,i #aacth ,,congress #ast ,session ,h4 ,r4 #cbjd ,,in ,,the ,,house ,,of ,,representatives ,september #bg1 #bjac,mr4 ,upton 7for himself1 ,mr4 ,waxman1 ,mr4 ,pitts1 ,mr4 ,pallone1 ,mr4 ,murphy of ,pennsylvania1 ,mr4 ,dingell1 ,mr4 ,latta1 ,ms4 ,de,gette1 ,mr4 ,griffith of ,virginia1 ,mr4 ,gene ,green of ,texas1 and ,mr4 ,matheson7 introduced the following bill2 which was referred to the ,committee on ,energy and ,commerce ,a ,,bill ,to amend the ,federal ,food1 ,drug1 and ,cosmetic ,act with respect to human drug compounding and drug supply chain security1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,drug ,quality and ,security ,act4 #b4 ,references in ,act2 table of contents 7a7 ,references in ,act ,except as otherwise specified1 amendments made by this ,act to a section or other provision of law are amendments to such section or other provision of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cja et seq474 7b7 ,table of contents ,the table of contents of this ,act is as follows3 ,sec4 #a4 ,short title4,sec4 #b4 ,references in ,act2 table of contents4,,title ,i--,drug compounding,sec4 #aja4 ,short title4,sec4 #ajb4 ,voluntary outsourcing facilities4,sec4 #ajc4 ,penalties4,sec4 #ajd4 ,regulations4,sec4 #aje4 ,enhanced communication4,sec4 #ajf4 ,severability4,sec4 #ajg4 ,,gao study4,,title ,,ii--,drug ,supply ,chain ,security,sec4 #bja4 ,short title4,sec4 #bjb4 ,pharmaceutical distribution supply chain4,sec4 #bjc4 ,enhanced drug distribution security4,sec4 #bjd4 ,national standards for prescription drug wholesale distributors4,sec4 #bje4 ,national standards for third-party logistics providers2 uniform national policy4,sec4 #bjf4 ,penalties4,sec4 #bjg4 ,conforming amendment4,sec4 #bjh4 ,savings clause4 ,i ,drug compounding #aja4 ,short title ,this ,act may be cited as the ,compounding ,quality ,act4 #ajb4 ,voluntary outsourcing facilities 7a7 ,in general ,subchapter ,a of chapter ,v 7#ba ,u4,s4,c4 #cea et seq47 is amended-- 7#a7 by redesignating section #ejc;,b as section #ejc;,c2 and 7#b7 by inserting after section #ejc;,a the following new section3 #ejc;,b4 ,outsourcing facilities 7a7 ,in general ,sections #ejb7;f77#a71 #eje1 and #ehb shall not apply to a drug compounded by or under the direct supervision of a licensed pharmacist in a facility that elects to register as an outsourcing facility if each of the following conditions is met3 7#a7 ,registration and reporting ,the drug is compounded in an outsourcing facility that is in compliance with the requirements of subsection 7b74 7#b7 ,bulk drug substances ,the drug is compounded in an outsourcing facility that does not compound using bulk drug substances 7as defined in section #bjg4c7;a77#d7 of title #ba1 ,code of ,federal ,regulations 7or any successor regulation771 unless-- 7,a7 7i7 the bulk drug substance appears on a list established by the ,secretary identifying bulk drug substances for which there is a clinical need1 by-- 7,i7 publishing a notice in the ,federal ,register proposing bulk drug substances to be included on the list1 including the rationale for such proposal2 7,,ii7 providing a period of not less than #fj calendar days for comment on the notice2 and 7,,iii7 publishing a notice in the ,federal ,register designating bulk drug substances for inclusion on the list2 or 7ii7 the drug compounded from such bulk drug substance appears on the drug shortage list in effect under section #ejf;,e at the time of compounding1 distribution1 and dispensing2 7,b7 if an applicable monograph exists under the ,united ,states ,pharmacopeia1 the ,national ,formulary1 or another compendium or pharmacopeia recognized by the ,secretary for purposes of this paragraph1 the bulk drug substances each comply with the monograph2 7,c7 the bulk drug substances are each manufactured by an establishment that is registered under section #eaj 7including a foreign establishment that is registered under section #eaj7;i772 and 7,d7 the bulk drug substances are each accompanied by a valid certificate of analysis4 7#c7 ,ingredients 7other than bulk drug substances7 ,if any ingredients 7other than bulk drug substances7 are used in compounding the drug1 such ingredients comply with the standards of the applicable ,united ,states ,pharmacopeia or ,national ,formulary monograph1 if such monograph exists1 or of another compendium or pharmacopeia recognized by the ,secretary for purposes of this paragraph if any4 7#d7 ,drugs withdrawn or removed because unsafe or not effective ,the drug does not appear on a list published by the ,secretary of drugs that have been withdrawn or removed from the market because such drugs or components of such drugs have been found to be unsafe or not effective4 7#e7 ,essentially a copy of an approved drug ,the drug is not essentially a copy of one or more approved drugs4 7#f7 ,drugs presenting demonstrable difficulties for compounding ,the drug-- 7,a7 is not identified 7directly or as part of a category of drugs7 on a list published by the ,secretary1 through the process described in subsection 7c71 of drugs or categories of drugs that present demonstrable difficulties for compounding that are reasonably likely to lead to an adverse effect on the safety or effectiveness of the drug or category of drugs1 taking into account the risks and benefits to patients2 or 7,b7 is compounded in accordance with all applicable conditions identified on the list described in subparagraph 7,a7 as conditions that are necessary to prevent the drug or category of drugs from presenting the demonstrable difficulties described in subparagraph 7,a74 7#g7 ,elements to assure safe use ,in the case of a drug that is compounded from a drug that is the subject of a risk evaluation and mitigation strategy approved with elements to assure safe use pursuant to section #eje-a1 or from a bulk drug substance that is a component of such drug1 the outsourcing facility demonstrates to the ,secretary prior to beginning compounding that such facility will utilize controls comparable to the controls applicable under the relevant risk evaluation and mitigation strategy4 7#h7 ,prohibition on wholesaling ,the drug will not be sold or transferred by an entity other than the outsourcing facility that compounded such drug4 ,this paragraph does not prohibit administration of a drug in a health care setting or dispensing a drug pursuant to a prescription executed in accordance with section #ejc7;b77#a74 7#i7 ,fees ,the drug is compounded in an outsourcing facility that has paid all fees owed by such facility pursuant to section #gdd,k4 7#aj7 ,labeling of drugs 7,a7 ,label ,the label of the drug includes-- 7i7 the statement ,this is a compounded drug4 or a reasonable comparable alternative statement 7as specified by the ,secretary7 that prominently identifies the drug as a compounded drug2 7ii7 the name1 address1 and phone number of the applicable outsourcing facility2 and 7iii7 with respect to the drug-- 7,i7 the lot or batch number2 7,,ii7 the established name of the drug2 7,,iii7 the dosage form and strength2 7,,iv7 the statement of quantity or volume1 as appropriate2 7,v7 the date that the drug was compounded2 7,,vi7 the expiration date2 7,,vii7 storage and handling instructions2 7,,viii7 the ,national ,drug ,code number1 if available2 7,,ix7 the statement ,not for resale1 and1 if the drug is dispensed or distributed other than pursuant to a prescription for an individual identified patient1 the statement ,office ,use ,only2 and 7,x7 subject to subparagraph 7,b77i71 a list of active and inactive ingredients1 identified by established name and the quantity or proportion of each ingredient4 7,b7 ,container ,the container from which the individual units of the drug are removed for dispensing or for administration 7such as a plastic bag containing individual product syringes7 shall include-- 7i7 the information described under subparagraph 7,a77iii77,x71 if there is not space on the label for such information2 7ii7 the following information to facilitate adverse event reporting3 www4fda4gov_/medwatch and #a-hjj-;,,fda-#ajhh 7or any successor ,internet ,web site or phone number72 and 7iii7 directions for use1 including1 as appropriate1 dosage and administration4 7,c7 ,additional information ,the label and labeling of the drug shall include any other information as determined necessary and specified in regulations promulgated by the ,secretary4 7#aa7 ,outsourcing facility requirement ,the drug is compounded in an outsourcing facility in which the compounding of drugs occurs only in accordance with this section4 7b7 ,registration of outsourcing facilities and reporting of drugs 7#a7 ,registration of outsourcing facilities 7,a7 ,annual registration ,upon electing and in order to become an outsourcing facility1 and during the period beginning on ,october #a and ending on ,december #ca of each year thereafter1 a facility-- 7i7 shall register with the ,secretary its name1 place of business1 and unique facility identifier 7which shall conform to the requirements for the unique facility identifier established under section #eaj71 and a point of contact email address2 and 7ii7 shall indicate whether the outsourcing facility intends to compound a drug that appears on the list in effect under section #ejf;,e during the subsequent calendar year4 7,b7 ,availability of registration for inspection2 list 7i7 ,registrations ,the ,secretary shall make available for inspection1 to any person so requesting1 any registration filed pursuant to this paragraph4 7ii7 ,list ,the ,secretary shall make available on the public ,internet ,web site of the ,food and ,drug ,administration a list of the name of each facility registered under this subsection as an outsourcing facility1 the ,state in which each such facility is located1 whether the facility compounds from bulk drug substances1 and whether any such compounding from bulk drug substances is for sterile or nonsterile drugs4 7#b7 ,drug reporting by outsourcing facilities 7,a7 ,in general ,upon initially registering as an outsourcing facility1 once during the month of ,june of each year1 and once during the month of ,december of each year1 each outsourcing facility that registers with the ,secretary under paragraph 7#a7 shall submit to the ,secretary a report-- 7i7 identifying the drugs compounded by such outsourcing facility during the previous #f-month period2 and 7ii7 with respect to each drug identified under clause 7i71 providing the active ingredient1 the source of such active ingredient1 the ,national ,drug ,code number of the source drug or bulk active ingredient1 if available1 the strength of the active ingredient per unit1 the dosage form and route of administration1 the package description1 the number of individual units produced1 and the ,national ,drug ,code number of the final product1 if assigned4 7,b7 ,form ,each report under subparagraph 7,a7 shall be prepared in such form and manner as the ,secretary may prescribe by regulation or guidance4 7,c7 ,confidentiality ,reports submitted under this paragraph shall be exempt from inspection under paragraph 7#a77;,b77i71 unless the ,secretary finds that such an exemption would be inconsistent with the protection of the public health4 7#c7 ,electronic registration and reporting ,registrations and drug reporting under this subsection 7including the submission of updated information7 shall be submitted to the ,secretary by electronic means unless the ,secretary grants a request for waiver of such requirement because use of electronic means is not reasonable for the person requesting waiver4 7#d7 ,risk-based inspection frequency 7,a7 ,in general ,outsourcing facilities-- 7i7 shall be subject to inspection pursuant to section #gjd2 and 7ii7 shall not be eligible for the exemption under section #gjd7;a77#b77;,a74 7,b7 ,risk-based schedule ,the ,secretary1 acting through one or more officers or employees duly designated by the ,secretary1 shall inspect outsourcing facilities in accordance with a risk-based schedule established by the ,secretary4 7,c7 ,risk factors ,in establishing the risk-based schedule1 the ,secretary shall inspect outsourcing facilities according to the known safety risks of such outsourcing facilities1 which shall be based on the following factors3 7i7 ,the compliance history of the outsourcing facility4 7ii7 ,the record1 history1 and nature of recalls linked to the outsourcing facility4 7iii7 ,the inherent risk of the drugs compounded at the outsourcing facility4 7iv7 ,the inspection frequency and history of the outsourcing facility1 including whether the outsourcing facility has been inspected pursuant to section #gjd within the last #d years4 7v7 ,whether the outsourcing facility has registered under this paragraph as an entity that intends to compound a drug that appears on the list in effect under section #ejf;,e4 7vi7 ,any other criteria deemed necessary and appropriate by the ,secretary for purposes of allocating inspection resources4 7#e7 ,adverse event reporting ,outsourcing facilities shall submit adverse event reports to the ,secretary in accordance with the content and format requirements established through guidance or regulation under section #caj4cje of title #ba1 ,code of ,federal ,regulations 7or any successor regulations74 7c7 ,regulations 7#a7 ,in general ,the ,secretary shall implement the list described in subsection 7a77#f7 through regulations4 7#b7 ,advisory committee on compounding ,before issuing regulations to implement subsection 7a77#f71 the ,secretary shall convene and consult an advisory committee on compounding4 ,the advisory committee shall include representatives from the ,national ,association of ,boards of ,pharmacy1 the ,united ,states ,pharmacopeia1 pharmacists with current experience and expertise in compounding1 physicians with background and knowledge in compounding1 and patient and public health advocacy organizations4 7#c7 ,interim list 7,a7 ,in general ,before the effective date of the regulations finalized to implement subsection 7a77#f71 the ,secretary may designate drugs1 categories of drugs1 or conditions as described such subsection by-- 7i7 publishing a notice of such substances1 drugs1 categories of drugs1 or conditions proposed for designation1 including the rationale for such designation1 in the ,federal ,register2 7ii7 providing a period of not less than #fj calendar days for comment on the notice2 and 7iii7 publishing a notice in the ,federal ,register designating such drugs1 categories of drugs1 or conditions4 7,b7 ,sunset of ,notice ,any notice provided under subparagraph 7,a7 shall not be effective after the earlier of-- 7i7 the date that is #e years after the date of enactment of the ,compounding ,quality ,act2 or 7ii7 the effective date of the final regulations issued to implement subsection 7a77#f74 7#d7 ,updates ,the ,secretary shall review1 and update as necessary1 the regulations containing the lists of drugs1 categories of drugs1 or conditions described in subsection 7a77#f7 regularly1 but not less than once every #d years4 ,nothing in the previous sentence prohibits submissions to the ,secretary1 before or during any #d-year period described in such sentence1 requesting updates to such lists4 7d7 ,definitions ,in this section3 7#a7 ,the term compounding includes the combining1 admixing1 mixing1 diluting1 pooling1 reconstituting1 or otherwise altering of a drug or bulk drug substance to create a drug4 7#b7 ,the term essentially a copy of an approved drug means-- 7,a7 a drug that is identical or nearly identical to an approved drug1 or a marketed drug not subject to section #ejc7;b7 and not subject to approval in an application submitted under section #eje1 unless1 in the case of an approved drug1 the drug appears on the drug shortage list in effect under section #ejf;,e at the time of compounding1 distribution1 and dispensing2 or 7,b7 a drug1 a component of which is a bulk drug substance that is a component of an approved drug or a marketed drug that is not subject to section #ejc7;b7 and not subject to approval in an application submitted under section #eje1 unless there is a change that produces for an individual patient a clinical difference1 as determined by the prescribing practitioner1 between the compounded drug and the comparable approved drug4 7#c7 ,the term approved drug means a drug that is approved under section #eje and does not appear on the list described in subsection 7a77#d7 of drugs that have been withdrawn or removed from the market because such drugs or components of such drugs have been found to be unsafe or not effective4 7#d7 7,a7 ,the term outsourcing facility means a facility at one geographic location or address that-- 7i7 is engaged in the compounding of sterile drugs2 7ii7 has elected to register as an outsourcing facility2 and 7iii7 complies with all of the requirements of this section4 7,b7 ,an outsourcing facility is not required to be a licensed pharmacy4 7,c7 ,an outsourcing facility may or may not obtain prescriptions for identified individual patients4 7#e7 ,the term sterile drug means a drug that is intended for parenteral administration1 an ophthalmic or oral inhalation drug in aqueous format1 or a drug that is required to be sterile under ,federal or ,state law4 4 7d7 ,obligation ,to pay fees ,payment of the fee under section #gdd,k1 as described in subsection 7a77#i71 shall not relieve an outsourcing facility that is licensed as a pharmacy in any ,state that requires pharmacy licensing fees of its obligation to pay such ,state fees4 4 7b7 ,fees ,subchapter ,c of chapter ,,vii 7#ba ,u4,s4,c4 #cgi;f et seq47 is amended by adding at the end the following3 #i ,fees relating to outsourcing facilities #gdd;,j4 ,definitions ,in this part3 7#a7 ,the term affiliate has the meaning given such term in section #gce7aa74 7#b7 ,the term gross annual sales means the total worldwide gross annual sales1 in ,united ,states dollars1 for an outsourcing facility1 including the sales of all the affiliates of the outsourcing facility4 7#c7 ,the term outsourcing facility has the meaning given to such term in section #ejc;,b7d77#d74 7#d7 ,the term reinspection means1 with respect to an outsourcing facility1 #a or more inspections conducted under section #gjd subsequent to an inspection conducted under