Library / Laws / 113th / s / S. 959 / Reported in Senate
II
Calendar No. 89
113th CONGRESS
1st Session
S. 959
IN THE SENATE OF THE UNITED STATES
May 15, 2013
Mr. Harkin (for himself,
Mr. Alexander, Mr. Roberts, Mr.
Franken, Ms. Mikulski, and
Ms. Warren) introduced the following
bill; which was read twice and referred to the
Committee on Health, Education, Labor,
and Pensions
June 19, 2013
Reported by Mr. Harkin,
with an amendment and an amendment to the title
Strike out all after the enacting clause and insert
the part printed in italic
A BILL
To amend the Federal Food, Drug, and Cosmetic Act with
respect to compounding drugs.
1.
Short title; references in
Act
(a)
Short
title
This Act may be cited
as the Pharmaceutical Compounding
Quality and Accountability Act.
(b)
References in
Act
Except as otherwise specified, amendments made by this Act to
a section or other provision of law are amendments to such section or other
provision of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et
seq.).
2.
Regulation of
human and animal drug compounding
(a)
Clarification of
new drug and new animal drug status
For purposes of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.), the terms new
drug (as defined in section 201(p) of such Act) and new animal
drug (as defined in section 201(v) of such Act) shall include a
compounded human drug and a compounded animal drug, respectively.
(b)
Regulation of
human and animal drug compounding
Section 503A (21 U.S.C. 353a)
is amended to read as follows:
503A.
Human and
animal drug compounding
(a)
Scope
(1)
Compounding
In
this section, the terms compounding and
compound—
(A) include—
(i) the combining,
admixing, mixing, diluting, reconstituting, or otherwise altering of a marketed
drug;
(ii) compounding a
drug from a bulk drug substance; and
(iii) repackaging, as
defined in subsection (b)(5); and
(B) exclude mixing,
reconstituting, or other such acts with respect to a marketed drug that are
limited to and performed solely in accordance with specific directions for such
acts contained in approved labeling provided by a drug’s manufacturer, when
performed upon receipt of a prescription order for an identified individual
patient.
(2)
Dispensing not a
sale
In this section, the terms sell or
resale do not include dispensing to patients, or, in the case of
animal drugs, to the individual responsible for providing care for the animal
for which the drug is intended, in accordance with State law, including any fee
associated with such dispensing.
(3)
Exemptions
This
section shall not apply to—
(A) medical
gases;
(B) animal drugs that
are subject to regulation as biological products by the Secretary of
Agriculture under the Act commonly known as the Virus-Serum-Toxin Act;
or
(C) human blood and
blood components for transfusion.
(b)
Definitions
In
this section:
(1)
Compounding
manufacturer
(A)
In
general
The term compounding manufacturer means a
facility at one geographic location or address—
(i) that compounds any
sterile drug product without receiving a prescription order for such sterile
drug product prior to beginning compounding, and distributes or offers to sell
such compounded sterile drug product in interstate commerce; or
(ii) that repackages
any preservative-free sterile drug product or pools any sterile drug products,
except as provided in paragraph (7)(B).
(B)
Excluded
activities
Notwithstanding subparagraph (A)(ii), a facility shall
not be considered a compounding manufacturer if such facility—
(i) repackages drugs
in accordance with section 506F or the final guidance described in section
506F(d); and
(ii) does not
otherwise meet the definition of compounding manufacturer under subparagraph
(A).
(2)
Pooling;
pools
The terms pooling and
pool—
(A) mean taking a
single drug approved under section 505 or 512, conditionally approved under
section 571, included on the index established under section 572(a)(1), or
licensed under section 351 of the Public Health Service Act from the container
in which it is distributed by the original manufacturer and combining it with
the same drug from one or more other containers without or before further
manipulating the product (such as by diluting it or mixing it with another,
different drug or drugs);
(B) do not include
combining the drug from two or more separate containers of the same drug when a
single container of the drug is not sufficient to prepare a single dose for
administration to an individual patient; and
(C) do not include
combining the drug from two or more separate containers of component products
of a total parenteral nutrition product, if such pooling, and labeling and use
of the finished total parenteral nutrition product, comply with State pharmacy
law.
(3)
Practitioner
The
term practitioner includes a physician, veterinarian, or any other
person that is authorized to prescribe medication under State law.
(4)
Prescription;
prescription order
The term prescription or
prescription order means a prescription or prescription order, as
defined under applicable State law, that complies with requirements applicable
under such State law.
(5)
Repackage or
repackaging
The term repackage or
repackaging means taking a drug approved under section 505 or 512,
conditionally approved under section 571, included on the index established
under section 572(a)(1), or licensed under section 351 of the Public Health
Service Act from the container in which it is distributed by the original
manufacturer and placing it in a different container of the same or smaller
size without further manipulating the drug (such as by diluting it or mixing it
with another, different drug or drugs), unless such repackaging is done
pursuant to a prescription for an identified individual patient.
(6)
Sterile drug
product
The term sterile drug product means a drug
that is—
(A) intended for
parenteral administration;
(B) an ophthalmic or
inhalation drug; or
(C) required to be
sterile under Federal or State law.
(7)
Traditional
compounder
(A)
In
general
The term traditional compounder means an
entity—
(i) wherein a drug is
compounded by—
(I) a licensed
pharmacist, or other pharmacy personnel (to the extent permitted under State
law), in a State-licensed pharmacy or a Federal facility; or
(II) a licensed
physician or licensed veterinarian, to the extent permitted under State
law;
(ii) that—
(I) compounds a drug
upon receipt of a prescription order for an identified individual patient;
or
(II) compounds a drug
in limited quantities before receipt of a prescription order for an identified
individual patient, to the extent permitted under State law, if such
compounding is based on a history of the licensed pharmacist, licensed
physician, or licensed veterinarian receiving prescription orders for the
compounding of the drug, which orders have been generated solely within an
established relationship between the licensed pharmacist, licensed physician,
or licensed veterinarian and—
(aa) such individual
patient for whom the prescription order will be provided, or, in the case of an
animal drug, such individual responsible for providing care for the animal for
which the drug is ordered; or
(bb) the licensed
physician, licensed veterinarian, or other licensed practitioner who will write
such prescription order; and
(iii) that does not
meet the definition of a compounding manufacturer under paragraph (1).
(B)
Exceptions
(i)
Hospitals and
health systems
(I)
In
general
A pharmacy within a hospital, veterinary hospital, or
health system that compounds a drug and dispenses such drug (which may include
interstate shipment) within such hospital or health system or ships such drug
for dispensing to patients with an established relationship with the hospital
or health system (which may include interstate shipment), or that repackages
preservative-free sterile drug product or pools sterile drug products, shall be
considered a traditional compounder if such pharmacy otherwise meets the
definition under subparagraph (A).
(II)
Health system
defined
For purposes of this subparagraph, the term health
system means two or more hospitals or veterinary hospitals that are
owned and operated by the same entity and that share access to databases with
drug order information for patients or animals, as applicable. A health system
includes both the inpatient and outpatient facilities of hospitals within the
health system.
(ii)
PET and
radiopharmaceuticals
A pharmacy that compounds positron emission
tomography drugs or radiopharmaceuticals shall be considered a traditional
compounder if it does not compound other drugs that would cause it to be a
compounding manufacturer described in paragraph (1)(A).
(c)
Exemptions from
certain requirements
(1)
Drugs compounded
by traditional compounders
Sections 501(a)(2)(B), 502(f)(1), 505
(in the case of a human drug), section 512 (in the case of an animal drug), and
section 351 of the Public Health Service Act (in the case of a biological
product) shall not apply to a compounded drug if such drug—
(A) is compounded by a
traditional compounder that is in compliance with this section; and
(B) meets the
requirements of this section applicable to drugs compounded by traditional
compounders.
