Prescription Drug Marketing Act of 1987
PL 100-293 (H.R.1207), enacted 04/22/1988

PUBLIC LAW 100-293—APR. 22, 1988 
102 STAT. 95 
Public Law 100-293 
100th Congress 
An Act 
To amend the Federal Food, Drug, and Cosmetic Act to ban the reimportation of 
drugs produced in the United States, to place restrictions on the distribution of 
drug samples, to ban certain resales of drugs by hospitals and other health care 
entities, and for other purposes. 
Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; REFERENCE. 
(a) SHORT TITLE.—This Act may be cited as the "Prescription Drug 
Marketing Act of 1987". 
(b) REFERENCE.—Whenever in this Act an amendment or repeal is 
expressed in terms of an amendment to, or repeal of, a section or 
other provision, the reference shall be considered to be made to a 
section or other provision of the Federal Food, Drug, and Cosmetic 
Act. 
SEC. 2. FINDINGS. 
The Congress finds the following: 
(1) American consumers cannot purchase prescription drugs 
with the certainty that the products are safe and effective. 
(2) The integrity of the distribution system for prescription 
drugs is insufficient to prevent the introduction and eventual 
retail sale of substandard, ineffective, or even counterfeit drugs. 
(3) The existence and operation of a wholesale submarket, 
commonly known as the "diversion market", prevents effective 
control over or even routine knowledge of the true sources of 
prescription drugs in a significant number of cases. 
(4) Large amounts of drugs are being reimported to the 
United States as American goods returned. These imports are a 
health and safety risk to American consumers because they 
may have become subpotent or adulterated during foreign han-
dling and shipping. 
(5) The ready market for prescription drug reimports has been 
the catalyst for a continuing series of frauds against American 
manufacturers and has provided the cover for the importation 
of foreign counterfeit drugs. 
(6) The existing system of providing drug samples to physi-
cians through manufacturer's representatives has been abused 
for decades and has resulted in the sale to consumers of mis-
branded, expired, and adulterated pharmaceuticals. 
(7) The bulk resale of below wholesale priced prescription 
drugs by health care entities, for ultimate sale at retail, helps 
fuel the diversion market and is an unfair form of competition 
to wholesalers and retailers that must pay otherwise prevailing 
market prices. 
(8) The effect of these several practices and conditions is to 
create an unacceptable risk that counterfeit, adulterated, mis-
Apr. 22. 1988 
[H.R. 1207] 
Prescription 
Drug Marketing 
Act of 1987. 
Commerce and 
21 u s e 301 note. 
21 u s e 353 note. 
102 STAT. 96 
PUBLIC LAW 100-293—APR. 22, 1988 
branded, subpotent, or expired drugs will be sold to American 
consumers. 
SEC. 3. REIMPORTATION. 
» 
Section 801 (21 U.S.C. 381) is amended by redesignating subsection 
(d) as subsection (e) and by inserting after subsection (c) the 
following: 
"(d)(1) Except as provided in paragraph (2), no drug subject to 
section 503(b) which is manufactured in a State and exported may be 
imported into the United States unless the drug is imported by the 
person who manufactured the drug. 
"(2) The Secretary may authorize the importation of a drug the 
importation of which is prohibited by paragraph (1) if the drug is 
required for emergency medical care.". 
SEC. 4. SALES RESTRICTIONS. 
Section 503 (21 U.S.C. 353) is amended by adding at the end the 
following: 
"(c)(1) No person may sell, purchase, or trade or offer to sell, 
purchase, or trade any drug sample. For purposes of this paragraph 
and subsection (d), the term 'drug sample' means a unit of a drug, 
subject to subsection (b), which is not intended to be sold and is 
intended to promote the sale of the drug. Nothing in this paragraph 
shall subject an officer or executive of a drug manufacturer or 
distributor to criminal liability solely because of a sale, purchase, 
trade, or offer to sell, purchase, or trade in violation of this para-
graph by other employees of the manufacturer or distributor. 
"(2) No person may sell, purchase, or trade, offer to sell, purchase, 
or trade, or counterfeit any coupon. For purposes of this paragraph, 
the term 'coupon' means a form which may be redeemed, at no cost 
or at a reduced cost, for a drug which is prescribed in accordance 
with section 503(b). 
"(3)(A) No person may sell, purchase, or trade, or offer to sell, 
purchase, or trade, any drug— 
"(i) which is subject to subsection (b), and 
"(ii)(I) which was purchased by a public or private hospital or 
other health care entity, or 
"(II) which was donated or supplied at a reduced price to a 
charitable organization described in section 501(c)(3) of the 
Internal Revenue Code of 1954. 