such provision which identified noncompliance materially related to an applicable requirement of this ,act1 specifically to determine whether compliance has been achieved to the ,secretary's satisfaction4 #gdd,k4 ,authority to assess and use outsourcing facility fees 7a7 ,establishment and reinspection fees 7#a7 ,in general ,for fiscal year #bjae and each subsequent fiscal year1 the ,secretary shall1 in accordance with this subsection1 assess and collect-- 7,a7 an annual establishment fee from each outsourcing facility2 and 7,b7 a reinspection fee from each outsourcing facility subject to a reinspection in such fiscal year4 7#b7 ,multiple reinspections ,an outsourcing facility subject to multiple reinspections in a fiscal year shall be subject to a reinspection fee for each reinspection4 7b7 ,establishment and reinspection fee setting ,the ,secretary shall-- 7#a7 establish the amount of the establishment fee and reinspection fee to be collected under this section for each fiscal year based on the methodology described in subsection 7c72 and 7#b7 publish such fee amounts in a ,federal ,register notice not later than #fj calendar days before the start of each such year4 7c7 ,amount of establishment fee and reinspection fee 7#a7 ,in general ,for each outsourcing facility in a fiscal year-- 7,a7 except as provided in paragraph 7#d71 the amount of the annual establishment fee under subsection 7b7 shall be equal to the sum of-- 7i7 #ae1jjj1 multiplied by the inflation adjustment factor described in paragraph 7#b72 plus 7ii7 the small business adjustment factor described in paragraph 7#c72 and 7,b7 the amount of any reinspection fee 7if applicable7 under subsection 7b7 shall be equal to #ae1jjj1 multiplied by the inflation adjustment factor described in paragraph 7#b74 7#b7 ,inflation adjustment factor 7,a7 ,in general ,for fiscal year #bjae and subsequent fiscal years1 the fee amounts established in paragraph 7#a7 shall be adjusted by the ,secretary by notice1 published in the ,federal ,register1 for a fiscal year by the amount equal to the sum of-- 7i7 #a2 7ii7 the average annual percent change in the cost1 per full-time equivalent position of the ,food and ,drug ,administration1 of all personnel compensation and benefits paid with respect to such positions for the first #c years of the preceding #d fiscal years1 multiplied by the proportion of personnel compensation and benefits costs to total costs of an average full-time equivalent position of the ,food and ,drug ,administration for the first #c years of the preceding #d fiscal years2 plus 7iii7 the average annual percent change that occurred in the ,consumer ,price ,index for urban consumers 7,u4,s4 ,city ,average2 ,not ,seasonally ,adjusted2 ,all items2 ,annual ,index7 for the first #c years of the preceding #d years of available data multiplied by the proportion of all costs other than personnel compensation and benefits costs to total costs of an average full-time equivalent position of the ,food and ,drug ,administration for the first #c years of the preceding #d fiscal years4 7,b7 ,compounded basis ,the adjustment made each fiscal year under subparagraph 7,a7 shall be added on a compounded basis to the sum of all adjustments made each fiscal year after fiscal year #bjad under subparagraph 7,a74 7#c7 ,small business adjustment factor ,the small business adjustment factor described in this paragraph shall be an amount established by the ,secretary for each fiscal year based on the ,secretary's estimate of-- 7,a7 the number of small businesses that will pay a reduced establishment fee for such fiscal year2 and 7,b7 the adjustment to the establishment fee necessary to achieve total fees equaling the total fees that the ,secretary would have collected if no entity qualified for the small business exception in paragraph 7#d74 7#d7 ,exception for small businesses 7,a7 ,in general ,in the case of an outsourcing facility with gross annual sales of #a1jjj1jjj or less in the #ab months ending ,april #a of the fiscal year immediately preceding the fiscal year in which the fees under this section are assessed1 the amount of the establishment fee under subsection 7b7 for a fiscal year shall be equal to #a_/c of the amount calculated under paragraph 7#a77;,a77i7 for such fiscal year4 7,b7 ,application ,to qualify for the exception under this paragraph1 a small business shall submit to the ,secretary a written request for such exception1 in a format specified by the ,secretary in guidance1 certifying its gross annual sales for the #ab months ending ,april #a of the fiscal year immediately preceding the fiscal year in which fees under this subsection are assessed4 ,any such application shall be submitted to the ,secretary not later than ,april #cj of such immediately preceding fiscal year4 7#e7 ,crediting of fees ,in establishing the small business adjustment factor under paragraph 7#c7 for a fiscal year1 the ,secretary shall-- 7,a7 provide for the crediting of fees from the previous year to the next year if the ,secretary overestimated the amount of the small business adjustment factor for such previous fiscal year2 and 7,b7 consider the need to account for any adjustment of fees and such other factors as the ,secretary determines appropriate4 7d7 ,use of fees ,the ,secretary shall make all of the fees collected pursuant to subparagraphs 7,a7 and 7,b7 of subsection 7a77#a7 available solely to pay for the costs of oversight of outsourcing facilities4 7e7 ,supplement not supplant ,funds received by the ,secretary pursuant to this section shall be used to supplement and not supplant any other ,federal funds available to carry out the activities described in this section4 7f7 ,crediting and availability of fees ,fees authorized under this section shall be collected and available for obligation only to the extent and in the amount provided in advance in appropriations ,acts4 ,such fees are authorized to remain available until expended4 ,such sums as may be necessary may be transferred from the ,food and ,drug ,administration salaries and expenses appropriation account without fiscal year limitation to such appropriation account for salaries and expenses with such fiscal year limitation4 ,the sums transferred shall be available solely for the purpose of paying the costs of oversight of outsourcing facilities4 7g7 ,collection of fees 7#a7 ,establishment fee ,an outsourcing facility shall remit the establishment fee due under this section in a fiscal year when submitting a registration pursuant to section #ejc;,b7b7 for such fiscal year4 7#b7 ,reinspection fee ,the ,secretary shall specify in the ,federal ,register notice described in subsection 7b77#b7 the manner in which reinspection fees assessed under this section shall be collected and the timeline for payment of such fees4 ,such a fee shall be collected after the ,secretary has conducted a reinspection of the outsourcing facility involved4 7#c7 ,effect of failure to pay fees 7,a7 ,registration ,an outsourcing facility shall not be considered registered under section #ejc;,b7b7 in a fiscal year until the date that the outsourcing facility remits the establishment fee under this subsection for such fiscal year4 7,b7 ,misbranding ,all drugs manufactured1 prepared1 propagated1 compounded1 or processed by an outsourcing facility for which any establishment fee or reinspection fee has not been paid1 as required by this section1 shall be deemed misbranded under section #ejb until the fees owed for such outsourcing facility under this section have been paid4 7#d7 ,collection of unpaid fees ,in any case where the ,secretary does not receive payment of a fee assessed under this section within #cj calendar days after it is due1 such fee shall be treated as a claim of the ,united ,states ,government subject to provisions of subchapter ,,ii of chapter #cg of title #ca1 ,united ,states ,code4 7h7 ,annual report to congress ,not later than #abj calendar days after each fiscal year in which fees are assessed and collected under this section1 the ,secretary shall submit a report to the ,committee on ,health1 ,education1 ,labor1 and ,pensions of the ,senate and the ,committee on ,energy and ,commerce of the ,house of ,representatives1 to include a description of fees assessed and collected for such year1 a summary description of entities paying the fees1 a description of the hiring and placement of new staff1 a description of the use of fee resources to support inspecting outsourcing facilities1 and the number of inspections and reinspections of such facilities performed each year4 7i7 ,authorization of appropriations ,for fiscal year #bjad and each subsequent fiscal year1 there is authorized to be appropriated for fees under this section an amount equivalent to the total amount of fees assessed for such fiscal year under this section4 4 #ajc4 ,penalties 7a7 ,prohibited acts ,section #cja 7#ba ,u4,s4,c4 #cca7 is amended by adding at the end the following3 7ccc7 7#a7 ,the resale of a compounded drug that is labeled not for resale in accordance with section #ejc;,b4 7#b7 ,with respect to a drug to be compounded pursuant to section #ejc;,a or #ejc;,b1 the intentional falsification of a prescription1 as applicable4 7#c7 ,the failure to report drugs or adverse events by an entity that is registered in accordance with subsection 7b7 of section #ejc;,b4 4 7b7 ,misbranded drugs ,section #ejb 7#ba ,u4,s4,c4 #ceb7 is amended by adding at the end the following3 7bb7 ,if the advertising or promotion of a compounded drug is false or misleading in any particular4 4 #ajd4 ,regulations ,in promulgating any regulations to implement this title 7and the amendments made by this title71 the ,secretary of ,health and ,human ,services shall-- 7#a7 issue a notice of proposed rulemaking that includes the proposed regulation2 7#b7 provide a period of not less than #fj calendar days for comments on the proposed regulation2 and 7#c7 publish the final regulation not more than #ah months following publication of the proposed rule and not less than #cj calendar days before the effective date of such final regulation4 #aje4 ,enhanced communication 7a7 ,submissions from ,state boards of pharmacy ,in a manner specified by the ,secretary of ,health and ,human ,services 7referred to in this section as the ,secretary71 the ,secretary shall receive submissions from ,state boards of pharmacy-- 7#a7 describing actions taken against compounding pharmacies1 as described in subsection 7b72 or 7#b7 expressing concerns that a compounding pharmacy may be acting contrary to section #ejc;,a of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cec;a74 7b7 ,content of submissions from state boards of pharmacy ,an action referred to in subsection 7a77#a7 is1 with respect to a pharmacy that compounds drugs1 any of the following3 7#a7 ,the issuance of a warning letter1 or the imposition of sanctions or penalties1 by a ,state for violations of a ,state's pharmacy regulations pertaining to compounding4 7#b7 ,the suspension or revocation of a ,state-issued pharmacy license or registration for violations of a ,state's pharmacy regulations pertaining to compounding4 7#c7 ,the recall of a compounded drug due to concerns relating to the quality or purity of such drug4 7c7 ,consultation ,the ,secretary shall implement subsection 7a7 in consultation with the ,national ,association of ,boards of ,pharmacy4 7d7 ,notifying state boards of pharmacy ,the ,secretary shall immediately notify ,state boards of pharmacy when-- 7#a7 the ,secretary receives a submission under subsection 7a77#a72 or 7#b7 the ,secretary makes a determination that a pharmacy is acting contrary to section #ejc;,a of the ,federal ,food1 ,drug1 and ,cosmetic ,act4 #ajf4 ,severability 7a7 ,in general ,section #ejc;,a 7#ba ,u4,s4,c4 #cec;a7 is amended -- 7#a7 in subsection 7a71 in the matter preceding paragraph 7#a71 by striking unsolicited2 7#b7 by striking subsection 7c72 7#c7 by redesignating subsections 7d7 through 7f7 as subsections 7c7 through 7e71 respectively2 and 7#d7 in subsection 7b77#a77;,a77i77,,iii71 by striking subsection 7d7 and inserting subsection 7c74 7b7 ,severability ,if any provision of this ,act 7including the amendments made by this ,act7 is declared unconstitutional1 or the applicability of this ,act 7including the amendments made by this ,act7 to any person or circumstance is held invalid1 the constitutionality of the remainder of this ,act 7including the amendments made by this ,act7 and the applicability thereof to other persons and circumstances shall not be affected4 #ajg4 ,,gao study 7a7 ,study ,not later than #cf months after the date of the enactment of this ,act1 the ,comptroller ,general of the ,united ,states shall submit to ,congress a report on pharmacy compounding and the adequacy of ,state and ,federal efforts to assure the safety of compounded drugs4 7b7 ,contents ,the report required under this section shall include-- 7#a7 a review of pharmacy compounding in each ,state1 and the settings in which such compounding occurs2 7#b7 a review of the ,state laws and policies governing pharmacy compounding1 including enforcement of ,state laws and policies2 7#c7 an assessment of the available tools to permit purchasers of compounded drugs to determine the safety and quality of such drugs2 7#d7 an evaluation of the effectiveness of the communication among ,states and between ,states and the ,food and ,drug ,administration regarding compounding2 and 7#e7 an evaluation of the ,food and ,drug ,administration's implementation of sections #ejc;,a and #ejc;,b of the ,federal ,food1 ,drug1 and ,cosmetic ,act4 ,,ii ,drug ,supply ,chain ,security #bja4 ,short title ,this title may be cited as the ,drug ,supply ,chain ,security ,act4 #bjb4 ,pharmaceutical distribution supply chain ,chapter ,v 7#ba ,u4,s4,c4 #cea et seq47 is amended by adding at the end the following3 ,h ,pharmaceutical distribution supply chain #eha4 ,definitions ,in this subchapter3 7#a7 ,affiliate ,the term affiliate means a business entity that has a relationship with a second business entity if1 directly or indirectly-- 7,a7 one business entity controls1 or has the power to control1 the other business entity2 or 7,b7 a third party controls1 or has the power to control1 both of the business entities4 7#b7 ,authorized ,the term authorized means-- 7,a7 in the case of a manufacturer or repackager1 having a valid registration in accordance with section #eaj2 7,b7 in the case of a wholesale distributor1 having a valid license under ,state law or section #ehc1 in accordance with section #ehb7;a77#f71 and complying with the licensure reporting requirements under section #ejc7;e71 as amended by the ,drug ,supply ,chain ,security ,act2 7,c7 in the case of a third-party logistics provider1 having a valid license under ,state law or section #ehd7;a77#a71 in accordance with section #ehb7;a77#g71 and complying with the licensure reporting requirements under section #ehd7;b72 and 7,d7 in the case of a dispenser1 having a valid license under ,state law4 7#c7 ,dispenser ,the term dispenser-- 7,a7 means a retail pharmacy1 hospital pharmacy1 a group of chain pharmacies under common ownership and control that do not act as a wholesale distributor1 or any other person authorized by law to dispense or administer prescription drugs1 and the affiliated warehouses or distribution centers of such entities under common ownership and control that do not act as a wholesale distributor2 and 7,b7 does not include a person who dispenses only products to be used in animals in accordance with section #eab7;a77#e74 7#d7 ,disposition ,the term disposition1 with respect to a product within the possession or control of an entity1 means the removal of such product from the pharmaceutical distribution supply chain1 which may include disposal or return of the product for disposal or other appropriate handling and other actions1 such as retaining a sample of the product for further additional physical examination or laboratory analysis of the product by a manufacturer or regulatory or law enforcement agency4 7#e7 ,distribute or distribution ,the term distribute or distribution means the sale1 purchase1 trade1 delivery1 handling1 storage1 or receipt of a product1 and does not include the dispensing of a product pursuant to a prescription executed in accordance with section #ejc7;b77#a7 or the dispensing of a product approved under section #eab7;b74 7#f7 ,exclusive distributor ,the term exclusive distributor means the wholesale distributor that directly purchased the product from the manufacturer and is the sole distributor of that manufacturer's product to a subsequent repackager1 wholesale distributor1 or dispenser4 7#g7 ,homogeneous case ,the term homogeneous case means a sealed case containing only product that has a single ,national ,drug ,code number belonging to a single lot4 7#h7 ,illegitimate product ,the term illegitimate product means a product for which credible evidence shows that the product-- 7,a7 is counterfeit1 diverted1 or stolen2 7,b7 is intentionally adulterated such that the product would result in serious adverse health consequences or death to humans2 7,c7 is the subject of a fraudulent transaction2 or 7,d7 appears otherwise unfit for distribution such that the product would be reasonably likely to result in serious adverse health consequences or death to humans4 7#i7 ,licensed ,the term licensed means-- 7,a7 in the case of a wholesale distributor1 having a valid license in accordance with section #ejc7;e7 or section #ehb7;a77#f71 as applicable2 7,b7 in the case of a third-party logistics provider1 having a valid license in accordance with section #ehd7;a7 or section #ehb7;a77#g71 as applicable2 and 7,c7 in the case of a dispenser1 having a valid license under ,state law4 7#aj7 ,manufacturer ,the term manufacturer means1 with respect to a product-- 7,a7 a person that holds an application approved under section #eje or a license issued under section #cea of the ,public ,health ,service ,act for such product1 or if such product is not the subject of an approved application or license1 the person who manufactured the product2 7,b7 a co-licensed partner of the person described in subparagraph 7,a7 that obtains the product directly from a person described