(2)
Drugs compounded
by compounding manufacturers
Sections 502(f)(1), 505 (in the case
of a human drug), section 512 (in the case of an animal drug), and section 351
of the Public Health Service Act (in the case of a biological product) shall
not apply to a compounded prescription drug if such drug—
(A) is compounded by a
compounding manufacturer—
(i) that is not
licensed as a pharmacy in any State; and
(ii) that is in
compliance with this section; and
(B) meets the
requirements of this section applicable to drugs compounded by compounding
manufacturers.
(d)
Drugs that may
not be compounded
(1)
In
general
The following drugs may not be compounded, except under
conditions specified by the Secretary:
(A)
Drugs that are
demonstrably difficult to compound
A drug or category of drugs
that presents demonstrable difficulties for compounding, which may include a
complex dosage form or biological product, as designated by the Secretary
pursuant to paragraph (2).
(B)
Marketed
drugs
A drug, other than a biological product, that is a copy of
a marketed drug approved under 505 or 512, conditionally approved under section
571, or included on the index established under section 572(a)(1), except as
provided in paragraph (3).
(C)
Biological
products
A drug that is a biological product, except as provided
in paragraph (4).
(D)
Drugs removed
for safety and efficacy
A drug that appears on a list published
by the Secretary in the Federal Register of drugs that have been withdrawn or
removed from the market because such drug or components of such drug have been
found to be unsafe or not effective, subject to paragraph (5).
(2)
Drugs that are
demonstrably difficult to compound
(A)
In
general
The Secretary may promulgate a regulation that designates
drugs or categories of drugs that are demonstrably difficult to compound that
may not be compounded, or that may be compounded only under conditions
specified by the Secretary. Such regulation—
(i) may include the
designation of drugs or categories of drugs that are complex dosage forms or
biological products, such as extended release products, metered dose inhalers,
transdermal patches, and sterile liposomal products; and
(ii) shall specify,
for each drug included on the list, whether the prohibition or condition
applies to the use of the drug in humans, animals, or both.
(B)
Interim
list
(i)
In
general
Before the effective date of the regulation promulgated
under subparagraph (A), the Secretary may designate drugs that are complex
dosage forms or biological products that cannot be compounded by—
(I) publishing a
notice of such drugs proposed for designation, including the rationale for such
designation, in the Federal Register;
(II) providing a
period of not less than 60 days for comment on the notice; and
(III) publishing a
notice in the Federal Register designating the drugs that are complex dosage
forms and biological products that cannot be compounded.
(ii)
Sunset
Any
notice provided under clause (i) shall cease to have force or effect on the
date that is 5 years after the date of enactment of the
Pharmaceutical Compounding Quality and
Accountability Act or on the effective date of the final
regulation under subparagraph (A), whichever is earlier.
(3)
Exceptions
regarding marketed drugs
(A)
In
general
A drug (other than a biological product) that is a copy
of a marketed drug approved under 505 or 512, conditionally approved under
section 571, or included on the index established under section 572(a)(1),
including variations of such drug compounded from bulk substances, may be
compounded only if—
(i)
(I) the compounded
variation produces for the patient a clinical difference between the compounded
drug and such marketed drug, as determined by the prescribing practitioner,
and, prior to beginning compounding a variation of such drug, the facility
compounding the variation receives a prescription order specifying that the
variation may be compounded; or
(II)
(aa) such marketed drug, at
the time of compounding a copy of such drug and at the time of distribution of
the compounded drug, is on the drug shortage list under section 506E (in the
case of a human drug), on the Current Drug Shortages list for veterinary
products maintained on the Internet Web site of the Food and Drug
Administration (in the case of an animal drug), or in the Secretary’s sole
discretion, has otherwise been identified by the Secretary as in shortage such
as in a specific region or on a drug shortage list maintained by a private
party; and
(bb) the traditional
compounder or the compounding manufacturer notifies the Secretary not later
than 3 calendar days after beginning the compounding, unless the Secretary
waives the notice requirement; and
(ii) in the case of a
marketed drug approved under section 505 that is subject to a risk evaluation
and mitigation strategy approved with elements to assure safe use pursuant to
section 505–1, the entity compounding the drug demonstrates to the Secretary
that the entity will utilize controls that are comparable to the controls
applicable under the relevant risk evaluation and mitigation strategy.
(B)
Exclusion
For
purposes of this paragraph, repackaging a marketed drug approved under section
505, 512, conditionally approved under section 571, or included on the index
established under section 572(a)(1), does not make the repackaged drug a copy
of such marketed drug.
(4)
Exceptions
regarding biological products
A drug that is a biological product
may be compounded only if—
(A) such drug is
compounded from a licensed biological product and the compounding does not
involve combining or mixing the licensed biological product with—
(i) a bulk drug
substance; or
(ii) another,
different drug or drugs approved under 505 or 512, conditionally approved under
section 571, included on the index established under section 572(a)(1), or
licensed under section 351 of the Public Health Service Act, unless the
compounding is limited to the combining, mixing, or diluting of licensed
allergenic products; and
(B)
(i) with respect to a
traditional compounder, the compounded biological product produces for the
patient a clinical difference between the compounded drug and the licensed
biological product, as determined by the prescribing practitioner, and, prior
to beginning compounding such drug, the facility compounding the variation
receives a prescription order specifying that the biological product may be
compounded;
(ii) with respect to a
compounding manufacturer, the compounded variation biological product produces
for the patient a clinical difference between the compounded drug and the
licensed biological product, as determined by a licensed practitioner
responsible for the patient’s care in a health care entity that provides
medical services through licensed prescribers directly to patients, and, prior
to beginning compounding such drug, the compounding manufacturer receives a
duly authorized medical order from a hospital or health system specifying that
the biological product may be compounded; or
(iii) the compounded
biological product is an allergenic product.
(5)
Requirement
regarding drugs removed for safety or efficacy
The list published
by the Secretary in the Federal Register of drugs that have been withdrawn or
removed from the market, as described in paragraph (1)(D), shall specify
whether a human drug on such list may, notwithstanding the inclusion on such
list, be compounded for use in animals. The Secretary shall update the lists
described in subparagraphs (D) and (E) of subsection (e)(2), as appropriate, to
conform with the list described in paragraph (1)(D).
(e)
Quality of drug
ingredients
(1)
Human
drugs
A traditional compounder or a compounding manufacturer
shall—
(A) compound a human
drug using only bulk drug substances (as defined in regulations of the
Secretary published at section 207.3(a)(4) of title 21, Code of Federal
Regulations (or any successor regulations))—
(i) that—
(I) comply with the
standards of an applicable United States Pharmacopoeia or National Formulary
monograph, if a monograph exists and has not been identified under paragraph
(6), and the United States Pharmacopoeia chapters on pharmacy
compounding;
(II) if such a
monograph does not exist, are drug substances that are components of drugs
approved by the Secretary; or
(III) if such a
monograph does not exist and the drug substance is not a component of a drug
approved by the Secretary, that appear on a list developed by the Secretary
through regulations issued by the Secretary;
(ii) that are
manufactured by an establishment that is registered under section 510
(including a foreign establishment that is registered under section 510(i));
and
(iii) that are
accompanied by valid certificates of analysis for each specific lot of bulk
drug substance; and
(B) use ingredients
(other than bulk drug substances) that comply with the standards of an
applicable United States Pharmacopoeia or National Formulary monograph, if a
monograph exists and has not been identified under paragraph (6), and with the
United States Pharmacopoeia chapter on pharmacy compounding.
