs to 
individuals in the United States from 
the country will not adversely affect 
public health. 
‘‘(ii) The term ‘importer’ means a 
pharmacy, a group of pharmacies, or a 
wholesaler that is in the business of im-
porting a drug into the United States or 
that, pursuant to submitting a registration 
under subsection (b), seeks to be in such 
business. 
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‘‘(iii) The term ‘pharmacist’ means a 
person licensed by a State to practice 
pharmacy, including the dispensing and 
selling of prescription drugs. 
‘‘(iv) The term ‘pharmacy’ means a 
person that— 
‘‘(I) is licensed by a State to en-
gage in the business of selling pre-
scription drugs at retail; and 
‘‘(II) employs 1 or more phar-
macists. 
‘‘(v) The term ‘prescription drug’ 
means a drug that is described in section 
503(b)(1). 
‘‘(vi) The term ‘wholesaler’— 
‘‘(I) means a person licensed as a 
wholesaler or distributor of prescrip-
tion drugs in the United States under 
section 503(e)(2)(A); and 
‘‘(II) does not include a person 
authorized to import drugs under sec-
tion 801(d)(1). 
‘‘(E) PERMITTED
COUNTRY.—The term 
‘permitted country’ means— 
‘‘(i) Australia; 
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‘‘(ii) Canada; 
‘‘(iii) a member country of the Euro-
pean Union, but does not include a mem-
ber country with respect to which— 
‘‘(I) the country’s Annex to the 
Treaty of Accession to the European 
Union 2003 includes a transitional 
measure for the regulation of human 
pharmaceutical products that has not 
expired; or 
‘‘(II) the Secretary determines 
that the requirements described in 
subclauses (I) and (II) of clause (vii) 
will not be met by the date on which 
such transitional measure for the reg-
ulation 
of 
human 
pharmaceutical 
products expires; 
‘‘(iv) Japan; 
‘‘(v) New Zealand; 
‘‘(vi) Switzerland; and 
‘‘(vii) a country in which the Sec-
retary determines the following require-
ments are met: 
‘‘(I) The country has statutory or 
regulatory requirements— 
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‘‘(aa) that require the review 
of drugs for safety and effective-
ness by an entity of the govern-
ment of the country; 
‘‘(bb) that authorize the ap-
proval of only those drugs that 
have been determined to be safe 
and effective by experts employed 
by or acting on behalf of such en-
tity and qualified by scientific 
training and experience to evalu-
ate the safety and effectiveness of 
drugs on the basis of adequate 
and well-controlled investigations, 
including clinical investigations, 
conducted by experts qualified by 
scientific training and experience 
to evaluate the safety and effec-
tiveness of drugs; 
‘‘(cc) that require the meth-
ods used in, and the facilities and 
controls used for the manufac-
ture, processing, and packing of 
drugs in the country to be ade-
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quate to preserve their identity, 
quality, purity, and strength; 
‘‘(dd) for the reporting of 
adverse reactions to drugs and 
procedures to withdraw approval 
and remove drugs found not to 
be safe or effective; and 
‘‘(ee) that require the label-
ing and promotion of drugs to be 
in accordance with the approval 
of the drug. 
‘‘(II) The valid marketing au-
thorization system in the country is 
equivalent to the systems in the coun-
tries described in clauses (i) through 
(vi). 
‘‘(III) The importation of drugs 
to the United States from the country 
will not adversely affect public health. 
‘‘(b) REGISTRATION OF IMPORTERS AND EXPORT-
ERS.— 
‘‘(1) REGISTRATION
OF
IMPORTERS
AND
EX-
PORTERS.—A registration condition is that the im-
porter or exporter involved (referred to in this sub-
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section as a ‘registrant’) submits to the Secretary a 
registration containing the following: 
‘‘(A)(i) In the case of an exporter, the 
name of the exporter and an identification of all 
places of business of the exporter that relate to 
qualifying drugs, including each warehouse or 
other facility owned or controlled by, or oper-
ated for, the exporter. 
‘‘(ii) In the case of an importer, the name 
of the importer and an identification of the 
places of business of the importer at which the 
importer initially receives a qualifying drug 
after importation (which shall not exceed 3 
places of business except by permission of the 
Secretary). 
‘‘(B) Such information as the Secretary 
determines to be necessary to demonstrate that 
the registrant is in compliance with registration 
conditions under— 
‘‘(i) in the case of an importer, sub-
sections (c), (d), (e), (g), and (j) (relating 
to the sources of imported qualifying 
drugs; the inspection of facilities of the im-
porter; the payment of fees; compliance 
with the standards referred to in section 
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dcolon on DSK2BSOYB1PROD with BILLS
801(a); and maintenance of records and 
samples); or 
‘‘(ii) in the case of an exporter, sub-
sections (c), (d), (f), (g), (h), (i), and (j) 
(relating to the sources of exported quali-
fying drugs; the inspection of facilities of 
the exporter and the marking of compliant 
shipments; the payment of fees; and com-
pliance with the standards referred to in 
section 801(a); being licensed as a phar-
macist; conditions for individual importa-
tion; and maintenance of records and sam-
ples). 
‘‘(C) An agreement by the registrant that 
the registrant will not under subsection (a) im-
port or export any drug that is not a qualifying 
drug. 
‘‘(D) An agreement by the registrant to— 
‘‘(i) notify the Secretary of a recall or 
withdrawal of a qualifying drug distributed 
in a permitted country that the registrant 
has exported or imported, or intends to ex-
port or import, to the United States under 
subsection (a); 
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‘‘(ii) provide for the return to the reg-
istrant of such drug; and 
‘‘(iii) cease, or not begin, the expor-
tation or importation of such drug unless 
the Secretary has notified the registrant 
that exportation or importation of such 
drug may proceed. 