"(B) Subparagraph (A) does not apply to— 
"(i) the purchase or other acquisition by a hospital or other 
health care entity which is a member of a group purchasing 
organization of a drug for its own use from the group purcheis-
ing organization or from other hospitals or health care entities 
which are members of such organization, 
"(ii) the sale, purchase, or trade of a drug or an offer to sell, 
purchase, or trade a drug by an organization described in 
subparagraph (AXiiXII) to a nonprofit affiliate of the organiza-
tion to the extent otherwise permitted by law, 
"(iii) a sale, purchase, or trade of a drug or an offer to sell, 
purchase, or trade a drug among hospitals or other health care 
entities which are under common control, 
"(iv) a sale, purchase, or trade of a drug or an offer to sell, 
purchase, or trade a drug for emergency medical reasons, or 
PUBLIC LAW 100-293—APR. 22, 1988 
102 STAT. 97 
"(v) a sale, purchase, or trade of a drug, an offer to sell, 
purchase, or trade a drug, or the dispensing of a drug pursuant 
to a prescription executed in accordance with section 503(b). 
For purposes of this paragraph, the term 'entity' does not include a 
wholesale distributor of drugs or a retail pharmacy licensed under 
State law and the term 'emergency medical reasons' includes trans-
fers of a drug between health care entities or from a health care 
entity to a retail pharmacy undertaken to alleviate temporary 
shortages of the drug arising from delays in or interruptions of 
regular distribution schedules.". 
SEC. 5. DISTRIBUTION OF DRUG SAMPLES. 
Section 503 (as amended by section 4 of this Act) is amended by 
adding at the end thereof the following: 
"(d)(1) Except as provided in paragraphs (2) and (3), no representa-
tive of a drug manufacturer or distributor may distribute any drug 
sample. 
"(2)(A) The manufacturer or distributor of a drug subject to 
subsection (b) may, in accordance with this paragraph, distribute 
drug samples by mail or common carrier to practitioners licensed to 
prescribe such drugs or, at the request of a licensed practitioner, to 
pharmacies of hospitals or other health care entities. Such a dis-
tribution of drug samples may only be made— 
"(i) in response to a written request for drug samples made on 
a form which meets the requirements of subparagraph (B), and 
"(ii) \. nder a system which requires the recipient of the drug 
sample to execute a written receipt for the drug sample upon its 
delivery and the return of the receipt to the manufacturer or 
distributor. 
"(B) A written request for a drug sample required by subpara-
graph (A)(i) shall contain— 
"(i) the name, address, professional designation, and signature 
of the practitioner making the request, 
"(ii) the identity of the drug sample requested and the quan-
titv requested, 
(iii) the name of the manufacturer of the drug sample 
requested, and 
"(iv) the date of the request. 
"(C) Each drug manufacturer or distributor which makes distribu-
tions by mail or common carrier under this paragraph shall main-
tain, for a period of 3 years, the request forms submitted for such 
distributions and the receipts submitted for such distributions and 
shall maintain a record of distributions of drug samples which 
identifies the drugs distributed and the recipients of the distribu-
tions. Forms, receipts, and records required to be mainteiined under 
this subparagraph shall be made available by the drug manufac-
turer or distributor to Federal and State officials engaged in the 
regulation of drugs and in the enforcement of laws applicable to 
drugs. 
"(3) The manufacturer or distributor of a drug subject to subsec-
tion (b) may, by means other than mail or common carrier, distrib-
ute drug samples only if the manufacturer or distributor makes the 
distributions in accordance with subparagraph (A) and carries out 
the activities described in subparagraphs (B) through (F) as follows: 
"(A) Drug samples may only be distributed— 
"(i) to practitioners licensed to prescribe such drugs if 
they make a written request for the drug samples, or 
Mail. 
Health care 
professionals. 
Mail. 
Records. 
State and local 
governments. 
Health care 
professionals. 
102 STAT. 98 
PUBLIC LAW 100-293—APR. 22, 1988 
Records. 
Reports. 
Records. 
R^ulations. 
"(ii) at the written request of such a licensed practitioner, 
to pharmacies of hospitals or other health care entities. 
A written request for drug samples shall be made on a form 
which contains the practitioner's name, address, and profes-
sional designation, the identity of the drug sample requested, 
the quantity of drug samples requested, the name of the manu-
facturer or distributor of the drug sample, the date of the 
request and signature of the practitioner making the request. 
' (B) Drug manufacturers or distributors shall store drug sam-
ples under conditions that will maintain their stability, integ-
rity, and effectiveness and will assure that the drug samples 
will be free of contamination, deterioration, and adulteration. 
