110 HR 6800 IH: Medicare Drugs for Seniors (MEDS) Act of

U.S. House of Representatives
2008-08-01
text/xml
EN
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		I
		110th CONGRESS
		2d Session
		H. R. 6800
		IN THE HOUSE OF REPRESENTATIVES

			August 1, 2008
			Mr. Kucinich (for
			 himself, Mr. DeFazio,
			 Ms. Lee, Mr. Conyers, Mr.
			 Davis of Illinois, Mr.
			 Abercrombie, Mr.
			 Jefferson, Ms. Woolsey,
			 Mr. Filner,
			 Mr. Hinchey,
			 Mr. Jackson of Illinois,
			 Mr. Ellison,
			 Ms. Kaptur,
			 Mr. Grijalva,
			 Ms. Hirono,
			 Ms. Eddie Bernice Johnson of Texas,
			 Mr. Cummings,
			 Ms. Jackson-Lee of Texas,
			 Mr. Nadler, and
			 Mr. Carson) introduced the following
			 bill; which was referred to the Committee
			 on Energy and Commerce, and in addition to the Committee on
			 Ways and Means, for a
			 period to be subsequently determined by the Speaker, in each case for
			 consideration of such provisions as fall within the jurisdiction of the
			 committee concerned

		A BILL
		To amend title XVIII of the Social Security Act to
		  replace the Medicare prescription drug benefit adopted by the Medicare
		  Prescription Drug, Improvement, and Modernization Act of 2003 with a revised
		  and simplified prescription benefit program for all Medicare
		  beneficiaries.

		1.Short title; table of
			 contents
			(a)Short
			 titleThis Act may be cited as the Medicare Drugs for Seniors (MEDS) Act of
			 2008.
			(b)Table of
			 contentsThe table of contents for this Act is as follows:

					Sec. 1. Short title; table of contents.
					Sec. 2. Findings.
					Sec. 3. Repeal and transition.
					Sec. 4. Prescription medicine benefit
				program.
						Part D—Prescription medicine benefit for the aged and
				  disabled
						Sec. 1860D–1. Establishment of prescription medicine benefit
				  program for the aged and disabled.
						Sec. 1860D–2. Scope of benefits.
						Sec. 1860D–3. Payment of benefits.
						Sec. 1860D–4. Eligibility and enrollment.
						Sec. 1860D–5. No premium.
						Sec. 1860D–6. Prescription Medicine Insurance
				  Account.
						Sec. 1860D–7. Administration of benefits.
						Sec. 1860D–8. Promotion of pharmaceutical research on
				  break-through medicines while providing program cost containment.
						Sec. 1860D–9. Appropriations to cover Government
				  contributions.
						Sec. 1860D–10. Prescription medicine
				  defined.
					Sec. 5. Substantial reductions in the price of prescription
				drugs for medicare beneficiaries.
					Sec. 6. Importation of certain prescription drugs.
					Sec. 7. Reasonable price agreement for federally funded
				research.
					Sec. 8. GAO ongoing studies and reports on program;
				miscellaneous reports.
					Sec. 9. Medigap transition provisions.

			2.FindingsCongress makes the following
			 findings:
			(1)The amendments made by title I of the
			 Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Public
			 Law 108–173) do not ensure the long-term financial viability of the Medicare
			 prescription drug benefit enacted by such title through cost-containment
			 measures, and contains a provision that explicitly prohibits Medicare from
			 negotiating for lower prescription drug prices, which is a practice of the
			 Department of Veterans Affairs (VA).
			(2)Medicare Part D
			 pays on average 30 percent more for drugs than does its federally administered
			 counterpart in Medicaid. That amounted to a windfall worth over $3.7 billion
			 for drug manufacturers in the first two years of the Medicare Part D
			 program.
			(3)Since the
			 inception of privatized Part D, average premiums have increased from $25.93 in
			 2006 to $27.39 in 2007. In 2008 the average premium could increase by 17
			 percent to $31.99 if enrollees stay in their current plan, which is the
			 norm.
			(4)Only 8 percent of
			 enrollees are in a Part D plan that provides any coverage in the “doughnut
			 hole,” a period in which there is no coverage of drug costs, which exemplifies
			 the ways in which insurance plans cause significant financial vulnerability for
			 enrollees by providing partial coverage for prescription drugs.
			(5)All Medicare
			 beneficiaries should have access to a voluntary, reliable, affordable, and
			 defined outpatient medicine benefit that is part of the Medicare program and
			 that assists with the high cost of prescription medicines and protects such
			 beneficiaries from excessive out-of-pocket costs.
			(6)Americans unjustly
			 pay up to 5 times more to fill their prescriptions than consumers in other
			 countries.
			(7)The United States
			 is the largest market for pharmaceuticals in the world, yet American consumers
			 pay the highest prices for brand pharmaceuticals in the world.
			(8)A
			 prescription drug is neither safe nor effective to an individual who cannot
			 afford it.
			(9)Allowing and
			 structuring the importation of prescription drugs to ensure access to safe and
			 affordable drugs approved by the Food and Drug Administration will provide a
			 level of safety to American consumers that they do not currently enjoy.
			(10)Allowing open
			 pharmaceutical markets could save American consumers well over $38,000,000,000
			 each year
			3.Repeal and
			 transition
			(a)Repeal of
			 Medicare part D benefit and transition to new Medicare prescription medicine
			 benefit programThe amendments made by title I of the Medicare
			 Prescription Drug, Improvement, and Modernization Act of 2003 (Public Law
			 108–173) are repealed as of December 31, 2009, and the provisions of law
			 amended by such title shall read as if such title had not been enacted.
			(b)TransitionThe Secretary of Health and Human Services
			 shall provide for an appropriate transition from administering the Social
			 Security Act in accordance with the amendments made by title I of the Medicare
			 Prescription Drug, Improvement, and Modernization Act of 2003 (Public Law
			 108–173) to administering such Act in accordance with the amendments made by
			 section 4 of this Act.
			4.Prescription
			 medicine benefit program
			(a)In
			 generalTitle XVIII of the Social
			 Security Act (42 U.S.C. 1395 et seq.), as in effect before the
			 insertion of part D under title I of the Medicare Prescrption Drug,
			 Improvement, and Modernization Act of 2003, is amended—
				(1)by redesignating
			 part D as part E; and
				(2)by inserting after
			 part C the following new part:

						DPrescription
				medicine benefit for the aged and disabled
							1860D–1.Establishment of prescription medicine
		  benefit program for the aged and disabledThere is established a voluntary insurance
				program to provide prescription medicine benefits, including pharmacy services,
				in accordance with the provisions of this part for individuals who are aged or
				disabled or have end-stage renal disease and who elect to enroll under such
				program, to be financed from premium payments by enrollees together with
				contributions from funds appropriated by the Federal Government.
							1860D–2.Scope of benefits(a)In
				generalThe benefits provided to an individual enrolled in the
				insurance program under this part shall consist of—
									(1)payments made, in
				accordance with the provisions of this part, for covered prescription medicines
				(as specified in subsection (b)) dispensed by any pharmacy participating in the
				program under this part (and, in circumstances designated by the Secretary, by
				a nonparticipating pharmacy), including any specifically named medicine
				prescribed for the individual by a qualified health care professional
				regardless of whether the medicine is included in any formulary established
				under this part if such medicine is certified as medically necessary by such
				health care professional (except that the Secretary shall encourage to the
				maximum extent possible the substitution and use of lower-cost generics), up to
				the benefit limits specified in section 1860D–3; and
									(2)charging by
				pharmacies of the negotiated price—
										(A)for all covered
				prescription medicines, without regard to such benefit limit; and
										(B)established with
				respect to any drugs or classes of drugs described in subparagraphs (A), (B),
				(D), (E), or (F) of section 1927(d)(2) that are available to individuals
				receiving benefits under this title.
										(b)Covered
				prescription medicines
									(1)In
				generalCovered prescription medicines, for purposes of this
				part, include all prescription medicines (as defined in section 1860D–10(1)),
				including smoking cessation agents, except as otherwise provided in this
				subsection.
									(2)Exclusions from
				coverageCovered prescription medicines shall not include drugs
				or classes of drugs described in subparagraphs (A) through (D) and (F) through
				(H) of section 1927(d)(2) unless—
										(A)specifically
				provided otherwise by the Secretary with respect to a drug in any of such
				classes; or
										(B)a drug in any of
				such classes is certified to be medically necessary by a health care
				professional.
										(3)Exclusion of
				prescription medicines to the extent covered under part A or BA
				medicine prescribed for an individual that would otherwise be a covered
				prescription medicine under this part shall not be so considered to the extent
				that payment for such medicine is available under part A or B, including all
				injectable drugs and biologicals for which payment was made or should have been
				made by a carrier under section 1861(s)(2) (A) or (B) as of the date of
				enactment of the Medicare Drugs for Seniors
				(MEDS) Act of 2008. Medicines otherwise covered under part A or B
				shall be covered under this part to the extent that benefits under part A or B
				are exhausted.
									(4)Study on
				inclusion of home infusion therapy servicesNot later than one
				year after the date of the enactment of the Medicare Drugs for Seniors (MEDS) Act of
				2008, the Secretary shall submit to Congress a legislative
				proposal for the delivery of home infusion therapy services under this title
				and for a system of payment for such a benefit that coordinates items and
				services furnished under part B and under this part.
									1860D–3.Payment of benefitsThere shall be paid from the Prescription
				Medicine Insurance Account within the Supplementary Medical Insurance Trust
				Fund, in the case of each individual who is enrolled in the insurance program
				under this part and who purchases covered prescription medicines in a calendar
				year, 100 percent of the negotiated price for each such covered prescription
				medicine.
							1860D–4.Eligibility and
		  enrollment(a)EligibilityEvery
				individual who, during or after 2009, is entitled to hospital insurance
				benefits under part A or enrolled in the medical insurance program under part
				B, whether or not the individual is enrolled in a Medicare Advantage plan under
				part C, is eligible to enroll, in accordance with the provisions of this
				section, in the insurance program under this part, during an enrollment period
				under this section, in such manner and form specified by the Secretary in
				regulations.
								(b)Enrollment
									(1)In
				generalEach individual who satisfies subsection (a) shall be
				enrolled (or eligible to enroll) in the program under this part in accordance
				with the provisions of section 1837, as if that section applied to this part,
				except as otherwise explicitly provided in this part.
									(2)Single
				enrollment periodExcept as
				provided in section 1837(i) (as such section applies to this part) or
				1860D–8(e), or as otherwise explicitly provided, no individual shall be
				entitled to enroll in the program under this part at any time after the initial
				enrollment period without penalty, and in the case of all other late
				enrollments, the Secretary shall develop a late enrollment penalty for the
				individual that fully recovers the additional actuarial risk involved providing
				coverage for the individual.
									(3)Special
				enrollment period for 2009
										(A)In
				generalAn individual who first satisfies subsection (a) in 2009
				may on or after the date on which they first become eligible and at any time on
				or before December 31, 2009—
											(i)enroll in the
				program under this part; and
											(ii)enroll or
				reenroll in such program after having previously declined or terminated
				enrollment in such program.
											(B)Effective date
				of coverageAn individual who enrolls under the program under
				this part pursuant to subparagraph (A) shall be entitled to benefits under this
				part beginning on the first day of the month following the month in which such
				enrollment occurs, but in no case earlier than January 1, 2010.
										(c)Period of
				coverage
									(1)In
				generalExcept as otherwise provided in this part, an
				individual’s coverage under the program under this part shall be effective for
				the period provided in section 1838, as if that section applied to the program
				under this part.
									(2)Part D coverage
				terminated by termination of coverage under parts A and BIn
				addition to the causes of termination specified in section 1838, an
				individual’s coverage under this part shall be terminated if the individual
				retains coverage under neither the program under part A nor the program under
				part B, effective on the effective date of termination of coverage under part A
				or (if later) under part B.
									1860D–5.No premiumThere is no premium for enrollment under
				this part.
							1860D–6.Prescription Medicine Insurance
		  Account(a)EstablishmentThere
				is created within the Federal Supplemental Medical Insurance Trust Fund
				established by section 1841 an account to be known as the Prescription
				Medicine Insurance Account (in this section referred to as the
				Account).
								(b)Amounts in
				Account
									(1)In
				generalThe Account shall consist of—
										(A)such amounts as
				may be deposited in, or appropriated to, such fund as provided in this part;
				and
										(B)such gifts and
				bequests as may be made as provided in section 201(i)(1).
										(2)Separation of
				fundsFunds provided under this part to the Account shall be kept
				separate from all other funds within the Federal Supplemental Medical Insurance
				Trust Fund.
									(c)Payments from
				AccountThe Managing Trustee shall pay from time to time from the
				Account such amounts as the Secretary certifies are necessary to make the
				payments provided for by this part, and the payments with respect to
				administrative expenses in accordance with section 201(g).
								1860D–7.Administration of
		  benefits(a)Through
				CMSThe Secretary shall provide for administration of the
				benefits under this part through the Centers for Medicare & Medicaid
				Services in accordance with the provisions of this section. The Administrator
				of such Centers may enter into contracts with carriers to administer this part
				in the same manner as the Administrator enters into such contracts to
				administer part B. Any such contract shall be separate from any contract under
				section 1842.
								(b)Administration
				functionsIn carrying out this part, the Administrator (or a
				carrier under a contract with the Administrator) shall (or in the case of the
				function described in paragraph (9), may) perform the following
				functions:
									(1)Participation
				agreements, prices, and fees
										(A)Negotiated
				pricesEstablish, through negotiations with medicine
				manufacturers and wholesalers and pharmacies, a schedule of prices for covered
				prescription medicines.
										(B)Agreements with
				pharmaciesEnter into participation agreements under subsection
				(c) with pharmacies, that include terms that—
											(i)secure the
				participation of sufficient numbers of pharmacies to ensure convenient access
				(including adequate emergency access);
											(ii)permit the
				participation of any pharmacy in the service area that meets the participation
				requirements described in subsection (c); and
											(iii)allow for
				reasonable dispensing and consultation fees for pharmacies.
											(C)Lists of prices
				and participating pharmaciesEnsure that the negotiated prices
				established under subparagraph (A) and the list of pharmacies with agreements
				under subsection (c) are regularly updated and readily available to health care
				professionals authorized to prescribe medicines, participating pharmacies, and
				enrolled individuals.
										(2)Tracking of
				covered enrolled individualsMaintain accurate, updated records
				of all enrolled individuals (other than individuals enrolled in a plan under
				part C).
									(3)Payment and
				coordination of benefits
										(A)Payment
											(i)Administer claims
				for payment of benefits under this part and encourage, to the maximum extent
				possible, use of electronic means for the submissions of claims.
											(ii)Determine amounts
				of benefit payments to be made.
											(iii)Receive,
				disburse, and account for funds used in making such payments, including through
				the activities specified in the provisions of this paragraph.
											(B)CoordinationCoordinate
				with other private benefit providers, pharmacies, and other relevant entities
				as necessary to ensure appropriate coordination of benefits with respect to
				enrolled individuals, including coordination of access to and payment for
				covered prescription medicines according to an individual’s in-service area
				plan provisions, when such individual is traveling outside the home service
				area, and under such other circumstances as the Secretary may specify.
										(C)Explanation of
				benefitsFurnish to enrolled individuals an explanation of
				benefits in accordance with section 1806(a), and a notice of the balance of
				benefits remaining for the current year, whenever prescription medicine
				benefits are provided under this part (except that such notice need not be
				provided more often than monthly).
										(4)Rules relating
				to provision of benefits
										(A)In
				generalIn providing benefits under this part, the Secretary
				(directly or through contracts) shall employ mechanisms to provide benefits
				economically, including the use of—
											(i)formularies
				(consistent with subparagraph (B));
											(ii)automatic generic
				medicine substitution (unless the physician specifies otherwise, in which case
				a 30-day prescription may be dispensed pending a consultation with the
				physician on whether a generic substitute can be dispensed in the future);
				and
											(iii)therapeutic
				interchange.
											(B)Requirements
				with respect to formulariesIf a formulary is used to contain
				costs under this part—
											(i)use an advisory
				committee (or a therapeutics committee) comprised of licensed practicing
				physicians, pharmacists, and other health care practitioners to develop and
				manage the formulary;
											(ii)include in the
				formulary at least one medicine from each therapeutic class and, if available,
				a generic equivalent thereof; and
											(iii)disclose to
				current and prospective enrollees and to participating providers and
				pharmacies, the nature of the formulary restrictions, including information
				regarding the medicines included in the formulary.
											(C)ConstructionNothing
				in this subsection shall be construed to prevent the Secretary (directly or
				through contracts) from using incentives to encourage enrollees to select
				generic or other cost-effective medicines, so long as—
											(i)such incentives
				are designed not to result in any increase in the aggregate expenditures under
				the Federal Medicare Prescription Medicine Trust Fund; and
											(ii)the reimbursement
				for a prescribed nonformulary medicine without a restrictive prescription in no
				case shall be more than the lowest reimbursement for a formulary medicine in
				the therapeutic class of the prescribed medicine.
											(D)Restrictive
				prescriptionFor purposes of this section:
											(i)Written
				prescriptionsIn the case of a written prescription for a
				medicine, it is a restrictive prescription only if the prescription indicates,
				in the writing of the physician or other qualified person prescribing the
				medicine and with an appropriate phrase (such as brand medically
				necessary) recognized by the Secretary, that a particular medicine
				product must be dispensed based upon a belief by the physician or person
				prescribing the medicine that the particular medicine will provide even
				marginally superior therapeutic benefits to the individual for whom the
				medicine is prescribed or would have marginally fewer adverse reactions with
				respect to such individual.
											(ii)Telephone
				prescriptionsIn the case of a prescription issued by telephone
				for a medicine, it is a restrictive prescription only if the prescription
				cannot be longer than 30 days and the physician or other qualified person
				prescribing the medicine (through use of such an appropriate phrase) states
				that a particular medicine product must be dispensed, and the physician or
				other qualified person submits to the pharmacy involved, within 30 days after
				the date of the telephone prescription, a written confirmation from the
				physician or other qualified person prescribing the medicine and which
				indicates with such appropriate phrase that the particular medicine product was
				required to have been dispensed based upon a belief by the physician or person
				prescribing the medicine that the particular medicine will provide even
				marginally superior therapeutic benefits to the individual for whom the
				medicine is prescribed or would have marginally fewer adverse reactions with
				respect to such individual. Such written confirmation is required to refill the
				prescription.
											(iii)Review of
				restrictive prescriptionsThe advisory committee (established
				under subparagraph (B)(i)) may decide to review a restrictive prescription and,
				if so, it may approve or disapprove such restrictive prescription. It may not
				disapprove such restrictive prescription unless it finds that there is no
				literature approved by the Food and Drug Administration that supports a
				determination that the particular medicine provides even marginally superior
				therapeutic benefits to the individual for whom the medicine is prescribed or
				would have marginally fewer adverse reactions with respect to such individual.
				If it disapproves, upon request of the prescribing physician or the enrollee,
				the committee must provide for a review by an independent contractor of such
				decision within 48 hours of the time of submission of the prescription, to
				determine whether the prescription is an eligible benefit under this part. The
				Secretary shall ensure that independent contractors so used are completely
				independent of the contractor or its advisory committee.
											(5)Cost and
				utilization management; quality assuranceHave in place effective
				cost and utilization management, drug utilization review, quality assurance
				measures, and systems to reduce medical errors, including at least the
				following, together with such additional measures as the Administrator may
				specify:
										(A)Drug utilization
				reviewA drug utilization review program conforming to the
				standards provided in section 1927(g)(2) (with such modifications as the
				Administrator finds appropriate).
										(B)Fraud and abuse
				controlActivities to control fraud, abuse, and waste, including
				prevention of diversion of pharmaceuticals to the illegal market.
										(C)Medication
				therapy management
											(i)In
				generalA program of medicine therapy management and medication
				administration that is designed to assure that covered outpatient medicines are
				appropriately used to achieve therapeutic goals and reduce the risk of adverse
				events, including adverse drug interactions.
											(ii)ElementsSuch
				program may include—
												(I)enhanced
				beneficiary understanding of such appropriate use through beneficiary
				education, counseling, and other appropriate means; and
												(II)increased
				beneficiary adherence with prescription medication regimens through medication
				refill reminders, special packaging, and other appropriate means.
												(iii)Development of
				program in cooperation with licensed pharmacistsThe program
				shall be developed in cooperation with licensed pharmacists and
				physicians.
											(iv)Considerations
				in pharmacy feesThere shall be taken into account, in
				establishing fees for pharmacists and others providing services under the
				medication therapy management program, the resources and time used in
				implementing the program.
											(6)Education and
				information activitiesHave in place mechanisms for disseminating
				educational and informational materials to enrolled individuals and health care
				providers designed to encourage effective and cost-effective use of
				prescription medicine benefits and to ensure that enrolled individuals
				understand their rights and obligations under the program.
									(7)Beneficiary
				protections
										(A)Confidentiality
				of health informationHave in effect systems to safeguard the
				confidentiality of health care information on enrolled individuals, which
				comply with section 1106 and with section 552a of title 5, United States Code,
				and meet such additional standards as the Administrator may prescribe.
										(B)Grievance and
				appeal proceduresHave in place such procedures as the
				Administrator may specify for hearing and resolving grievances and appeals,
				including expedited appeals, brought by enrolled individuals against the
				Administrator or a pharmacy concerning benefits under this part, which shall
				include procedures equivalent to those specified in subsections (f) and (g) of
				section 1852.
										(8)Records,
				reports, and audits
										(A)Records and
				auditsMaintain adequate records, and afford the Administrator
				access to such records (including for audit purposes).
										(B)ReportsMake
				such reports and submissions of financial and utilization data as the
				Administrator may require taking into account standard commercial
				practices.
										(9)Proposal for
				alternative coinsurance amount
										(A)SubmissionThe
				Administrator may provide for increased Government cost-sharing for generic
				prescription medicines, prescription medicines on a formulary, or prescription
				medicines obtained through mail order pharmacies.
										(B)ContentsThe
				proposal submitted under subparagraph (A) shall contain evidence that such
				increased cost-sharing would not result in an increase in aggregate costs to
				the Account, including an analysis of differences in projected drug utilization
				patterns by beneficiaries whose cost-sharing would be reduced under the
				proposal and those making the cost-sharing payments that would otherwise
				apply.
										(10)Other
				requirementsMeet such other requirements as the Secretary may
				specify.
									The
				Administrator shall negotiate a schedule of prices under paragraph (1)(A),
				except that nothing in this sentence shall prevent a carrier under a contract
				with the Administrator from negotiating a lower schedule of prices for covered
				prescription medicines.(c)Pharmacy
				participation agreements
									(1)In
				generalA pharmacy that meets the requirements of this subsection
				shall be eligible to enter an agreement with the Administrator to furnish
				covered prescription medicines and pharmacists’ services to enrolled
				individuals.
									(2)Terms of
				agreementAn agreement under this subsection shall include the
				following terms and requirements:
										(A)LicensingThe
				pharmacy and pharmacists shall meet (and throughout the contract period will
				continue to meet) all applicable State and local licensing requirements.
										(B)Limitation on
				chargesPharmacies
				participating under this part shall not charge an enrolled individual more than
				the negotiated price for an individual medicine as established under subsection
				(b)(1), regardless of whether such individual has attained the benefit limit
				under section 1860D–3(b), and shall not charge an enrolled individual more than
				the individual’s share of the negotiated price as determined under the
				provisions of this part.
										(C)Performance
				standardsThe pharmacy and the pharmacist shall comply with
				performance standards relating to—
											(i)measures for
				quality assurance, reduction of medical errors, and participation in the drug
				utilization review program described in subsection (b)(3)(A);
											(ii)systems to ensure
				compliance with the confidentiality standards applicable under subsection
				(b)(5)(A); and
											(iii)other
				requirements as the Secretary may impose to ensure integrity, efficiency, and
				the quality of the program.
											(D)Disclosure of
				price of generic medicineA pharmacy participating under this
				part shall inform an enrollee of the difference in price between generic and
				non-generic equivalents.
										(d)Special
				attention to rural and hard-To-serve areas
									(1)In
				generalThe Secretary shall ensure that all beneficiaries have
				access to the full range of pharmaceuticals under this part, and shall give
				special attention to access, pharmacist counseling, and delivery in rural and
				hard-to-serve areas (as the Secretary may define by regulation).
									(2)Special
				attention definedFor purposes of paragraph (1), the term
				special attention may include bonus payments to retail pharmacists
				in rural areas and any other actions the Secretary determines are necessary to
				ensure full access to rural and hard-to-serve beneficiaries.
									(3)GAO
				reportNot later than two years after the implementation of this
				part the Comptroller General of the United States shall submit to Congress a
				report on the access of medicare beneficiaries to pharmaceuticals and
				pharmacists’ services in rural and hard-to-serve areas under this part together
				with any recommendations of the Comptroller General regarding any additional
				steps the Secretary may need to take to ensure the access of medicare
				beneficiaries to pharmaceuticals and pharmacists’ services in such areas under
				this part.
									(e)Incentives for
				cost and utilization management and quality improvementThe
				Secretary is authorized to include in a contract awarded under subsection (b)
				with a carrier such incentives for cost and utilization management and quality
				improvement as the Secretary may deem appropriate, including—
									(1)bonus and penalty
				incentives to encourage administrative efficiency;
									(2)incentives under
				which carriers share in any benefit savings achieved;
									(3)risk-sharing
				arrangements related to initiatives to encourage savings in benefit
				payments;
									(4)financial
				incentives under which savings derived from the substitution of generic
				medicines in lieu of non-generic medicines are made available to carriers,
				pharmacies, and the Prescription Medicine Insurance Account; and
									(5)any other
				incentive that the Secretary deems appropriate and likely to be effective in
				managing costs or utilization.
									1860D–8.Promotion of pharmaceutical research on
		  break-through medicines while providing program cost
		  containment(a)Monitoring
				expendituresThe Secretary shall monitor expenditures under this
				part. On October 1, 2009, the Secretary shall estimate total expenditures under
				this part for 2010.
								(b)Establishment of
				sustainable growth rate
									(1)In
				generalThe Secretary shall establish a sustainable growth rate
				prescription medicine target system for expenditures under this part for each
				year after 2010.
									(2)Initial
				computationSuch target shall equal the amount of total
				expenditures estimated for 2010 adjusted by the Secretary’s estimate of a
				sustainable growth rate (in this section referred to as an SGR)
				percentage between 2010 and 2011. Such SGR shall be estimated based on the
				following:
										(A)Reasonable changes
				in the cost of production or price of covered pharmaceuticals, but in no event
				more than the rate of increase in the consumer price index for all urban
				consumers for the period involved.
										(B)Population
				enrolled in this part, both in numbers and in average age and severity of
				chronic and acute illnesses.
										(C)Appropriate
				changes in utilization of pharmaceuticals, as determined by the Drug Review
				Board (established under subsection (c)(3)) and based on best estimates of
				utilization change if there were no direct-to-consumer advertising or
				promotions to providers.
										(D)Productivity index
				of manufacturers and distributors.
										(E)Percentage of
				products with patent and market exclusivity protection versus products without
				patent protection and changes in the availability of generic
				substitutes.
										(F)Such other factors
				as the Secretary may determine are appropriate.
										In no
				event may the sustainable growth rate exceed 120 percent of the estimated per
				capita growth in total spending under this title.(3)Computation for
				subsequent yearsIn October of 2011 and each year thereafter, for
				purposes of setting the SGRs for the succeeding year, the Secretary shall
				adjust each current year’s estimated expenditures by the estimated SGR for the
				succeeding year, further adjusted for corrections in earlier estimates and the
				receipt of additional data on previous years spending as follows:
										(A)Error
				estimatesAn adjustment (up or down) for errors in the estimate
				of total expenditures under this part for the previous year.
										(B)CostsAn
				adjustment (up or down) for corrections in the cost of production of
				prescriptions covered under this part between the current calendar year and the
				previous year.
										(C)TargetAn
				adjustment for any amount (over or under) that expenditures in the current year
				under this part are estimated to differ from the target amount set for the
				year. If expenditures in the current year are estimated to be—
											(i)less
				than the target amount, future target amounts will be adjusted downward;
				or
											(ii)more than the
				target amount, the Secretary shall notify all pharmaceutical manufacturers with
				sales of pharmaceutical prescription medicine products to medicare
				beneficiaries under this part, of a rebate requirement (except as provided in
				this subparagraph) to be deposited in the Federal Medicare Prescription
				Medicine Trust Fund.
											(D)Rebate
				determinationThe amount of the rebate described in subparagraph
				(C)(ii) may vary among manufacturers and shall be based on the manufacturer’s
				estimated contribution to the expenditure above the target amount, taking into
				consideration such factors as—
											(i)above average
				increases in the cost of the manufacturer’s product;
											(ii)increases in
				utilization due to promotion activities of the manufacturer, wholesaler, or
				retailer;
											(iii)launch prices of
				new drugs at the same or higher prices as similar drugs already in the
				marketplace (so-called me too or copy-cat
				drugs);
											(iv)the role of the
				manufacturer in delaying the entry of generic products into the market;
				and
											(v)such other actions
				by the manufacturer that the Secretary may determine has contributed to the
				failure to meet the SGR target.
											The
				rebates shall be established under such subparagraph so that the total amount
				of the rebates is estimated to ensure that the amount the target for the
				current year is estimated to be exceeded is recovered in lower spending in the
				subsequent year; except that, no rebate shall be made in any manufacturer’s
				product which the Food and Drug Administration has determined is a breakthrough
				medicine (as determined under subsection (c)) or an orphan medicine.(c)Breakthrough
				medicines
									(1)DeterminationFor
				purposes of this section, a medicine is a breakthrough medicine
				if the Drug Review Board (established under paragraph (3)) determines—
										(A)it is a new
				product that will make a significant and major improvement by reducing physical
				or mental illness, reducing mortality, or reducing disability; and
										(B)that no other
				product is available to beneficiaries that achieves similar results for the
				same condition at a lower cost.
										(2)ConditionAn
				exemption from rebates under subsection (b)(3) for a breakthrough medicine
				shall continue as long as the medicine is certified as a breakthrough medicine
				but shall be limited to seven calendar years from 2007 or seven calendar years
				from the date of the initial determination under paragraph (1), whichever is
				later.
									(3)Drug Review
				BoardThe Drug Review Board under this paragraph shall consist of
				the Commissioner of Food and Drugs, the Directors of the National Institutes of
				Health, the Director of the National Science Foundation, and 10 experts in
				pharmaceuticals, medical research, and clinical care, selected by the
				Commissioner of Food and Drugs from the faculty of academic medical centers,
				except that no person who has (or who has an immediate family member that has)
				any conflict of interest with any pharmaceutical manufacturer shall serve on
				the Board.
									(d)No
				reviewThe Secretary’s determination of the rebate amounts under
				this section, and the Drug Review Board’s determination of what is a
				breakthrough drug, are not subject to administrative or judicial review.
								1860D–9.Appropriations to cover Government
		  contributionsThere are authorized to be appropriated from
				time to time, out of any moneys in the Treasury not otherwise appropriated, to
				the Prescription Medicine Insurance Account, a Government contribution equal to
				the aggregate costs payable under this part.
							1860D–10.Prescription medicine
		  definedAs used in
				this part, the term prescription medicine means—
								(1)a drug that may be
				dispensed only upon a prescription, and that is described in subparagraph
				(A)(i), (A)(ii), or (B) of section 1927(k)(2); and
								(2)insulin certified
				under section 506 of the Federal Food, Drug,
				and Cosmetic Act, and needles, syringes, and disposable pumps for
				the administration of such
				insulin.
								.
				(b)Conforming
			 amendments
				(1)Amendments to
			 Federal supplementary health insurance trust fundSection 1841 of
			 the Social Security Act (42 U.S.C.
			 1395t) is amended—
					(A)in the last
			 sentence of subsection (a)—
						(i)by
			 striking and after section 201(i)(1); and
						(ii)by
			 inserting before the period the following: , and such amounts as may be
			 deposited in, or appropriated to, the Prescription Medicine Insurance Account
			 established by section 1860D–6;
						(B)in subsection (g),
			 by inserting after by this part, the following: the
			 payments provided for under part D (in which case the payments shall come from
			 the Prescription Medicine Insurance Account in the Supplementary Medical
			 Insurance Trust Fund),;
					(C)in the first
			 sentence of subsection (h), by inserting before the period the following:
			 and section 1860D–5(b)(4) (in which case the payments shall come from
			 the Prescription Medicine Insurance Account in the Supplementary Medical
			 Insurance Trust Fund); and
					(D)in the first
			 sentence of subsection (i)—
						(i)by
			 striking and after section 1840(b)(1); and
						(ii)by
			 inserting before the period the following: , section 1860D–5(b)(2) (in
			 which case the payments shall come from the Prescription Medicine Insurance
			 Account in the Supplementary Medical Insurance Trust Fund).
						(2)No part D
			 prescription medicine coverage under MA plansSection 1852(a)(1)(A) of the Social
			 Security Act (42 U.S.C. 1395w–22(a)(1)(A)) is amended by adding at the end the
			 following: No Medicare Advantage plan shall provide benefits for
			 coverage provided under part D.
				(3)Exclusions from
			 coverage
					(A)Application to
			 part DSection 1862(a) of the Social Security Act (42 U.S.C. 1395y(a)) is
			 amended in the matter preceding paragraph (1) by striking part A or part
			 B and inserting part A, B, or D.
					(B)Prescription
			 medicines not excluded from coverage if appropriately
			 prescribedSection 1862(a)(1) of such Act (42 U.S.C. 1395y(a)(1))
			 is amended—
						(i)in
			 subparagraph (N), by striking and at the end;
						(ii)in
			 subparagraph (O), by striking the semicolon at the end and inserting ,
			 and; and
						(iii)by
			 adding at the end the following new subparagraph:

								(P)in the case of
				prescription medicines covered under part D, which are not prescribed in
				accordance with such
				part;
								.
						(c)Effective
			 dateThe amendments made by this section shall take effect on
			 January 1, 2010, and the Secretary of Health and Human Services shall
			 administer the Social Security Act in accordance with such amendments on and
			 after such date.
			5.Substantial
			 reductions in the price of prescription drugs for medicare
			 beneficiaries
			(a)Participating
			 manufacturers
				(1)In
			 generalEach participating manufacturer of a covered outpatient
			 drug shall make available for purchase by each pharmacy such covered outpatient
			 drug in the amount described in paragraph (2) at the price described in
			 paragraph (3).
				(2)Description of
			 amount of drugsThe amount of a covered outpatient drug that a
			 participating manufacturer shall make available for purchase by a pharmacy is
			 an amount equal to the aggregate amount of the covered outpatient drug sold or
			 distributed by the pharmacy to medicare beneficiaries.
				(3)Description of
			 priceThe price at which a participating manufacturer shall make
			 a covered outpatient drug available for purchase by a pharmacy is the price
			 equal to the lowest of the following:
					(A)The lowest price
			 paid for the covered outpatient drug by any agency or department of the United
			 States.
					(B)The manufacturer’s
			 best price for the covered outpatient drug, as defined in section 1927(c)(1)(C)
			 of the Social Security Act (42 U.S.C.
			 1396r–8(c)(1)(C)).
					(C)The lowest price
			 at which the drug is available (as determined by the Secretary) through
			 importation consistent with the provisions of section 804 of the
			 Federal Food, Drug, and Cosmetic
			 Act.
					(b)Special provision
			 with respect to hospice programsFor purposes of determining the
			 amount of a covered outpatient drug that a participating manufacturer shall
			 make available for purchase by a pharmacy under subsection (a), there shall be
			 included in the calculation of such amount the amount of the covered outpatient
			 drug sold or distributed by a pharmacy to a hospice program. In calculating
			 such amount, only amounts of the covered outpatient drug furnished to a
			 medicare beneficiary enrolled in the hospice program shall be included.
			(c)AdministrationThe
			 Secretary shall issue such regulations as may be necessary to implement this
			 section.
			(d)Reports to
			 Congress regarding effectiveness of section
				(1)In
			 generalNot later than two years after the date of the enactment
			 of this Act, and annually thereafter, the Secretary shall report to Congress
			 regarding the effectiveness of this section in—
					(A)protecting
			 medicare beneficiaries from discriminatory pricing by drug manufacturers;
			 and
					(B)making
			 prescription drugs available to medicare beneficiaries at substantially reduced
			 prices.
					(2)ConsultationIn
			 preparing such reports, the Secretary shall consult with public health experts,
			 affected industries, organizations representing consumers and older Americans,
			 and other interested persons.
				(3)RecommendationsThe
			 Secretary shall include in such reports any recommendations they consider
			 appropriate for changes in this section to further reduce the cost of covered
			 outpatient drugs to medicare beneficiaries.
				(e)DefinitionsFor
			 purposes of this section:
				(1)Participating
			 manufacturerThe term participating manufacturer
			 means any manufacturer of drugs or biologicals that, on or after the date of
			 the enactment of this Act, enters into a contract or agreement with the United
			 States for the sale or distribution of covered outpatient drugs to the United
			 States.
				(2)Covered
			 outpatient drugThe term covered outpatient drug has
			 the meaning given that term in section 1927(k)(2) of the
			 Social Security Act (42 U.S.C.
			 1396r–8(k)(2)).
				(3)Medicare
			 beneficiaryThe term medicare beneficiary means an
			 individual entitled to benefits under part A of title XVIII of the
			 Social Security Act or enrolled under
			 part B of such title, or both.
				(4)Hospice
			 programThe term hospice program has the meaning
			 given that term under section 1861(dd)(2) of the Social Security Act (42 U.S.C.
			 1395x(dd)(2)).
				(5)SecretaryThe
			 term Secretary means the Secretary of Health and Human
			 Services.
				(f)Effective
			 dateThis section shall take effect on January 1, 2010, and the
			 Secretary shall implement this section in a manner consistent with the
			 obligations of the United States.
			6.Importation of
			 certain prescription drugs
			(a)Repeal of
			 certain section regarding importation of prescription
			 drugsChapter VIII of the Federal
			 Food, Drug, and Cosmetic Act (21 U.S.C. 381 et seq.) is amended by
			 striking section 804.
			(b)Importation of
			 prescription drugs; waiver of certain import restrictions
				(1)In
			 GeneralChapter VIII of the Federal Food, Drug, and Cosmetic Act (21
			 U.S.C. 381 et seq.), as amended by section 3, is further amended by inserting
			 after section 803 the following:

						804.Commercial and
				personal importation of prescription drugs
							(a)Importation of
				Prescription Drugs
								(1)In
				generalIn the case of qualifying drugs imported or offered for
				import into the United States from registered exporters or by registered
				importers—
									(A)the limitation on
				importation that is established in section 801(d)(1) is waived; and
									(B)the standards
				referred to in section 801(a) regarding admission of the drugs are subject to
				subsection (g) of this section (including with respect to qualifying drugs to
				which section 801(d)(1) does not apply).
									(2)ImportersA
				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 member of
				the individual (not for resale) from a registered exporter.
									(3)Rule of
				constructionThis section shall apply only with respect to a drug
				that is imported or offered for import into the United States—
									(A)by a registered
				importer; or
									(B)from a registered
				exporter to an individual.
									(4)Definitions
									(A)Registered
				exporter; registered importerFor purposes of this
				section:
										(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 approved.
										(B)Qualifying
				drugFor 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
				drugFor 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 ingredients, route of
				administration, dosage form, and strength as the qualifying drug;
										(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 Controlled Substances Act (21 U.S.C.
				802);
											(II)a biological
				product, as defined 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 recombinant DNA-derived product;
												(III)an infused drug,
				including a peritoneal dialysis solution;
											(IV)an injected
				drug;
											(V)a drug that is
				inhaled during surgery; or
											(VI)a drug that is the
				listed drug referred to in 2 or more abbreviated new drug applications under
				which the drug is commercially marketed.
											(D)Other
				definitionsFor 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 subclause (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 individuals in the United States if the
				Secretary determines that—
												(aa)the country has statutory or
				regulatory standards that are equivalent to the standards in the United States
				and Canada with respect to—
													(AA)the training of pharmacists;
													(BB)the practice of pharmacy; and
													(CC)the protection of the privacy of personal
				medical information; 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 importing a drug into the United States or that,
				pursuant to submitting a registration under subsection (b), seeks to be in such
				business.
										(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 engage in the business of selling prescription drugs at retail;
				and
											(II)employs 1 or more
				pharmacists.
											(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 prescription drugs in the United States under
				section 503(e)(2)(A); and
											(II)does not include a person
				authorized to import drugs under section 801(d)(1).
											(E)Permitted countryThe
				term permitted country means—
										(i)Australia;
										(ii)Canada;
										(iii)a member country of the European
				Union, but does not include a member 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 regulation of human
				pharmaceutial products expires;
											(iv)Japan;
										(v)New Zealand;
										(vi)Switzerland; and
										(vii)a country in which the Secretary
				determines the following requirements are met:
											(I)The country has statutory or
				regulatory requirements—
												(aa)that require the review of drugs for
				safety and effectiveness by an entity of the government of the country;
												(bb)that authorize the approval of only
				those drugs that have been determined to be safe and effective by experts
				employed by or acting on behalf of such entity and qualified by scientific
				training and experience to evaluate 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 effectiveness of drugs;
												(cc)that require the methods used in, and
				the facilities and controls used for the manufacture, processing, and packing
				of drugs in the country to be adequate 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 labeling and promotion
				of drugs to be in accordance with the approval of the drug.
												(II)The valid marketing authorization
				system in the country is equivalent to the systems in the countries 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 Exporters
								(1)Registration of
				importers and exportersA registration condition is that the
				importer or exporter involved (referred to in this subsection 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 operated 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, subsections (c), (d), (e), (g), and (j) (relating to
				the sources of imported qualifying drugs; the inspection of facilities of the
				importer; the payment of fees; compliance with the standards referred to in
				section 801(a); and maintenance of records and samples); or
										(ii)in the case of an
				exporter, subsections (c), (d), (f), (g), (h), (i), and (j) (relating to the
				sources of exported qualifying drugs; the inspection of facilities of the
				exporter and the marking of compliant shipments; the payment of fees; and
				compliance with the standards referred to in section 801(a); being licensed as
				a pharmacist; conditions for individual importation; and maintenance of records
				and samples).
										(C)An agreement by
				the registrant that the registrant will not under subsection (a) import 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
				export or import, to the United States under subsection (a);
										(ii)provide for the
				return to the registrant of such drug; and
										(iii)cease, or not
				begin, the exportation 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 registration condition,
				to promptly correct any noncompliance with such a condition, and to promptly
				report to the Secretary any such noncompliance.
									(F)A plan describing
				the manner in which the registrant will comply with the agreement 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 before the registrant
				intends to make the change, of—
										(i)any
				change that the registrant intends to make regarding information provided 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 subsection (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 Canadian law, or the law
				of the permitted country designated under subsection (a)(4)(D)(i)(II) in which
				the exporter is located, that protect the privacy of personal information with
				respect to each individual importing a prescription drug from the exporter
				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 during 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 during the previous fiscal
				year.
											(J)In the case of an
				importer, an agreement by the importer to report to the Secretary—
										(i)not later than
				August 1 of each fiscal year, the total price and the total 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 Secretary 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 registration
									(A)In
				generalNot later than 90 days after the date on which a
				registrant submits to the Secretary a registration under paragraph (1), the
				Secretary shall notify the registrant whether the registration is approved or
				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 registration is approved if the Secretary determines that
				the registrant is in compliance with such conditions.
									(B)Changes in
				registration informationNot later than 30 days after receiving a
				notice under paragraph (1)(H) from a registrant, the Secretary shall determine
				whether the change involved affects the approval of the registration of the
				registrant under paragraph (1), and shall inform the registrant of the
				determination.
									(3)Publication of
				contact information for registered exportersThrough the Internet
				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 registered
				exporters, including contact information for the exporters. Promptly after the
				approval of a registration submitted under paragraph (1), the Secretary shall
				update the Internet website and the information provided through the toll-free
				telephone number accordingly.
								(4)Suspension and
				termination
									(A)SuspensionWith
				respect to the effectiveness of a registration submitted under paragraph
				(1):
										(i)Subject to clause
				(ii), the Secretary may suspend the registration if the Secretary determines,
				after notice and opportunity for a hearing, that the registrant has failed to
				maintain substantial compliance with a registration condition.
										(ii)If the Secretary
				determines that, under color of the registration, the exporter has exported a
				drug or the importer has imported a drug that is not a qualifying 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
				preceding sentence is not subject to the provision by the Secretary of prior
				notice, and the Secretary shall provide to the registrant an opportunity for a
				hearing not later than 10 days after the date on which the registration is
				suspended.
										(iii)The Secretary
				may reinstate the registration, whether suspended under clause (i) or (ii), if
				the Secretary determines that the registrant has demonstrated that further
				violations of registration conditions will not occur.
										(B)TerminationThe
				Secretary, after notice and opportunity for a hearing, may terminate the
				registration under paragraph (1) of a registrant if the Secretary determines
				that the registrant has engaged in a pattern or practice of violating 1 or more
				registration conditions, or if on 1 or more occasions the Secretary has under
				subparagraph (A)(ii) suspended the registration of the registrant. The
				Secretary may make the termination permanent, or for a fixed period of not less
				than 1 year. During the period in which the registration is terminated, any
				registration submitted under paragraph (1) by the registrant, or a person that
				is a partner in the export or import enterprise, or a principal officer in such
				enterprise, and any registration prepared with the assistance of the registrant
				or such a person, has no legal effect under this section.
									(5)Default of
				bondA bond required to be posted by an exporter under paragraph
				(1)(I)(ii) shall be defaulted and paid to the Treasury of the United States if,
				after opportunity for an informal hearing, the Secretary determines that the
				exporter has—
									(A)exported a drug to
				the United States that is not a qualifying drug or that is not in compliance
				with subsection (g)(2)(A), (g)(4), or (i); or
									(B)failed to permit
				the Secretary to conduct an inspection described under subsection (d).
									(c)Sources of
				Qualifying DrugsA registration condition is that the exporter or
				importer involved agrees that a qualifying drug will under subsection (a) be
				exported or imported into the United States only if there is compliance with
				the following:
								(1)The drug was
				manufactured in an establishment—
									(A)required to
				register under subsection (h) or (i) of section 510; and
									(B)(i)inspected by the
				Secretary; or
										(ii)for which the Secretary has
				elected to rely on a satisfactory report of a good manufacturing practice
				inspection of the establishment from a permitted country whose regulatory
				system the Secretary recognizes as equivalent under a mutual recognition
				agreement, as provided for under section 510(i)(3), section 803, or part 26 of
				title 21, Code of Federal Regulations (or any corresponding successor rule or
				regulation).
										(2)The establishment
				is located in any country, and the establishment manufactured the drug for
				distribution in the United States or for distribution in 1 or more of the
				permitted countries (without regard to whether in addition the drug is
				manufactured for distribution in a foreign country that is not a permitted
				country).
								(3)The exporter or
				importer obtained the drug—
									(A)directly from the
				establishment; or
									(B)directly from an
				entity that, by contract with the exporter or importer—
										(i)provides to the
				exporter or importer a statement (in such form and containing such information
				as the Secretary may require) that, for the chain of custody from the
				establishment, identifies each prior sale, purchase, or trade of the drug
				(including the date of the transaction and the names and addresses of all
				parties to the transaction);
										(ii)agrees to permit
				the Secretary to inspect such statements and related records to determine their
				accuracy;
										(iii)agrees, with
				respect to the qualifying drugs involved, to permit the Secretary to inspect
				warehouses and other facilities, including records, of the entity for purposes
				of determining whether the facilities are in compliance with any standards
				under this Act that are applicable to facilities of that type in the United
				States; and
										(iv)has ensured,
				through such contractual relationships as may be necessary, that the Secretary
				has the same authority regarding other parties in the chain of custody from the
				establishment that the Secretary has under clauses (ii) and (iii) regarding
				such entity.
										(4)(A)The foreign country from
				which the importer will import the drug is a permitted country; or
									(B)The foreign country from which the
				exporter will export the drug is the permitted country in which the exporter is
				located.
									(5)During any period
				in which the drug was not in the control of the manufacturer of the drug, the
				drug did not enter any country that is not a permitted country.
								(6)The exporter or
				importer retains a sample of each lot of the drug sufficient for testing by the
				Secretary.
								(d)Inspection of
				Facilities; Marking of Shipments
								(1)Inspection of
				facilitiesA registration condition is that, for the purpose of
				assisting the Secretary in determining whether the exporter involved is in
				compliance with all other registration conditions—
									(A)the exporter agrees
				to permit the Secretary—
										(i)to
				conduct onsite inspections, including monitoring on a day-to-day basis, of
				places of business of the exporter that relate to qualifying drugs, including
				each warehouse or other facility owned or controlled by, or operated for, the
				exporter;
										(ii)to have access,
				including on a day-to-day basis, to—
											(I)records of the
				exporter that relate to the export of such drugs, including financial records;
				and
											(II)samples of such
				drugs;
											(iii)to carry out the
				duties described in paragraph (3); and
										(iv)to carry out any
				other functions determined by the Secretary to be necessary regarding the
				compliance of the exporter; and
										(B)the Secretary has
				assigned 1 or more employees of the Secretary to carry out the functions
				described in this subsection for the Secretary randomly, but not less than 12
				times annually, on the premises of places of businesses referred to in
				subparagraph (A)(i), and such an assignment remains in effect on a continuous
				basis.
									(2)Marking of
				compliant shipmentsA registration condition is that the exporter
				involved agrees to affix to each shipping container of qualifying drugs
				exported under subsection (a) such markings as the Secretary determines to be
				necessary to identify the shipment as being in compliance with all registration
				conditions. Markings under the preceding sentence shall—
									(A)be designed to
				prevent affixation of the markings to any shipping container that is not
				authorized to bear the markings; and
									(B)include
				anticounterfeiting or track-and-trace technologies, taking into account the
				economic and technical feasibility of those technologies.
									(3)Certain duties
				relating to exportersDuties of the Secretary with respect to an
				exporter include the following:
									(A)Inspecting,
				randomly, but not less than 12 times annually, the places of business of the
				exporter at which qualifying drugs are stored and from which qualifying drugs
				are shipped.
									(B)During the
				inspections under subparagraph (A), verifying the chain of custody of a
				statistically significant sample of qualifying drugs from the establishment in
				which the drug was manufactured to the exporter, which shall be accomplished or
				supplemented by the use of anticounterfeiting or track-and-trace technologies,
				taking into account the economic and technical feasibility of those
				technologies, except that a drug that lacks such technologies from the point of
				manufacture shall not for that reason be excluded from importation by an
				exporter.
									(C)Randomly reviewing
				records of exports to individuals for the purpose of determining whether the
				drugs are being imported by the individuals in accordance with the conditions
				under subsection (i). Such reviews shall be conducted in a manner that will
				result in a statistically significant determination of compliance with all such
				conditions.
									(D)Monitoring the
				affixing of markings under paragraph (2).
									(E)Inspecting as the
				Secretary determines is necessary the warehouses and other facilities,
				including records, of other parties in the chain of custody of qualifying
				drugs.
									(F)Determining
				whether the exporter is in compliance with all other registration
				conditions.
									(4)Prior notice of
				shipmentsA registration condition is that, not less than 8 hours
				and not more than 5 days in advance of the time of the importation of a
				shipment of qualifying drugs, the importer involved agrees to submit to the
				Secretary a notice with respect to the shipment of drugs to be imported or
				offered for import into the United States under subsection (a). A notice under
				the preceding sentence shall include—
									(A)the name and
				complete contact information of the person submitting the notice;
									(B)the name and
				complete contact information of the importer involved;
									(C)the identity of
				the drug, including the established name of the drug, the quantity of the drug,
				and the lot number assigned by the manufacturer;
									(D)the identity of the
				manufacturer of the drug, including the identity of the establishment at which
				the drug was manufactured;
									(E)the country from
				which the drug is shipped;
									(F)the name and
				complete contact information for the shipper of the drug;
									(G)anticipated
				arrival information, including the port of arrival and crossing location within
				that port, and the date and time;
									(H)a summary of the
				chain of custody of the drug from the establishment in which the drug was
				manufactured to the importer;
									(I)a declaration as
				to whether the Secretary has ordered that importation of the drug from the
				permitted country cease under subsection (g)(2)(C) or (D); and
									(J)such other
				information as the Secretary may require by regulation.
									(5)Marking of
				compliant shipmentsA registration condition is that the importer
				involved agrees, before wholesale distribution (as defined in section 503(e))
				of a qualifying drug that has been imported under subsection (a), to affix to
				each container of such drug such markings or other technology as the Secretary
				determines necessary to identify the shipment as being in compliance with all
				registration conditions, except that the markings or other technology shall not
				be required on a drug that bears comparable, compatible markings or technology
				from the manufacturer of the drug. Markings or other technology under the
				preceding sentence shall—
									(A)be designed to
				prevent affixation of the markings or other technology to any container that is
				not authorized to bear the markings; and
									(B)shall include
				anticounterfeiting or track-and-trace technologies, taking into account the
				economic and technical feasibility of such technologies.
									(6)Certain duties
				relating to importersDuties of the Secretary with respect to an
				importer include the following:
									(A)Inspecting,
				randomly, but not less than 12 times annually, the places of business of the
				importer at which a qualifying drug is initially received after
				importation.
									(B)During the
				inspections under subparagraph (A), verifying the chain of custody of a
				statistically significant sample of qualifying drugs from the establishment in
				which the drug was manufactured to the importer, which shall be accomplished or
				supplemented by the use of anticounterfeiting or track-and-trace technologies,
				taking into account the economic and technical feasibility of those
				technologies, except that a drug that lacks such technologies from the point of
				manufacture shall not for that reason be excluded from importation by an
				importer.
									(C)Reviewing notices
				under paragraph (4).
									(D)Inspecting as the
				Secretary determines is necessary the warehouses and other facilities,
				including records of other parties in the chain of custody of qualifying
				drugs.
									(E)Determining
				whether the importer is in compliance with all other registration
				conditions.
									(e)Importer
				Fees
								(1)Registration
				feeA registration condition is that the importer involved pays
				to the Secretary a fee of $10,000 due on the date on which the importer first
				submits the registration to the Secretary under subsection (b).
								(2)Inspection
				feeA registration condition is that the importer involved pays a
				fee to the Secretary in accordance with this subsection. Such fee shall be paid
				not later than October 1 and April 1 of each fiscal year in the amount provided
				for under paragraph (3).
								(3)Amount of
				inspection fee
									(A)Aggregate total
				of feesNot later than 30 days before the start of each fiscal
				year, the Secretary, in consultation with the Secretary of Homeland Security
				and the Secretary of the Treasury, shall establish an aggregate total of fees
				to be collected under paragraph (2) for importers for that fiscal year that is
				sufficient, and not more than necessary, to pay the costs for that fiscal year
				of administering this section with respect to registered importers, including
				the costs associated with—
										(i)inspecting the
				facilities of registered importers, and of other entities in the chain of
				custody of a qualifying drug as necessary, under subsection (d)(6);
										(ii)developing,
				implementing, and operating under such subsection an electronic system for
				submission and review of the notices required under subsection (d)(4) with
				respect to shipments of qualifying drugs under subsection (a) to assess
				compliance with all registration conditions when such shipments are offered for
				import into the United States; and
										(iii)inspecting such
				shipments as necessary, when offered for import into the United States to
				determine if such a shipment should be refused admission under subsection
				(g)(5).
										(B)LimitationSubject
				to subparagraph (C), the aggregate total of fees collected under paragraph (2)
				for a fiscal year shall not exceed 1 percent of the total price of qualifying
				drugs imported during that fiscal year into the United States by registered
				importers under subsection (a).
									(C)Total price of
				drugs
										(i)EstimateFor
				the purposes of complying with the limitation described in subparagraph (B)
				when establishing under subparagraph (A) the aggregate total of fees to be
				collected under paragraph (2) for a fiscal year, the Secretary shall estimate
				the total price of qualifying drugs imported into the United States by
				registered importers during that fiscal year by adding the total price of
				qualifying drugs imported by each registered importer during the 6-month period
				from January 1 through June 30 of the previous fiscal year, as reported to the
				Secretary by each registered importer under subsection (b)(1)(J).
										(ii)CalculationNot
				later than March 1 of the fiscal year that follows the fiscal year for which
				the estimate under clause (i) is made, the Secretary shall calculate the total
				price of qualifying drugs imported into the United States by registered
				importers during that fiscal year by adding the total price of qualifying drugs
				imported by each registered importer during that fiscal year, as reported to
				the Secretary by each registered importer under subsection (b)(1)(J).
										(iii)AdjustmentIf
				the total price of qualifying drugs imported into the United States by
				registered importers during a fiscal year as calculated under clause (ii) is
				less than the aggregate total of fees collected under paragraph (2) for that
				fiscal year, the Secretary shall provide for a pro-rata reduction in the fee
				due from each registered importer on April 1 of the subsequent fiscal year so
				that the limitation described in subparagraph (B) is observed.
										(D)Individual
				importer feeSubject to the limitation described in subparagraph
				(B), the fee under paragraph (2) to be paid on October 1 and April 1 by an
				importer shall be an amount that is proportional to a reasonable estimate by
				the Secretary of the semiannual share of the importer of the volume of
				qualifying drugs imported by importers under subsection (a).
									(4)Use of
				fees
									(A)In
				generalSubject to appropriations Acts, fees collected by the
				Secretary under paragraphs (1) and (2) shall be credited to the appropriation
				account for salaries and expenses of the Food and Drug Administration until
				expended (without fiscal year limitation), and the Secretary may, in
				consultation with the Secretary of Homeland Security and the Secretary of the
				Treasury, transfer some proportion of such fees to the appropriation account
				for salaries and expenses of the Bureau of Customs and Border Protection until
				expended (without fiscal year limitation).
									(B)Sole
				purposeFees collected by the Secretary under paragraphs (1) and
				(2) are only available to the Secretary and, if transferred, to the Secretary
				of Homeland Security, and are for the sole purpose of paying the costs referred
				to in paragraph (3)(A).
									(5)Collection of
				feesIn any case where the Secretary does not receive payment of
				a fee assessed under paragraph (1) or (2) within 30 days after it is due, such
				fee shall be treated as a claim of the United States Government subject to
				subchapter II of chapter 37 of title 31, United States Code.
								(f)Exporter
				Fees
								(1)Registration
				feeA registration condition is that the exporter involved pays
				to the Secretary a fee of $10,000 due on the date on which the exporter first
				submits that registration to the Secretary under subsection (b).
								(2)Inspection
				feeA registration condition is that the exporter involved pays a
				fee to the Secretary in accordance with this subsection. Such fee shall be paid
				not later than October 1 and April 1 of each fiscal year in the amount provided
				for under paragraph (3).
								(3)Amount of
				inspection fee
									(A)Aggregate total
				of feesNot later than 30 days before the start of each fiscal
				year, the Secretary, in consultation with the Secretary of Homeland Security
				and the Secretary of the Treasury, shall establish an aggregate total of fees
				to be collected under paragraph (2) for exporters for that fiscal year that is
				sufficient, and not more than necessary, to pay the costs for that fiscal year
				of administering this section with respect to registered exporters, including
				the costs associated with—
										(i)inspecting the
				facilities of registered exporters, and of other entities in the chain of
				custody of a qualifying drug as necessary, under subsection (d)(3);
										(ii)developing,
				implementing, and operating under such subsection a system to screen marks on
				shipments of qualifying drugs under subsection (a) that indicate compliance
				with all registration conditions, when such shipments are offered for import
				into the United States; and
										(iii)screening such
				markings, and inspecting such shipments as necessary, when offered for import
				into the United States to determine if such a shipment should be refused
				admission under subsection (g)(5).
										(B)LimitationSubject
				to subparagraph (C), the aggregate total of fees collected under paragraph (2)
				for a fiscal year shall not exceed 1 percent of the total price of qualifying
				drugs imported during that fiscal year into the United States by registered
				exporters under subsection (a).
									(C)Total price of
				drugs
										(i)EstimateFor
				the purposes of complying with the limitation described in subparagraph (B)
				when establishing under subparagraph (A) the aggregate total of fees to be
				collected under paragraph (2) for a fiscal year, the Secretary shall estimate
				the total price of qualifying drugs imported into the United States by
				registered exporters during that fiscal year by adding the total price of
				qualifying drugs exported by each registered exporter during the 6-month period
				from January 1 through June 30 of the previous fiscal year, as reported to the
				Secretary by each registered exporter under subsection (b)(1)(I)(iv).
										(ii)CalculationNot
				later than March 1 of the fiscal year that follows the fiscal year for which
				the estimate under clause (i) is made, the Secretary shall calculate the total
				price of qualifying drugs imported into the United States by registered
				exporters during that fiscal year by adding the total price of qualifying drugs
				exported by each registered exporter during that fiscal year, as reported to
				the Secretary by each registered exporter under subsection
				(b)(1)(I)(iv).
										(iii)AdjustmentIf
				the total price of qualifying drugs imported into the United States by
				registered exporters during a fiscal year as calculated under clause (ii) is
				less than the aggregate total of fees collected under paragraph (2) for that
				fiscal year, the Secretary shall provide for a pro-rata reduction in the fee
				due from each registered exporter on April 1 of the subsequent fiscal year so
				that the limitation described in subparagraph (B) is observed.
										(D)Individual
				exporter feeSubject to the limitation described in subparagraph
				(B), the fee under paragraph (2) to be paid on October 1 and April 1 by an
				exporter shall be an amount that is proportional to a reasonable estimate by
				the Secretary of the semiannual share of the exporter of the volume of
				qualifying drugs exported by exporters under subsection (a).
									(4)Use of
				fees
									(A)In
				generalSubject to appropriations Acts, fees collected by the
				Secretary under paragraphs (1) and (2) shall be credited to the appropriation
				account for salaries and expenses of the Food and Drug Administration until
				expended (without fiscal year limitation), and the Secretary may, in
				consultation with the Secretary of Homeland Security and the Secretary of the
				Treasury, transfer some proportion of such fees to the appropriation account
				for salaries and expenses of the Bureau of Customs and Border Protection until
				expended (without fiscal year limitation).
									(B)Sole
				purposeFees collected by the Secretary under paragraphs (1) and
				(2) are only available to the Secretary and, if transferred, to the Secretary
				of Homeland Security, and are for the sole purpose of paying the costs referred
				to in paragraph (3)(A).
									(5)Collection of
				feesIn any case where the Secretary does not receive payment of
				a fee assessed under paragraph (1) or (2) within 30 days after it is due, such
				fee shall be treated as a claim of the United States Government subject to
				subchapter II of chapter 37 of title 31, United States Code.
								(g)Compliance With
				Section 801(a)
								(1)In
				generalA registration condition is that each qualifying drug
				exported under subsection (a) by the registered exporter involved or imported
				under subsection (a) by the registered importer involved is in compliance with
				the standards referred to in section 801(a) regarding admission of the drug
				into the United States, subject to paragraphs (2), (3), and (4).
								(2)Section 505;
				approval status
									(A)In
				generalA qualifying drug that is imported or offered for import
				under subsection (a) shall comply with the conditions established in the
				approved application under section 505(b) for the U.S. label drug as described
				under this subsection.
									(B)Notice by
				manufacturer; general provisions
										(i)In
				generalThe person that manufactures a qualifying drug that is,
				or will be, introduced for commercial distribution in a permitted country shall
				in accordance with this paragraph submit to the Secretary a notice that—
											(I)includes each
				difference in the qualifying drug from a condition established in the approved
				application for the U.S. label drug beyond—
												(aa)the
				variations provided for in the application; and
												(bb)any
				difference in labeling (except ingredient labeling); or
												(II)states that there
				is no difference in the qualifying drug from a condition established in the
				approved application for the U.S. label drug beyond—
												(aa)the
				variations provided for in the application; and
												(bb)any
				difference in labeling (except ingredient labeling).
												(ii)Information in
				noticeA notice under clause (i)(I) shall include the information
				that the Secretary may require under section 506A, any additional information
				the Secretary may require (which may include data on bioequivalence if such
				data are not required under section 506A), and, with respect to the permitted
				country that approved the qualifying drug for commercial distribution, or with
				respect to which such approval is sought, include the following:
											(I)The date on which
				the qualifying drug with such difference was, or will be, introduced for
				commercial distribution in the permitted country.
											(II)Information
				demonstrating that the person submitting the notice has also notified the
				government of the permitted country in writing that the person is submitting to
				the Secretary a notice under clause (i)(I), which notice describes the
				difference in the qualifying drug from a condition established in the approved
				application for the U.S. label drug.
											(III)The information
				that the person submitted or will submit to the government of the permitted
				country for purposes of obtaining approval for commercial distribution of the
				drug in the country which, if in a language other than English, shall be
				accompanied by an English translation verified to be complete and accurate,
				with the name, address, and a brief statement of the qualifications of the
				person that made the translation.
											(iii)CertificationsThe
				chief executive officer and the chief medical officer of the manufacturer
				involved shall each certify in the notice under clause (i) that—
											(I)the information
				provided in the notice is complete and true; and
											(II)a copy of the
				notice has been provided to the Federal Trade Commission and to the State
				attorneys general.
											(iv)FeeIf
				a notice submitted under clause (i) includes a difference that would, under
				section 506A, require the submission of a supplemental application if made as a
				change to the U.S. label drug, the person that submits the notice shall pay to
				the Secretary a fee in the same amount as would apply if the person were paying
				a fee pursuant to section 736(a)(1)(A)(ii). Subject to appropriations Acts,
				fees collected by the Secretary under the preceding sentence are available only
				to the Secretary and are for the sole purpose of paying the costs of reviewing
				notices submitted under clause (i).
										(v)Timing of
				submission of notices
											(I)Prior approval
				noticesA notice under clause (i) to which subparagraph (C)
				applies shall be submitted to the Secretary not later than 120 days before the
				qualifying drug with the difference is introduced for commercial distribution
				in a permitted country, unless the country requires that distribution of the
				qualifying drug with the difference begin less than 120 days after the country
				requires the difference.
											(II)Other approval
				noticesA notice under clause (i) to which subparagraph (D)
				applies shall be submitted to the Secretary not later than the day on which the
				qualifying drug with the difference is introduced for commercial distribution
				in a permitted country.
											(III)Other
				noticesA notice under clause (i) to which subparagraph (E)
				applies shall be submitted to the Secretary on the date that the qualifying
				drug is first introduced for commercial distribution in a permitted country and
				annually thereafter.
											(vi)Review by