‘‘(E) An agreement by the registrant to 
ensure and monitor compliance with each reg-
istration condition, to promptly correct any 
noncompliance with such a condition, and to 
promptly report to the Secretary any such non-
compliance. 
‘‘(F) A plan describing the manner in 
which the registrant will comply with the agree-
ment under subparagraph (E). 
‘‘(G) An agreement by the registrant to 
enforce a contract under subsection (c)(3)(B) 
against a party in the chain of custody of a 
qualifying drug with respect to the authority of 
the Secretary under clauses (ii) and (iii) of that 
subsection. 
‘‘(H) An agreement by the registrant to 
notify the Secretary not more than 30 days be-
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fore the registrant intends to make the change, 
of— 
‘‘(i) any change that the registrant in-
tends to make regarding information pro-
vided under subparagraph (A) or (B); and 
‘‘(ii) any change that the registrant 
intends to make in the compliance plan 
under subparagraph (F). 
‘‘(I) In the case of an exporter: 
‘‘(i) An agreement by the exporter 
that a qualifying drug will not under sub-
section (a) be exported to any individual 
not authorized pursuant to subsection 
(a)(2)(B) to be an importer of such drug. 
‘‘(ii) An agreement to post a bond, 
payable to the Treasury of the United 
States that is equal in value to the lesser 
of— 
‘‘(I) the value of drugs exported 
by the exporter to the United States 
in a typical 4-week period over the 
course of a year under this section; or 
‘‘(II) $1,000,000. 
‘‘(iii) An agreement by the exporter to 
comply with applicable provisions of Cana-
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dian law, or the law of the permitted coun-
try 
designated 
under 
subsection 
(a)(4)(D)(i)(II) in which the exporter is lo-
cated, that protect the privacy of personal 
information with respect to each individual 
importing a prescription drug from the ex-
porter under subsection (a)(2)(B). 
‘‘(iv) An agreement by the exporter to 
report to the Secretary— 
‘‘(I) not later than August 1 of 
each fiscal year, the total price and 
the total volume of drugs exported to 
the United States by the exporter dur-
ing the 6-month period from January 
1 through June 30 of that year; and 
‘‘(II) not later than January 1 of 
each fiscal year, the total price and 
the total volume of drugs exported to 
the United States by the exporter dur-
ing the previous fiscal year. 
‘‘(J) In the case of an importer, an agree-
ment by the importer to report to the Sec-
retary— 
‘‘(i) not later than August 1 of each 
fiscal year, the total price and the total 
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volume of drugs imported to the United 
States by the importer during the 6-month 
period from January 1 through June 30 of 
that fiscal year; and 
‘‘(ii) not later than January 1 of each 
fiscal year, the total price and the total 
volume of drugs imported to the United 
States by the importer during the previous 
fiscal year. 
‘‘(K) Such other provisions as the Sec-
retary may require by regulation to protect the 
public health while permitting— 
‘‘(i) the importation by pharmacies, 
groups of pharmacies, and wholesalers as 
registered importers of qualifying drugs 
under subsection (a); and 
‘‘(ii) importation by individuals of 
qualifying drugs under subsection (a). 
‘‘(2) APPROVAL OR DISAPPROVAL OF REGISTRA-
TION.— 
‘‘(A) IN
GENERAL.—Not later than 90 
days after the date on which a registrant sub-
mits to the Secretary a registration under para-
graph (1), the Secretary shall notify the reg-
istrant whether the registration is approved or 
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is disapproved. The Secretary shall disapprove 
a registration if there is reason to believe that 
the registrant is not in compliance with one or 
more registration conditions, and shall notify 
the registrant of such reason. In the case of a 
disapproved registration, the Secretary shall 
subsequently notify the registrant that the reg-
istration is approved if the Secretary deter-
mines that the registrant is in compliance with 
such conditions. 
‘‘(B) CHANGES IN REGISTRATION INFOR-
MATION.—Not later than 30 days after receiv-
ing a notice under paragraph (1)(H) from a 
registrant, the Secretary shall determine wheth-
er the change involved affects the approval of 
the registration of the registrant under para-
graph (1), and shall inform the registrant of 
the determination. 
‘‘(3) PUBLICATION OF CONTACT INFORMATION 
FOR REGISTERED EXPORTERS.—Through the Inter-
net website of the Food and Drug Administration 
and a toll-free telephone number, the Secretary shall 
make readily available to the public a list of reg-
istered exporters, including contact information for 
the exporters. Promptly after the approval of a reg-
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istration submitted under paragraph (1), the Sec-
retary shall update the Internet website and the in-
formation provided through the toll-free telephone 
number accordingly. 
‘‘(4) SUSPENSION AND TERMINATION.— 
‘‘(A) SUSPENSION.—With respect to the 
effectiveness of a registration submitted under 
paragraph (1): 
‘‘(i) Subject to clause (ii), the Sec-
retary may suspend the registration if the 
Secretary determines, after notice and op-
portunity for a hearing, that the registrant 
has failed to maintain substantial compli-
ance with a registration condition. 
‘‘(ii) If the Secretary determines that, 
under color of the registration, the ex-
porter has exported a drug or the importer 
has imported a drug that is not a quali-
fying drug, or a drug that does not comply 
with subsection (g)(2)(A) or (g)(4), or has 
exported a qualifying drug to an individual 
in violation of subsection (i)(2)(F), the 
Secretary shall immediately suspend the 
registration. A suspension under the pre-
ceding sentence is not subject to the provi-
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