"(C) Drug manufacturers or distributors shall conduct, at 
least annually, a complete and accurate inventory of all drug 
samples in the possession of representatives of the manufac-
turer or distributor. Drug manufacturers or distributors shall 
maintain lists of the names and address of each of their rep-
resentatives who distribute drug samples and of the sites where 
drug samples are stored. Drug manufacturers or distributors 
shall maintain records for at least 3 years of all drug samples 
distributed, destroyed, or returned to the manufacturer or 
distributor, of eill inventories maintained under this subpara-
graph, of all thefts or significant losses of drug samples, and of 
all requests made under subparagraph (A) for drug samples. 
Records and lists maintained under this subparagraph shall be 
made available by the drug manufacturer or distributor to the 
Secretary upon request, 
"(D) Drug manufacturers or distributors shall notify the Sec-
retary of any significant loss of drug samples and any known 
theft of drug samples. 
"(E) Drug manufacturers or distributors shall report to the 
Secretary any conviction of their representatives for violations 
of section 503(c)(1) or a State law because of the sale, purchase, 
or trade of a drug sample or the offer to sell, purchase, or trade 
a drug sample. 
"(F) Drug manufacturers or distributors shall provide to the 
Secretary the name and telephone number of the individual 
responsible for responding to a request for information respect-
ing drug samples.". 
SEC. 6. WHOLESALE DISTRIBUTORS. 
Section 503 (as amended by section 5 of this Act) is amended by 
adding at the end the following: 
"(eXD Each person who is engaged in the wholesale distribution of 
drugs subject to subsection (b) and who is not an authorized distribu-
tor of record of such drugs shall provide to each wholesale distribu-
tor of such drugs a statement identifying each sale of the drug 
(including the date of the sale) before the sale to such wholesale 
distributor. Each manufacturer shall maintain at its corporate of-
fices a current list of such authorized distributors. 
"(2)(A) No person may engage in the wholesale distribution in 
interstate commerce of drugs subject to subsection (b) in a State 
unless such person is licensed by the State in accordance with the 
guidelines issued under subparagraph (B). 
"(B) The Secretary shall by regulation issue guidelines establish-
ing minimum standards, terms, and conditions for the licensing of 
persons to make wholesale distributions in interstate commerce of 
PUBUC LAW 100-293—APR. 22,1988 
102 STAT. 99 
drugs subject to subsection (b)- Such guidelines shall prescribe Records, 
requirements for the storsige and handling of such drugs and for the 
establishment and maintenance of records of the distributions of 
such drugs. 
"(3) For the purposes of this subsection— 
"(A) the term 'authorized distributors of record' means those 
distributors with whom a manufacturer has established an 
ongoing relationship to distribute such manufacturer's prod-
ucts, and 
"(B) the term 'wholesale distribution' means distribution of 
drugs subject to subsection (b) to other than the consumer or 
patient but does not include intracompany sales and does not 
include distributions of drugs described in subsection (c)(3XB).". 
SEC. 7. PENALTIES. 
(a) PROHIBITED ACTS.—Section 301 (21 U.S.C. 331) is amended by 
adding at the end the following: 
"(t) The importation of a drug in violation of section 801(dXl), the 
sale, purchase, or trade of a drug or drug sample or the offer to sell, 
purchase, or trade a drug or drug sample in violation of section 
503(c), the sale, purchase, or trade of a coupon, the offer to sell, 
purchase, or trade such a coupon, or the counterfeiting of such a 
coupon in violation of section 503(cX2), the distribution of a drug 
sample in violation of section 503(d) or the failure to otherwise 
comply with the requirements of section 503(d), or the distribution of 
drugs in violation of section 503(e) or the failure to otherwise comply 
with the requirements of section 503(e).". 
(b) PENALTIES.—Section 303 (21 U.S.C. 333) is amended— 
(1) by inserting "(1)" after "(a)", 
(2) by redesignating subsection (b) as paragraph (2) and by 
striking out "subsection (a)" in such subsection and inserting in 
lieu thereof "paragraph (1)", and 
(3) by inserting after subsection (a) the following: 
"(b)(1) Notwithstanding subsection (a), any person who violates 
section 301(t) because of an importation of a drug in violation of 
section SOKdXD, because of a sale, purchase, or trade of a drug or 
drug sample or the offer to sell, purchase, or trade a drug or drug 
sample in violation of section 503(c), because of the sale, purchase, or 
trade of a coupon, the offer to sell, purchgise, or trade such a coupon, 
or the counterfeiting of such a coupon in violation of section 
503(cX2), or the distribution of drugs in violation of section 
503(e)(2)(A) shall be imprisoned for not more than 10 years or fined 
not more than $250,000, or both. 