(2)
Animal
drugs
A traditional compounder or a compounding manufacturer
shall—
(A) compound an animal
drug using only bulk drug substances (as defined in regulations of the
Secretary published at section 207.3(a)(4) of title 21, Code of Federal
Regulations (or any successor regulations)) that—
(i) are manufactured
by an establishment that is registered under section 510 (including a foreign
establishment that is registered under section 510(i)); and
(ii) are accompanied
by valid certificates of analysis for each specific lot of bulk drug
substance;
(B) use ingredients
(other than bulk drug substances) that comply with the standards of an
applicable United States Pharmacopoeia or National Formulary monograph, if a
monograph exists and has not been identified under paragraph (6), and with the
United States Pharmacopoeia chapters on pharmacy compounding;
(C) in the case of a
compounded animal drug for use in non-food-producing minor species, use bulk
substances that—
(i) comply with the
standards of an applicable United States Pharmacopoeia or National Formulary
monograph, if a monograph exists and has not been identified under paragraph
(6), and with the United States Pharmacopoeia chapters on pharmacy
compounding;
(ii) if such a
monograph does not exist, are drug substances that are components of drugs
approved by the Secretary; or
(iii) if such a
monograph does not exist and the drug substance is not a component of a drug
approved by the Secretary, that appear on a list developed by the Secretary
through regulations issued by the Secretary;
(D) in the case of a
compounded animal drug for use in non-food-producing major species, beginning
on the date of publication of the list established in accordance with paragraph
(3)(A), shall use bulk substances that are included on such list, subject to
paragraph (3)(C); and
(E) in the case of a
compounded animal drug for use in food-producing major and minor species, shall
use bulk substances that are included on a list established by the Secretary of
bulk substances acceptable for use in compounding a drug for one or more such
species, in accordance with paragraph (4).
(3)
Non-food-producing
major species listing procedure
(A)
In
general
Not later than 30 days after the effective date of the
Pharmaceutical Compounding Quality and
Accountability Act, the Secretary shall establish a list of bulk
substances acceptable for compounding a drug for use in non-food-producing
major species, and any conditions applicable to such use, and may also identify
bulk substances that the Secretary has determined not acceptable for
compounding with respect to a drug for use in such species.
(B)
Procedure
In
developing and updating the list under subparagraph (A), the Secretary
shall—
(i) publish a notice
in the Federal Register identifying bulk substances proposed as acceptable and
any bulk substance determine to be unacceptable, and the rationale for such
proposed designations;
(ii) provide a period
of not less than 30 days for comment on the notice; and
(iii) publish a notice
in the Federal Register designating the bulk substances acceptable, and any
bulk substances determined to be unacceptable, and the rationale for such
designations and determinations.
(C)
Notification
Upon
initial publication of the list under subparagraph (B)(iii), any traditional
compounder or compounding manufacturer that has received and filled a
prescription in the 60 days prior to such publication for a compounded drug for
a non-food-producing major species from a bulk substance not addressed in the
notice (either as acceptable or unacceptable), and that reasonably expect to
receive and fill another prescription for such a drug for such species within
60 days after such publication, may notify the Secretary of such bulk substance
within 30 days of such publication, in a manner to be determined by the
Secretary and published in the Federal Register on or before publication of the
list under subparagraph (B)(iii). A traditional compounder or compounding
manufacturer that provides such notice shall not be subject to the restriction
in paragraph (2)(D) until such time as the Secretary designates such bulk
substance as acceptable or determines it to be unacceptable pursuant to the
process described in subparagraph (B)(iii).
(D)
Modification of
list
The Secretary may amend the list at any time, in accordance
with process described in subparagraph (B).
(E)
Criteria
In
evaluating bulk substances for purposes of subparagraph (B), the Secretary
shall consider, among other factors—
(i) the safety of the
bulk substance;
(ii) historical use of
the substance in pharmacy compounding;
(iii) evidence of the
effectiveness of the bulk substance or lack of effectiveness;
(iv) whether any drug
approved under section 505 or 512, conditionally approved under section 571, or
included on the index established under section 572(a)(1), can be used on
label, or any drug approved under section 505 or 512 can be used in an
extralabel manner in accordance with section paragraphs (4) and (5) of section
512(a), to treat the applicable condition in the identified species; and
(v) whether a
compounded drug appropriate to treat the applicable condition in the identified
species could be obtained by manipulating a drug approved under 505 or 512,
conditionally approved under section 571, or included on the index established
under section 572(a)(1).
(4)
Food-producing
animals listing procedure
In establishing a list of designated
bulk substances acceptable for use in compounding a drug for use in
food-producing major and minor species under paragraph (2), and any conditions
applicable to such use, the Secretary shall—
(A) publish a notice
in the Federal Register identifying bulk substances proposed as acceptable and
any bulk substance determine to be unacceptable, and the rationale for such
designations;
(B) provide a period
of not less than 30 days for comment on the notice; and
(C) publish a notice
in the Federal Register designating the bulk substances acceptable for use in
compounding a drug for use in food-producing major and minor species, and the
rationale for such designations.
(5)
Withdrawal
periods
The requirements for establishing substantially extended
withdrawal periods in accordance with section 530.20 of title 21, Code of
Federal Regulations (or any successor regulations) shall apply to compounded
animal drugs for use in food-producing animals that are compounded using bulk
substances.
(6)
Identification
by Secretary
(A)
In
general
Notwithstanding the existence of an applicable monograph
under subparagraph (A)(i)(I) or (B) of paragraph (1) or subparagraph (B) or
(C)(i) of paragraph (2), the Secretary may identify bulk substances that the
Secretary determines, based on public health concerns, may not be used in
compounding a drug.
(B)
Procedure
In
identifying the bulk substances that may not be used in compounding, the
Secretary shall—
(i) publish a notice
of such bulk substances proposed for identification in the Federal
Register;
(ii) provide a period
of not less than 60 days for comment on the notice;
(iii) publish a notice
in the Federal Register identifying the bulk substances that may not be used in
compounding a drug; and
(iv) state whether the
bulk is not suitable for compounding of human drugs, animal drugs, or
both.
(f)
Requirements
regarding wholesaling and labeling applicable to traditional compounders and
compounding manufacturers
(1)
In
general
A compounded drug—
(A) may not be sold by
an entity other than the compounding manufacturer or traditional compounder
that compounded the drug;
(B) compounded by a
compounding manufacturer may not be sold to an entity other than a health care
entity that provides medical services through licensed prescribers directly to
patients or animals, or a network of such providers, except that a compounding
manufacturer may transfer without profit a compounded sterile drug to a
licensed pharmacy if—
(i) the licensed
pharmacy falls under the same corporate ownership as the compounding
manufacturer;
(ii) the transfer of
such compounded sterile drug is solely for the purpose of dispensing the
compounded sterile drug to the end user, who has been instructed by the
prescribing physician to self-administer such compounded sterile drug;
(iii) as of the date
of enactment of the Pharmaceutical
Compounding Quality and Accountability Act, the compounding
manufacturer is an entity that provides pharmacy benefits management services
on behalf of a health benefits plan;
(iv) the compounding
manufacturer identifies itself to the Secretary upon registering under
subsection (g)(2) as an entity that qualifies for the exemption under this
subparagraph, and provides documentation of the compounding of such drugs as of
the date of enactment of the Pharmaceutical
Compounding Quality and Accountability Act, in a manner described
by the Secretary; and
(v) the compounding
manufacturer receives confirmation from the Secretary that the compounding
manufacturer qualifies for the exemption under this subparagraph and the
sterile drug or drugs for which the exemption applies; and
(C) in the case of a
compounded drug sold to a health care entity described in subparagraph (B),
shall be labeled not for resale.
(2)
Advertising and
promotion
The advertising and promotion of compounded drugs shall
not be false or misleading in any particular.