in this subparagraph or subparagraph 7,a7 or 7,c72 or 7,c7 an affiliate of a person described in subparagraph 7,a7 or 7,b7 that receives the product directly from a person described in this subparagraph or subparagraph 7,a7 or 7,b74 7#aa7 ,package 7,a7 ,in general ,the term package means the smallest individual saleable unit of product for distribution by a manufacturer or repackager that is intended by the manufacturer for ultimate sale to the dispenser of such product4 7,b7 ,individual saleable unit ,for purposes of this paragraph1 an individual saleable unit is the smallest container of product introduced into commerce by the manufacturer or repackager that is intended by the manufacturer or repackager for individual sale to a dispenser4 7#ab7 ,prescription drug ,the term prescription drug means a drug for human use subject to section #ejc7;b77#a74 7#ac7 ,product ,the term product means a prescription drug in a finished dosage form for administration to a patient without substantial further manufacturing 7such as capsules1 tablets1 and lyophilized products before reconstitution71 but for purposes of section #ehb1 does not include blood or blood components intended for transfusion1 radioactive drugs or radioactive biological products 7as defined in section #fjj4c7;ee7 of title #ba1 ,code of ,federal ,regulations7 that are regulated by the ,nuclear ,regulatory ,commission or by a ,state pursuant to an agreement with such ,commission under section #bgd of the ,atomic ,energy ,act of #aied 7#db ,u4,s4,c4 #bjba71 imaging drugs1 an intravenous product described in clause 7xiv71 7xv71 or 7xvi7 of paragraph 7#bd77;,b71 any medical gas 7as defined in section #ege71 homeopathic drugs marketed in accordance with applicable guidance under this ,act1 or a drug compounded in compliance with section #ejc;,a or #ejc;,b4 7#ad7 ,product identifier ,the term product identifier means a standardized graphic that includes1 in both human-readable form and on a machine-readable data carrier that conforms to the standards developed by a widely recognized international standards development organization1 the standardized numerical identifier1 lot number1 and expiration date of the product4 7#ae7 ,quarantine ,the term quarantine means the storage or identification of a product1 to prevent distribution or transfer of the product1 in a physically separate area clearly identified for such use or through other procedures4 7#af7 ,repackager ,the term repackager means a person who owns or operates an establishment that repacks and relabels a product or package for-- 7,a7 further sale2 or 7,b7 distribution without a further transaction4 7#ag7 ,return ,the term return means providing product to the authorized immediate trading partner from which such product was purchased or received1 or to a returns processor or reverse logistics provider for handling of such product4 7#ah7 ,returns processor or reverse logistics provider ,the term returns processor or reverse logistics provider means a person who owns or operates an establishment that dispositions or otherwise processes saleable or nonsaleable product received from an authorized trading partner such that the product may be processed for credit to the purchaser1 manufacturer1 or seller or disposed of for no further distribution4 7#ai7 ,specific patient need ,the term specific patient need refers to the transfer of a product from one pharmacy to another to fill a prescription for an identified patient4 ,such term does not include the transfer of a product from one pharmacy to another for the purpose of increasing or replenishing stock in anticipation of a potential need4 7#bj7 ,standardized numerical identifier ,the term standardized numerical identifier means a set of numbers or characters used to uniquely identify each package or homogenous case that is composed of the ,national ,drug ,code that corresponds to the specific product 7including the particular package configuration7 combined with a unique alphanumeric serial number of up to #bj characters4 7#ba7 ,suspect product ,the term suspect product means a product for which there is reason to believe that such product-- 7,a7 is potentially counterfeit1 diverted1 or stolen2 7,b7 is potentially intentionally adulterated such that the product would result in serious adverse health consequences or death to humans2 7,c7 is potentially the subject of a fraudulent transaction2 or 7,d7 appears otherwise unfit for distribution such that the product would result in serious adverse health consequences or death to humans4 7#bb7 ,third-party logistics provider ,the term third-party logistics provider means an entity that provides or coordinates warehousing1 or other logistics services of a product in interstate commerce on behalf of a manufacturer1 wholesale distributor1 or dispenser of a product1 but does not take ownership of the product1 nor have responsibility to direct the sale or disposition of the product4 7#bc7 ,trading partner ,the term trading partner means-- 7,a7 a manufacturer1 repackager1 wholesale distributor1 or dispenser from whom a manufacturer1 repackager1 wholesale distributor1 or dispenser accepts direct ownership of a product or to whom a manufacturer1 repackager1 wholesale distributor1 or dispenser transfers direct ownership of a product2 or 7,b7 a third-party logistics provider from whom a manufacturer1 repackager1 wholesale distributor1 or dispenser accepts direct possession of a product or to whom a manufacturer1 repackager1 wholesale distributor1 or dispenser transfers direct possession of a product4 7#bd7 ,transaction 7,a7 ,in general ,the term transaction means the transfer of product between persons in which a change of ownership occurs4 7,b7 ,exemptions ,the term transaction does not include-- 7i7 intracompany distribution of any product between members of an affiliate or within a manufacturer2 7ii7 the distribution of a product among hospitals or other health care entities that are under common control2 7iii7 the distribution of a product for emergency medical reasons including a public health emergency declaration pursuant to section #cai of the ,public ,health ,service ,act1 except that a drug shortage not caused by a public health emergency shall not constitute an emergency medical reason2 7iv7 the dispensing of a product pursuant to a prescription executed in accordance with section #ejc7;b77#a72 7v7 the distribution of product samples by a manufacturer or a licensed wholesale distributor in accordance with section #ejc7;d72 7vi7 the distribution of blood or blood components intended for transfusion2 7vii7 the distribution of minimal quantities of product by a licensed retail pharmacy to a licensed practitioner for office use2 7viii7 the sale1 purchase1 or trade of a drug or an offer to sell1 purchase1 or trade a drug by a charitable organization described in section #eja7;c77#c7 of the ,internal ,revenue ,code of #aihf to a nonprofit affiliate of the organization to the extent otherwise permitted by law2 7ix7 the distribution of a product pursuant to the sale or merger of a pharmacy or pharmacies or a wholesale distributor or wholesale distributors1 except that any records required to be maintained for the product shall be transferred to the new owner of the pharmacy or pharmacies or wholesale distributor or wholesale distributors2 7x7 the dispensing of a product approved under section #eab7;c72 7xi7 products transferred to or from any facility that is licensed by the ,nuclear ,regulatory ,commission or by a ,state pursuant to an agreement with such ,commission under section #bgd of the ,atomic ,energy ,act of #aied 7#db ,u4,s4,c4 #bjba72 7xii7 a combination product that is not subject to approval under section #eje or licensure under section #cea of the ,public ,health ,service ,act1 and that is-- 7,i7 a product comprised of a device and #a or more other regulated components 7such as a drug_/device1 biologic_/device1 or drug_/device_/biologic7 that are physically1 chemically1 or otherwise combined or mixed and produced as a single entity2 7,,ii7 #b or more separate products packaged together in a single package or as a unit and comprised of a drug and device or device and biological product2 or 7,,iii7 #b or more finished medical devices plus one or more drug or biological products that are packaged together in what is referred to as a medical convenience kit as described in clause 7xiii72 7xiii7 the distribution of a collection of finished medical devices1 which may include a product or biological product1 assembled in kit form strictly for the convenience of the purchaser or user 7referred to in this clause as a medical convenience kit7 if-- 7,i7 the medical convenience kit is assembled in an establishment that is registered with the ,food and ,drug ,administration as a device manufacturer in accordance with section #eaj7;b77#b72 7,,ii7 the medical convenience kit does not contain a controlled substance that appears in a schedule contained in the ,comprehensive ,drug ,abuse ,prevention and ,control ,act of #aigj2 7,,iii7 in the case of a medical convenience kit that includes a product1 the person that manufacturers the kit-- 7aa7 purchased such product directly from the pharmaceutical manufacturer or from a wholesale distributor that purchased the product directly from the pharmaceutical manufacturer2 and 7bb7 does not alter the primary container or label of the product as purchased from the manufacturer or wholesale distributor2 and 7,,iv7 in the case of a medical convenience kit that includes a product1 the product is-- 7aa7 an intravenous solution intended for the replenishment of fluids and electrolytes2 7bb7 a product intended to maintain the equilibrium of water and minerals in the body2 7cc7 a product intended for irrigation or reconstitution2 7dd7 an anesthetic2 7ee7 an anticoagulant2 7ff7 a vasopressor2 or 7gg7 a sympathomimetic2 7xiv7 the distribution of an intravenous product that1 by its formulation1 is intended for the replenishment of fluids and electrolytes 7such as sodium1 chloride1 and potassium7 or calories 7such as dextrose and amino acids72 7xv7 the distribution of an intravenous product used to maintain the equilibrium of water and minerals in the body1 such as dialysis solutions2 7xvi7 the distribution of a product that is intended for irrigation1 or sterile water1 whether intended for such purposes or for injection2 7xvii7 the distribution of a medical gas 7as defined in section #ege72 or 7xviii7 the distribution or sale of any licensed product under section #cea of the ,public ,health ,service ,act that meets the definition of a device under section #bja7;h74 7#be7 ,transaction history ,the term transaction history means a statement in paper or electronic form1 including the transaction information for each prior transaction going back to the manufacturer of the product4 7#bf7 ,transaction information ,the term transaction information means-- 7,a7 the proprietary or established name or names of the product2 7,b7 the strength and dosage form of the product2 7,c7 the ,national ,drug ,code number of the product2 7,d7 the container size2 7,e7 the number of containers2 7,f7 the lot number of the product2 7,g7 the date of the transaction2 7,h7 the date of the shipment1 if more than #bd hours after the date of the transaction2 7,i7 the business name and address of the person from whom ownership is being transferred2 and 7,j7 the business name and address of the person to whom ownership is being transferred4 7#bg7 ,transaction statement ,the transaction statement is a statement1 in paper or electronic form1 that the entity transferring ownership in a transaction-- 7,a7 is authorized as required under the ,drug ,supply ,chain ,security ,act2 7,b7 received the product from a person that is authorized as required under the ,drug ,supply ,chain ,security ,act2 7,c7 received transaction information and a transaction statement from the prior owner of the product1 as required under section #ehb2 7,d7 did not knowingly ship a suspect or illegitimate product2 7,e7 had systems and processes in place to comply with verification requirements under section #ehb2 7,f7 did not knowingly provide false transaction information2 and 7,g7 did not knowingly alter the transaction history4 7#bh7 ,verification or verify ,the term verification or verify means determining whether the product identifier affixed to1 or imprinted upon1 a package or homogeneous case corresponds to the standardized numerical identifier or lot number and expiration date assigned to the product by the manufacturer or the repackager1 as applicable in accordance with section #ehb4 7#bi7 ,wholesale distributor ,the term wholesale distributor means a person 7other than a manufacturer1 a manufacturer's co-licensed partner1 a third-party logistics provider1 or repackager7 engaged in wholesale distribution 7as defined in section #ejc7;e77#d71 as amended by the ,drug ,supply ,chain ,security ,act74 #ehb4 ,requirements 7a7 ,in general 7#a7 ,other activities ,each manufacturer1 repackager1 wholesale distributor1 and dispenser shall comply with the requirements set forth in this section with respect to the role of such manufacturer1 repackager1 wholesale distributor1 or dispenser in a transaction involving product4 ,if an entity meets the definition of more than one of the entities listed in the preceding sentence1 such entity shall comply with all applicable requirements in this section1 but shall not be required to duplicate requirements4 7#b7 ,initial standards 7,a7 ,in general ,the ,secretary shall1 in consultation with other appropriate ,federal officials1 manufacturers1 repackagers1 wholesale distributors1 dispensers1 and other pharmaceutical distribution supply chain stakeholders1 issue a draft guidance document that establishes standards for the interoperable exchange of transaction information1 transaction history1 and transaction statements1 in paper or electronic format1 for compliance with this subsection and subsections 7b71 7c71 7d71 and 7e74 ,in establishing such standards1 the ,secretary shall consider the feasibility of establishing standardized documentation to be used by members of the pharmaceutical distribution supply chain to convey the transaction information1 transaction history1 and transaction statement to the subsequent purchaser of a product and to facilitate the exchange of lot level data4 ,the standards established under this paragraph shall take into consideration the standards established under section #eje;,d and shall comply with a form and format developed by a widely recognized international standards development organization4 7,b7 ,public input ,prior to issuing the draft guidance under subparagraph 7,a71 the ,secretary shall gather comments and information from stakeholders and maintain such comments and information in a public docket for at least #fj days prior to issuing such guidance4 7,c7 ,publication ,the ,secretary shall publish the standards established under subparagraph 7,a7 not later than #a year after the date of enactment of the ,drug ,supply ,chain ,security ,act4 7#c7 ,waivers1 exceptions1 and exemptions 7,a7 ,in general ,not later than #b years after the date of enactment of the ,drug ,supply ,chain ,security ,act1 the ,secretary shall1 by guidance-- 7i7 establish a process by which an authorized manufacturer1 repackager1 wholesale distributor1 or dispenser may request a waiver from any of the requirements set forth in this section1 which the ,secretary may grant if the ,secretary determines that such requirements would result in an undue economic hardship or for emergency medical reasons1 including a public health emergency declaration pursuant to section #cai of the ,public ,health ,service ,act2 7ii7 establish a process by which the ,secretary determines exceptions1 and a process through which a manufacturer or repackager may request such an exception1 to the requirements relating to product identifiers if a product is packaged in a container too small or otherwise unable to accommodate a label with sufficient space to bear the information required for compliance with this section2 and 7iii7 establish a process by which the ,secretary may determine other products or transactions that shall be exempt from the requirements of this section4 7,b7 ,content ,the guidance issued under subparagraph 7,a7 shall include a process for the biennial review and renewal of such waivers1 exceptions1 and exemptions1 as applicable4 7,c7 ,process ,in issuing the guidance under this paragraph1 the ,secretary shall provide an effective date that is not later than #ahj days prior to the date on which manufacturers are required to affix or imprint a product identifier to each package and homogenous case of product intended to be introduced in a transaction into commerce consistent with this section4 7#d7 ,self-executing requirements ,except where otherwise specified1 the requirements of this section may be enforced without further regulations or guidance from the ,secretary4 7#e7 ,grandfathering product 7,a7 ,product identifier ,not later than #b years after the date of enactment of the ,drug ,supply ,chain ,security ,act1 the ,secretary shall finalize guidance specifying whether and under what circumstances product that is not labeled with a product identifier and that is in the pharmaceutical distribution supply chain at the time of the effective date of the requirements of this section shall be exempted from the requirements of this section4 7,b7 ,tracing ,for a product that entered the pharmaceutical distribution supply chain prior to ,january #a1 #bjae-- 7i7 authorized trading partners shall be exempt from providing transaction information as required under subsections 7b77#a77;,a77i71 7c77#a77;,a77ii71 7d77#a77;,a77ii71 and 7e77#a77;,a77ii72 7ii7 transaction history required under this section shall begin with the owner of such product on such date2 and 7iii7 the owners of such product on such date shall be exempt from asserting receipt of transaction information and transaction statement from the prior owner as required under this section4 7#f7 ,wholesale distributor licenses ,notwithstanding section #eha7i77;,a71 until the effective date of the wholesale distributor licensing regulations under