"(2) Any manufacturer or distributor who distributes drug sam-
ples by means other than the mail or common carrier whose rep-
resentative, during the course of the representative's employment or 
association with that manufacturer or distributor, violated section 
301(t) because of a violation of section 503(cXl) or violated any State 
law prohibiting the sale, purchase, or trade of a drug sample subject 
to section 503(b) or the offer to sell, purchase, or trade such a drug 
sample shall, upon conviction of the representative for such viola-
tion, be subject to the following civil penalties: 
"(A) A civil penalty of not more than $50,000 for each of the 
first two such violations resulting in a conviction of any rep-
resentative of the manufacturer or distributor in any 10-year 
period. 
102 STAT. 100 
PUBLIC LAW 100-293—APR. 22, 1988 
"(B) A civil penalty of not more than $1,000,000 for each 
violation resulting in a conviction of any representative after 
the second conviction in any 10-year period. 
For the purposes of this paragraph, multiple convictions of one or 
more persons arising out of the same event or transaction, or a 
related series of events or transactions, shall be considered as one 
violation. 
"(3) Any manufacturer or distributor who violates section 301(t) 
because of a failure to make a report required by section 503(d)(3)(E) 
shall be subject to a civil penalty of not more than $100,000. 
"(4)(A) If a manufacturer or distributor or any representative of 
such manufacturer or distributor provides information leading to 
the arrest and conviction of any representative of that manufac-
turer or distributor for a violation of section 301(t) because of a sale, 
purchase, or trade or offer to purchase, sell, or trade a drug sample 
in violation of section 503(c)(1) or for a violation of State law 
prohibiting the sale, purchase, or trade or offer to sell, purchase, or 
trade a drug sample, the conviction of such representative shall not 
be considered as a violation for purposes of paragraph (2). 
"(B) If, in an action brought under paragraph (2) against a manu-
facturer or distributor relating to the conviction of a representative 
of such manufacturer or distributor for the sale, purchase, or trade 
of a drug or the offer to sell, purchase, or trade a drug, it is shown, 
by clear and convincing evidence— 
"(i) that the manufacturer or distributor conducted, before 
the arrest of such representative for the violation which re-
sulted in such conviction, an investigation of events or trans-
actions which would have led to the reporting of information 
leading to the arrest and conviction of such representative for 
such purchase, sale, or trade or offer to purchase, sell, or trade, 
or 
"(ii) that, except in the case of the conviction of a representa-
tive employed in a supervisory function, despite diligent im-
plementation by the manufacturer 
or distributor of an 
independent audit and security system designed to detect such a 
violation, the manufacturer or distributor could not reasonably 
have been expected to have detected such violation, 
the conviction of such representative shall not be considered as a 
conviction for purposes of paragraph (2). 
"(5) If a person provides information leading to the arrest and 
conviction of a person for a violation of section 301(t) because of the 
sale, purchase, or trade of a drug sample or the offer to sell, 
purchase, or trade a drug sample in violation of section 503(c)(1), 
such person shall be entitled to one-half of the criminal fine imposed 
and collected for such violation but not more than $125,000.". 
21 u s e 353 note. 
SEC. 8. EFFECTIVE DATE. 
(a) GENERAL RULE.—Except as provided in subsection (b), this Act 
and the amendments made by this Act shall take effect upon the 
expiration of 90 days after the date of the enactment of this Act 
03) EXCEPTION.— 
(1) Section 503(d) of the Federal Food, Drug, and Cosmetic Act 
(as added by section 5 of this Act) shall take effect upon the 
expiration of 180 days after the date of tlie enactment of this 
Act. 
Regulations. 
(2) The Secretary of Health and Human Services shall by 
regulation issue the guidelines required by section 503(e)(2)(B) of 
PUBLIC LAW 100-293—APR. 22, 1988 
102 STAT. 101 
the Federal Food, Drug, and Cosmetic Act (as added by section 6 
of this Act) not later than 180 days after the date of the 
enactment of this Act. Section 503(e)(2)(A) of such Act shall take 
effect upon the expiration of 2 years after the date such regula-
tions are promulgated and take effect. 
Approved April 22, 1988. 
LEGISLATIVE HISTORY—H.R. 1207: 
HOUSE REPORTS: No. 100-76 (Comm. on Energy and Commerce). 
SENATE REPORTS: No. 100-303 (Comm. on Finance). 
CONGRESSIONAL RECORD: 
Vol. 133 (1987): May 4, considered and passed House. 
Vol. 134 (1988): Mar. 31, considered and passed Senate. 
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 24 (1988): 
Apr. 22, Presidential statement.