(g)
Other
requirements applicable to compounding manufacturers
(1)
Licensed
pharmacist oversight
A compounding manufacturer shall ensure that
a pharmacist licensed in the State where the compounding manufacturer is
located exercises direct supervision over the operations of the compounding
manufacturer.
(2)
Registration of
compounding manufacturers and reporting of drugs
(A)
Registration of
compounding manufacturers
(i)
Annual
registration
During the period beginning on October 1 and ending
on December 31 each year, each compounding manufacturer shall register with the
Secretary its name, place of business, and unique facility identifier (which
shall conform to the requirements for the unique facility identifier
established under section 510), and a point of contact e-mail address.
(ii)
New compounding
manufacturers
Each compounding manufacturer, upon first engaging
in the operations described in subsection (b)(1), shall immediately register
with the Secretary and provide the information described under clause (i). The
Secretary shall establish a timeline for registration for the first year
following the effective date of the Pharmaceutical Compounding Quality and Accountability
Act. In no case may registration be required until at least 60
days following publication of the timeline in the Federal Register.
(iii)
Additional
facilities
Each compounding manufacturer duly registered in
accordance with clauses (i) and (ii) shall immediately identify to the
Secretary any additional facility that engages in the activities described in
subsection (b)(1) and that is owned or operated in any State by the person that
owns or operates the compounding manufacturer.
(iv)
Availability of
registration for inspection
The Secretary shall make available
for inspection, to any person so requesting, any registration filed pursuant to
this subparagraph, except that any drug reporting information submitted
pursuant to this subparagraph and the information accompanying such reporting
shall be exempt from such inspection, unless the Secretary finds that such an
exemption would be inconsistent with the protection of the public
health.
(B)
Drug reporting
by compounding manufacturers
(i)
In
general
Each compounding manufacturer who registers with the
Secretary under subparagraph (A) shall submit to the Secretary, once during the
month of June of each year and once during the month of December of each year,
a report—
(I) identifying the
drugs compounded by such compounding manufacturer during the previous 6-month
period; and
(II) with respect to
each drug identified under subclause (I), providing the active ingredient, the
source of such active ingredient, the National Drug Code number of the source
drug or bulk active ingredient, the strength of the active ingredient per unit,
the dosage form and route of administration, the package description, the
number of individual units produced, the National Drug Code number of the final
product, and which conforms to other applicable requirements identified by the
Secretary in accordance with clause (ii).
(ii)
Form
Each
report under clause (i) shall be prepared in such form and manner as the
Secretary may prescribe by regulation or guidance.
(C)
Electronic
registration and reporting
Registrations and drug reporting under
this paragraph (including the submission of updated information) 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 waiver.
(D)
Risk-based
inspection frequency
(i)
In
general
Compounding manufacturers shall be subject to inspection
pursuant to section 704.
(ii)
Risk-based
schedule
The Secretary, acting through one or more officers or
employees duly designated by the Secretary, shall inspect compounding
manufacturers described in clause (i) in accordance with a risk-based schedule
established by the Secretary.
(iii)
Risk
factors
In establishing the risk-based schedule under clause
(ii), the Secretary shall inspect compounding manufacturers according to the
known safety risks of such compounding manufacturers, which shall be based on
the following factors:
(I) The compliance
history of the compounding manufacturer.
(II) The record,
history, and nature of recalls linked to the compounding manufacturer.
(III) The inherent
risk of the drug compounded at the compounding manufacturer.
(IV) The inspection
frequency and history of the compounding manufacturer, including whether the
compounding manufacturer has been inspected pursuant to section 704 within the
last 4 years.
(V) Any other criteria
deemed necessary and appropriate by the Secretary for purposes of allocating
inspection resources.
(3)
Adverse event
reporting
(A)
Definitions
In
this paragraph:
(i)
Adverse
event
The term adverse event means any
health-related event associated with the use of a compounded drug that is
adverse, including—
(I) an event occurring
in the course of the use of the drug in professional practice;
(II) an event
occurring from an overdose of the drug, whether accidental or
intentional;
(III) an event
occurring from abuse of the drug;
(IV) an event
occurring from withdrawal of the drug; and
(V) any failure of
expected pharmacological action of the drug.
(ii)
Serious adverse
event
The term serious adverse event means an
adverse event that—
(I) results in—
(aa) death;
(bb) an adverse drug
event that places the patient at immediate risk of death from the adverse drug
event as it occurred (not including an adverse drug event that might have
caused death had it occurred in a more severe form);
(cc) inpatient
hospitalization or prolongation of existing hospitalization;
(dd) a persistent or
significant incapacity or substantial disruption of the ability to conduct
normal life functions; or
(ee) a congenital
anomaly or birth defect; or
(II) based on
appropriate medical judgment, may jeopardize the patient and may require a
medical or surgical intervention to prevent an outcome described in subclause
(I).
(B)
Reports
(i)
Adverse event
reporting requirement
(I)
15-day
report
If a compounding manufacturer becomes aware of any serious
adverse event, such manufacturer shall submit reports of each instance to the
Secretary as soon as practicable, but in no case later than 15 calendar days
after the initial receipt of the applicable information. Such manufacturer
shall investigate and submit to the Secretary followup reports for each such
instance not later than 15 calendar days after receipt of new information or as
requested by the Secretary. Unless and until the Secretary establishes the
content and format of adverse event reports by guidance or regulation, reports
shall be submitted in accordance with the content and format requirements under
section 310.305 of title 21, Code of Federal Regulations (or any successor
regulations) (in the case of human drugs), section 600.80 of title 21, Code of
Federal Regulations (or any successor regulations) (in the case of biological
products), or section 514.80 of title 21, Code of Federal Regulations (or any
successor regulations) (in the case of animal drugs).
(II)
Annual
report
Compounding manufacturers that report serious adverse
events shall submit in December of each year a narrative summary of any
analysis of each report submitted under subclause (I), including a history of
actions taken during the year because of each report, using the content,
format, and manner established by the Secretary by guidance or regulation.
Until such time as the Secretary publishes such guidance or regulation, each
compounding manufacturer shall retain such summaries as part of the records to
be maintained in accordance with subparagraph (C).
(ii)
Product quality
reporting requirement
Not later than 3 calendar days after the
compounding manufacturer becomes aware of information pertaining to sterility,
stability, or other product quality concerns that could result in serious
adverse events, the compounding manufacturer shall submit to the Secretary a
product quality report, in a form and manner established by the Secretary by
guidance or regulation.
(C)
Maintenance of
records
A compounding manufacturer shall maintain for a period of
10 years records of all serious adverse drug events known to the compound
manufacturer in accordance with section 314.80(i) of title 21, Code of Federal
Regulations (or any successor regulation), or as otherwise directed by the
Secretary in regulations.
(4)
Labeling of
drugs
(A)
Label
The
label of a drug compounded by a compounding manufacturer shall include—
(i) the statement
This is a compounded drug. or a reasonable comparable
alternative statement (as specified by the Secretary) that identifies the drug
as a compounded drug;
(ii) the name,
address, and phone number of the applicable compounding manufacturer;
and
(iii) with respect to
the compounded drug—
(I) the lot or batch
number;
(II) the established
name of the medication;
(III) the dosage form
and strength;
(IV) the statement of
quantity or volume, as appropriate;
(V) in the case of a
drug intended for use in a food-producing animal, the withdrawal period
established pursuant to subsection (e)(5) to ensure that no residues from the
compounded drug can be detected in edible tissues of the treated animal;
(VI) the date that the
drug was compounded;
(VII) the expiration
date;
(VIII) storage and
handling instructions;
(IX) the National Drug
Code number, if available;
(X) the not for
resale statement required as required by subsection (f)(1)(C);
and
(XI) subject to
subparagraph (B)(i), a list of active and inactive ingredients, identified by
established name and the quantity or proportion of each ingredient.