section #ehc1 the term licensed or authorized1 as it relates to a wholesale distributor with respect to prescription drugs1 shall mean a wholesale distributor with a valid license under ,state law4 7#g7 ,third-party logistics provider licenses ,until the effective date of the third-party logistics provider licensing regulations under section #ehd1 a third-party logistics provider shall be considered licensed under section #eha7i77;,b7 unless the ,secretary has made a finding that the third-party logistics provider does not utilize good handling and distribution practices and publishes notice thereof4 7#h7 ,label changes ,changes made to package labels solely to incorporate the product identifier may be submitted to the ,secretary in the annual report of an establishment1 in accordance with section #cad4gj7;d7 of chapter #ba1 ,code of ,federal ,regulations 7or any successor regulation74 7#i7 ,product identifiers ,with respect to any requirement relating to product identifiers under this subchapter-- 7,a7 unless the ,secretary allows1 through guidance1 the use of other technologies for data instead of or in addition to the technologies described in clauses 7i7 and 7ii71 the applicable data-- 7i7 shall be included in a #b-;dimensional data matrix barcode when affixed to1 or imprinted upon1 a package2 and 7ii7 shall be included in a linear or #b-;dimensional data matrix barcode when affixed to1 or imprinted upon1 a homogeneous case2 and 7,b7 verification of the product identifier may occur by using human-readable or machine-readable methods4 7b7 ,manufacturer requirements 7#a7 ,product tracing 7,a7 ,in general ,beginning not later than ,january #a1 #bjae1 a manufacturer shall-- 7i7 prior to1 or at the time of1 each transaction in which such manufacturer transfers ownership of a product1 provide the subsequent owner with transaction history1 transaction information1 and a transaction statement1 in a single document in an paper or electronic format2 and 7ii7 capture the transaction information 7including lot level information71 transaction history1 and transaction statement for each transaction and maintain such information1 history1 and statement for not less than #f years after the date of the transaction4 7,b7 ,requests for information ,upon a request by the ,secretary or other appropriate ,federal or ,state official1 in the event of a recall or for the purpose of investigating a suspect product or an illegitimate product1 a manufacturer shall1 not later than #a business day1 and not to exceed #dh hours1 after receiving the request1 or in other such reasonable time as determined by the ,secretary1 based on the circumstances of the request1 provide the applicable transaction information1 transaction history1 and transaction statement for the product4 7,c7 ,electronic format 7i7 ,in general ,beginning not later than #d years after the date of enactment of the ,drug ,supply ,chain ,security ,act1 except as provided under clause 7ii71 a manufacturer shall provide the transaction information1 transaction history1 and transaction statement required under subparagraph 7,a77i7 in electronic format4 7ii7 ,exception ,a manufacturer may continue to provide the transaction information1 transaction history1 and transaction statement required under subparagraph 7,a77i7 in a paper format to a licensed health care practitioner authorized to prescribe medication under ,state law or other licensed individual under the supervision or direction of such a practitioner who dispenses product in the usual course of professional practice4 7#b7 ,product identifier 7,a7 ,in general ,beginning not later than #d years after the date of enactment of the ,drug ,supply ,chain ,security ,act1 a manufacturer shall affix or imprint a product identifier to each package and homogenous case of a product intended to be introduced in a transaction into commerce4 ,such manufacturer shall maintain the product identifier information for such product for not less than #f years after the date of the transaction4 7,b7 ,exception ,a package that is required to have a standardized numerical identifier is not required to have a unique device identifier4 7#c7 ,authorized trading partners ,beginning not later than ,january #a1 #bjae1 the trading partners of a manufacturer may be only authorized trading partners4 7#d7 ,verification ,beginning not later than ,january #a1 #bjae1 a manufacturer shall have systems in place to enable the manufacturer to comply with the following requirements3 7,a7 ,suspect product 7i7 ,in general ,upon making a determination that a product in the possession or control of the manufacturer is a suspect product1 or upon receiving a request for verification from the ,secretary that has made a determination that a product within the possession or control of a manufacturer is a suspect product1 a manufacturer shall-- 7,i7 quarantine such product within the possession or control of the manufacturer from product intended for distribution until such product is cleared or dispositioned2 and 7,,ii7 promptly conduct an investigation in coordination with trading partners1 as applicable1 to determine whether the product is an illegitimate product1 which shall include validating any applicable transaction history and transaction information in the possession of the manufacturer and otherwise investigating to determine whether the product is an illegitimate product1 and1 beginning #d years after the date of enactment of the ,drug ,supply ,chain ,security ,act1 verifying the product at the package level1 including the standardized numerical identifier4 7ii7 ,cleared product ,if the manufacturer makes the determination that a suspect product is not an illegitimate product1 the manufacturer shall promptly notify the ,secretary1 if applicable1 of such determination and such product may be further distributed4 7iii7 ,records ,a manufacturer shall keep records of the investigation of a suspect product for not less than #f years after the conclusion of the investigation4 7,b7 ,illegitimate product 7i7 ,in general ,upon determining that a product in the possession or control of a manufacturer is an illegitimate product1 the manufacturer shall1 in a manner consistent with the systems and processes of such manufacturer-- 7,i7 quarantine such product within the possession or control of the manufacturer from product intended for distribution until such product is dispositioned2 7,,ii7 disposition the illegitimate product within the possession or control of the manufacturer2 7,,iii7 take reasonable and appropriate steps to assist a trading partner to disposition an illegitimate product not in the possession or control of the manufacturer2 and 7,,iv7 retain a sample of the product for further physical examination or laboratory analysis of the product by the manufacturer or ,secretary 7or other appropriate ,federal or ,state official7 upon request by the ,secretary 7or other appropriate ,federal or ,state official71 as necessary and appropriate4 7ii7 ,making a notification 7,i7 ,illegitimate product ,upon determining that a product in the possession or control of the manufacturer is an illegitimate product1 the manufacturer shall notify the ,secretary and all immediate trading partners that the manufacturer has reason to believe may have received such illegitimate product of such determination not later than #bd hours after making such determination4 7,,ii7 ,high risk of illegitimacy ,a manufacturer shall notify the ,secretary and immediate trading partners that the manufacturer has reason to believe may have in the trading partner's possession a product manufactured by1 or purported to be a product manufactured by1 the manufacturer not later than #bd hours after determining or being notified by the ,secretary or a trading partner that there is a high risk that such product is an illegitimate product4 ,for purposes of this subclause1 a high risk may include a specific high risk that could increase the likelihood that illegitimate product will enter the pharmaceutical distribution supply chain and other high risks as determined by the ,secretary in guidance pursuant to subsection 7h74 7iii7 ,responding to a notification ,upon the receipt of a notification from the ,secretary or a trading partner that a determination has been made that a product is an illegitimate product1 a manufacturer shall identify all illegitimate product subject to such notification that is in the possession or control of the manufacturer1 including any product that is subsequently received1 and shall perform the activities described in subparagraph 7,a74 7iv7 ,terminating a notification ,upon making a determination1 in consultation with the ,secretary1 that a notification is no longer necessary1 a manufacturer shall promptly notify immediate trading partners that the manufacturer notified pursuant to clause 7ii7 that such notification has been terminated4 7v7 ,records ,a manufacturer shall keep records of the disposition of an illegitimate product for not less than #f years after the conclusion of the disposition4 7,c7 ,requests for verification ,beginning #d years after the date of enactment of the ,drug ,supply ,chain ,security ,act1 upon receiving a request for verification from an authorized repackager1 wholesale distributor1 or dispenser that is in possession or control of a product such person believes to be manufactured by such manufacturer1 a manufacturer shall1 not later than #bd hours after receiving the request for verification or in other such reasonable time as determined by the ,secretary1 based on the circumstances of the request1 notify the person making the request whether the product identifier1 including the standardized numerical identifier1 that is the subject of the request corresponds to the product identifier affixed or imprinted by the manufacturer4 ,if a manufacturer responding to a request for verification identifies a product identifier that does not correspond to that affixed or imprinted by the manufacturer1 the manufacturer shall treat such product as suspect product and conduct an investigation as described in subparagraph 7,a74 ,if the manufacturer has reason to believe the product is an illegitimate product1 the manufacturer shall advise the person making the request of such belief at the time such manufacturer responds to the request for verification4 7,d7 ,electronic database ,a manufacturer may satisfy the requirements of this paragraph by developing a secure electronic database or utilizing a secure electronic database developed or operated by another entity4 ,the owner of such database shall establish the requirements and processes to respond to requests and may provide for data access to other members of the pharmaceutical distribution supply chain1 as appropriate4 ,the development and operation of such a database shall not relieve a manufacturer of the requirement under this paragraph to respond to a request for verification submitted by means other than a secure electronic database4 7,e7 ,saleable returned product ,beginning #d years after the date of enactment of the ,drug ,supply ,chain ,security ,act 7except as provided pursuant to subsection 7a77#e771 upon receipt of a returned product that the manufacturer intends to further distribute1 before further distributing such product1 the manufacturer shall verify the product identifier1 including the standardized numerical identifier1 for each sealed homogeneous case of such product or1 if such product is not in a sealed homogeneous case1 verify the product identifier1 including the standardized numerical identifier1 on each package4 7,f7 ,nonsaleable returned product ,a manufacturer may return a nonsaleable product to the manufacturer or repackager1 to the wholesale distributor from whom such product was purchased1 or to a person acting on behalf of such a person1 including a returns processor1 without providing the information described in paragraph 7#a77;,a77i74 7c7 ,wholesale distributor requirements 7#a7 ,product tracing 7,a7 ,in general ,beginning not later than ,january #a1 #bjae1 the following requirements shall apply to wholesale distributors3 7i7 ,a wholesale distributor shall not accept ownership of a product unless the previous owner prior to1 or at the time of1 the transaction provides the transaction history1 transaction information1 and a transaction statement for the product1 as applicable under this subparagraph4 7ii7 7,i7 7aa7 ,if the wholesale distributor purchased a product directly from the manufacturer1 the exclusive distributor of the manufacturer1 or a repackager that purchased directly from the manufacturer1 then prior to1 or at the time of1 each transaction in which the wholesale distributor transfers ownership of a product1 the wholesale distributor shall provide to the subsequent purchaser-- 7,,aa7 a transaction statement1 which shall state that such wholesale distributor1 or a member of the affiliate of such wholesale distributor1 purchased the product directly from the manufacturer1 exclusive distributor of the manufacturer1 or repackager that purchased the product directly from the manufacturer2 and 7,,bb7 subject to subclause 7,,ii71 the transaction history and transaction information4 7bb7 ,the wholesale distributor shall provide the transaction history1 transaction information1 and transaction statement under item 7aa7-- 7,,aa7 if provided to a dispenser1 on a single document in a paper or electronic format2 and 7,,bb7 if provided to a wholesale distributor1 through any combination of self-generated paper1 electronic data1 or manufacturer-provided information on the product package4 7,,ii7 ,for purposes of transactions described in subclause 7,i71 transaction history and transaction information shall not be required to include the lot number of the product1 the initial transaction date1 or the initial shipment date from the manufacturer 7as defined in subparagraphs 7,f71 7,g71 and 7,h7 of section #eha7bf774 7iii7 ,if the wholesale distributor did not purchase a product directly from the manufacturer1 the exclusive distributor of the manufacturer1 or a repackager that purchased directly from the manufacturer1 as described in clause 7ii71 then prior to1 or at the time of1 each transaction or subsequent transaction1 the wholesale distributor shall provide to the subsequent purchaser a transaction statement1 transaction history1 and transaction information1 in a paper or electronic format that complies with the guidance document issued under subsection 7a77#b74 7iv7 ,for the purposes of clause 7iii71 the transaction history supplied shall begin only with the wholesale distributor described in clause 7ii77,i71 but the wholesale distributor described in clause 7iii7 shall inform the subsequent purchaser that such wholesale distributor received a direct purchase statement from a wholesale distributor described in clause 7ii77,i74 7v7 ,a wholesale distributor shall-- 7,i7 capture the transaction information 7including lot level information7 consistent with the requirements of this section1 transaction history1 and transaction statement for each transaction described in clauses 7i71 7ii71 and 7iii7 and maintain such information1 history1 and statement for not less than #f years after the date of the transaction2 and 7,,ii7 maintain the confidentiality of the transaction information 7including any lot level information consistent with the requirements of this section71 transaction history1 and transaction statement for a product in a manner that prohibits disclosure to any person other than the ,secretary or other appropriate ,federal or ,state official1 except to comply with clauses 7ii7 and 7iii71 and1 as applicable1 pursuant to an agreement under subparagraph 7,d74 7,b7 ,returns 7i7 ,saleable returns ,notwithstanding subparagraph 7,a77i71 the following shall apply3 7,i7 ,requirements ,until the date that is #f years after the date of enactment of the ,drug ,supply ,chain ,security ,act 7except as provided pursuant to subsection 7a77#e771 a wholesale distributor may accept returned product from a dispenser or repackager pursuant to the terms and conditions of any agreement between the parties1 and1 notwithstanding subparagraph 7,a77ii71 may distribute such returned product without providing the transaction history4 ,for transactions subsequent to the return1 the transaction history of such product shall begin with the wholesale distributor that accepted the returned product1 consistent with the requirements of this subsection4 7,,ii7 ,enhanced requirements ,beginning #f years after the date of enactment of the ,drug ,supply ,chain ,security ,act 7except as provided pursuant to subsection 7a77#e771 a wholesale distributor may accept returned product from a dispenser or repackager only if the wholesale distributor can associate returned product with the transaction information and transaction statement associated with that product4 ,for all transactions after such date1 the transaction history1 as applicable1 of such product shall begin with the wholesale distributor that accepted and verified the returned product4 ,for purposes of this subparagraph1 the transaction information and transaction history1 as applicable1 need not include transaction dates if it is not reasonably practicable to obtain such dates4 7ii7 ,nonsaleable returns ,a wholesale distributor may return a nonsaleable product to the manufacturer or repackager1 to the wholesale distributor from whom such product was purchased1 or to a person acting on behalf of such a person1 including a returns processor1 without providing the information required under subparagraph 7,a77i74 7,c7 ,requests for information ,upon a request by the ,secretary or other appropriate ,federal or ,state official1 in the event of a recall or for the purpose of investigating a suspect product or an illegitimate product1 a wholesale distributor shall1 not later than #a business day1 and not to exceed #dh hours1 after receiving the request or in other such reasonable time as determined by the ,secretary1 based on the circumstances of the request1 provide the applicable transaction information1 transaction history1 and transaction statement for the product4 7,d7 ,trading partner agreements ,beginning #f years after the date of