				Secretary
											(I)In
				generalIn this paragraph, the difference in a qualifying drug
				that is submitted in a notice under clause (i) from the U.S. label drug shall
				be treated by the Secretary as if it were a manufacturing change to the U.S.
				label drug under section 506A.
											(II)Standard of
				reviewExcept as provided in subclause (III), the Secretary shall
				review and approve or disapprove the difference in a notice submitted under
				clause (i), if required under section 506A, using the safe and effective
				standard for approving or disapproving a manufacturing change under section
				506A.
											(III)BioequivalenceIf
				the Secretary would approve the difference in a notice submitted under clause
				(i) using the safe and effective standard under section 506A and if the
				Secretary determines that the qualifying drug is not bioequivalent to the U.S.
				label drug, the Secretary may—
												(aa)include in the
				labeling provided under paragraph (3) a prominent advisory that the qualifying
				drug is safe and effective but is not bioequivalent to the U.S. label drug if
				the Secretary determines that such an advisory is necessary for health care
				practitioners and patients to use the qualifying drug safely and effectively;
				or
												(bb)decline to
				approve the difference if the Secretary determines that the availability of
				both the qualifying drug and the U.S. label drug would pose a threat to the
				public health.
												(IV)Review by the
				secretaryThe Secretary shall review and approve or disapprove
				the difference in a notice submitted under clause (i), if required under
				section 506A, not later than 120 days after the date on which the notice is
				submitted.
											(V)Establishment
				inspectionIf review of such difference would require an
				inspection of the establishment in which the qualifying drug is
				manufactured—
												(aa)such inspection
				by the Secretary shall be authorized; and
												(bb)the
				Secretary may rely on a satisfactory report of a good manufacturing practice
				inspection of the establishment from a permitted country whose regulatory
				system the Secretary recognizes as equivalent under a mutual recognition
				agreement, as provided under section 510(i)(3), section 803, or part 26 of
				title 21, Code of Federal Regulations (or any corresponding successor rule or
				regulation).
												(vii)Publication of
				information on notices
											(I)In
				generalThrough the Internet website of the Food and Drug
				Administration and a toll-free telephone number, the Secretary shall readily
				make available to the public a list of notices submitted under clause
				(i).
											(II)ContentsThe
				list under subclause (I) shall include the date on which a notice is submitted
				and whether—
												(aa)a
				notice is under review;
												(bb)the
				Secretary has ordered that importation of the qualifying drug from a permitted
				country cease; or
												(cc)the
				importation of the drug is permitted under subsection (a).
												(III)UpdateThe
				Secretary shall promptly update the Internet website with any changes to the
				list.
											(C)Notice; drug
				difference requiring prior approvalIn the case of a notice under
				subparagraph (B)(i) that includes a difference that would, under section
				506A(c) or (d)(3)(B)(i), require the approval of a supplemental application
				before the difference could be made to the U.S. label drug the following shall
				occur:
										(i)Promptly after the
				notice is submitted, the Secretary shall notify registered exporters,
				registered importers, the Federal Trade Commission, and the State attorneys
				general that the notice has been submitted with respect to the qualifying drug
				involved.
										(ii)If
				the Secretary has not made a determination whether such a supplemental
				application regarding the U.S. label drug would be approved or disapproved by
				the date on which the qualifying drug involved is to be introduced for
				commercial distribution in a permitted country, the Secretary shall—
											(I)order that the
				importation of the qualifying drug involved from the permitted country not
				begin until the Secretary completes review of the notice; and
											(II)promptly notify
				registered exporters, registered importers, the Federal Trade Commission, and
				the State attorneys general of the order.
											(iii)If the Secretary
				determines that such a supplemental application regarding the U.S. label drug
				would not be approved, the Secretary shall—
											(I)order that the
				importation of the qualifying drug involved from the permitted country cease,
				or provide that an order under clause (ii), if any, remains in effect;
											(II)notify the
				permitted country that approved the qualifying drug for commercial distribution
				of the determination; and
											(III)promptly notify
				registered exporters, registered importers, the Federal Trade Commission, and
				the State attorneys general of the determination.
											(iv)If the Secretary
				determines that such a supplemental application regarding the U.S. label drug
				would be approved, the Secretary shall—
											(I)vacate the order
				under clause (ii), if any;
											(II)consider the
				difference to be a variation provided for in the approved application for the
				U.S. label drug;
											(III)permit
				importation of the qualifying drug under subsection (a); and
											(IV)promptly notify
				registered exporters, registered importers, the Federal Trade Commission, and
				the State attorneys general of the determination.
											(D)Notice; drug
				difference not requiring prior approvalIn the case of a notice
				under subparagraph (B)(i) that includes a difference that would, under section
				506A(d)(3)(B)(ii), not require the approval of a supplemental application
				before the difference could be made to the U.S. label drug the following shall
				occur:
										(i)During the period
				in which the notice is being reviewed by the Secretary, the authority under
				this subsection to import the qualifying drug involved continues in
				effect.
										(ii)If
				the Secretary determines that such a supplemental application regarding the
				U.S. label drug would not be approved, the Secretary shall—
											(I)order that the
				importation of the qualifying drug involved from the permitted country
				cease;
											(II)notify the
				permitted country that approved the qualifying drug for commercial distribution
				of the determination; and
											(III)promptly notify
				registered exporters, registered importers, the Federal Trade Commission, and
				the State attorneys general of the determination.
											(iii)If the Secretary
				determines that such a supplemental application regarding the U.S. label drug
				would be approved, the difference shall be considered to be a variation
				provided for in the approved application for the U.S. label drug.
										(E)Notice; drug
				difference not requiring approval; no differenceIn the case of a
				notice under subparagraph (B)(i) that includes a difference for which, under
				section 506A(d)(1)(A), a supplemental application would not be required for the
				difference to be made to the U.S. label drug, or that states that there is no
				difference, the Secretary—
										(i)shall consider such
				difference to be a variation provided for in the approved application for the
				U.S. label drug;
										(ii)may not order that
				the importation of the qualifying drug involved cease; and
										(iii)shall promptly
				notify registered exporters and registered importers.
										(F)Differences in
				active ingredient, route of administration, dosage form, or strength
										(i)In
				generalA person who manufactures a drug approved under section
				505(b) shall submit an application under section 505(b) for approval of another
				drug that is manufactured for distribution in a permitted country by or for the
				person that manufactures the drug approved under section 505(b) if—
											(I)there is no
				qualifying drug in commercial distribution in permitted countries whose
				combined population represents at least 50 percent of the total population of
				all permitted countries with the same active ingredient or ingredients, route
				of administration, dosage form, and strength as the drug approved under section
				505(b); and
											(II)each active
				ingredient of the other drug is related to an active ingredient of the drug
				approved under section 505(b), as defined in clause (v).
											(ii)Application
				under section 505(b)The
				application under section 505(b) required under clause (i) shall—
											(I)request approval
				of the other drug for the indication or indications for which the drug approved
				under section 505(b) is labeled;
											(II)include the
				information that the person submitted to the government of the permitted
				country for purposes of obtaining approval for commercial distribution of the
				other drug in that country, which if in a language other than English, shall be
				accompanied by an English translation verified to be complete and accurate,
				with the name, address, and a brief statement of the qualifications of the
				person that made the translation;
											(III)include a right
				of reference to the application for the drug approved under section 505(b);
				and
											(IV)include such
				additional information as the Secretary may require.
											(iii)Timing of
				submission of applicationAn application under section 505(b)
				required under clause (i) shall be submitted to the Secretary not later than
				the day on which the information referred to in clause (ii)(II) is submitted to
				the government of the permitted country.
										(iv)Notice of
				decision on applicationThe Secretary shall promptly notify
				registered exporters, registered importers, the Federal Trade Commission, and
				the State attorneys general of a determination to approve or to disapprove an
				application under section 505(b) required under clause (i).
										(v)Related active
				ingredientsFor purposes of clause (i)(II), 2 active ingredients
				are related if they are—
											(I)the same; or
											(II)different salts,
				esters, or complexes of the same moiety.
											(3)Section 502;
				labeling
									(A)Importation by
				registered importer
										(i)In
				generalIn the case of a qualifying drug that is imported or
				offered for import by a registered importer, such drug shall be considered to
				be in compliance with section 502 and the labeling requirements under the
				approved application for the U.S. label drug if the qualifying drug
				bears—
											(I)a copy of the
				labeling approved for the U.S. label drug under section 505, without regard to
				whether the copy bears any trademark involved;
											(II)the name of the
				manufacturer and location of the manufacturer;
											(III)the lot number
				assigned by the manufacturer;
											(IV)the name,
				location, and registration number of the importer; and
											(V)the National Drug
				Code number assigned to the qualifying drug by the Secretary.
											(ii)Request for copy
				of the labelingThe Secretary shall provide such copy to the
				registered importer involved, upon request of the importer.
										(iii)Requested
				labelingThe labeling provided by the Secretary under clause (ii)
				shall—
											(I)include the
				established name, as defined in section 502(e)(3), for each active ingredient
				in the qualifying drug;
											(II)not include the
				proprietary name of the U.S. label drug or any active ingredient
				thereof;
											(III)if required
				under paragraph (2)(B)(vi)(III), a prominent advisory that the qualifying drug
				is safe and effective but not bioequivalent to the U.S. label drug; and
											(IV)if the inactive
				ingredients of the qualifying drug are different from the inactive ingredients
				for the U.S. label drug, include—
												(aa)a
				prominent notice that the ingredients of the qualifying drug differ from the
				ingredients of the U.S. label drug and that the qualifying drug must be
				dispensed with an advisory to people with allergies about this difference and a
				list of ingredients; and
												(bb)a
				list of the ingredients of the qualifying drug as would be required under
				section 502(e).
												(B)Importation by
				individual
										(i)In
				generalIn the case of a qualifying drug that is imported or
				offered for import by a registered exporter to an individual, such drug shall
				be considered to be in compliance with section 502 and the labeling
				requirements under the approved application for the U.S. label drug if the
				packaging and labeling of the qualifying drug complies with all applicable
				regulations promulgated under sections 3 and 4 of the Poison Prevention
				Packaging Act of 1970 (15 U.S.C. 1471 et seq.) and the labeling of the
				qualifying drug includes—
											(I)directions for use
				by the consumer;
											(II)the lot number
				assigned by the manufacturer;
											(III)the name and
				registration number of the exporter;
											(IV)if required under
				paragraph (2)(B)(vi)(III), a prominent advisory that the drug is safe and
				effective but not bioequivalent to the U.S. label drug;
											(V)if the inactive
				ingredients of the drug are different from the inactive ingredients for the
				U.S. label drug—
												(aa)a
				prominent advisory that persons with an allergy should check the ingredient
				list of the drug because the ingredients of the drug differ from the
				ingredients of the U.S. label drug; and
												(bb)a
				list of the ingredients of the drug as would be required under section 502(e);
				and
												(VI)a copy of any
				special labeling that would be required by the Secretary had the U.S. label
				drug been dispensed by a pharmacist in the United States, without regard to
				whether the special labeling bears any trademark involved.
											(ii)Request for
				copy of special labeling and ingredient listThe Secretary shall
				provide to the registered exporter involved a copy of the special labeling, the
				advisory, and the ingredient list of the drug, upon request of the
				exporter.
										(iii)Requested
				labeling and ingredient listThe labeling and ingredient list
				provided by the Secretary under clause (ii) shall—
											(I)include the
				established name, as defined in section 502(e)(3), for each active ingredient
				in the drug; and
											(II)not include the
				proprietary name of the U.S. label drug or any active ingredient
				thereof.
											(4)Section 501;
				adulterationA qualifying drug that is imported or offered for
				import under subsection (a) shall be considered to be in compliance with
				section 501 if the drug is in compliance with subsection (c).
								(5)Standards for
				refusing admissionA drug exported under subsection (a) from a
				registered exporter or imported by a registered importer may be refused
				admission into the United States if 1 or more of the following applies:
									(A)The drug is not a
				qualifying drug.
									(B)A notice for the
				drug required under paragraph (2)(B) has not been submitted to the
				Secretary.
									(C)The Secretary has
				ordered that importation of the drug from the permitted country cease under
				paragraph (2) (C) or (D).
									(D)The drug does not
				comply with paragraph (3) or (4).
									(E)The shipping
				container appears damaged in a way that may affect the strength, quality, or
				purity of the drug.
									(F)The Secretary
				becomes aware that—
										(i)the
				drug may be counterfeit;
										(ii)the drug may have
				been prepared, packed, or held under insanitary conditions; or
										(iii)the methods used
				in, or the facilities or controls used for, the manufacturing, processing,
				packing, or holding of the drug do not conform to good manufacturing
				practice.
										(G)The Secretary has
				obtained an injunction under section 302 that prohibits the distribution of the
				drug in interstate commerce.
									(H)The Secretary has
				under section 505(e) withdrawn approval of the drug.
									(I)The manufacturer
				of the drug has instituted a recall of the drug.
									(J)If the drug is
				imported or offered for import by a registered importer without submission of a
				notice in accordance with subsection (d)(4).
									(K)If the drug is
				imported or offered for import from a registered exporter to an individual and
				1 or more of the following applies:
										(i)The shipping
				container for such drug does not bear the markings required under subsection
				(d)(2).
										(ii)The markings on
				the shipping container appear to be counterfeit.
										(iii)The shipping
				container or markings appear to have been tampered with.
										(h)Licensing as
				PharmacistA registration condition is that the exporter involved
				agrees that a qualifying drug will be exported to an individual only if the
				Secretary has verified that—
								(1)the exporter is
				authorized under the law of the permitted country in which the exporter is
				located to dispense prescription drugs; and
								(2)the exporter
				employs persons that are licensed under the law of the permitted country in
				which the exporter is located to dispense prescription drugs in sufficient
				number to dispense safely the drugs exported by the exporter to individuals,
				and the exporter assigns to those persons responsibility for dispensing such
				drugs to individuals.
								(i)Individuals;
				Conditions for Importation
								(1)In
				generalFor purposes of subsection (a)(2)(B), the importation of
				a qualifying drug by an individual is in accordance with this subsection if the
				following conditions are met:
									(A)The drug is
				accompanied by a copy of a prescription for the drug, which
				prescription—
										(i)is
				valid under applicable Federal and State laws; and
										(ii)was issued by a
				practitioner who, under the law of a State of which the individual is a
				resident, or in which the individual receives care from the practitioner who
				issues the prescription, is authorized to administer prescription drugs.
										(B)The drug is
				accompanied by a copy of the documentation that was required under the law or
				regulations of the permitted country in which the exporter is located, as a
				condition of dispensing the drug to the individual.
									(C)The copies
				referred to in subparagraphs (A)(i) and (B) are marked in a manner
				sufficient—
										(i)to
				indicate that the prescription, and the equivalent document in the permitted
				country in which the exporter is located, have been filled; and
										(ii)to prevent a
				duplicative filling by another pharmacist.
										(D)The individual has
				provided to the registered exporter a complete list of all drugs used by the
				individual for review by the individuals who dispense the drug.
									(E)The quantity of
				the drug does not exceed a 90-day supply.
									(F)The drug is not an
				ineligible subpart H drug. For purposes of this section, a prescription drug is
				an ineligible subpart H drug if the drug was approved by the
				Secretary under subpart H of part 314 of title 21, Code of Federal Regulations
				(relating to accelerated approval), with restrictions under section 520 of such
				part to assure safe use, and the Secretary has published in the Federal
				Register a notice that the Secretary has determined that good cause exists to
				prohibit the drug from being imported pursuant to this subsection.
									(2)Notice regarding
				drug refused admissionIf a registered exporter ships a drug to
				an individual pursuant to subsection (a)(2)(B) and the drug is refused
				admission to the United States, a written notice shall be sent to the
				individual and to the exporter that informs the individual and the exporter of
				such refusal and the reason for the refusal.
								(j)Maintenance of
				Records and Samples
								(1)In
				generalA registration condition is that the importer or exporter
				involved shall—
									(A)maintain records
				required under this section for not less than 2 years; and
									(B)maintain samples
				of each lot of a qualifying drug required under this section for not less than
				2 years.
									(2)Place of record
				maintenanceThe records described under paragraph (1) shall be
				maintained—
									(A)in the case of an
				importer, at the place of business of the importer at which the importer
				initially receives the qualifying drug after importation; or
									(B)in the case of an
				exporter, at the facility from which the exporter ships the qualifying drug to
				the United States.
									(k)Drug
				Recalls
								(1)ManufacturersA
				person that manufactures a qualifying drug imported from a permitted country
				under this section shall promptly inform the Secretary—
									(A)if the drug is
				recalled or withdrawn from the market in a permitted country;
									(B)how the drug may
				be identified, including lot number; and
									(C)the reason for the
				recall or withdrawal.
									(2)SecretaryWith
				respect to each permitted country, the Secretary shall—
									(A)enter into an
				agreement with the government of the country to receive information about
				recalls and withdrawals of qualifying drugs in the country; or
									(B)monitor recalls
				and withdrawals of qualifying drugs in the country using any information that
				is available to the public in any media.
									(3)NoticeThe
				Secretary may notify, as appropriate, registered exporters, registered
				importers, wholesalers, pharmacies, or the public of a recall or withdrawal of
				a qualifying drug in a permitted country.
								(l)Drug
				LabelingWhen a qualifying drug that is imported into the United
				States by an importer under subsection (a) is dispensed by a pharmacist to an
				individual, the pharmacist shall provide that the packaging and labeling of the
				drug complies with all applicable regulations promulgated under sections 3 and
				4 of the Poison Prevention Packaging Act of 1970 (15 U.S.C. 1471 et seq.) and
				include with any other labeling provided to the individual the
				following:
								(1)The lot number
				assigned by the manufacturer.
								(2)The name and
				registration number of the importer.
								(3)If the inactive
				ingredients of the drug are different from the inactive ingredients for the
				U.S. label drug—
									(A)a prominent
				advisory that persons with allergies should check the ingredient list of the
				drug because the ingredients of the drug differ from the ingredients of the
				U.S. label drug; and
									(B)a list of the
				ingredients of the drug as would be required under section 502(e).
									(4)If required under
				paragraph (2)(B)(vi)(III) of subsection (g), a prominent advisory that the drug
				is safe and effective but not bioequivalent to the U.S. label drug.
								(m)Charitable
				ContributionsNotwithstanding any other provision of this
				section, this section does not authorize the importation into the United States
				of a qualifying drug donated or otherwise supplied for free or at nominal cost
				by the manufacturer of the drug to a charitable or humanitarian organization,
				including the United Nations and affiliates, or to a government of a foreign
				country.
							(n)Unfair and
				Discriminatory Acts and Practices
								(1)In
				generalIt is unlawful for a manufacturer, directly or indirectly
				(including by being a party to a licensing agreement or other agreement),
				to—
									(A)discriminate by
				charging a higher price for a prescription drug sold to a registered exporter
				or other person in a permitted country that exports a qualifying drug to the
				United States under this section than the price that is charged, inclusive of
				rebates or other incentives to the permitted country or other person, to
				another person that is in the same country and that does not export a
				qualifying drug into the United States under this section;
									(B)discriminate by
				charging a higher price for a prescription drug sold to a registered importer
				or other person that distributes, sells, or uses a qualifying drug imported
				into the United States under this section than the price that is charged to
				another person in the United States that does not import a qualifying drug
				under this section, or that does not distribute, sell, or use such a
				drug;
									(C)discriminate by
				denying, restricting, or delaying supplies of a prescription drug to a
				registered exporter or other person in a permitted country that exports a
				qualifying drug to the United States under this section or to a registered
				importer or other person that distributes, sells, or uses a qualifying drug
				imported into the United States under this section;
									(D)discriminate by
				publicly, privately, or otherwise refusing to do business with a registered
				exporter or other person in a permitted country that exports a qualifying drug
				to the United States under this section or with a registered importer or other
				person that distributes, sells, or uses a qualifying drug imported into the
				United States under this section;
									(E)knowingly fail to
				submit a notice under subsection (g)(2)(B)(i), knowingly fail to submit such a
				notice on or before the date specified in subsection (g)(2)(B)(v) or as
				otherwise required under subsection (e) (3), (4), and (5) of section 4 of the
				Pharmaceutical Market Access and Drug Safety Act of 2005, knowingly submit such
				a notice that makes a materially false, fictitious, or fraudulent statement, or
				knowingly fail to provide promptly any information requested by the Secretary
				to review such a notice;
									(F)knowingly fail to
				submit an application required under subsection (g)(2)(F), knowingly fail to
				submit such an application on or before the date specified in subsection
				(g)(2)(F)(ii), knowingly submit such an application that makes a materially
				false, fictitious, or fraudulent statement, or knowingly fail to provide
				promptly any information requested by the Secretary to review such an
				application;
									(G)cause there to be
				a difference (including a difference in active ingredient, route of
				administration, dosage form, strength, formulation, manufacturing
				establishment, manufacturing process, or person that manufactures the drug)
				between a prescription drug for distribution in the United States and the drug
				for distribution in a permitted country;
									(H)refuse to allow an
				inspection authorized under this section of an establishment that manufactures
				a qualifying drug that is, or will be, introduced for commercial distribution
				in a permitted country;
									(I)fail to conform to
				the methods used in, or the facilities used for, the manufacturing, processing,
				packing, or holding of a qualifying drug that is, or will be, introduced for
				commercial distribution in a permitted country to good manufacturing practice
				under this Act;
									(J)become a party to
				a licensing agreement or other agreement related to a qualifying drug that
				fails to provide for compliance with all requirements of this section with
				respect to such drug;
									(K)enter into a
				contract that restricts, prohibits, or delays the importation of a qualifying
				drug under this section;
									(L)engage in any
				other action to restrict, prohibit, or delay the importation of a qualifying
				drug under this section; or
									(M)engage in any other
				action that the Federal Trade Commission determines to discriminate against a
				person that engages or attempts to engage in the importation of a qualifying
				drug under this section.
									(2)Affirmative
				defense
									(A)DiscriminationIt
				shall be an affirmative defense to a charge that a manufacturer has
				discriminated under subparagraph (A), (B), (C), (D), or (M) of paragraph (1)
				that the higher price charged for a prescription drug sold to a person, the
				denial, restriction, or delay of supplies of a prescription drug to a person,
				the refusal to do business with a person, or other discriminatory activity
				against a person, is not based, in whole or in part, on—
										(i)the
				person exporting or importing a qualifying drug into the United States under
				this section; or
										(ii)the person
				distributing, selling, or using a qualifying drug imported into the United
				States under this section.
										(B)Drug
				differencesIt shall be an affirmative defense to a charge that a
				manufacturer has caused there to be a difference described in subparagraph (G)
				of paragraph (1) that—
										(i)the difference was
				required by the country in which the drug is distributed;
										(ii)the Secretary has
				determined that the difference was necessary to improve the safety or
				effectiveness of the drug;
										(iii)the person
				manufacturing the drug for distribution in the United States has given notice
				to the Secretary under subsection (g)(2)(B)(i) that the drug for distribution
				in the United States is not different from a drug for distribution in permitted
				countries whose combined population represents at least 50 percent of the total
				population of all permitted countries; or
										(iv)the difference
				was not caused, in whole or in part, for the purpose of restricting importation
				of the drug into the United States under this section.
										(3)Effect of
				subsection
									(A)Sales in other
				countriesThis subsection applies only to the sale or
				distribution of a prescription drug in a country if the manufacturer of the
				drug chooses to sell or distribute the drug in the country. Nothing in this
				subsection shall be construed to compel the manufacturer of a drug to
				distribute or sell the drug in a country.
									(B)Discounts to
				insurers, health plans, pharmacy benefit managers, and covered
				entitiesNothing in this subsection shall be construed to—
										(i)prevent or
				restrict a manufacturer of a prescription drug from providing discounts to an
				insurer, health plan, pharmacy benefit manager in the United States, or covered
				entity in the drug discount program under section 340B of the
				Public Health Service Act (42 U.S.C.
				256b) in return for inclusion of the drug on a formulary;
										(ii)require that such
				discounts be made available to other purchasers of the prescription drug;
				or
										(iii)prevent or
				restrict any other measures taken by an insurer, health plan, or pharmacy
				benefit manager to encourage consumption of such prescription drug.
										(C)Charitable
				contributionsNothing in this subsection shall be construed
				to—
										(i)prevent a
				manufacturer from donating a prescription drug, or supplying a prescription
				drug at nominal cost, to a charitable or humanitarian organization, including
				the United Nations and affiliates, or to a government of a foreign country;
				or
										(ii)apply to such
				donations or supplying of a prescription drug.
										(4)Enforcement
									(A)Unfair or
				deceptive act or practiceA violation of this subsection shall be
				treated as a violation of a rule defining an unfair or deceptive act or
				practice prescribed under section 18(a)(1)(B) of the
				Federal Trade Commission Act (15
				U.S.C. 57a(a)(1)(B)).
									(B)Actions by the
				CommissionThe Federal Trade Commission—
										(i)shall enforce this
				subsection in the same manner, by the same means, and with the same
				jurisdiction, powers, and duties as though all applicable terms and provisions
				of the Federal Trade Commission Act
				(15 U.S.C. 41 et seq.) were incorporated into and made a part of this section;
				and
										(ii)may seek monetary
				relief threefold the damages sustained, in addition to any other remedy
				available to the Federal Trade Commission under the
				Federal Trade Commission Act (15
				U.S.C. 41 et seq.).
										(5)Actions by
				States
									(A)In
				general
										(i)Civil
				actionsIn any case in which the attorney general of a State has
				reason to believe that an interest of the residents of that State have been
				adversely affected by any manufacturer that violates paragraph (1), the
				attorney general of a State may bring a civil action on behalf of the residents
				of the State, and persons doing business in the State, in a district court of
				the United States of appropriate jurisdiction to—
											(I)enjoin that
				practice;
											(II)enforce
				compliance with this subsection;
											(III)obtain damages,
				restitution, or other compensation on behalf of residents of the State and
				persons doing business in the State, including threefold the damages; or
											(IV)obtain such other
				relief as the court may consider to be appropriate.
											(ii)Notice
											(I)In
				generalBefore filing an action under clause (i), the attorney
				general of the State involved shall provide to the Federal Trade
				Commission—
												(aa)written notice of
				that action; and
												(bb)a
				copy of the complaint for that action.
												(II)ExemptionSubclause
				(I) shall not apply with respect to the filing of an action by an attorney
				general of a State under this paragraph, if the attorney general determines
				that it is not feasible to provide the notice described in that subclause
				before filing of the action. In such case, the attorney general of a State
				shall provide notice and a copy of the complaint to the Federal Trade
				Commission at the same time as the attorney general files the action.
											(B)Intervention
										(i)In
				generalOn receiving notice under subparagraph (A)(ii), the
				Federal Trade Commission shall have the right to intervene in the action that
				is the subject of the notice.
										(ii)Effect of
				interventionIf the Federal Trade Commission intervenes in an
				action under subparagraph (A), it shall have the right—
											(I)to be heard with
				respect to any matter that arises in that action; and
											(II)to file a
				petition for appeal.
											(C)ConstructionFor
				purposes of bringing any civil action under subparagraph (A), nothing in this
				subsection shall be construed to prevent an attorney general of a State from
				exercising the powers conferred on the attorney general by the laws of that
				State to—
										(i)conduct
				investigations;
										(ii)administer oaths
				or affirmations; or
										(iii)compel the
				attendance of witnesses or the production of documentary and other
				evidence.
										(D)Actions by the
				CommissionIn any case in which an action is instituted by or on
				behalf of the Federal Trade Commission for a violation of paragraph (1), a
				State may not, during the pendency of that action, institute an action under
				subparagraph (A) for the same violation against any defendant named in the
				complaint in that action.
									(E)VenueAny
				action brought under subparagraph (A) may be brought in the district court of
				the United States that meets applicable requirements relating to venue under
				section 1391 of title 28, United States Code.
									(F)Service of
				processIn an action brought under subparagraph (A), process may
				be served in any district in which the defendant—
										(i)is
				an inhabitant; or
										(ii)may be
				found.
										(G)Measurement of
				damagesIn any action under this paragraph to enforce a cause of
				action under this subsection in which there has been a determination that a
				defendant has violated a provision of this subsection, damages may be proved
				and assessed in the aggregate by statistical or sampling methods, by the
				computation of illegal overcharges or by such other reasonable system of
				estimating aggregate damages as the court in its discretion may permit without
				the necessity of separately proving the individual claim of, or amount of
				damage to, persons on whose behalf the suit was brought.
									(H)Exclusion on
				duplicative reliefThe district court shall exclude from the
				amount of monetary relief awarded in an action under this paragraph brought by
				the attorney general of a State any amount of monetary relief which duplicates
				amounts which have been awarded for the same injury.
									(6)Effect on
				antitrust lawsNothing in this subsection shall be construed to
				modify, impair, or supersede the operation of the antitrust laws. For the
				purpose of this subsection, the term antitrust laws has the
				meaning given it in the first 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.
								(7)ManufacturerIn
				this subsection, the term manufacturer means any entity, including
				any affiliate or licensee of that entity, that is engaged in—
									(A)the production,
				preparation, propagation, compounding, conversion, or processing of a
				prescription drug, either directly or indirectly by extraction from substances
				of natural origin, or independently by means of chemical synthesis, or by a
				combination of extraction and chemical synthesis; or
									(B)the packaging,
				repackaging, labeling, relabeling, or distribution of a prescription
				drug.
									.
				(2)Prohibited
			 ActsThe Federal Food, Drug, and
			 Cosmetic Act is amended—
					(A)in section 301 (21
			 U.S.C. 331), by striking paragraph (aa) and inserting the following:

							(aa)(1)The sale or trade by a
				pharmacist, or by a business organization of which the pharmacist is a part, of
				a qualifying drug that under section 804(a)(2)(A) was imported by the
				pharmacist, other than—
								(A)a sale at retail made pursuant to
				dispensing the drug to a customer of the pharmacist or organization; or
							(B)a sale or trade of the drug to a
				pharmacy or a wholesaler registered to import drugs under section 804.
							(2)The sale or trade by an individual of
				a qualifying drug that under section 804(a)(2)(B) was imported by the
				individual.
							(3)The making of a materially false,
				fictitious, or fraudulent statement or representation, or a material omission,
				in a notice under clause (i) of section 804(g)(2)(B) or in an application
				required under section 804(g)(2)(F), or the failure to submit such a notice or
				application.
							(4)The importation of a drug in
				violation of a registration condition or other requirement under section 804,
				the falsification of any record required to be maintained, or provided to the
				Secretary, under such section, or the violation of any registration condition
				or other requirement under such
				section.
							;
				and
					(B)in section 303(a)
			 (21 U.S.C. 333(a)), by striking paragraph (6) and inserting the
			 following:

							(6)Notwithstanding subsection (a), any
				person that knowingly violates section 301(i) (2) or (3) or section 301(aa)(4)
				shall be imprisoned not more than 10 years, or fined in accordance with title
				18, United States Code, or
				both.
							.
					(3)Amendment of
			 Certain Provisions
					(A)In
			 generalSection 801 of the Federal Food, Drug, and Cosmetic Act (21
			 U.S.C. 381) is amended by striking subsection (g) and inserting the
			 following:

							(g)With respect to a
				prescription drug that is imported or offered for import into the United States
				by an individual who is not in the business of such importation, that is not
				shipped by a registered exporter under section 804, and that is refused
				admission under subsection (a), the Secretary shall notify the individual
				that—
								(1)the drug has been
				refused admission because the drug was not a lawful import under section
				804;
								(2)the drug is not
				otherwise subject to a waiver of the requirements of subsection (a);
								(3)the individual may
				under section 804 lawfully import certain prescription drugs from exporters
				registered with the Secretary under section 804; and
								(4)the individual can
				find information about such importation, including a list of registered
				exporters, on the Internet website of the Food and Drug Administration or
				through a toll-free telephone number required under section
				804.
								.
					(B)Establishment
			 registrationSection 510(i) of the
			 Federal Food, Drug, and Cosmetic Act
			 (21 U.S.C. 360(i)) is amended in paragraph (1) by inserting after import
			 into the United States the following: , including a drug that
			 is, or may be, imported or offered for import into the United States under
			 section 804,.
					(C)Effective
			 dateThe amendments made by this subsection shall take effect on
			 the date that is 90 days after the date of enactment of this Act.
					(4)Exhaustion
					(A)In
			 generalSection 271 of title 35, United States Code, is
			 amended—
						(i)by
			 redesignating subsections (h) and (i) as (i) and (j), respectively; and
						(ii)by
			 inserting after subsection (g) the following:

								(h)It shall not be an
				act of infringement to use, offer to sell, or sell within the United States or
				to import into the United States any patented invention under section 804 of
				the Federal Food, Drug, and Cosmetic
				Act that was first sold abroad by or under authority of the owner or
				licensee of such
				patent.
								.
						(B)Rule of
			 constructionNothing in the amendment made by paragraph (1) shall
			 be construed to affect the ability of a patent owner or licensee to enforce
			 their patent, subject to such amendment.
					(5)Effect of
			 Section 804
					(A)In
			 generalSection 804 of the Federal Food, Drug, and Cosmetic Act, as added
			 by subsection (a), shall permit the importation of qualifying drugs (as defined
			 in such section 804) into the United States without regard to the status of the
			 issuance of implementing regulations—
						(i)from
			 exporters registered under such section 804 on the date that is 90 days after
			 the date of enactment of this Act; and
						(ii)from permitted
			 countries, as defined in such section 804, by importers registered under such
			 section 804 on the date that is 1 year after the date of enactment of this
			 Act.
						(B)Review of
			 registration by certain exporters
						(i)Review
			 priorityIn the review of registrations submitted under
			 subsection (b) of such section 804, registrations submitted by entities in
			 Canada that are significant exporters of prescription drugs to individuals in
			 the United States as of the date of enactment of this Act will have priority
			 during the 90-day period that begins on such date of enactment.
						(ii)Period for
			 reviewDuring such 90-day period, the reference in subsection
			 (b)(2)(A) of such section 804 to 90 days (relating to approval or disapproval
			 of registrations) is, as applied to such entities, deemed to be 30 days.
						(iii)LimitationThat
			 an exporter in Canada exports, or has exported, prescription drugs to
			 individuals in the United States on or before the date that is 90 days after
			 the date of enactment of this Act shall not serve as a basis, in whole or in
			 part, for disapproving a registration under such section 804 from the
			 exporter.
						(iv)First year
			 limit on number of exportersDuring the 1-year period beginning
			 on the date of enactment of this Act, the Secretary of Health and Human
			 Services (referred to in this section as the Secretary) may
			 limit the number of registered exporters under such section 804 to not less
			 than 50, so long as the Secretary gives priority to those exporters with
			 demonstrated ability to process a high volume of shipments of drugs to
			 individuals in the United States.
						(v)Second year limit
			 on number of exportersDuring the 1-year period beginning on the
			 date that is 1 year after the date of enactment of this Act, the Secretary may
			 limit the number of registered exporters under such section 804 to not less
			 than 100, so long as the Secretary gives priority to those exporters with
			 demonstrated ability to process a high volume of shipments of drugs to
			 individuals in the United States.
						(vi)Further limit
			 on number of exportersThe Secretary shall report to Congress to
			 request the authority to impose a limitation on the number of registered
			 exporters under such section 804 during any period beginning on a date that is
			 not less than 2 years after the date of enactment of this Act if the Secretary
			 determines that—
							(I)a
			 limitation on the number of registered exporters is necessary for the effective
			 and efficient enforcement of the requirements of such section 804 with respect
			 to such exporters; and
							(II)such limitation
			 will not restrict the ability of individuals to import prescription drugs for
			 personal use from registered exporters under such section 804.
							(C)Limits on number
			 of importers
						(i)First year limit
			 on number of importersDuring the 1-year period beginning on the
			 date that is 1 year after the date of enactment of this Act, the Secretary may
			 limit the number of registered importers under such section 804 to not less
			 than 100 (of which at least a significant number shall be groups of pharmacies,
			 to the extent feasible given the applications submitted by such groups), so
			 long as the Secretary gives priority to those importers with demonstrated
			 ability to process a high volume of shipments of drugs imported into the United
			 States.
						(ii)Second year
			 limit on number of importersDuring the 1-year period beginning
			 on the date that is 2 years after the date of enactment of this Act, the
			 Secretary may limit the number of registered importers under such section 804
			 to not less than 200 (of which at least a significant number shall be groups of
			 pharmacies, to the extent feasible given the applications submitted by such
			 groups), so long as the Secretary gives priority to those importers with
			 demonstrated ability to process a high volume of shipments of drugs to
			 individuals in the United States.
						(iii)Further limit
			 on number of importersThe Secretary shall report to Congress to
			 request the authority to impose a limitation on the number of registered
			 importers under such section 804 during any period beginning on a date that is
			 not less than 3 years after the date of enactment of this Act if the Secretary
			 determines that—
							(I)a
			 limitation on the number of registered importers is necessary for the effective
			 and efficient enforcement of the requirements of such section 804 with respect
			 to such importers; and
							(II)such limitation
			 will not restrict the ability of individuals to purchase qualifying drugs
			 imported under such section 804 or savings available to individuals by
			 purchasing such qualifying drugs.
							(D)Notices for
			 drugs for import from CanadaThe notice with respect to a
			 qualifying drug introduced for commercial distribution in Canada as of the date
			 of enactment of this Act that is required under subsection (g)(2)(B)(i) of such
			 section 804 shall be submitted to the Secretary not later than 30 days after
			 the date of enactment of this Act if—
						(i)the
			 U.S. label drug (as defined in such section 804) for the qualifying drug is 1
			 of the 100 prescription drugs with the highest dollar volume of sales in the
			 United States based on the 12 calendar month period most recently completed
			 before the date of enactment of this Act; or
						(ii)the
			 notice is a notice under subsection (g)(2)(B)(i)(II) of such section
			 804.
						(E)Notice for drugs
			 for import from other countriesThe notice with respect to a
			 qualifying drug introduced for commercial distribution in a permitted country
			 other than Canada as of the date of enactment of this Act that is required
			 under subsection (g)(2)(B)(i) of such section 804 shall be submitted to the
			 Secretary not later than 180 days after the date of enactment of this Act
			 if—
						(i)the
			 U.S. label drug for the qualifying drug is 1 of the 100 prescription drugs with
			 the highest dollar volume of sales in the United States based on the 12
			 calendar month period that is first completed on the date that is 120 days
			 after the date of enactment of this Act; or
						(ii)the
			 notice is a notice under subsection (g)(2)(B)(i)(II) of such section
			 804.
						(F)Notice for other
			 drugs for import
						(i)Guidance on
			 submission datesThe Secretary shall by guidance establish a
			 series of submission dates for the notices under subsection (g)(2)(B)(i) of
			 such section 804 with respect to qualifying drugs introduced for commercial
			 distribution as of the date of enactment of this Act and that are not required
			 to be submitted under subparagraph (D) or (E).
						(ii)Consistent and
			 efficient use of resourcesThe Secretary shall establish the
			 dates described under clause (i) so that such notices described under such
			 clause are submitted and reviewed at a rate that allows consistent and
			 efficient use of the resources and staff available to the Secretary for such
			 reviews. Review of all such notices shall be completed not later than 5 years
			 after the date of enactment of this Act.
						(iii)Priority for
			 drugs with higher salesThe Secretary shall establish the dates
			 described under clause (i) so that the Secretary reviews the notices described
			 under such clause with respect to qualifying drugs with higher dollar volume of
			 sales in the United States before the notices with respect to drugs with lower
			 sales in the United States.
						(G)Notices for
			 drugs approved after effective dateThe notice required under
			 subsection (g)(2)(B)(i) of such section 804 for a qualifying drug first
			 introduced for commercial distribution in a permitted country (as defined in
			 such section 804) after the date of enactment of this Act shall be submitted to
			 and reviewed by the Secretary as provided under subsection (g)(2)(B) of such
			 section 804, without regard to subparagraph (D), (E), or (F).
					(H)ReportBeginning
			 with fiscal year 2009, not later than 90 days after the end of each fiscal year
			 during which the Secretary reviews a notice referred to in subparagraph (D),
			 (E), or (F), the Secretary shall submit a report to Congress concerning the
			 progress of the Food and Drug Administration in reviewing the notices referred
			 to in subparagraphs (D), (E), and (F).
					(I)User
			 fees
						(i)ExportersWhen
			 establishing an aggregate total of fees to be collected from exporters under
			 subsection (f)(2) of such section 804, the Secretary shall, under subsection
			 (f)(3)(C)(i) of such section 804, estimate the total price of drugs imported
			 under subsection (a) of such section 804 into the United States by registered
			 exporters during fiscal year 2009 to be $1,000,000,000.
						(ii)ImportersWhen
			 establishing an aggregate total of fees to be collected from importers under
			 subsection (e)(2) of such section 804, the Secretary shall, under subsection
			 (e)(3)(C)(i) of such section 804, estimate the total price of drugs imported
			 under subsection (a) of such section 804 into the United States by registered
			 importers during—
							(I)fiscal year 2009
			 to be $1,000,000,000; and
							(II)fiscal year 2010
			 to be $10,000,000,000.
							(iii)Fiscal year
			 2010 adjustment
							(I)ReportsNot
			 later than February 20, 2010, registered importers shall report to the
			 Secretary the total price and the total volume of drugs imported to the United
			 States by the importer during the 4-month period from October 1, 2009, through
			 January 31, 2010.
							(II)ReestimateNotwithstanding
			 subsection (e)(3)(C)(ii) of such section 804 or clause (ii), the Secretary
			 shall reestimate the total price of qualifying drugs imported under subsection
			 (a) of such section 804 into the United States by registered importers during
			 fiscal year 2010. Such reestimate shall be equal to—
								(aa)the
			 total price of qualifying drugs imported by each importer as reported under
			 subclause (I); multiplied by
								(bb)3.
								(III)AdjustmentThe
			 Secretary shall adjust the fee due on April 1, 2010, from each importer so that
			 the aggregate total of fees collected under paragraph (5)(B) for fiscal year
			 2010 does not exceed the total price of qualifying drugs imported under
			 subsection (a) of such section 804 into the United States by registered
			 importers during fiscal year 2008 as reestimated under subclause (II).
							(iv)Annual
			 report
							(I)Food and drug
			 administrationBeginning with fiscal year 2009, not later than
			 180 days after the end of each fiscal year during which fees are collected
			 under subsection (e), (f), or (g)(2)(B)(iv) of such section 804, the Secretary
			 shall prepare and submit to the House of Representatives and the Senate a
			 report on the implementation of the authority for such fees during such fiscal
			 year and the use, by the Food and Drug Administration, of the fees collected
			 for the fiscal year for which the report is made and credited to the Food and
			 Drug Administration.
							(II)Customs and
			 border controlBeginning with fiscal year 2007, not later than
			 180 days after the end of each fiscal year during which fees are collected
			 under subsection (e) or (f) of such section 804, the Secretary of Homeland
			 Security, in consultation with the Secretary of the Treasury, shall prepare and
			 submit to the House of Representatives and the Senate a report on the use, by
			 the Bureau of Customs and Border Protection, of the fees, if any, transferred
			 by the Secretary to the Bureau of Customs and Border Protection for the fiscal
			 year for which the report is made.
							(6)Implementation
			 of Section 804
					(A)Interim
			 ruleThe Secretary may promulgate an interim rule for
			 implementing section 804 of the Federal Food,
			 Drug, and Cosmetic Act, as added by subsection (a) of this
			 section.
					(B)No notice of
			 proposed rulemakingThe interim rule described under subparagraph
			 (A) may be developed and promulgated by the Secretary without providing general
			 notice of proposed rulemaking.
					(C)Final
			 ruleNot later than 1 year after the date on which the Secretary
			 promulgates an interim rule under subparagraph (A), the Secretary shall, in
			 accordance with procedures under section 553 of title 5, United States Code,
			 promulgate a final rule for implementing such section 804, which may
			 incorporate by reference provisions of the interim rule provided for under
			 subparagraph (A), to the extent that such provisions are not modified.
					(7)Consumer
			 EducationThe Secretary shall carry out activities that educate
			 consumers—
					(A)with regard to the
			 availability of qualifying drugs for import for personal use from an exporter
			 registered with and approved by the Food and Drug Administration under section
			 804 of the Federal Food, Drug, and Cosmetic
			 Act, as added by this section, including information on how to
			 verify whether an exporter is registered and approved by use of the Internet
			 website of the Food and Drug Administration and the toll-free telephone number
			 required by this Act;
					(B)that drugs that
			 consumers attempt to import from an exporter that is not registered with and
			 approved by the Food and Drug Administration can be seized by the United States
			 Customs Service and destroyed, and that such drugs may be counterfeit,
			 unapproved, unsafe, or ineffective; and
					(C)with regard to the
			 availability at domestic retail pharmacies of qualifying drugs imported under
			 such section 804 by domestic wholesalers and pharmacies registered with and
			 approved by the Food and Drug Administration.
					(8)Effect on
			 Administration PracticesNotwithstanding any provision of this
			 Act (and the amendments made by this Act), nothing in this Act (or the
			 amendments made by this Act) shall be construed to change, limit, or restrict
			 the practices of the Food and Drug Administration or the Bureau of Customs and
			 Border Protection in effect on January 1, 2008, with respect to the importation
			 of prescription drugs into the United States by an individual, on the person of
			 such individual, for personal use.
				(c)Disposition of
			 certain drugs denied admission into United States
				(1)In
			 GeneralChapter VIII of the Federal Food, Drug, and Cosmetic Act (21
			 U.S.C. 381 et seq.), as amended by this section, is further amended by adding
			 at the end the following section:

						805.Disposition of
				certain drugs denied admission
							(a)In
				GeneralThe Secretary of Homeland Security shall deliver to the
				Secretary a shipment of drugs that is imported or offered for import into the
				United States if—
								(1)the shipment has a
				declared value of less than $10,000; and
								(2)(A)the shipping container
				for such drugs does not bear the markings required under section 804(d)(2);
				or
									(B)the Secretary has requested delivery
				of such shipment of drugs.
									(b)No Bond or
				ExportSection 801(b) does not authorize the delivery to the
				owner or consignee of drugs delivered to the Secretary under subsection (a)
				pursuant to the execution of a bond, and such drugs may not be exported.
							(c)Destruction of
				Violative ShipmentThe Secretary shall destroy a shipment of
				drugs delivered by the Secretary of Homeland Security to the Secretary under
				subsection (a) if—
								(1)in the case of
				drugs that are imported or offered for import from a registered exporter under
				section 804, the drugs are in violation of any standard described in section
				804(g)(5); or
								(2)in the case of
				drugs that are not imported or offered for import from a registered exporter
				under section 804, the drugs are in violation of a standard referred to in
				section 801(a) or 801(d)(1).
								(d)Certain
				Procedures
								(1)In
				generalThe delivery and destruction of drugs under this section
				may be carried out without notice to the importer, owner, or consignee of the
				drugs except as required by section 801(g) or section 804(i)(2). The issuance
				of receipts for the drugs, and recordkeeping activities regarding the drugs,
				may be carried out on a summary basis.
								(2)Objective of
				proceduresProcedures promulgated under paragraph (1) shall be
				designed toward the objective of ensuring that, with respect to efficiently
				utilizing Federal resources available for carrying out this section, a
				substantial majority of shipments of drugs subject to described in subsection
				(c) are identified and destroyed.
								(e)Evidence
				ExceptionDrugs may not be destroyed under subsection (c) to the
				extent that the Attorney General of the United States determines that the drugs
				should be preserved as evidence or potential evidence with respect to an
				offense against the United States.
							(f)Rule of
				ConstructionThis section may not be construed as having any
				legal effect on applicable law with respect to a shipment of drugs that is
				imported or offered for import into the United States and has a declared value
				equal to or greater than
				$10,000.
							.
				(2)ProceduresProcedures
			 for carrying out section 805 of the Federal
			 Food, Drug, and Cosmetic Act, as added by this subsection, shall be
			 established not later than 90 days after the date of the enactment of this
			 Act.
				(3)Effective
			 DateThe amendments made by this subsection shall take effect on
			 the date that is 90 days after the date of enactment of this Act.
				(d)Civil actions
			 regarding property
				(1)In
			 GeneralSection 303 of the Federal Food, Drug, and Cosmetic Act (21
			 U.S.C. 333) is amended by adding at the end the following subsection:

						(g)(1)If a person is alienating
				or disposing of property, or intends to alienate or dispose of property, that
				is obtained as a result of or is traceable to a drug imported in violation of
				section 801(a) or 801(d), the Attorney General may commence a civil action in
				any Federal court—
								(A)to enjoin such alienation or
				disposition of property; or
								(B)for a restraining order to—
									(i)prohibit any person from
				withdrawing, transferring, removing, dissipating, or disposing of any such
				property or property of equivalent value; and
									(ii)appoint a temporary receiver to
				administer such restraining order.
									(2)Proceedings under paragraph (1) shall
				be carried out in the same manner as applies under section 1345 of title 18,
				United States
				Code.
							.
				(2)Effective
			 DateThe amendment made by this subsection shall take effect on
			 the day that is 90 days after the date of enactment of this Act.
				(e)Wholesale
			 distribution of drugs; statements regarding prior sale, purchase, or
			 trade
				(1)Striking of
			 Exemptions; Applicability to Registered ExportersSection 503(e)
			 of the Federal Food, Drug, and Cosmetic
			 Act (21 U.S.C. 353(e)) is amended—
					(A)in paragraph
			 (1)—
						(i)by
			 striking and who is not the manufacturer or an authorized distributor of
			 record of such drug;
						(ii)by
			 striking to an authorized distributor of record or; and
						(iii)by
			 striking subparagraph (B) and inserting the following:

								(B)The fact that a drug subject to
				subsection (b) is exported from the United States does not with respect to such
				drug exempt any person that is engaged in the business of the wholesale
				distribution of the drug from providing the statement described in subparagraph
				(A) to the person that receives the drug pursuant to the export of the
				drug.
								(C)(i)The Secretary shall by
				regulation establish requirements that supersede subparagraph (A) (referred to
				in this subparagraph as alternative requirements) to identify
				the chain of custody of a drug subject to subsection (b) from the manufacturer
				of the drug throughout the wholesale distribution of the drug to a pharmacist
				who intends to sell the drug at retail if the Secretary determines that the
				alternative requirements, which may include standardized anti-counterfeiting or
				track-and-trace technologies, will identify such chain of custody or the
				identity of the discrete package of the drug from which the drug is dispensed
				with equal or greater certainty to the requirements of subparagraph (A), and
				that the alternative requirements are economically and technically
				feasible.
									(ii)When the Secretary promulgates a
				final rule to establish such alternative requirements, the final rule in
				addition shall, with respect to the registration condition established in
				clause (i) of section 804(c)(3)(B), establish a condition equivalent to the
				alternative requirements, and such equivalent condition may be met in lieu of
				the registration condition established in such clause
				(i).
									;
						(B)in paragraph
			 (2)(A), by adding at the end the following: The preceding sentence may
			 not be construed as having any applicability with respect to a registered
			 exporter under section 804.; and
					(C)in paragraph (3),
			 by striking and subsection (d)— in the matter preceding
			 subparagraph (A) and all that follows through the term wholesale
			 distribution means in subparagraph (B) and inserting the
			 following: and subsection (d), the term wholesale
			 distribution means.
					(2)Conforming
			 AmendmentSection 503(d) of the Federal Food, Drug, and Cosmetic Act (21
			 U.S.C. 353(d)) is amended by adding at the end the following:

						(4)Each manufacturer of a drug subject
				to subsection (b) shall maintain at its corporate offices a current list of the
				authorized distributors of record of such drug.
						(5)For purposes of this subsection, the
				term authorized distributors of record means those distributors
				with whom a manufacturer has established an ongoing relationship to distribute
				such manufacturer’s
				products.
						.
				(3)Effective
			 Date
					(A)In
			 generalThe amendments made by subparagraphs (A) and (C) of
			 paragraph (1) and by paragraph (2) shall take effect on January 1, 2013.
					(B)Drugs imported
			 by registered importers under section 804Notwithstanding
			 subparagraph (A), the amendments made by subparagraphs (A) and (C) of paragraph
			 (1) and by paragraph (2) shall take effect on the date that is 90 days after
			 the date of enactment of this Act with respect to qualifying drugs imported
			 under section 804 of the Federal Food, Drug,
			 and Cosmetic Act, as added by this section.
					(C)High-risk
			 drugs
						(i)In
			 generalNotwithstanding subparagraph (A), the Secretary of Health
			 and Human Services (referred to in this section as the
			 Secretary) may apply the amendments made by subparagraphs (A)
			 and (C) of paragraph (1) and by paragraph (2) before January 1, 2013, with
			 respect to a prescription drug if the Secretary—
							(I)determines that
			 the drug is at high risk for being counterfeited; and
							(II)publishes the
			 determination and the basis for the determination in the Federal
			 Register.
							(ii)Pedigree not
			 requiredNotwithstanding a determination under clause (i) with
			 respect to a prescription drug, the amendments described in such clause shall
			 not apply with respect to a wholesale distribution of such drug if the drug is
			 distributed by the manufacturer of the drug to a person that distributes the
			 drug to a retail pharmacy for distribution to the consumer or patient, with no
			 other intervening transactions.
						(iii)LimitationThe
			 Secretary may make the determination under clause (i) with respect to not more
			 than 50 drugs before January 1, 2013.
						(D)Effect with
			 respect to registered exportersThe amendment made by paragraph
			 (1)(B) shall take effect on the date that is 90 days after the date of
			 enactment of this Act.
					(E)Alternative
			 requirementsThe Secretary shall issue regulations to establish
			 the alternative requirements, referred to in the amendment made by paragraph
			 (1)(A), that take effect not later than—
						(i)January 1, 2011,
			 with respect to a prescription drug determined under subparagraph (C)(i) to be
			 at high risk for being counterfeited; and
						(ii)January 1, 2013,
			 with respect to all other prescription drugs.
						(F)Intermediate
			 requirementsWith respect to the prescription drugs described
			 under subparagraph (E)(ii), the Secretary shall by regulation require the use
			 of standardized anti-counterfeiting or track-and-trace technologies on such
			 prescription drugs at the case and pallet level effective not later than
			 January 1, 2012.
					(f)Internet sales
			 of prescription drugs
				(1)In
			 GeneralChapter V of the Federal
			 Food, Drug, and Cosmetic Act (21 U.S.C. 351 et seq.) is amended by
			 inserting after section 503A the following:

						503B.Internet sales
				of prescription drugs
							(a)Requirements
				Regarding Information on Internet Site
								(1)In
				generalA person may not dispense a prescription drug pursuant to
				a sale of the drug by such person if—
									(A)the purchaser of
				the drug submitted the purchase order for the drug, or conducted any other part
				of the sales transaction for the drug, through an Internet site;
									(B)the person
				dispenses the drug to the purchaser by mailing or shipping the drug to the
				purchaser; and
									(C)such site, or any
				other Internet site used by such person for purposes of sales of a prescription
				drug, fails to meet each of the requirements specified in paragraph (2), other
				than a site or pages on a site that—
										(i)are not intended
				to be accessed by purchasers or prospective purchasers; or
										(ii)provide an
				Internet information location tool within the meaning of section 231(e)(5) of
				the Communications Act of 1934 (47
				U.S.C. 231(e)(5)).
										(2)RequirementsWith
				respect to an Internet site, the requirements referred to in subparagraph (C)
				of paragraph (1) for a person to whom such paragraph applies are as
				follows:
									(A)Each page of the
				site shall include either the following information or a link to a page that
				provides the following information:
										(i)The name of such
				person.
										(ii)Each State in
				which the person is authorized by law to dispense prescription drugs.
										(iii)The address and
				telephone number of each place of business of the person with respect to sales
				of prescription drugs through the Internet, other than a place of business that
				does not mail or ship prescription drugs to purchasers.
										(iv)The name of each
				individual who serves as a pharmacist for prescription drugs that are mailed or
				shipped pursuant to the site, and each State in which the individual is
				authorized by law to dispense prescription drugs.
										(v)If
				the person provides for medical consultations through the site for purposes of
				providing prescriptions, the name of each individual who provides such
				consultations; each State in which the individual is licensed or otherwise
				authorized by law to provide such consultations or practice medicine; and the
				type or types of health professions for which the individual holds such
				licenses or other authorizations.
										(B)A link to which
				paragraph (1) applies shall be displayed in a clear and prominent place and
				manner, and shall include in the caption for the link the words
				licensing and contact information.
									(b)Internet Sales
				Without Appropriate Medical Relationships
								(1)In
				generalExcept as provided in paragraph (2), a person may not
				dispense a prescription drug, or sell such a drug, if—
									(A)for purposes of
				such dispensing or sale, the purchaser communicated with the person through the
				Internet;
									(B)the patient for
				whom the drug was dispensed or purchased did not, when such communications
				began, have a prescription for the drug that is valid in the United
				States;
									(C)pursuant to such
				communications, the person provided for the involvement of a practitioner, or
				an individual represented by the person as a practitioner, and the practitioner
				or such individual issued a prescription for the drug that was
				purchased;
									(D)the person knew,
				or had reason to know, that the practitioner or the individual referred to in
				subparagraph (C) did not, when issuing the prescription, have a qualifying
				medical relationship with the patient; and
									(E)the person
				received payment for the dispensing or sale of the drug.
									For
				purposes of subparagraph (E), payment is received if money or other other
				valuable consideration is received.(2)ExceptionsParagraph
				(1) does not apply to—
									(A)the dispensing or
				selling of a prescription drug pursuant to telemedicine practices sponsored
				by—
										(i)a
				hospital that has in effect a provider agreement under title XVIII of the
				Social Security Act (relating to the
				Medicare program); or
										(ii)a
				group practice that has not fewer than 100 physicians who have in effect
				provider agreements under such title; or
										(B)the dispensing or
				selling of a prescription drug pursuant to practices that promote the public
				health, as determined by the Secretary by regulation.
									(3)Qualifying
				medical relationship
									(A)In
				generalWith respect to issuing a prescription for a drug for a
				patient, a practitioner has a qualifying medical relationship with the patient
				for purposes of this section if—
										(i)at
				least one in-person medical evaluation of the patient has been conducted by the
				practitioner; or
										(ii)the practitioner
				conducts a medical evaluation of the patient as a covering practitioner.
										(B)In-person
				medical evaluationA medical evaluation by a practitioner is an
				in-person medical evaluation for purposes of this section if the practitioner
				is in the physical presence of the patient as part of conducting the
				evaluation, without regard to whether portions of the evaluation are conducted
				by other health professionals.
									(C)Covering
				practitionerWith respect to a patient, a practitioner is a
				covering practitioner for purposes of this section if the practitioner conducts
				a medical evaluation of the patient at the request of a practitioner who has
				conducted at least one in-person medical evaluation of the patient and is
				temporarily unavailable to conduct the evaluation of the patient. A
				practitioner is a covering practitioner without regard to whether the
				practitioner has conducted any in-person medical evaluation of the patient
				involved.
									(4)Rules of
				construction
									(A)Individuals
				represented as practitionersA person who is not a practitioner
				(as defined in subsection (e)(1)) lacks legal capacity under this section to
				have a qualifying medical relationship with any patient.
									(B)Standard
				practice of pharmacyParagraph (1) may not be construed as
				prohibiting any conduct that is a standard practice in the practice of
				pharmacy.
									(C)Applicability of
				requirementsParagraph (3) may not be construed as having any
				applicability beyond this section, and does not affect any State law, or
				interpretation of State law, concerning the practice of medicine.
									(c)Actions by
				States
								(1)In
				generalWhenever an attorney general of any State has reason to
				believe that the interests of the residents of that State have been or are
				being threatened or adversely affected because any person has engaged or is
				engaging in a pattern or practice that violates section 301(l), the State may
				bring a civil action on behalf of its residents in an appropriate district
				court of the United States to enjoin such practice, to enforce compliance with
				such section (including a nationwide injunction), to obtain damages,
				restitution, or other compensation on behalf of residents of such State, to
				obtain reasonable attorneys fees and costs if the State prevails in the civil
				action, or to obtain such further and other relief as the court may deem
				appropriate.
								(2)NoticeThe
				State shall serve prior written notice of any civil action under paragraph (1)
				or (5)(B) upon the Secretary and provide the Secretary with a copy of its
				complaint, except that if it is not feasible for the State to provide such
				prior notice, the State shall serve such notice immediately upon instituting
				such action. Upon receiving a notice respecting a civil action, the Secretary
				shall have the right—
									(A)to intervene in
				such action;
									(B)upon so
				intervening, to be heard on all matters arising therein; and
									(C)to file petitions
				for appeal.
									(3)ConstructionFor
				purposes of bringing any civil action under paragraph (1), nothing in this
				chapter shall prevent an attorney general of a State from exercising the powers
				conferred on the attorney general by the laws of such State to conduct
				investigations or to administer oaths or affirmations or to compel the
				attendance of witnesses or the production of documentary and other
				evidence.
								(4)Venue; service
				of processAny civil action brought under paragraph (1) in a
				district court of the United States may be brought in the district in which the
				defendant is found, is an inhabitant, or transacts business or wherever venue
				is proper under section 1391 of title 28, United States Code. Process in such
				an action may be served in any district in which the defendant is an inhabitant
				or in which the defendant may be found.
								(5)Actions by other
				state officials
									(A)Nothing contained
				in this section shall prohibit an authorized State official from proceeding in
				State court on the basis of an alleged violation of any civil or criminal
				statute of such State.
									(B)In addition to
				actions brought by an attorney general of a State under paragraph (1), such an
				action may be brought by officers of such State who are authorized by the State
				to bring actions in such State on behalf of its residents.
									(d)Effect of
				SectionThis section shall not apply to a person that is a
				registered exporter under section 804.
							(e)General
				DefinitionsFor purposes of this section:
								(1)The term
				practitioner means a practitioner referred to in section 503(b)(1)
				with respect to issuing a written or oral prescription.
								(2)The term
				prescription drug means a drug that is described in section
				503(b)(1).
								(3)The term
				qualifying medical relationship, with respect to a practitioner
				and a patient, has the meaning indicated for such term in subsection
				(b).
								(f)Internet-Related
				Definitions
								(1)In
				generalFor purposes of this section:
									(A)The term
				Internet means collectively the myriad of computer and
				telecommunications facilities, including equipment and operating software,
				which comprise the interconnected world-wide network of networks that employ
				the transmission control protocol/internet protocol, or any predecessor or
				successor protocols to such protocol, to communicate information of all kinds
				by wire or radio.
									(B)The term
				link, with respect to the Internet, means one or more letters,
				words, numbers, symbols, or graphic items that appear on a page of an Internet
				site for the purpose of serving, when activated, as a method for executing an
				electronic command—
										(i)to
				move from viewing one portion of a page on such site to another portion of the
				page;
										(ii)to move from
				viewing one page on such site to another page on such site; or
										(iii)to move from
				viewing a page on one Internet site to a page on another Internet site.
										(C)The term
				page, with respect to the Internet, means a document or other file
				accessed at an Internet site.
									(D)(i)The terms
				site and address, with respect to the Internet, mean
				a specific location on the Internet that is determined by Internet Protocol
				numbers. Such term includes the domain name, if any.
										(ii)The term domain name
				means a method of representing an Internet address without direct reference to
				the Internet Protocol numbers for the address, including methods that use
				designations such as .com, .edu,
				.gov, .net, or .org.
										(iii)The term Internet Protocol
				numbers includes any successor protocol for determining a specific
				location on the Internet.
										(2)Authority of
				secretaryThe Secretary may by regulation modify any definition
				under paragraph (1) to take into account changes in technology.
								(g)Interactive
				Computer Service; AdvertisingNo provider of an interactive
				computer service, as defined in section 230(f)(2) of the
				Communications Act of 1934 (47 U.S.C.
				230(f)(2)), or of advertising services shall be liable under this section for
				dispensing or selling prescription drugs in violation of this section on
				account of another person’s selling or dispensing such drugs, provided that the
				provider of the interactive computer service or of advertising services does
				not own or exercise corporate control over such
				person.
							.
				(2)Inclusion as
			 Prohibited ActSection 301 of the Federal Food, Drug, and Cosmetic Act (21
			 U.S.C. 331) is amended by inserting after subsection (k) the following:

						(l)The dispensing or
				selling of a prescription drug in violation of section
				503B.
						.
				(3)Internet Sales
			 of Prescription Drugs; Consideration by Secretary of Practices and Procedures
			 for Certification of Legitimate BusinessesIn carrying out
			 section 503B of the Federal Food, Drug, and
			 Cosmetic Act (as added by this section), the Secretary of Health and
			 Human Services shall take into consideration the practices and procedures of
			 public or private entities that certify that businesses selling prescription
			 drugs through Internet sites are legitimate businesses, including practices and
			 procedures regarding disclosure formats and verification programs.
				(4)Reports
			 Regarding Internet-Related Violations of Federal and State Laws on Dispensing
			 of Drugs
					(A)In
			 generalThe Secretary of Health and Human Services (referred to
			 in this paragraph as the Secretary) shall, pursuant to the
			 submission of an application meeting the criteria of the Secretary, make an
			 award of a grant or contract to the National Clearinghouse on Internet
			 Prescribing (operated by the Federation of State Medical Boards) for the
			 purpose of—
						(i)identifying
			 Internet sites that appear to be in violation of Federal or State laws
			 concerning the dispensing of drugs;
						(ii)reporting such
			 sites to State medical licensing boards and State pharmacy licensing boards,
			 and to the Attorney General and the Secretary, for further investigation;
			 and
						(iii)submitting, for
			 each fiscal year for which the award under this subsection is made, a report to
			 the Secretary describing investigations undertaken with respect to violations
			 described in clause (i).
						(B)Authorization of
			 appropriationsFor the purpose of carrying out subparagraph (A),
			 there is authorized to be appropriated $100,000 for each of the fiscal years
			 2009 through 2011.
					(5)Effective
			 DateThe amendments made by paragraphs (1) and (2) take effect 90
			 days after the date of enactment of this Act, without regard to whether a final
			 rule to implement such amendments has been promulgated by the Secretary of
			 Health and Human Services under section 701(a) of the
			 Federal Food, Drug, and Cosmetic
			 Act. The preceding sentence may not be construed as affecting the
			 authority of such Secretary to promulgate such a final rule.
				(g)Importation
			 exemption under Controlled Substances Import and Export
			 ActSection 1006(a)(2) of the Controlled Substances Import and
			 Export Act (21 U.S.C. 956(a)(2)) is amended by striking not import the
			 controlled substance into the United States in an amount that exceeds 50 dosage
			 units of the controlled substance. and inserting import into the
			 United States not more than 10 dosage units combined of all such controlled
			 substances..
			7.Reasonable price
			 agreement for federally funded research
			(a)In
			 generalIf any Federal agency or any non-profit entity undertakes
			 federally funded health care research and development and is to convey or
			 provide a patent or other exclusive right to use such research and development
			 for a drug or other health care technology, such agency or entity shall not
			 make such conveyance or provide such patent or other right until the person who
			 will receive such conveyance or patent or other right first agrees to a
			 reasonable pricing agreement with the Secretary of Health and Human Services or
			 the Secretary makes a determination that the public interest is served by a
			 waiver of the reasonable pricing agreement provided in accordance with
			 subsection (c).
			(b)Consideration of
			 competitive biddingIn cases where the Federal Government conveys
			 or licenses exclusive rights to federally funded research under subsection (a),
			 consideration shall be given to mechanisms for determining reasonable prices
			 which are based upon a competitive bidding process. When appropriate, the
			 mechanisms should be considered where—
				(1)qualified bidders
			 compete on the basis of the lowest prices that will be charged to
			 consumers;
				(2)qualified bidders
			 compete on the basis of the least sales revenues before prices are adjusted in
			 accordance with a cost based reasonable pricing formula;
				(3)qualified bidders
			 compete on the basis of the least period of time before prices are adjusted in
			 accordance with a cost based reasonable pricing formula;
				(4)qualified bidders
			 compete on the basis of the shortest period of exclusivity; or
				(5)qualified bidders
			 compete under other competitive bidding systems.
				Such
			 competitive bidding process may incorporate requirements for minimum levels of
			 expenditures on research, marketing, maximum price, or other factors.(c)WaiverNo
			 waiver shall take effect under subsection (a) before the public is given notice
			 of the proposed waiver and provided a reasonable opportunity to comment on the
			 proposed waiver. A decision to grant a waiver shall set out the Secretary’s
			 finding that such a waiver is in the public interest.
			8.GAO ongoing
			 studies and reports on program; miscellaneous reports
			(a)Ongoing
			 studyThe Comptroller General of the United States shall conduct
			 an ongoing study and analysis of the prescription medicine benefit program
			 under part D of the medicare program under title XVIII of the
			 Social Security Act (as added by
			 section 4 of this Act), including an analysis of each of the following:
				(1)The extent to which
			 the administering entities have achieved volume-based discounts similar to the
			 favored price paid by other large purchasers.
				(2)Whether access to
			 the benefits under such program are in fact available to all beneficiaries,
			 with special attention given to access for beneficiaries living in rural and
			 hard-to-serve areas.
				(3)The success of
			 such program in reducing medication error and adverse medicine reactions and
			 improving quality of care, and whether it is probable that the program has
			 resulted in savings through reduced hospitalizations and morbidity due to
			 medication errors and adverse medicine reactions.
				(4)Whether patient
			 medical record confidentiality is being maintained and safe-guarded.
				(5)Such other issues
			 as the Comptroller General may consider.
				(b)ReportsThe
			 Comptroller General shall issue such reports on the results of the ongoing
			 study described in (a) as the Comptroller General shall deem appropriate and
			 shall notify Congress on a timely basis of significant problems in the
			 operation of the part D prescription medicine program and the need for
			 legislative adjustments and improvements.
			(c)Miscellaneous
			 studies and reports
				(1)Study on methods
			 to encourage additional research on breakthrough pharmaceuticals
					(A)In
			 generalThe Secretary of Health and Human Services shall seek the
			 advice of the Secretary of the Treasury on possible tax and trade law changes
			 to encourage increased original research on new pharmaceutical breakthrough
			 products designed to address disease and illness.
					(B)ReportNot
			 later than January 1, 2009, the Secretary shall submit to Congress a report on
			 such study. The report shall include recommended methods to encourage the
			 pharmaceutical industry to devote more resources to research and development of
			 new covered products than it devotes to overhead expenses.
					(2)Study on
			 pharmaceutical sales practices and impact on costs and quality of care
					(A)In
			 generalThe Secretary of Health and Human Services shall conduct
			 a study on the methods used by the pharmaceutical industry to advertise and
			 sell to consumers and educate and sell to providers.
					(B)ReportNot
			 later than January 1, 2009, the Secretary shall submit to Congress a report on
			 such study. The report shall include the estimated direct and indirect costs of
			 the sales methods used, the quality of the information conveyed, and whether
			 such sales efforts leads (or could lead) to inappropriate prescribing. Such
			 report may include legislative and regulatory recommendations to encourage more
			 appropriate education and prescribing practices.
					(3)Study on cost of
			 pharmaceutical research
					(A)In
			 generalThe Secretary of Health and Human Services shall conduct
			 a study on the costs of, and needs for, the pharmaceutical research and the
			 role that the taxpayer provides in encouraging such research.
					(B)ReportNot
			 later than January 1, 2009, the Secretary shall submit to Congress a report on
			 such study. The report shall include a description of the full-range of
			 taxpayer-assisted programs impacting pharmaceutical research, including tax,
			 trade, government research, and regulatory assistance. The report may also
			 include legislative and regulatory recommendations that are designed to ensure
			 that the taxpayer’s investment in pharmaceutical research results in the
			 availability of pharmaceuticals at reasonable prices.
					(4)Report on
			 pharmaceutical prices in major foreign nationsNot later than
			 January 1, 2009, the Secretary of Health and Human Services shall submit to
			 Congress a report on the retail price of major pharmaceutical products in
			 various developed nations, compared to prices for the same or similar products
			 in the United States. The report shall include a description of the principal
			 reasons for any price differences that may exist.
				9.Medigap
			 transition provisions
			(a)In
			 generalNotwithstanding any other provision of law, no new
			 medicare supplemental policy that provides coverage of expenses for
			 prescription drugs may be issued under section 1882 of the
			 Social Security Act on or after
			 January 1, 2010, to an individual unless it replaces a medicare supplemental
			 policy that was issued to that individual and that provided some coverage of
			 expenses for prescription drugs.
			(b)Issuance of
			 substitute policies if obtain prescription drug coverage through
			 medicare
				(1)In
			 generalThe issuer of a medicare supplemental policy—
					(A)may not deny or
			 condition the issuance or effectiveness of a medicare supplemental policy that
			 has a benefit package classified as A, B,
			 C, D, E, F, or
			 G (under the standards established under subsection (p)(2) of
			 section 1882 of the Social Security
			 Act, 42 U.S.C. 1395ss) and that is offered and is available for
			 issuance to new enrollees by such issuer;
					(B)may not
			 discriminate in the pricing of such policy, because of health status, claims
			 experience, receipt of health care, or medical condition; and
					(C)may not impose an
			 exclusion of benefits based on a pre-existing condition under such
			 policy,
					in the case
			 of an individual described in paragraph (2) who seeks to enroll under the
			 policy not later than 63 days after the date of the termination of enrollment
			 described in such paragraph and who submits evidence of the date of termination
			 or disenrollment along with the application for such medicare supplemental
			 policy.(2)Individual
			 coveredAn individual described in this paragraph is an
			 individual who—
					(A)enrolls under part
			 D of title XVIII of the Social Security
			 Act; and
					(B)at the time of
			 such enrollment was enrolled and terminates enrollment in a medicare
			 supplemental policy which has a benefit package classified as H,
			 I, or J under the standards referred to in
			 paragraph (1)(A) or terminates enrollment in a policy to which such standards
			 do not apply but which provides benefits for prescription drugs.
					(3)EnforcementThe
			 provisions of paragraph (1) shall be enforced as though they were included in
			 section 1882(s) of the Social Security
			 Act (42 U.S.C. 1395ss(s)) on and after January 1, 2010.
				(4)DefinitionsFor
			 purposes of this subsection, the term medicare supplemental policy
			 has the meaning given such term in section 1882(g) of the
			 Social Security Act (42 U.S.C.
			 1395ss(g)).