(B)
Container
The
container from which the individual units of a drug compounded by a compounding
manufacturer are removed for dispensing or for administration (such as a
plastic bag containing individual product syringes) shall include—
(i) the information
described under subparagraph (A)(iii)(XI), if there is not space on the label
for such information;
(ii) the following
information to facilitate adverse event reporting: www.fda.gov/medwatch and
1–800–FDA–1088; and
(iii) the directions
for use, including dosage and administration, as appropriate.
(C)
Additional
information
The label and labeling of a drug compounded by a
compounding manufacturer shall include any other information as determined
necessary and specified in regulations promulgated by the Secretary.
(h)
Compounding
manufacturer establishment and reinspection fees
(1)
Definitions
In
this subsection—
(A) the term
affiliate has the meaning given such term in section
735(11);
(B) the term
gross annual sales means the total worldwide gross annual sales,
in United States dollars, for a compounding manufacturer, including the sales
of all the affiliates of the compounding manufacturer; and
(C) the term
reinspection means, with respect to a compounding manufacturer,
one or more inspections conducted under section 704 subsequent to an inspection
conducted under such provision which identified noncompliance materially
related to an applicable requirement of this Act, specifically to determine
whether compliance has been achieved to the Secretary's satisfaction.
(2)
Establishment
and reinspection fees
For fiscal year 2015 and each subsequent
fiscal year, the Secretary shall, in accordance with this subsection, assess
and collect—
(A) an annual
establishment fee from each compounding manufacturer to cover
inspection-related costs relating to inspections of drug compounders for such
year; and
(B) a reinspection fee
from each compounding manufacturer subject to a reinspection in such fiscal
year.
(3)
Establishment
and reinspection fee setting
The Secretary shall establish the
establishment and reinspection fee to be collected under this subsection for
each fiscal year, based on the methodology described in paragraph (4) and shall
publish such fee in a Federal Register notice not later than 60 days before the
start of each such year.
(4)
Amount of
establishment and reinspection fee
(A)
In
general
Except as provided in subparagraph (D), the amount of the
annual establishment fee and the reinspection fee (if applicable) under
paragraph (2) for each compounding manufacturer in a fiscal year shall be equal
to the sum of—
(i)
(I) $15,000 per compounding
manufacturer, multiplied by
(II) the inflation
adjustment factor described in subparagraph (B); plus
(ii) the small
business adjustment factor described in subparagraph (C).
(B)
Inflation
adjustment factor
(i)
In
general
For fiscal year 2015 and subsequent fiscal years, the
revenues established in subparagraph (A) shall be adjusted by the Secretary by
notice, published in the Federal Register, for a fiscal year by the amount
equal to the sum of—
(I) one;
(II) the average
annual percent change in the cost, per full-time equivalent position of the
Food and Drug Administration, of all personnel compensation and benefits paid
with respect to such positions for the first 3 years of the preceding 4 fiscal
years, 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 3 years of the preceding 4 fiscal years,
and
(III) the average
annual percent change that occurred in the Consumer Price Index for urban
consumers (U.S. City Average; Not Seasonally Adjusted; All items; Annual Index)
for the first 3 years of the preceding 4 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 3 years of the preceding 4 fiscal
years.
(ii)
Compounded
basis
The adjustment made each fiscal year under clause (i) shall
be added on a compounded basis to the sum of all adjustments made each fiscal
year after fiscal year 2014 under clause (i).
(C)
Small business
adjustment factor
The small business adjustment factor described
in subparagraph (A)(ii) shall be an amount established by the Secretary for
each fiscal year based on the Secretary’s estimate of—
(i) the number of
small businesses that will pay a reduced establishment fee for such fiscal
year; and
(ii) 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 subparagraph (D).
(D)
Exception for
small businesses
(i)
In
general
In the case of a compounding manufacturer with gross
annual sales of $1,000,000 or less in the 12 months ending June 1 of the fiscal
year immediately preceding the fiscal year in which the fees under this
subsection are assessed, the amount of the establishment fee and reinspection
fee under paragraph (2) for a fiscal year shall be equal to
1/3 of the amount calculated under subparagraph (A)(i) in
such fiscal year.
(ii)
Application
The
Secretary may require a small business to apply for the exception under this
subparagraph by certifying its gross annual sales for the 12 months ending June
1 of the fiscal year immediately preceding the fiscal year in which fees under
this subsection are assessed. Any such application must be submitted to the
Secretary prior to August 1 for the following fiscal year. Any statement or
representation made to the Secretary shall be subject to section 1001 of title
18, United States Code.
(E)
Crediting of
fees
In establishing the small business adjustment factor under
subparagraph (C) for a fiscal year, the Secretary shall 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 year, and consider the need to account for any adjustment of
fees and such other factors as the Secretary determines appropriate.
(5)
Use of
fees
The Secretary shall make all of the fees collected pursuant
to subparagraph (A) and (B) of paragraph (2) available solely to pay for the
inspection-related costs (including re-inspection) for the oversight of drug
compounding.
(6)
Supplement not
supplant
Funds received by the Secretary pursuant to this
subsection shall be used to supplement and not supplant any other Federal funds
available to carry out the activities described in this subsection.
(7)
Crediting and
availability of fees
Fees authorized under this subsection shall
be collected and available for obligation only to the extent and in the amount
provided in advance in appropriations Acts. Such fees are authorized to remain
available until expended. 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 limitation. The sums transferred shall be
available solely for the purpose of paying the inspection-related costs
(including reinspection) for the oversight of drug compounding.
(8)
Collection of
fees
(A)
Establishment
fee
A compounding manufacturer shall remit the establishment fee
due under this subsection in a fiscal year when submitting a registration
pursuant to subsection (g) for such fiscal year.
(B)
Reinspection
fee
The Secretary shall specify in the Federal Register notice
described in paragraph (3) the manner in which reinspection fees assessed under
this subsection shall be collected and the timeline for payment of such fees.
Such a fee shall be collected after the Secretary has conducted a reinspection
of the compounding manufacturer involved.
(C)
Effect of
failure to pay fees
(i)
Registration
A
compounding manufacturer shall not be considered registered under subsection
(g) in a fiscal year until the date that the compounding manufacturer remits
the establishment fee under this subsection for such fiscal year.
(ii)
Misbranding
All
drugs compounded by a compounding manufacturer for which any establishment fee
or reinspection fee has not been paid as required by this subsection shall be
deemed misbranded under section 502(cc) until the fees owed for such
compounding manufacturer under this subsection have been paid.
(D)
Collection of
unpaid fees
In any case where the Secretary does not receive
payment of a fee assessed under this subsection within 30 days after it is due,
such fee shall be treated as a claim of the United States Government subject to
provisions of subchapter II of chapter 37 of title 31, United States
Code.
(9)
Annual report to
congress
Not later than 120 days after each fiscal year in which
fees are assessed and collected under this subsection, the Secretary shall
submit a report to the Committee on Health, Education, Labor, and Pensions of
the Senate and the Committee on Energy and Commerce of the House of
Representatives, to include a description of fees assessed and collected for
each year, a summary description of entities paying the fees, and the number of
inspections and reinspections of such entities performed each year.
(10)
Authorization
of appropriations
For fiscal year 2015 and each subsequent fiscal
year, there is authorized to be appropriated for fees under this subsection an
amount equivalent to the total amount of fees assessed for such fiscal year
under this subsection.
(i)
Action by
Secretary regarding complaints from State boards of pharmacy
(1)
Designation
The
Secretary shall designate a point of contact and establish a format and
procedure for a State Board of Pharmacy to notify the Secretary if it appears
to a State Board of Pharmacy that an entity licensed by a State as a pharmacy
is required to be registered with the Secretary as a compounding
manufacturer.