enactment of the ,drug ,supply ,chain ,security ,act1 a wholesale distributor may disclose the transaction information1 including lot level information1 transaction history1 or transaction statement of a product to the subsequent purchaser of the product1 pursuant to a written agreement between such wholesale distributor and such subsequent purchaser4 ,nothing in this subparagraph shall be construed to limit the applicability of subparagraphs 7,a7 through 7,c74 7#b7 ,product identifier ,beginning #f years after the date of enactment of the ,drug ,supply ,chain ,security ,act1 a wholesale distributor may engage in transactions involving a product only if such product is encoded with a product identifier 7except as provided pursuant to subsection 7a77#e774 7#c7 ,authorized trading partners ,beginning not later than ,january #a1 #bjae1 the trading partners of a wholesale distributor may be only authorized trading partners4 7#d7 ,verification ,beginning not later than ,january #a1 #bjae1 a wholesale distributor shall have systems in place to enable the wholesale distributor to comply with the following requirements3 7,a7 ,suspect product 7i7 ,in general ,upon making a determination that a product in the possession or control of a wholesale distributor is a suspect product1 or upon receiving a request for verification from the ,secretary that has made a determination that a product within the possession or control of a wholesale distributor is a suspect product1 a wholesale distributor shall-- 7,i7 quarantine such product within the possession or control of the wholesale distributor from product intended for distribution until such product is cleared or dispositioned2 and 7,,ii7 promptly conduct an investigation in coordination with trading partners1 as applicable1 to determine whether the product is an illegitimate product1 which shall include validating any applicable transaction history and transaction information in the possession of the wholesale distributor and otherwise investigating to determine whether the product is an illegitimate product1 and1 beginning #f years after the date of enactment of the ,drug ,supply ,chain ,security ,act 7except as provided pursuant to subsection 7a77#e771 verifying the product at the package level1 including the standardized numerical identifier4 7ii7 ,cleared product ,if the wholesale distributor determines that a suspect product is not an illegitimate product1 the wholesale distributor shall promptly notify the ,secretary1 if applicable1 of such determination and such product may be further distributed4 7iii7 ,records ,a wholesale distributor shall keep records of the investigation of a suspect product for not less than #f years after the conclusion of the investigation4 7,b7 ,illegitimate product 7i7 ,in general ,upon determining1 in coordination with the manufacturer1 that a product in the possession or control of a wholesale distributor is an illegitimate product1 the wholesale distributor shall1 in a manner that is consistent with the systems and processes of such wholesale distributor-- 7,i7 quarantine such product within the possession or control of the wholesale distributor from product intended for distribution until such product is dispositioned2 7,,ii7 disposition the illegitimate product within the possession or control of the wholesale distributor2 7,,iii7 take reasonable and appropriate steps to assist a trading partner to disposition an illegitimate product not in the possession or control of the wholesale distributor2 and 7,,iv7 retain a sample of the product for further physical examination or laboratory analysis of the product by the manufacturer or ,secretary 7or other appropriate ,federal or ,state official7 upon request by the manufacturer or ,secretary 7or other appropriate ,federal or ,state official71 as necessary and appropriate4 7ii7 ,making a notification ,upon determining that a product in the possession or control of the wholesale distributor is an illegitimate product1 the wholesale distributor shall notify the ,secretary and all immediate trading partners that the wholesale distributor has reason to believe may have received such illegitimate product of such determination not later than #bd hours after making such determination4 7iii7 ,responding to a notification ,upon the receipt of a notification from the ,secretary or a trading partner that a determination has been made that a product is an illegitimate product1 a wholesale distributor shall identify all illegitimate product subject to such notification that is in the possession or control of the wholesale distributor1 including any product that is subsequently received1 and shall perform the activities described in subparagraph 7,a74 7iv7 ,terminating a notification ,upon making a determination1 in consultation with the ,secretary1 that a notification is no longer necessary1 a wholesale distributor shall promptly notify immediate trading partners that the wholesale distributor notified pursuant to clause 7ii7 that such notification has been terminated4 7v7 ,records ,a wholesale distributor shall keep records of the disposition of an illegitimate product for not less than #f years after the conclusion of the disposition4 7,c7 ,electronic database ,a wholesale distributor may satisfy the requirements of this paragraph by developing a secure electronic database or utilizing a secure electronic database developed or operated by another entity4 ,the owner of such database shall establish the requirements and processes to respond to requests and may provide for data access to other members of the pharmaceutical distribution supply chain1 as appropriate4 ,the development and operation of such a database shall not relieve a wholesale distributor of the requirement under this paragraph to respond to a verification request submitted by means other than a secure electronic database4 7,d7 ,verification of saleable returned product ,beginning #f years after the date of enactment of the ,drug ,supply ,chain ,security ,act1 upon receipt of a returned product that the wholesale distributor intends to further distribute1 before further distributing such product1 the wholesale distributor shall verify the product identifier1 including the standardized numerical identifier1 for each sealed homogeneous case of such product or1 if such product is not in a sealed homogeneous case1 verify the product identifier1 including the standardized numerical identifier1 on each package4 7d7 ,dispenser requirements 7#a7 ,product tracing 7,a7 ,in general ,beginning ,july #a1 #bjae1 a dispenser-- 7i7 shall not accept ownership of a product1 unless the previous owner prior to1 or at the time of1 the transaction1 provides transaction history1 transaction information1 and a transaction statement2 7ii7 prior to1 or at the time of1 each transaction in which the dispenser transfers ownership of a product 7but not including dispensing to a patient or returns7 shall provide the subsequent owner with transaction history1 transaction information1 and a transaction statement for the product1 except that the requirements of this clause shall not apply to sales by a dispenser to another dispenser to fulfill a specific patient need2 and 7iii7 shall capture transaction information 7including lot level information1 if provided71 transaction history1 and transaction statements1 as necessary to investigate a suspect product1 and maintain such information1 history1 and statements for not less than #f years after the transaction4 7,b7 ,agreements with third parties ,a dispenser may enter into a written agreement with a third party1 including an authorized wholesale distributor1 under which the third party confidentially maintains the transaction information1 transaction history1 and transaction statements required to be maintained under this subsection on behalf of the dispenser4 ,if a dispenser enters into such an agreement1 the dispenser shall maintain a copy of the written agreement and shall not be relieved of the obligations of the dispenser under this subsection4 7,c7 ,returns 7i7 ,saleable returns ,a dispenser may return product to the trading partner from which the dispenser obtained the product without providing the information required under subparagraph 7,a74 7ii7 ,nonsaleable returns ,a dispenser may return a nonsaleable product to the manufacturer or repackager1 to the wholesale distributor from whom such product was purchased1 to a returns processor1 or to a person acting on behalf of such a person without providing the information required under subparagraph 7,a74 7,d7 ,requests for information ,upon a request by the ,secretary or other appropriate ,federal or ,state official1 in the event of a recall or for the purpose of investigating a suspect or an illegitimate product1 a dispenser shall1 not later than #b business days after receiving the request or in another such reasonable time as determined by the ,secretary1 based on the circumstances of the request1 provide the applicable transaction information1 transaction statement1 and transaction history which the dispenser received from the previous owner1 which shall not include the lot number of the product1 the initial transaction date1 or the initial shipment date from the manufacturer unless such information was included in the transaction information1 transaction statement1 and transaction history provided by the manufacturer or wholesale distributor to the dispenser4 ,the dispenser may respond to the request by providing the applicable information in either paper or electronic format4 ,until the date that is #d years after the date of enactment of the ,drug ,supply ,chain ,security ,act1 the ,secretary or other appropriate ,federal or ,state official shall grant a dispenser additional time1 as necessary1 only with respect to a request to provide lot level information described in subparagraph 7,f7 of section #eha7bf7 that was provided to the dispenser in paper format1 limit the request time period to the #f months preceding the request or other relevant date1 and1 in the event of a recall1 the ,secretary1 or other appropriate ,federal or ,state official may request information only if such recall involves a serious adverse health consequence or death to humans4 7#b7 ,product identifier ,beginning not later than #g years after the date of enactment of the ,drug ,supply ,chain ,security ,act1 a dispenser may engage in transactions involving a product only if such product is encoded with a product identifier 7except as provided pursuant to subsection 7a77#e774 7#c7 ,authorized trading partners ,beginning not later than ,january #a1 #bjae1 the trading partners of a dispenser may be only authorized trading partners4 7#d7 ,verification ,beginning not later than ,january #a1 #bjae1 a dispenser shall have systems in place to enable the dispenser to comply with the following requirements3 7,a7 ,suspect product 7i7 ,in general ,upon making a determination that a product in the possession or control of the dispenser is a suspect product1 or upon receiving a request for verification from the ,secretary that has made a determination that a product within the possession or control of a dispenser is a suspect product1 a dispenser shall-- 7,i7 quarantine such product within the possession or control of the dispenser from product intended for distribution until such product is cleared or dispositioned2 and 7,,ii7 promptly conduct an investigation in coordination with trading partners1 as applicable1 to determine whether the product is an illegitimate product4 7ii7 ,investigation ,an investigation conducted under clause 7i77,,ii7 shall include-- 7,i7 beginning #g years after the date of enactment of the ,drug ,supply ,chain ,security ,act1 verifying whether the lot number of a suspect product corresponds with the lot number for such product2 7,,ii7 beginning #g years after the date of enactment of such ,act1 verifying that the product identifier1 including the standardized numerical identifier1 of at least #c packages or #aj percent of such suspect product1 whichever is greater1 or all packages1 if there are fewer than #c1 corresponds with the product identifier for such product2 7,,iii7 validating any applicable transaction history and transaction information in the possession of the dispenser2 and 7,,iv7 otherwise investigating to determine whether the product is an illegitimate product4 7iii7 ,cleared product ,if the dispenser makes the determination that a suspect product is not an illegitimate product1 the dispenser shall promptly notify the ,secretary1 if applicable1 of such determination and such product may be further distributed or dispensed4 7iv7 ,records ,a dispenser shall keep records of the investigation of a suspect product for not less than #f years after the conclusion of the investigation4 7,b7 ,illegitimate product 7i7 ,in general ,upon determining1 in coordination with the manufacturer1 that a product in the possession or control of a dispenser is an illegitimate product1 the dispenser shall-- 7,i7 disposition the illegitimate product within the possession or control of the dispenser2 7,,ii7 take reasonable and appropriate steps to assist a trading partner to disposition an illegitimate product not in the possession or control of the dispenser2 and 7,,iii7 retain a sample of the product for further physical examination or laboratory analysis of the product by the manufacturer or ,secretary 7or other appropriate ,federal or ,state official7 upon request by the manufacturer or ,secretary 7or other appropriate ,federal or ,state official71 as necessary and appropriate4 7ii7 ,making a notification ,upon determining that a product in the possession or control of the dispenser is an illegitimate product1 the dispenser shall notify the ,secretary and all immediate trading partners that the dispenser has reason to believe may have received such illegitimate product of such determination not later than #bd hours after making such determination4 7iii7 ,responding to a notification ,upon the receipt of a notification from the ,secretary or a trading partner that a determination has been made that a product is an illegitimate product1 a dispenser shall identify all illegitimate product subject to such notification that is in the possession or control of the dispenser1 including any product that is subsequently received1 and shall perform the activities described in subparagraph 7,a74 7iv7 ,terminating a notification ,upon making a determination1 in consultation with the ,secretary1 that a notification is no longer necessary1 a dispenser shall promptly notify immediate trading partners that the dispenser notified pursuant to clause 7ii7 that such notification has been terminated4 7v7 ,records ,a dispenser shall keep records of the disposition of an illegitimate product for not less than #f years after the conclusion of the disposition4 7,c7 ,electronic database ,a dispenser may satisfy the requirements of this paragraph by developing a secure electronic database or utilizing a secure electronic database developed or operated by another entity4 7#e7 ,exception ,notwithstanding any other provision of law1 the requirements under paragraphs 7#a7 and 7#d7 shall not apply to licensed health care practitioners authorized to prescribe or administer medication under ,state law or other licensed individuals under the supervision or direction of such practitioners who dispense or administer product in the usual course of professional practice4 7e7 ,repackager requirements 7#a7 ,product tracing 7,a7 ,in general ,beginning not later than ,january #a1 #bjae1 a repackager described in section #eha7af77;,a7 shall-- 7i7 not accept ownership of a product unless the previous owner1 prior to1 or at the time of1 the transaction1 provides transaction history1 transaction information1 and a transaction statement for the product2 7ii7 prior to1 or at the time of1 each transaction in which the repackager transfers ownership of a product1 provide the subsequent owner with transaction history1 transaction information1 and a transaction statement for the product2 and 7iii7 capture the transaction information 7including lot level information71 transaction history1 and transaction statement for each transaction described in clauses 7i7 and 7ii7 and maintain such information1 history1 and statement for not less than #f years after the transaction4 7,b7 ,returns 7i7 ,nonsaleable product ,a repackager described in section #eha7af77;,a7 may return a nonsaleable product to the manufacturer or repackager1 or to the wholesale distributor from whom such product was purchased1 or to a person acting on behalf of such a person1 including a returns processor1 without providing the information required under subparagraph 7,a77ii74 7ii7 ,saleable or nonsaleable product ,a repackager described in section #eha7af77;,b7 may return a saleable or nonsaleable product to the manufacturer1 repackager1 or to the wholesale distributor from whom such product was received without providing the information required under subparagraph 7,a77ii7 on behalf of the hospital or other health care entity that took ownership of such product pursuant to the terms and conditions of any agreement between such repackager and the entity that owns the product4 7,c7 ,requests for information ,upon a request by the ,secretary or other appropriate ,federal or ,state official1 in the event of a recall or for the purpose of investigating a suspect product or an illegitimate product1 a repackager described in section #eha7af77;,a7 shall1 not later than #a business day1 and not to exceed #dh hours1 after receiving the request or in other such reasonable time as determined by the ,secretary1 provide the applicable transaction information1 transaction history1 and transaction statement for the product4 7#b7 ,product identifier 7,a7 ,in general ,beginning not later than #e years after the date of enactment of the ,drug ,supply ,chain ,security ,act1 a repackager described in section #eha7af77;,a7-- 7i7 shall affix or imprint a product identifier to each package and homogenous case of product intended to be introduced in a transaction in commerce2 7ii7 shall maintain the product identifier information for such product for not less than #f years after