The prescription drug that you picked up on the way to work this morning may have changed hands many times before the pharmacy clerk handed you the amber vial with its sticker label and perhaps one or two multi-page information inserts about the drug. That means that there were many potential opportunities for your drug to be mishandled or even substituted with a counterfeit. The counterfeit could be a watered down version of the actual drug, a sugar-filled non-medicinal fake, or a substitute chemical that looks, weighs, and reacts like the real drug but is actually toxic. While, overall, the U.S. drug supply is typically safe, Congress, the Food and Drug Administration (FDA), industry groups, and consumers are working to devise a system to limit opportunities for counterfeiting and mishandling. Health experts call the drug's journey a supply chain . It begins with the ingredients a manufacturer uses, carries through the manufacturing process, and continues through the distribution system of wholesalers, warehouses, and transportation to the dispensing retail and institutional pharmacies—all the way to you, the consumer, the patient. FDA, a federal scientific regulatory agency within the Department of Health and Human Services (HHS), regulates not only which drugs manufacturers may sell in the United States but also the integrity of the drugs through the supply chain, which is now global. In April 2013 testimony before the House Committee on Energy and Commerce, Janet Woodcock, the Director of FDA's Center for Drug Evaluation and Research, described the chain as follows. [T]he increasingly complex drug supply chain, from raw source materials to finished products for consumers, presents multiple opportunities for the product to be contaminated, diverted, or otherwise adulterated. Our efforts to secure the supply chain include minimizing risks that arise anywhere along the supply chain continuum, from sourcing a product's ingredients through the overseeing of a product's manufacture, storage, transit, sale, and distribution. A breach at any point in this continuum could lead to dangerous and even deadly outcomes for patients. Dr. Woodcock referred to problems "including contamination, diversion, counterfeiting, and other adulteration." She gave several examples of counterfeit and stolen or diverted products: counterfeit Adderall and Vicodin sold on the Internet; stolen insulin vials needing refrigeration that were later purchased by patients without accountability for appropriate handling; and a stolen and expired seizure drug that "made it back into the legitimate supply chain and was being returned for credit." Additional examples of specific breaks in the supply chain include human growth hormone bought from Medicaid patients and sold by a Florida wholesaler in 2008; insulin cargo stolen in 2009 that appeared among drugs sold by three wholesalers; and, in 2010, a licensed Texas wholesaler offering prescription drugs obtained from patients. Other publicized breaches of the supply chain have involved "fraudulent versions" of Botox "sold by unlicensed suppliers who are not part of the legitimate U.S. supply chain"; counterfeit Lipitor that U.S. consumers purchased from United Kingdom sources; and counterfeit Avastin (with no active ingredient) that some U.S. medical practices bought from foreign distributors. This report serves as a primer on pharmaceutical supply chain issues. It (1) describes the chain from manufacturer to patient, including where it is vulnerable; (2) summarizes current federal law, regulation, and FDA policies that Congress and the agency designed to protect the integrity of the final drug product, and indicates where those protections may falter; (3) notes state-level and professional association activities; and (4) discusses areas that Congress, FDA, and industry, health care, and patient stakeholders have suggested might be changed to increase the security of the pharmaceutical supply chain. To understand how the supply chain functions, it helps to know the extent of FDA's involvement with prescription drug safety and effectiveness. FDA regulates the approval, production, distribution, and advertising of prescription drugs. It works to prevent unsafe, ineffective, subpotent, superpotent, or adulterated drugs from reaching pharmacies and patients in the United States—whether introduced on purpose or inadvertently. Before FDA approves a manufacturer's application to sell a prescription drug, it requires, among other things, that a manufacturer demonstrate that its product is safe and effective for its intended use, that directions on the label are clear and appropriate, and that the drug will be manufactured in specific production lines that have been registered and approved by FDA. After FDA approv es the application, the manufacturer must continue production according to FDA-approved "good manufacturing practices" (GMPs). The manufacturer must register each establishment involved in drug production with FDA and provide a list of current products, and periodically open its production facilities to FDA inspection. After production, the manufacturer typically sends, perhaps via