(2)
Determination
If
the Secretary determines that such an entity described in paragraph (1) is
required to be registered with the Secretary as a compounding manufacturer, the
Secretary shall transmit such determination to the State Board of Pharmacy in
the State in which the entity is located, and to the State Board of Pharmacy in
the notifying State, if different, within 15 days of such determination.
(3)
Effect
The
Secretary shall encourage direct communications between States regarding
traditional compounders. Nothing in this subsection shall expand the
Secretary’s authority over or responsibility for traditional
compounding.
(j)
Prescription
order reference
For purposes of this section, reference to a
prescription order for an identified individual patient includes, in the case
of animal drugs, a prescription order for a specific herd or flock (or other
identified group) of
animals.
.
(c)
Prohibited
act
Section 301 (21 U.S.C. 331) is amended—
(1) in subsection (e),
by striking 417, 416, 504 and inserting 417, 416,
503A(g), 504; and
(2) by adding at the
end the following:
(ccc) The resale of a
compounded drug that is labeled not for resale as required by
section
503A.
.
(d)
Report by
GAO
Not later than November 1, 2016, the Comptroller General of
the United States shall conduct study and submit to Congress a report regarding
the impact of this Act (and the amendments made by this Act) on the safety of
animal drug compounding and the availability of safe and effective drugs for
animals.
3.
Other
requirements relating to compounding manufacturers
(a)
Labeling
Section 502 (21 U.S.C. 352) is amended by
adding at the end the following:
(bb) If it is a
compounded drug and the labeling does not include the information as required
by subsections (f)(1)(C) and (g)(4) of section 503A, as applicable.
(cc) If it is a drug,
and it was compounded by a compounding manufacturer for which fees have not
been paid as required by section
503A(g).
.
(b)
Application of
inspection requirements to compounding manufacturers
Section
704(a)(2) (21 U.S.C. 374(a)(2)) is amended by adding at the end the following
flush text:
The exemption in subparagraph (A)
does not apply with respect to compounding manufacturers (as such term is
defined in section
503A).
.
(c)
Adulteration of
compounded animal drugs containing drug residues
Section
402(a)(2)(C) is amended by striking 512; and inserting
512; or (iii) any residue from a compounded animal drug;.
4.
Implementation
In promulgating any regulations to implement
this Act (and the amendments made by this Act), the Secretary of Health and
Human Services shall—
(1) issue a notice of
proposed rulemaking that includes the proposed regulation;
(2) provide a period
of not less than 60 days for comments on the proposed regulation; and
(3) publish the final
regulation not more than 18 months following publication of the proposed rule
and not less than 30 days before the effective date of such final
regulation.
5.
Effective
date
This Act (and the
amendments made by this Act) shall take effect on the date that is 1 year after
the date of enactment of this Act.
1.
Short title
This Act may be cited as the
Pharmaceutical Quality, Security, and Accountability Act.
2.
References in Act; table
of contents
(a)
References in
Act
Except as otherwise specified, amendments made by this Act to
a section or other provision of law are amendments to such section or other
provision of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et
seq.).
(b)
Table of
contents
The table of contents of this Act is as follows:
Sec. 1. Short
title.
Sec. 2. References in Act; table of
contents.
TITLE I—Human drug
compounding
Sec. 101. Short title.
Sec. 102. Regulation of human drug
compounding.
Sec. 103. Other requirements.
Sec. 104. Implementation.
Sec. 105. Effective date.
TITLE II—Drug Supply Chain
Security
Sec. 201. Short title.
Sec. 202. Pharmaceutical distribution supply
chain.
Sec. 203. Enhanced drug distribution
security.
Sec. 204. National licensure standards for
prescription drug wholesale distributors.
Sec. 205. National licensure standards for
third-party logistics providers; uniform national policy.
Sec. 206. Penalties.
Sec. 207. Conforming amendment.
Sec. 208. Savings clause.
I
Human drug
compounding
101.
Short
title
This title may be cited
as the Pharmaceutical Compounding
Quality and Accountability Act.
102.
Regulation of human
drug compounding
(a)
Clarification of new
drug status
For purposes of the Federal Food, Drug and Cosmetic
Act (21 U.S.C. 301 et seq.), the term new drug (as defined in
section 201(p) of such Act) shall include a compounded human drug.
(b)
Regulation of human
drug compounding
Section 503A (21 U.S.C. 353a) is amended to read
as follows:
503A.
Human drug
compounding
(a)
Scope
(1)
Compounding
In
this section, the terms compounding and
compound—
(A) include—
(i) the combining, admixing,
mixing, diluting, reconstituting, or otherwise altering of a marketed
drug;
(ii) compounding a drug from
a bulk drug substance; and
(iii) repackaging; and
(B) exclude mixing,
reconstituting, or other such acts with respect to a marketed drug that are
limited to and performed in accordance with specific directions for such acts
contained in approved labeling provided by a drug’s manufacturer, when
performed based upon a prescription order for an identified individual
patient.
(2)
Administration and
dispensing not a sale
In this section, the terms
sell or resale do not include—
(A) circumstances in which
drug is administered to a patient or provided to a patient who has been
instructed to self-administer the drug;
(B) the dispensing of a drug
pursuant to a prescription executed in accordance with section 503(b)(1);
or
(C) any fee associated with
such administration, provision, or dispensing of the drug.
(3)
Inapplicability to
certain drugs
(A)
In
general
For purposes of this section, the activities described in
paragraph (1) shall not be considered compounding if such
activities are conducted in whole or in part with respect to a drug described
in subparagraph (B).
(B)
Excluded
drugs
The drugs described in this subparagraph are the
following:
(i) Blood and blood
components for transfusion.
(ii) Medical gases, as
defined in section 575.
(4)
Animal drugs for human
use
Nothing in this section shall be construed to permit the use
of animal drugs in compounding a drug for human use.
(b)
Definitions
In
this section:
(1)
Compounding
manufacturer
(A)
In
general
The term compounding manufacturer means a
facility at one geographic location or address—
(i) that compounds any
sterile drug without receiving a prescription order for an identified
individual patient for such sterile drug prior to beginning compounding, and
distributes or offers to sell such compounded sterile drug in interstate
commerce; or
(ii) that repackages any
preservative-free sterile drug or engages in sterile pooling.
(B)
Exclusions
(i)
Excluded
activities
Notwithstanding subparagraph (A)(ii), a facility shall
not be considered a compounding manufacturer if such facility—
(I) repackages drugs in
accordance with section 506F or the final guidance described in section 506F(d)
once the final guidance is published; and
(II) does not otherwise meet
the definition of compounding manufacturer under subparagraph (A).
(ii)
Compounding nuclear
pharmacy
The term compounding manufacturer shall not
include a compounding nuclear pharmacy.
(2)
Compounding nuclear
pharmacy
The term compounding nuclear pharmacy means
an entity that—
(A) is a State-licensed
pharmacy or a Federal facility;
(B) holds a license currently
in effect from the Nuclear Regulatory Commission or from a State pursuant to an
agreement with such commission under section 274 of the Atomic Energy Act of
1954; and
(C) does not compound
non-radioactive drugs that would cause the entity to be a compounding
manufacturer described in paragraph (1)(A).
(3)
Copy
The
term copy means an identical or nearly identical version of a
drug.
(4)
Practitioner
The
term practitioner includes a physician or any other person that is
authorized to prescribe medication under State law.