the date of the transaction2 7iii7 may engage in transactions involving a product only if such product is encoded with a product identifier 7except as provided pursuant to subsection 7a77#e772 and 7iv7 shall maintain records for not less than #f years to allow the repackager to associate the product identifier the repackager affixes or imprints with the product identifier assigned by the original manufacturer of the product4 7,b7 ,exception ,a package that is required to have a standardized numerical identifier is not required to have a unique device identifier4 7#c7 ,authorized trading partners ,beginning ,january #a1 #bjae1 the trading partners of a repackager described in section #eha7af7 may be only authorized trading partners4 7#d7 ,verification ,beginning not later than ,january #a1 #bjae1 a repackager described in section #eha7af77;,a7 shall have systems in place to enable the repackager to comply with the following requirements3 7,a7 ,suspect product 7i7 ,in general ,upon making a determination that a product in the possession or control of the repackager is a suspect product1 or upon receiving a request for verification from the ,secretary that has made a determination that a product within the possession or control of a repackager is a suspect product1 a repackager shall-- 7,i7 quarantine such product within the possession or control of the repackager from product intended for distribution until such product is cleared or dispositioned2 and 7,,ii7 promptly conduct an investigation in coordination with trading partners1 as applicable1 to determine whether the product is an illegitimate product1 which shall include validating any applicable transaction history and transaction information in the possession of the repackager and otherwise investigating to determine whether the product is an illegitimate product1 and1 beginning #e years after the date of enactment of the ,drug ,supply ,chain ,security ,act 7except as provided pursuant to subsection 7a77#e771 verifying the product at the package level1 including the standardized numerical identifier4 7ii7 ,cleared product ,if the repackager makes the determination that a suspect product is not an illegitimate product1 the repackager shall promptly notify the ,secretary1 if applicable1 of such determination and such product may be further distributed4 7iii7 ,records ,a repackager shall keep records of the investigation of a suspect product for not less than #f years after the conclusion of the investigation4 7,b7 ,illegitimate product 7i7 ,in general ,upon determining1 in coordination with the manufacturer1 that a product in the possession or control of a repackager is an illegitimate product1 the repackager shall1 in a manner that is consistent with the systems and processes of such repackager-- 7,i7 quarantine such product within the possession or control of the repackager from product intended for distribution until such product is dispositioned2 7,,ii7 disposition the illegitimate product within the possession or control of the repackager2 7,,iii7 take reasonable and appropriate steps to assist a trading partner to disposition an illegitimate product not in the possession or control of the repackager2 and 7,,iv7 retain a sample of the product for further physical examination or laboratory analysis of the product by the manufacturer or ,secretary 7or other appropriate ,federal or ,state official7 upon request by the manufacturer or ,secretary 7or other appropriate ,federal or ,state official71 as necessary and appropriate4 7ii7 ,making a notification ,upon determining that a product in the possession or control of the repackager is an illegitimate product1 the repackager shall notify the ,secretary and all immediate trading partners that the repackager has reason to believe may have received the illegitimate product of such determination not later than #bd hours after making such determination4 7iii7 ,responding to a notification ,upon the receipt of a notification from the ,secretary or a trading partner1 a repackager shall identify all illegitimate product subject to such notification that is in the possession or control of the repackager1 including any product that is subsequently received1 and shall perform the activities described in subparagraph 7,a74 7iv7 ,terminating a notification ,upon making a determination1 in consultation with the ,secretary1 that a notification is no longer necessary1 a repackager shall promptly notify immediate trading partners that the repackager notified pursuant to clause 7ii7 that such notification has been terminated4 7v7 ,records ,a repackager shall keep records of the disposition of an illegitimate product for not less than #f years after the conclusion of the disposition4 7,c7 ,requests for verification ,beginning #e years after the date of enactment of the ,drug ,supply ,chain ,security ,act1 upon receiving a request for verification from an authorized manufacturer1 wholesale distributor1 or dispenser that is in possession or control of a product they believe to be repackaged by such repackager1 a repackager shall1 not later than #bd hours after receiving the verification request or in other such reasonable time as determined by the ,secretary1 based on the circumstances of the request1 notify the person making the request whether the product identifier1 including the standardized numerical identifier1 that is the subject of the request corresponds to the product identifier affixed or imprinted by the repackager4 ,if a repackager responding to a verification request identifies a product identifier that does not correspond to that affixed or imprinted by the repackager1 the repackager shall treat such product as suspect product and conduct an investigation as described in subparagraph 7,a74 ,if the repackager has reason to believe the product is an illegitimate product1 the repackager shall advise the person making the request of such belief at the time such repackager responds to the verification request4 7,d7 ,electronic database ,a repackager may satisfy the requirements of paragraph 7#d7 by developing a secure electronic database or utilizing a secure electronic database developed or operated by another entity4 ,the owner of such database shall establish the requirements and processes to respond to requests and may provide for data access to other members of the pharmaceutical distribution supply chain1 as appropriate4 ,the development and operation of such a database shall not relieve a repackager of the requirement under subparagraph 7,c7 to respond to a verification request submitted by means other than a secure electronic database4 7,e7 ,verification of saleable returned product ,beginning #e years after the date of enactment of the ,drug ,supply ,chain ,security ,act1 upon receipt of a returned product that the repackager intends to further distribute1 before further distributing such product1 the repackager shall verify the product identifier for each sealed homogeneous case of such product or1 if such product is not in a sealed homogeneous case1 verify the product identifier on each package4 7f7 ,drop shipments 7#a7 ,in general ,a wholesale distributor that does not physically handle or store product shall be exempt from the provisions of this section1 except the notification requirements under clauses 7ii71 7iii71 and 7iv7 of subsection 7c77#d77;,b71 provided that the manufacturer1 repackager1 or other wholesale distributor that distributes the product to the dispenser by means of a drop shipment for such wholesale distributor includes on the transaction information and transaction history to the dispenser the contact information of such wholesale distributor and provides the transaction information1 transaction history1 and transaction statement directly to the dispenser4 7#b7 ,clarification ,for purposes of this subsection1 providing administrative services1 including processing of orders and payments1 shall not by itself1 be construed as being involved in the handling1 distribution1 or storage of a product4 4 #bjc4 ,enhanced drug distribution security ,section #ehb1 as added by section #bjb1 is amended by adding at the end the following3 7g7 ,enhanced drug distribution security 7#a7 ,in general ,on the date that is #aj years after the date of enactment of the ,drug ,supply ,chain ,security ,act1 the following interoperable1 electronic tracing of product at the package level requirements shall go into effect3 7,a7 ,the transaction information and the transaction statements as required under this section shall be exchanged in a secure1 interoperable1 electronic manner in accordance with the standards established under the guidance issued pursuant to paragraphs 7#c7 and 7#d7 of subsection 7h71 including any revision of such guidance issued in accordance with paragraph 7#e7 of such subsection4 7,b7 ,the transaction information required under this section shall include the product identifier at the package level for each package included in the transaction4 7,c7 ,systems and processes for verification of product at the package level1 including the standardized numerical identifier1 shall be required in accordance with the standards established under the guidance issued pursuant to subsection 7a77#b7 and the guidances issued pursuant to paragraphs 7#b71 7#c71 and 7#d7 of subsection 7h71 including any revision of such guidances issued in accordance with paragraph 7#e7 of such subsection1 which may include the use of aggregation and inference as necessary4 7,d7 ,the systems and processes necessary to promptly respond with the transaction information and transaction statement for a product upon a request by the ,secretary 7or other appropriate ,federal or ,state official7 in the event of a recall or for the purposes of investigating a suspect product or an illegitimate product shall be required4 7,e7 ,the systems and processes necessary to promptly facilitate gathering the information necessary to produce the transaction information for each transaction going back to the manufacturer1 as applicable1 shall be required-- 7i7 in the event of a request by the ,secretary 7or other appropriate ,federal or ,state official71 on account of a recall or for the purposes of investigating a suspect product or an illegitimate product2 or 7ii7 in the event of a request by an authorized trading partner1 in a secure manner that ensures the protection of confidential commercial information and trade secrets1 for purposes of investigating a suspect product or assisting the ,secretary 7or other appropriate ,federal or ,state official7 with a request described in clause 7i74 7,f7 ,each person accepting a saleable return shall have systems and processes in place to allow acceptance of such product and may accept saleable returns only if such person can associate the saleable return product with the transaction information and transaction statement associated with that product4 7#b7 ,compliance 7,a7 ,information maintenance agreement ,a dispenser may enter into a written agreement with a third party1 including an authorized wholesale distributor1 under which the third party shall confidentially maintain any information and statements required to be maintained under this section4 ,if a dispenser enters into such an agreement1 the dispenser shall maintain a copy of the written agreement and shall not be relieved of the obligations of the dispenser under this subsection4 7,b7 ,alternative methods ,the ,secretary1 taking into consideration the assessment conducted under paragraph 7#c71 shall provide for alternative methods of compliance with any of the requirements set forth in paragraph 7#a71 including-- 7i7 establishing timelines for compliance by small businesses 7including small business dispensers with #be or fewer full-time employees7 with such requirements1 in order to ensure that such requirements do not impose undue economic hardship for small businesses1 including small business dispensers for whom the criteria set forth in the assessment under paragraph 7#c7 is not met1 if the ,secretary determines that such requirements under paragraph 7#a7 would result in undue economic hardship2 and 7ii7 establishing a process by which a dispenser may request a waiver from any of the requirements set forth in paragraph 7#a7 if the ,secretary determines that such requirements would result in an undue economic hardship1 which shall include a process for the biennial review and renewal of any such waiver4 7#c7 ,assessment 7,a7 ,in general ,not later than the date that is #ah months after the ,secretary issues the final guidance required under subsection 7h71 the ,secretary shall enter into a contract with a private1 independent consulting firm with expertise to conduct a technology and software assessment that looks at the feasibility of dispensers with #be or fewer full-time employees conducting interoperable1 electronic tracing of products at the package level4 ,such assessment shall be completed not later than #h years after the date of enactment of the ,drug ,supply ,chain ,security ,act4 7,b7 ,condition ,as a condition of the award of the contract under subparagraph 7,a71 the private1 independent consulting firm shall agree to consult with dispensers with #be or fewer full-time employees when conducting the assessment under such subparagraph4 7,c7 ,content ,the assessment under subparagraph 7,a7 shall assess whether-- 7i7 the necessary software and hardware is readily accessible to such dispensers2 7ii7 the necessary software and hardware is prohibitively expensive to obtain1 install1 and maintain for such dispensers2 and 7iii7 the necessary hardware and software can be integrated into business practices1 such as interoperability with wholesale distributors1 for such dispensers4 7,d7 ,publication ,the ,secretary shall-- 7i7 publish the statement of work for the assessment under subparagraph 7,a7 for public comment prior to beginning the assessment2 7ii7 publish the final assessment for public comment not later than #cj calendar days after receiving such assessment2 and 7iii7 hold a public meeting not later than #ahj calendar days after receiving the final assessment at which public stakeholders may present their views on the assessment4 7#d7 ,procedure ,notwithstanding section #eec of title #e1 ,united ,states ,code1 the ,secretary1 in promulgating any regulation pursuant to this section1 shall-- 7,a7 provide appropriate flexibility by-- 7i7 not requiring the adoption of specific business systems for the maintenance and transmission of data2 7ii7 prescribing alternative methods of compliance for any of the requirements set forth in paragraph 7#a7 or set forth in regulations implementing such requirements1 including-- 7,i7 timelines for small businesses to comply with the requirements set forth in the regulations in order to ensure that such requirements do not impose undue economic hardship for small businesses 7including small business dispensers for whom the criteria set forth in the assessment under paragraph 7#c7 is not met71 if the ,secretary determines that such requirements would result in undue economic hardship2 and 7,,ii7 the establishment of a process by which a dispenser may request a waiver from any of the requirements set forth in such regulations if the ,secretary determines that such requirements would result in an undue economic hardship2 and 7iii7 taking into consideration-- 7,i7 the results of pilot projects1 including pilot projects pursuant to this section and private sector pilot projects1 including those involving the use of aggregation and inference2 7,,ii7 the public meetings held and related guidance documents issued under this section2 7,,iii7 the public health benefits of any additional regulations in comparison to the cost of compliance with such requirements1 including on entities of varying sizes and capabilities2 7,,iv7 the diversity of the pharmaceutical distribution supply chain by providing appropriate flexibility for each sector1 including both large and small businesses2 and 7,v7 the assessment pursuant to paragraph 7#c7 with respect to small business dispensers1 including related public comment and the public meeting1 and requirements under this section2 7,b7 issue a notice of proposed rulemaking that includes a copy of the proposed regulation2 7,c7 provide a period of not less than #fj days for comments on the proposed regulation2 and 7,d7 publish in the ,federal ,register the final regulation not less than #b years prior to the effective date of the regulation4 7h7 ,guidance documents 7#a7 ,in general ,for the purposes of facilitating the successful and efficient adoption of secure1 interoperable product tracing at the package level in order to enhance drug distribution security and further protect the public health1 the ,secretary shall issue the guidance documents as provided for in this subsection4 7#b7 ,suspect and illegitimate product 7,a7 ,in general ,not later than #ahj days after the date of enactment of the ,drug ,supply ,chain ,security ,act1 the ,secretary shall issue a guidance document to aid trading partners in the identification of a suspect product and notification termination4 ,such guidance document shall-- 7i7 identify specific scenarios that could significantly increase the risk of a suspect product entering the pharmaceutical distribution supply chain2 7ii7 provide recommendation on how trading partners may identify such product and make a determination on whether the product is a suspect product as soon as practicable2 and 7iii7 set forth the process by which manufacturers1 repackagers1 wholesale distributors1 and dispensers shall terminate notifications in consultation with the ,secretary regarding illegitimate product pursuant to subsections 7b77#d77;,b71 7c77#d77;,b71 7d77#d77;,b71 and 7e77#d77;,b74 7,b7 ,revised guidance ,if the ,secretary revises the guidance issued under subparagraph 7,a71 the ,secretary shall follow the procedure set forth in paragraph 7#e74 7#c7 ,unit level tracing 7,a7 ,in general ,in order to enhance drug distribution security at the package level1 not later than #ah months after conducting a public meeting on the system attributes necessary to enable secure tracing of product at the package level1 including allowing for the use of