a repackager, the drug to FDA-registered U.S. drug wholesale distributors (authorized distributors of record, secondary wholesale distributors, and others) for further distribution. Industry observers estimate that "consumers receive 11 million prescriptions per day from more than 150,000 locations throughout the US. Our drug distribution network involves tens of thousands of independent companies." States license or authorize the pharmacists and wholesalers who sell and distribute pharmaceuticals within their borders and also license the physicians and dentists who prescribe the drugs. As illustrated in Figure 1 , many entities are part of the downstream pharmaceutical supply chain. Definitions of the players vary somewhat across federal and state laws and regulations and across proposed federal systems. The following textbox provides general descriptions. Figure 1 presents the steps a finished drug product may take on its way from the manufacturer (labeled A) to the dispenser (labeled D) who will give the drug to the individual patient. This segment of the supply path is called downstream . The upstream segment ends with the manufacturer and involves the sources of materials that the manufacturer uses to produce the finished drug product, such as active pharmaceutical ingredients and inactive ingredients (e.g., fillers, binders, and colors). A manufacturer may sell directly to a dispenser, but usually sells to a primary wholesale distributor (labeled B). The primary wholesale distributor may sell directly to a dispenser or may sell to a secondary wholesale distributor (labeled C) who sells it to the dispenser. A dispenser may return unopened and unexpired medication to the wholesaler who may then sell it to another dispenser or to another wholesaler or return it to the manufacturer. The combinations are numerous. Interspersed throughout the chain may be third-party logistics providers who transport or warehouse the drug under contract to the manufacturer, distributor, or dispenser. At each change of hands, the drug could be vulnerable to theft, mishandling, adulteration, and tampering; for example, part of a legitimate shipment may be stolen for resale elsewhere and substituted with a fake. Problems may arise at other times; for example, an otherwise legitimate shipment may be inadequately refrigerated in a truck or warehouse. The colored lines in Figure 1 illustrate alternate paths from manufacturer to patient. FDA's earliest authorities, in 1906, concerned product integrity. Subsequent changes in the law related to product integrity and safety reflected the mid-century pharmaceutical industry with mostly domestic factories. Since its passage in 1938, the Federal Food, Drug, and Cosmetic Act (FFDCA), as amended, both directly addresses and indirectly influences the pharmaceutical supply chain. Relevant FFDCA sections cover topics including prohibitions and penalties regarding adulterated or misbranded drugs (e.g., Sections 301, 303, 501, and 502), pharmaceutical security (e.g., Section 505D), registration and inspection of producers and facilities (e.g., Sections 510 and 704), and imports and exports (e.g., Section 801), among others. In the last quarter century, Congress has made three focused attempts at improving supply chain security by amending the FFDCA. Each one added tools—standards, penalties, required planning—to strengthen federal oversight of the supply chain, as described below. Gaps, however, remain. In the 1980s, Congress determined that the drug distribution system was not sufficiently "closed" to prevent abuse of drug samples. The Prescription Drug Marketing Act of 1987 (PDMA, P.L. 100-293 ) amended FFDCA Section 503. It banned the sale, trade, and purchase of drug samples, and mandated storage, handling, and accounting standards for drug samples. By adding a new Subsection 503(e), PDMA also addressed other segments of the supply chain with the following changes to the FFDCA: required that wholesalers, except for authorized distributors of record, provide to the recipient "a statement ... identifying each prior sale, purchase, or trade of such drug.... ," often referred to as a pedigree; required each manufacturer to maintain a current list of its authorized distributors of record; stated that no one may engage in wholesale distribution unless licensed by a state in accordance with the Secretary's guidelines; required the Secretary to issue guidelines, by regulation, establishing minimum standards for wholesaler licensing to include storage and handling and records; and defined authorized distributor of record (ADR) and wholesale distribution (see earlier textbox). PDMA also established civil and criminal penalties for violations of its provisions. Implementation of FFDCA Section 503(e)—in particular the first bullet, above—has not gone smoothly. To enforce the law, the FDA drafted regulations that would require drug companies to maintain a detailed "chain of custody" (also known as a pedigree) for every pharmaceutical product sold in this country. The recorded pedigree would allow manufacturers to trace back suspected counterfeit shipments. FFDCA Section 503(e)(1)(A) [21 U.S.C.