(5)
Radioactive
drug
The term radioactive drug—
(A) means any substance
defined as a drug in section 201(g)(1) that exhibits spontaneous disintegration
of unstable nuclei with the emission of nuclear particles or photons and
includes any nonradioactive reagent kit or nuclide regenerator which is
intended to be used in the preparation of any such substance but does not
include drugs such as carbon-containing compounds or potassium-containing salts
which contain trace quantities of naturally occurring radionuclides; and
(B) includes a
radioactive biological product, which means a biological product
which is labeled with a radionuclide or intended solely to be labeled with a
radionuclide.
(6)
Repackage or
repackaging
The term repackage or
repackaging—
(A) means taking a drug
approved under section 505 or licensed under section 351 of the Public Health
Service Act from the container in which it is distributed by the original
manufacturer and placing it in a different container of the same or smaller
size without further manipulating the drug (such as by diluting it or mixing it
with another, different drug or drugs); and
(B) does not include removing
the drug from its original container for immediate administration to an
identified individual patient, such as withdrawing a drug into a syringe for
immediate injection or filling a cassette for immediate use within a drug
delivery device.
(7)
Sterile
drug
The term sterile drug means a drug that
is—
(A) intended for parenteral
administration;
(B) an ophthalmic or oral
inhalation drug in aqueous format; or
(C) required to be sterile
under Federal or State law.
(8)
Sterile
pooling
The term sterile pooling—
(A) means taking a single
sterile drug approved under section 505 from the container in which it is
distributed by the original manufacturer and combining it with the same sterile
drug from one or more other containers without or before further manipulating
the product (such as by diluting it or mixing it with another, different drug
or drugs);
(B) does not include
combining the drug from two or more separate containers of the same drug when a
single container of the drug is not sufficient to prepare a single dose for
administration to an individual patient; and
(C) does not include
combining a single drug from two or more separate containers of component
products of a parenteral nutrition product, if such pooling, labeling, and use
of the finished parenteral nutrition product, comply with State pharmacy
law.
(9)
Traditional
compounder
(A)
In
general
The term traditional compounder means a
facility operating pursuant to State law—
(i) wherein a drug is
compounded by—
(I) a licensed pharmacist in
a State-licensed pharmacy or a licensed Federal facility; or
(II) a licensed
physician;
(ii) that—
(I) compounds a drug upon
receipt of a prescription order for an identified individual patient; or
(II) compounds a drug in
limited quantities before receipt of a prescription order for an identified
individual patient, if such compounding is based on a history of the licensed
pharmacist or licensed physician receiving prescription orders for the
compounding of the drug, which orders have been generated solely within an
established relationship between the licensed pharmacist or licensed physician
and—
(aa) such individual patient
for whom the prescription order will be provided; or
(bb) the licensed physician
or other licensed practitioner who will write such prescription order;
and
(iii) that does not meet the
definition of a compounding manufacturer under paragraph (1).
(B)
Exceptions
(i)
Hospitals and health
systems
A pharmacy within a hospital or health system shall be
considered a traditional compounder if such pharmacy otherwise meets the
definition under subparagraph (A) and if, with respect to a drug compounded by
such pharmacy, the only activity conducted by the pharmacy is to dispense or
administer such drug (which may include interstate shipment) solely to a
patient of such hospital or health system.
(ii)
Health system
defined
The term health system—
(I) means an entity that owns
and operates—
(aa) one hospital; or
(bb) two or more hospitals
that have common access to databases with drug order information for patients;
and
(II) includes only the
inpatient, outpatient, and ambulatory facilities wholly owned and operated by
such entity, and accredited by a national accreditation body recognized by the
Secretary.
(c)
Exemptions from certain
requirements
(1)
In
general
Except as otherwise provided in paragraphs (2), (3), and
(4), a compounded drug shall be subject to all the requirements of this Act
applicable to new drugs.
(2)
Drugs compounded by
traditional compounders
Sections 501(a)(2)(B), 502(f)(1), and 505
of this Act and section 351 of the Public Health Service Act shall not apply to
a compounded drug if such drug—
(A) is compounded by a
traditional compounder that is in compliance with this section; and
(B) meets the requirements of
this section applicable to drugs compounded by traditional compounders.
(3)
Drugs compounded by
compounding manufacturers
Sections 502(f)(1) and 505 of this Act
and section 351 of the Public Health Service Act shall not apply to a
compounded prescription drug, if such prescription drug—
(A) is compounded by a
compounding manufacturer—
(i) that is not licensed as a
pharmacy in any State; and
(ii) that is in compliance
with this section; and
(B) meets the requirements of
this section applicable to drugs compounded by compounding
manufacturers.
(4)
Drugs compounded by
compounding nuclear pharmacies
Sections 501(a)(2)(B), 502(f)(1),
and 505 of this Act and section 351 of the Public Health Service Act shall not
apply to a compounded radioactive drug if such drug is compounded—
(A) by a licensed pharmacist
in a compounding nuclear pharmacy;
(B) solely using a
radioactive drug approved under section 505 or licensed under section 351 of
the Public Health Service Act, and one or more ingredients in compliance with
subsection (e)(1)(B); and
(C) in compliance with the
United States Pharmacopoeia chapters on pharmacy compounding.
(d)
Drugs that may not be
compounded
(1)
In
general
The following drugs may not be compounded:
(A)
Drugs that are
demonstrably difficult to compound
A drug or category of drugs
that presents demonstrable difficulties for compounding, which may include a
complex dosage form or biological product, as designated by the Secretary
pursuant to paragraph (2).
(B)
Marketed
drugs
A drug (other than a biological product) that is a copy of
a marketed drug approved under 505 or a variation of such drug compounded from
bulk drug substances, except as provided in paragraph (3).
(C)
Biological
products
A drug that is a biological product, except as provided
in paragraph (4).
(D)
Drugs subject to risk
evaluation and mitigation strategy
A copy or variation of a drug
approved under section 505 or licensed under section 351 of the Public Health
Service Act that is the subject of a risk evaluation and mitigation strategy
approved with elements to assure safe use pursuant to section 505–1, except
provided in paragraph (5).
(E)
Drugs removed for
safety and efficacy
A drug that appears on a list published by
the Secretary in the Federal Register of drugs that have been withdrawn or
removed from the market because such drug or components of such drug have been
found to be unsafe or not effective.
(2)
Drugs that are
demonstrably difficult to compound
(A)
In
general
The Secretary may promulgate a regulation that designates
drugs or categories of drugs that are demonstrably difficult to compound that
may not be compounded, or that may be compounded only under conditions
specified by the Secretary. Such regulation may include the designation of
drugs or categories of drugs that are complex dosage forms or biological
products, such as extended release products, metered dose inhalers, transdermal
patches, and sterile liposomal products.
(B)
Interim list
(i)
In
general
Before the effective date of the regulation promulgated
under subparagraph (A), the Secretary may designate drugs or categories of
drugs that present demonstrable difficulties for compounding, which may include
complex dosage forms or biological products that cannot be compounded, except
under conditions specified by the Secretary, by—
(I) publishing a notice of
such drugs or categories of drugs proposed for designation, including the
rationale for such designation, in the Federal Register;
(II) providing a period of
not less than 60 calendar days for comment on the notice; and
(III) publishing a notice in
the Federal Register designating such drugs or categories of drugs that cannot
be compounded, including the rationale for such designation.
(ii)
Sunset
Any
notice provided under clause (i) shall cease to have force or effect on the
date that is 5 years after the date of enactment of the Pharmaceutical
Compounding Quality and Accountability Act or on the effective date of the
final regulation under subparagraph (A), whichever is earlier.
(C)
Consultation with
stakeholders
Prior to establishing the lists described in this
paragraph, the Secretary shall consult with relevant stakeholders including
pharmacists, professional associations, patient and public health advocacy
groups, manufacturers and physicians about the need for the compounded drugs to
be included or excluded from the lists.