verification1 inference1 and aggregation1 as necessary1 the ,secretary shall issue a final guidance document that outlines and makes recommendations with respect to the system attributes necessary to enable secure tracing at the package level as required under the requirements established under subsection 7g74 ,such guidance document shall-- 7i7 define the circumstances under which the sectors within the pharmaceutical distribution supply chain may1 in the most efficient manner practicable1 infer the contents of a case1 pallet1 tote1 or other aggregate of individual packages or containers of product1 from a product identifier associated with the case1 pallet1 tote1 or other aggregate1 without opening each case1 pallet1 tote1 or other aggregate or otherwise individually scanning each package2 7ii7 identify methods and processes to enhance secure tracing of product at the package level1 such as secure processes to facilitate the use of inference1 enhanced verification activities1 the use of aggregation and inference1 processes that utilize the product identifiers to enhance tracing of product at the package level1 including the standardized numerical identifier1 or package security features2 and 7iii7 ensure the protection of confidential commercial information and trade secrets4 7,b7 ,procedure ,in issuing the guidance under subparagraph 7,a71 and in revising such guidance1 if applicable1 the ,secretary shall follow the procedure set forth in paragraph 7#e74 7#d7 ,standards for interoperable data exchange 7,a7 ,in general ,in order to enhance secure tracing of a product at the package level1 the ,secretary1 not later than #ah months after conducting a public meeting on the interoperable standards necessary to enhance the security of the pharmaceutical distribution supply chain1 shall update the guidance issued pursuant to subsection 7a77#b71 as necessary and appropriate1 and finalize such guidance document so that the guidance document-- 7i7 identifies and makes recommendations with respect to the standards necessary for adoption in order to support the secure1 interoperable electronic data exchange among the pharmaceutical distribution supply chain that comply with a form and format developed by a widely recognized international standards development organization2 7ii7 takes into consideration standards established pursuant to subsection 7a77#b7 and section #eje;,d2 7iii7 facilitates the creation of a uniform process or methodology for product tracing2 and 7iv7 ensures the protection of confidential commercial information and trade secrets4 7,b7 ,procedure ,in issuing the guidance under subparagraph 7,a71 and in revising such guidance1 if applicable1 the ,secretary shall follow the procedure set forth in paragraph 7#e74 7#e7 ,procedure ,in issuing or revising any guidance issued pursuant to this subsection or subsection 7g71 except the initial guidance issued under paragraph 7#b77;,a71 the ,secretary shall-- 7,a7 publish a notice in the ,federal ,register for a period not less than #cj days announcing that the draft or revised draft guidance is available2 7,b7 post the draft guidance document on the ,internet ,web site of the ,food and ,drug ,administration and make such draft guidance document available in hard copy2 7,c7 provide an opportunity for comment and review and take into consideration any comments received2 7,d7 revise the draft guidance1 as appropriate2 7,e7 publish a notice in the ,federal ,register for a period not less than #cj days announcing that the final guidance or final revised guidance is available2 7,f7 post the final guidance document on the ,internet ,web site of the ,food and ,drug ,administration and make such final guidance document available in hard copy2 and 7,g7 provide for an effective date of not earlier than #a year after such guidance becomes final4 7i7 ,public meetings 7#a7 ,in general ,the ,secretary shall hold not less than #e public meetings to enhance the safety and security of the pharmaceutical distribution supply chain and provide for comment4 ,the ,secretary may hold the first such public meeting not earlier than #a year after the date of enactment of the ,drug ,supply ,chain ,security ,act4 ,in carrying out the public meetings described in this paragraph1 the ,secretary shall-- 7,a7 prioritize topics necessary to inform the issuance of the guidance described in paragraphs 7#c7 and 7#d7 of subsection 7h72 and 7,b7 take all measures reasonable and practicable to ensure the protection of confidential commercial information and trade secrets4 7#b7 ,content ,each of the following topics shall be addressed in at least one of the public meetings described in paragraph 7#a73 7,a7 ,an assessment of the steps taken under subsections 7b7 through 7e7 to build capacity for a unit-level system1 including the impact of the requirements of such subsections on-- 7i7 the ability of the health care system collectively to maintain patient access to medicines2 7ii7 the scalability of such requirements1 including as it relates to product lines2 and 7iii7 the capability of different sectors and subsectors1 including both large and small businesses1 to affix and utilize the product identifier4 7,b7 ,the system attributes necessary to support the requirements set forth under subsection 7g71 including the standards necessary for adoption in order to support the secure1 interoperable electronic data exchange among sectors within the pharmaceutical distribution supply chain4 7,c7 ,best practices in each of the different sectors within the pharmaceutical distribution supply chain to implement the requirements of this section4 7,d7 ,the costs and benefits of the implementation of this section1 including the impact on each pharmaceutical distribution supply chain sector and on public health4 7,e7 ,whether electronic tracing requirements1 including tracing of product at the package level1 are feasible1 cost effective1 and needed to protect the public health4 7,f7 ,the systems and processes needed to utilize the product identifiers to enhance tracing of product at the package level1 including allowing for verification1 aggregation1 and inference1 as necessary4 7,g7 ,the technical capabilities and legal authorities1 if any1 needed to establish an interoperable1 electronic system that provides for tracing of product at the package level4 7,h7 ,the impact that such additional requirements would have on patient safety1 the drug supply1 cost and regulatory burden1 and timely patient access to prescription drugs4 7,i7 ,other topics1 as determined appropriate by the ,secretary4 7j7 ,pilot projects 7#a7 ,in general ,the ,secretary shall establish #a or more pilot projects1 in coordination with authorized manufacturers1 repackagers1 wholesale distributors1 and dispensers1 to explore and evaluate methods to enhance the safety and security of the pharmaceutical distribution supply chain4 ,such projects shall build upon efforts1 in existence as of the date of enactment of the ,drug ,supply ,chain ,security ,act1 to enhance the safety and security of the pharmaceutical distribution supply chain1 take into consideration any pilot projects conducted prior to such date of enactment1 including any pilot projects that use aggregation and inference1 and inform the draft and final guidance under paragraphs 7#c7 and 7#d7 of subsection 7h74 7#b7 ,content 7,a7 ,in general ,the ,secretary shall ensure that the pilot projects under paragraph 7#a7 reflect the diversity of the pharmaceutical distribution supply chain and that the pilot projects1 when taken as a whole1 include participants representative of every sector1 including both large and small businesses4 7,b7 ,project design ,the pilot projects under paragraph 7#a7 shall be designed to-- 7i7 utilize the product identifier for tracing of a product1 which may include verification of the product identifier of a product1 including the use of aggregation and inference2 7ii7 improve the technical capabilities of each sector and subsector to comply with systems and processes needed to utilize the product identifiers to enhance tracing of a product2 7iii7 identify system attributes that are necessary to implement the requirements established under this section2 and 7iv7 complete other activities as determined by the ,secretary4 7k7 ,sunset ,the following requirements shall have no force or effect beginning on the date that is #aj years after the date of enactment of the ,drug ,supply ,chain ,security ,act3 7#a7 ,the provision and receipt of transaction history under this section4 7#b7 ,the requirements set forth for returns under subsections 7b77#d77;,e71 7c77#a77;,b77i71 7d77#a77;,c77i71 and 7e77#d77;,e74 7#c7 ,the requirements set forth under subparagraphs 7,a77v77,,ii7 and 7,d7 of subsection 7c77#a71 as applied to lot level information only4 7l7 ,rule of construction ,the requirements set forth in subsections 7g77#d71 7i71 and 7j7 shall not be construed as a condition1 prohibition1 or precedent for precluding or delaying the provisions becoming effective pursuant to subsection 7g74 7m7 ,requests for information ,on the date that is #aj years after the date of enactment of the ,drug ,supply ,chain ,security ,act1 the timeline for responses to requests for information from the ,secretary1 or other appropriate ,federal or ,state official1 as applicable1 under subsections 7b77#a77;,b71 7c77#a77;,c71 and 7e77#a77;,c7 shall be not later than #bd hours after receiving the request from the ,secretary or other appropriate ,federal or ,state official1 as applicable1 or in such other reasonable time as determined by the ,secretary based on the circumstances of the request4 4 #bjd4 ,national standards for prescription drug wholesale distributors 7a7 ,amendments 7#a7 ,requirement ,section #ejc7;e7 7#ba ,u4,s4,c4 #cec7;e77 is amended by striking paragraphs 7#a71 7#b71 and 7#c7 and inserting the following3 7#a7 ,requirement ,subject to section #ehc3 7,a7 ,in general ,no person may engage in wholesale distribution of a drug subject to subsection 7b77#a7 in any ,state unless such person-- 7i7 7,i7 is licensed by the ,state from which the drug is distributed2 or 7,,ii7 if the ,state from which the drug is distributed has not established a licensure requirement1 is licensed by the ,secretary2 and 7ii7 if the drug is distributed interstate1 is licensed by the ,state into which the drug is distributed if the ,state into which the drug is distributed requires the licensure of a person that distributes drugs into the ,state4 7,b7 ,standards ,each ,federal and ,state license described in subparagraph 7,a7 shall meet the standards1 terms1 and conditions established by the ,secretary under section #ehc4 7#b7 ,reporting and database 7,a7 ,reporting ,beginning ,january #a1 #bjae1 any person who owns or operates an establishment that engages in wholesale distribution shall-- 7i7 report to the ,secretary1 on an annual basis pursuant to a schedule determined by the ,secretary-- 7,i7 each ,state by which the person is licensed and the appropriate identification number of each such license2 and 7,,ii7 the name1 address1 and contact information of each facility at which1 and all trade names under which1 the person conducts business2 and 7ii7 report to the ,secretary within a reasonable period of time and in a reasonable manner1 as determined by the ,secretary1 any significant disciplinary actions1 such as the revocation or suspension of a wholesale distributor license1 taken by a ,state or the ,federal ,government during the reporting period against the wholesale distributor4 7,b7 ,database ,not later than ,january #a1 #bjae1 the ,secretary shall establish a database of authorized wholesale distributors4 ,such database shall-- 7i7 identify each authorized wholesale distributor by name1 contact information1 and each ,state where such wholesale distributor is appropriately licensed to engage in wholesale distribution2 7ii7 be available to the public on the ,internet ,web site of the ,food and ,drug ,administration2 and 7iii7 be regularly updated on a schedule determined by the ,secretary4 7,c7 ,coordination ,the ,secretary shall establish a format and procedure for appropriate ,state officials to access the information provided pursuant to subparagraph 7,a7 in a prompt and secure manner4 7,d7 ,confidentiality ,nothing in this paragraph shall be construed as authorizing the ,secretary to disclose any information that is a trade secret or confidential information subject to section #eeb7;b77#d7 of title #e1 ,united ,states ,code1 or section #aije of title #ah1 ,united ,states ,code4 7#c7 ,costs 7,a7 ,authorized fees of secretary ,if a ,state does not establish a licensing program for persons engaged in the wholesale distribution of a drug subject to subsection 7b71 the ,secretary shall license a person engaged in wholesale distribution located in such ,state and may collect a reasonable fee in such amount necessary to reimburse the ,secretary for costs associated with establishing and administering the licensure program and conducting periodic inspections under this section4 ,the ,secretary shall adjust fee rates as needed on an annual basis to generate only the amount of revenue needed to perform this service4 ,fees authorized under this paragraph shall be collected and available for obligation only to the extent and in the amount provided in advance in appropriations ,acts4 ,such fees are authorized to remain available until expended4 ,such sums as may be necessary may be transferred from the ,food and ,drug ,administration salaries and expenses appropriation account without fiscal year limitation to such appropriation account for salaries and expenses with such fiscal year limitation4 7,b7 ,state licensing fees ,nothing in this ,act shall prohibit ,states from collecting fees from wholesale distributors in connection with ,state licensing of such distributors4 4 7#b7 ,wholesale distribution ,section #ejc7;e7 7#ba ,u4,s4,c4 #cec7;e771 as amended by paragraph 7#a71 is further amended by adding at the end the following3 7#d7 ,for the purposes of this subsection and subsection 7d71 the term wholesale distribution means the distribution of a drug subject to subsection 7b7 to a person other than a consumer or patient1 or receipt of a drug subject to subsection 7b7 by a person other than the consumer or patient1 but does not include-- 7,a7 intracompany distribution of any drug between members of an affiliate or within a manufacturer2 7,b7 the distribution of a drug1 or an offer to distribute a drug among hospitals or other health care entities which are under common control2 7,c7 the distribution of a drug or an offer to distribute a drug for emergency medical reasons1 including a public health emergency declaration pursuant to section #cai of the ,public ,health ,service ,act1 except that1 for purposes of this paragraph1 a drug shortage not caused by a public health emergency shall not constitute an emergency medical reason2 7,d7 the dispensing of a drug pursuant to a prescription executed in accordance with subsection 7b77#a72 7,e7 the distribution of minimal quantities of drug by a licensed retail pharmacy to a licensed practitioner for office use2 7,f7 the distribution of a drug or an offer to distribute a drug by a charitable organization to a nonprofit affiliate of the organization to the extent otherwise permitted by law2 7,g7 the purchase or other acquisition by a dispenser1 hospital1 or other health care entity of a drug for use by such dispenser1 hospital1 or other health care entity2 7,h7 the distribution of a drug by the manufacturer of such drug2 7,i7 the receipt or transfer of a drug by an authorized third-party logistics provider provided that such third-party logistics provider does not take ownership of the drug2 7,j7 a common carrier that transports a drug1 provided that the common carrier does not take ownership of the drug2 7,k7 the distribution of a drug1 or an offer to distribute a drug by an authorized repackager that has taken ownership or possession of the drug and repacks it in accordance with section #ehb7;e72 7,l7 saleable drug returns when conducted by a dispenser2 7,m7 the distribution of a collection of finished medical devices1 which may include a product or biological product1 assembled in kit form strictly for the convenience of the purchaser or user 7referred to in this subparagraph as a medical convenience kit7 if-- 7i7 the medical convenience kit is assembled in an establishment that is registered with the ,food and ,drug ,administration as a device manufacturer in accordance with section #eaj7;b77#b72 7ii7 the medical convenience kit does not contain a controlled substance that appears in a schedule contained in the ,comprehensive ,drug ,abuse ,prevention and ,control ,act of #aigj2 7iii7 in the case of a medical convenience kit that includes a product1 the person that manufacturers the kit-- 7,i7 purchased such product directly from the pharmaceutical manufacturer or from a wholesale distributor that purchased the product directly from the pharmaceutical manufacturer2 and 7,,ii7 does not alter the primary container or label of the product as purchased from the manufacturer or wholesale distributor2 and 7iv7 in the case of a medical convenience kit that includes a product1 the product is-- 7,i7 an intravenous solution intended for the replenishment of fluids and electrolytes2 7,,ii7 a product intended to maintain the equilibrium of water and minerals in the body2 7,,iii7 a product intended for irrigation or reconstitution2 7,,iv7 an anesthetic2 7,v7 an anticoagulant2 7,,vi7 a vasopressor2 or 7,,vii7 a sympathomimetic2 7,n7 the distribution of an intravenous drug that1 by its formulation1 is intended for the replenishment of fluids and electrolytes 7such as sodium1 chloride1 and potassium7 or calories 7such as dextrose and amino acids72 7,o7 the distribution of an intravenous drug used to maintain the equilibrium of water and minerals in the body1 such as dialysis solutions2 7,p7 the distribution of a drug that is intended for irrigation1 or sterile water1 whether intended for such purposes or for injection2 7,q7 the distribution of medical gas1 as defined in section #ege2 7,r7 facilitating the distribution of a product by providing solely administrative services1 including processing of orders and payments2 or 7,s7 the transfer of a product by a hospital or other health care entity1 or by a wholesale distributor or manufacturer operating at the direction of the hospital or other health care entity1 to a repackager described in section #eha7af77;,b7 and registered under section #eaj for the purpose of repackaging the drug for use by that hospital1 or other health care entity and other health care entities that are under common control1 if ownership of the drug remains with the hospital or other health care entity at all times4 4 7#c7 ,third-party logistics providers ,section #ejc7;e7 7#ba ,u4,s4,c4 #cec7;e771 as amended by paragraph 7#b71 is further amended by adding at the end the following3 7#e7 ,third-party logistics providers ,notwithstanding paragraphs 7#a7 through 7#d71 each entity that meets the definition of a third-party logistics provider under section #eha7bb7 shall obtain a license as a third-party logistics provider as described in section #ehd7;a7 and is not required to obtain a license as a wholesale distributor if the entity never assumes an ownership interest in the product it handles4 4 7#d7 ,affiliate ,section #ejc7;e7 7#ba ,u4,s4,c4 #cec7;e771 as amended by paragraph 7#c71 is further amended by adding at the end the following3 7#f7 ,affiliate ,for purposes of this subsection1 the term affiliate means a business entity that has a relationship with a second business entity if1 directly or indirectly-- 7,a7 one business entity controls1 or has the power to control1 the other business entity2 or 7,b7 a third party controls1 or has the power to control1 both of the business entities4 4 7#e7 ,standards ,subchapter ,h of chapter ,v1 as added by section #bjb1 is amended by adding at the end the following3 #ehc4 ,national standards for prescription drug wholesale distributors 7a7 ,in general ,the ,secretary shall1 not later than #b years after the date of enactment of the ,drug ,supply ,chain ,security ,act1 establish by regulation standards for the licensing of persons under section #ejc7;e77#a7 7as amended by the ,drug ,supply ,chain ,security ,act71 including the revocation1 reissuance1 and renewal of such license4 7b7 ,content ,for the purpose of ensuring uniformity with respect to standards set forth in this section1 the standards established under subsection 7a7 shall apply to all ,state and ,federal licenses described under section #ejc7;e77#a7 7as amended by the ,drug ,supply ,chain ,security ,act7 and shall include standards for the following3 7#a7 ,the storage and handling of prescription drugs1 including facility requirements4 7#b7 ,the establishment and maintenance of records of the distributions of such drugs4 7#c7 ,the furnishing of a bond or other equivalent means of security1 as follows3 7,a7 7i7 ,for the issuance or renewal of a wholesale distributor license1 an applicant that is not a government owned and operated wholesale distributor shall submit a surety bond of #ajj1jjj or other equivalent means of security acceptable to the ,state4 7ii7 ,for purposes of clause 7i71 the ,state or other applicable authority may accept a surety bond in the amount of #be1jjj if the annual gross receipts of the previous tax year for the wholesaler is #aj1jjj1jjj or less4 7,b7 ,if a wholesale distributor can provide evidence that it possesses the required bond in a ,state1 the requirement for a bond in another ,state shall be waived4 7#d7 ,mandatory background checks and fingerprinting of facility managers or designated representatives4 7#e7 ,the establishment and implementation of qualifications for key personnel4 7#f7 ,the mandatory physical inspection of any facility to be used in wholesale distribution within a reasonable time frame from the initial application of the facility and to be conducted by the licensing authority or by the ,state1 consistent with subsection 7c74 7#g7 ,in accordance with subsection 7d71 the prohibition of certain persons from receiving or maintaining licensure for wholesale distribution4 7c7 ,inspections ,to satisfy the inspection requirement under subsection 7b77#f71 the ,federal or ,state licensing authority may conduct the inspection or may accept an inspection by the ,state in which the facility is located1 or by a third-party accreditation or inspection service approved by the ,secretary or the ,state licensing such wholesale distributor4 7d7 ,prohibited persons ,the standards established under subsection 7a7 shall include requirements to prohibit a person from receiving or maintaining licensure for wholesale distribution if the person-- 7#a7 has been convicted of any felony for conduct relating to wholesale distribution1 any felony violation of subsection 7i7 or 7k7 of section #cja1 or any felony violation of section #acfe of title #ah1 ,united ,states ,code1 relating to product tampering2 or 7#b7 has engaged in a pattern of violating the requirements of this section1 or ,state requirements for licensure1 that presents a threat of serious adverse health consequences or death to humans4 7e7 ,requirements ,the ,secretary1 in promulgating any regulation pursuant to this section1 shall1 notwithstanding section #eec of title #e1 ,united ,states ,code-- 7#a7 issue a notice of proposed rulemaking that includes a copy of the proposed regulation2 7#b7 provide a period of not less than #fj days for comments on the proposed regulation2 and 7#c7 provide that the final regulation take effect on the date that is #b years after the date such final regulation is published4 4 7b7 ,authorized distributors of record ,section #ejc7;d7 7#ba ,u4,s4,c4 #cec7;d77 is amended by adding at the end the following3 7#d7 ,in this subsection1 the term authorized distributors of record means those distributors with whom a manufacturer has established an ongoing relationship to distribute such manufacturer's products4 4 7c7 ,effective date ,the amendments made by subsections 7a7 and 7b7 shall take effect on ,january #a1 #bjae4 #bje4 ,national standards for third-party logistics providers2 uniform national policy ,subchapter ,h of chapter ,v1 as amended by section #bjd1 is further amended by adding at the end the following3 #ehd4 ,national standards for third-party logistics providers 7a7 ,requirements ,no third-party logistics provider in any ,state may conduct activities in any ,state unless each facility of such third-party logistics provider-- 7#a7 7,a7 is licensed by the ,state from which the drug is distributed by the third-party logistics provider1 in accordance with the regulations promulgated under subsection 7d72 or 7,b7 if the ,state from which the drug distributed by the third-party logistics provider has not established a licensure requirement1 is licensed by the ,secretary1 in accordance with the regulations promulgated under subsection 7d72 and 7#b7 if the drug is distributed interstate1 is licensed by the ,state into which the drug is distributed by the third-party logistics provider if such ,state licenses third-party logistics providers that distribute drugs into the ,state and the third-party logistics provider is not licensed by the ,secretary as described in paragraph 7#a77;,b74 7b7 ,reporting ,beginning #a year after the date of enactment of the ,drug ,supply ,chain ,security ,act1 a facility of a third-party logistics provider shall report to the ,secretary1 on an annual basis pursuant to a schedule determined by the ,secretary-- 7#a7 the ,state by which the facility is licensed and the appropriate identification number of such license2 and 7#b7 the name and address of the facility and all trade names under which such facility conducts business4 7c7 ,costs 7#a7 ,authorized fees of secretary ,if a ,state does not establish a licensing program for a third-party logistics provider1 the ,secretary shall license the third-party logistics provider located in such ,state and may collect a reasonable fee in such amount necessary to reimburse the ,secretary for costs associated with establishing and administering the licensure program and conducting periodic inspections under this section4 ,the ,secretary shall adjust fee rates as needed on an annual basis to generate only the amount of revenue needed to perform this service4 ,fees authorized under this paragraph shall be collected and available for obligation only to the extent and in the amount provided in advance in appropriations ,acts4 ,such fees are authorized to remain available until expended4 ,such sums as may be necessary may be transferred from the ,food and ,drug ,administration salaries and expenses appropriation account without fiscal year limitation to such appropriation account for salaries and expenses with such fiscal year limitation4 7#b7 ,state licensing fees 7,a7 ,state established program ,nothing in this ,act shall prohibit a ,state that has established a program to license a third-party logistics provider from collecting fees from a third-party logistics provider for such a license4 7,b7 ,no ,state established program ,a ,state that does not establish a program to license a third-party logistics provider in accordance with this section shall be prohibited from collecting a ,state licensing fee from a third-party logistics provider4 7d7 ,regulations 7#a7 ,in general ,not later than #b years after the date of enactment of the ,drug ,supply ,chain ,security ,act1 the ,secretary shall issue regulations regarding the standards for licensing under subsection 7a71 including the revocation and reissuance of such license1 to third-party logistics providers under this section4 7#b7 ,content ,such regulations shall-- 7,a7 establish a process by which a third-party accreditation program approved by the ,secretary shall1 upon request by a third-party logistics provider1 issue a license to each third-party logistics provider that meets the requirements set forth in this section2 7,b7 establish a process by which the ,secretary shall issue a license to each third-party logistics provider that meets the requirements set forth in this section if the ,secretary is not able to approve a third-party accreditation program because no such program meets the ,secretary's requirements necessary for approval of such a third-party accreditation program2 7,c7 require that the entity complies with storage practices1 as determined by the ,secretary for such facility1 including-- 7i7 maintaining access to warehouse space of suitable size to facilitate safe operations1 including a suitable area to quarantine suspect product2 7ii7 maintaining adequate security2 and 7iii7 having written policies and procedures to-- 7,i7 address receipt1 security1 storage1 inventory1 shipment1 and distribution of a product2 7,,ii7 identify1 record1 and report confirmed losses or thefts in the ,united ,states2 7,,iii7 correct errors and inaccuracies in inventories2 7,,iv7 provide support for manufacturer recalls2 7,v7 prepare for1 protect against1 and address any reasonably foreseeable crisis that affects security or operation at the facility1 such as a strike1 fire1 or flood2 7,,vi7 ensure that any expired product is segregated from other products and returned to the manufacturer or repackager or destroyed2 7,,vii7 maintain the capability to trace the receipt and outbound distribution of a product1 and supplies and records of inventory2 and 7,,viii7 quarantine or destroy a suspect product if directed to do so by the respective manufacturer1 wholesale distributor1 dispenser1 or an authorized government agency2 7,d7 provide for periodic inspection by the licensing authority1 as determined by the ,secretary1 of such facility warehouse space to ensure compliance with this section2 7,e7 prohibit a facility from having as a manager or designated representative anyone convicted of any felony violation of subsection 7i7 or 7k7 of section #cja or any violation of section #acfe of title #ah1 ,united ,states ,code relating to product tampering2 7,f7 provide for mandatory background checks of a facility manager or a designated representative of such manager2 7,g7 require a third-party logistics provider to provide the applicable licensing authority1 upon a request by such authority1 a list of all product manufacturers1 wholesale distributors1 and dispensers for whom the third-party logistics provider provides services at such facility2 and 7,h7 include procedures under which any third-party logistics provider license-- 7i7 expires on the date that is #c years after issuance of the license2 and 7ii7 may be renewed for additional #c-year periods4 7#c7 ,procedure ,in promulgating the regulations under this subsection1 the ,secretary shall1 notwithstanding section #eec of title #e1 ,united ,states ,code-- 7,a7 issue a notice of proposed rulemaking that includes a copy of the proposed regulation2 7,b7 provide a period of not less than #fj days for comments on the proposed regulation2 and 7,c7 provide that the final regulation takes effect upon the expiration of #a year after the date that such final regulation is issued4 7e7 ,validity ,a license issued under this section shall remain valid as long as such third-party logistics provider remains licensed consistent with this section4 ,if the ,secretary finds that the third-party accreditation program demonstrates that all applicable requirements for licensure under this section are met1 the ,secretary shall issue a license under this section to a third-party logistics provider receiving accreditation1 pursuant to subsection 7d77#b77;,a74 #ehe4 ,uniform national policy 7a7 ,product tracing and other requirements ,beginning on the date of enactment of the ,drug ,supply ,chain ,security ,act1 no ,state or political subdivision of a ,state may establish or continue in effect any requirements for tracing products through the distribution system 7including any requirements with respect to statements of distribution history1 transaction history1 transaction information1 or transaction statement of a product as such product changes ownership in the supply chain1 or verification1 investigation1 disposition1 notification1 or recordkeeping relating to such systems1 including paper or electronic pedigree systems or for tracking and tracing drugs throughout the distribution system7 which are inconsistent with1 more stringent than1 or in addition to1 any requirements applicable under section #ejc7;e7 7as amended by such ,act7 or this subchapter 7or regulations issued thereunder71 or which are inconsistent with-- 7#a7 any waiver1 exception1 or exemption pursuant to section #eha or #ehb2 or 7#b7 any restrictions specified in section #ehb4 7b7 ,wholesale ,distributor and ,third-,party ,logistics ,provider standards 7#a7 ,in general ,beginning on the date of enactment of the ,drug ,supply ,chain ,security ,act1 no ,state or political subdivision of a ,state may establish or continue any standards1 requirements1 or regulations with respect to wholesale prescription drug distributor or third-party logistics provider licensure that are inconsistent with1 less stringent than1 directly related to1 or covered by the standards and requirements applicable under section #ejc7;e7 7as amended by such ,act71 in the case of a wholesale distributor1 or section #ehd1 in the case of a third-party logistics provider4 7#b7 ,state regulation of third-party logistics providers ,no ,state shall regulate third-party logistics providers as wholesale distributors4 7#c7 ,administration fees ,notwithstanding paragraph 7#a71 a ,state may administer fee collections for effectuating the wholesale drug distributor and third-party logistics provider licensure requirements under sections #ejc7;e7 7as amended by the ,drug ,supply ,chain ,security ,act71 #ehc1 and #ehd4 7#d7 ,enforcement1 suspension1 and revocation ,notwithstanding paragraph 7#a71 a ,state-- 7,a7 may take administrative action1 including fines1 to enforce a requirement promulgated by the ,state in accordance with section #ejc7;e7 7as amended by the ,drug ,supply ,chain ,security ,act7 or this subchapter2 7,b7 may provide for the suspension or revocation of licenses issued by the ,state for violations of the laws of such ,state2 7,c7 upon conviction of violations of ,federal1 ,state1 or local drug laws or regulations1 may provide for fines1 imprisonment1 or civil penalties2 and 7,d7 may regulate activities of licensed entities in a manner that is consistent with product tracing requirements under section #ehb4 7c7 ,exception ,nothing in this section shall be construed to preempt ,state requirements related to the distribution of prescription drugs if such requirements are not related to product tracing as described in subsection 7a7 or wholesale distributor and third-party logistics provider licensure as described in subsection 7b7 applicable under section #ejc7;e7 7as amended by the ,drug ,supply ,chain ,security ,act7 or this subchapter 7or regulations issued thereunder74 4 #bjf4 ,penalties 7a7 ,prohibited act ,section #cja7t7 7#ba ,u4,s4,c4 #cca7t771 is amended-- 7#a7 by striking or after the requirements of section #ejc7;d712 and 7#b7 by inserting 1 failure to comply with the requirements under section #ehb1 the failure to comply with the requirements under section #ehd1 as applicable1 after in violation of section #ejc7;e74 7b7 ,misbranding ,section #ejb 7#ba ,u4,s4,c4 #ceb71 as amended by section #ajc1 is further amended by adding at the end the following3 7cc7 ,if it is a drug and it fails to bear the product identifier as required by section #ehb4 4 #bjg4 ,conforming amendment 7a7 ,in general ,section #cjc7;b77#a77;,d7 7#ba ,u4,s4,c4 #ccc7;b77#a77;,d77 is amended by striking #ejc7;e77#b77;,a7 and inserting #ejc7;e77#a74 7b7 ,effective date ,the amendment made by subsection 7a7 shall take effect on ,january #a1 #bjae4 #bjh4 ,savings clause ,except as provided in the amendments made by paragraphs 7#a71 7#b71 and 7#c7 of section #bjd7;a7 and by section #bjf7;a71 nothing in this title 7including the amendments made by this title7 shall be construed as altering any authority of the ,secretary of ,health and ,human ,services with respect to a drug subject to section #ejc7;b77#a7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cec7;b77#a77 under any other provision of such ,act or the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bja et seq474