(D)
Updates to difficult to
compound list
Five years after the effective date of the
regulation described in subparagraph (A), and every 5 years thereafter, the
Secretary shall publish a Federal Register notice seeking public input about
the need for the compounded drugs to be included or excluded from the list
described in subparagraph (A). Nothing in the previous sentence prohibits
notifications or submissions before or during any 5-year period described under
such sentence regarding the need for the compounded drugs to be included or
excluded from the list.
(3)
Exceptions regarding
marketed drugs
(A)
In
general
A drug (other than a biological product) that is a copy
of a marketed drug approved under 505, including variations of such drug
compounded from bulk drug substances, may be compounded only if—
(i) the compounded variation
produces for the individually identified patient a clinical difference between
the compounded drug and such marketed drug, as determined by the prescribing
practitioner, and, prior to beginning compounding such variation, the
traditional compounder compounding the variation receives a prescription order
for an identified individual patient specifying that the variation may be
compounded; or
(ii)
(I) such marketed drug, at
the time of compounding a copy of such drug and at the time of distribution of
the compounded drug, is on the drug shortage list under section 506E, or has
otherwise been identified by the Secretary, in the Secretary's sole discretion,
as in shortage, such as in a specific region or on a drug shortage list
maintained by a private party;
(II) the facility compounding
the drug notifies the Secretary not later than 3 calendar days after beginning
the compounding; and
(III) in the case of a
compounding manufacturer, the compounding manufacturer has registered under
subsection (g)(2) as an entity that intends to compound pursuant to this
paragraph and notifies the Secretary at least 14 calendar days prior to
beginning the compounding.
(B)
Notice
waiver
The Secretary may waive a notice required under
subparagraph (A)(ii).
(C)
Exclusion
For
purposes of this paragraph, repackaging a marketed drug approved under section
505 does not make the repackaged drug a copy of such marketed drug, unless the
repackaged drug is also a marketed drug approved under section 505.
(4)
Exceptions regarding
biological products
(A)
In
general
A drug that is a variation of a licensed biological
product may be compounded only if—
(i)
(I) such compounded
variation is compounded solely using a licensed biological product, or solely
using a licensed biological product and one or more ingredients in compliance
with subsection (e)(1)(B); or
(II) in the case of a
licensed allergenic product, such variation is compounded solely using one or
more licensed allergenic products, or solely using one or more licensed
allergenic products and one or more ingredients in compliance with subsection
(e)(1)(B);
(ii) such compounded
variation produces for the patient a clinical difference between such
compounded variation and the licensed biological product, as determined
by—
(I) the prescribing
practitioner (in the case of a variation compounded by a traditional
compounder); or
(II) a licensed practitioner
responsible for the patient’s care in a health care entity that provides
medical services through licensed practitioners directly to patients (in the
case of a variation compounded by a compounding manufacturer);
(iii) prior to beginning
compounding—
(I) except as provided in
subparagraph (B), the traditional compounder receives a prescription order for
an identified individual patient specifying that the biological product may be
compounded for an identified individual patient; or
(II) the compounding
manufacturer receives a duly authorized medical order from a health care entity
that provides medical services through licensed practitioners directly to
patients, specifying that the biological product may be compounded based on
such order for an identified patient or patients; and
(iv) in the case of a
radioactive biological product, the compounded variation is compounded by a
compounding nuclear pharmacy in accordance with subsection (b)(2).
(B)
Special rule for
pediatric uses
A traditional compounder that is a hospital or
health system may begin compounding a drug that is a variation of a licensed
biological product prior to receiving a prescription order as required under
subparagraph (A)(iii) if—
(i) such compounded variation
is a diluted or repackaged variation of the licensed biological product for
emergent use in pediatric patients; and
(ii) such compounded
variation produces for the patient a clinical difference between such
compounded variation and the licensed biological product, as determined by a
licensed practitioner responsible for the patient’s care in the hospital or
health system.
(C)
Inapplicability
Clauses
(ii) and (iii) of subparagraph (A) shall not apply to a compounded allergenic
product.
(D)
Pooling
Notwithstanding
any other provision of this section, sterile pooling of a biological product is
not permitted.
(5)
Requirement for drugs
that have risk evaluation and mitigation strategies
(A)
In
general
A copy or variation of a drug approved under section 505
or biological product licensed under section 351 of the Public Health Service
Act that is the subject of a risk evaluation and mitigation strategy approved
with elements to assure safe use pursuant to section 505–1, may be compounded
only if—
(i) the entity compounding
the copy or variation receives a prescription order for an identified
individual patient specifying that the drug or biological product may be
compounded; and
(ii) the entity compounding
the copy or variation demonstrates to the Secretary, prior to beginning
compounding, that the entity will utilize controls that are comparable to the
controls applicable under the relevant risk evaluation and mitigation strategy
for the approved drug or licensed biological product.
(B)
Effect
Nothing
in this paragraph shall be construed to permit compounding a copy or variation
of a drug other than as permitted in paragraphs (3) and (4).
(e)
Quality of drug
ingredients
(1)
Human
drugs
A traditional compounder or a compounding manufacturer
shall—
(A) if compounding a drug
from bulk drug substances (as defined in regulations of the Secretary published
at section 207.3(a)(4) of title 21, Code of Federal Regulations (or any
successor regulations)), use only bulk substances—
(i) that—
(I) comply with the standards
of an applicable United States Pharmacopoeia or National Formulary monograph,
if a monograph exists and has not been identified under paragraph (2);
(II) if such a monograph does
not exist, are drug substances that are components of drugs approved by the
Secretary; or
(III) if such a monograph
does not exist and the drug substance is not a component of a drug approved by
the Secretary, that appear on a list developed by the Secretary through
regulations issued by the Secretary;
(ii) that are manufactured by
an establishment that is registered under section 510 (including a foreign
establishment that is registered under section 510(i)); and
(iii) that are accompanied by
valid certificates of analysis for each specific lot of bulk drug
substance;
(B) use ingredients (other
than bulk drug substances) that comply with the standards of an applicable
United States Pharmacopoeia or National Formulary monograph, if a monograph
exists and has not been identified under paragraph (2); and
(C) in the case of a
traditional compounder, comply with the standards of the United States
Pharmacopoeia chapters on pharmacy compounding.
(2)
Identification by
secretary
(A)
In
general
Notwithstanding the existence of an applicable monograph
under subparagraph (A)(i)(I) or (B) of paragraph (1), the Secretary may
identify bulk substances that the Secretary determines, based on public health
concerns, may not be used in compounding a drug.
(B)
Procedure
In
identifying the bulk substances that may not be used in compounding, the
Secretary shall—
(i) publish a notice of such
bulk substances proposed for identification in the Federal Register, including
the rationale for such proposal;
(ii) provide a period of not
less than 60 calendar days for comment on the notice; and
(iii) publish a notice in the
Federal Register identifying the bulk substances that may not be used in
compounding a drug.
(f)
Requirements regarding
wholesaling and labeling applicable to traditional compounders and compounding
manufacturers
A compounded drug—
(1) may not be sold by an
entity other than the compounding manufacturer or traditional compounder that
compounded the drug;
(2) compounded by a
compounding manufacturer may not be sold or transferred to an entity other than
a health care entity that provides medical services through licensed
practitioners directly to patients, or a network of such providers, except that
a compounding manufacturer may transfer without profit a compounded sterile
drug to a licensed pharmacy if—
(A) as of the date of
enactment of the Pharmaceutical Compounding Quality and Accountability Act, and
at the time of such transfer, the licensed pharmacy falls under the same
corporate ownership as the compounding manufacturer;
(B) the transfer of such
compounded sterile drug is solely for the purpose of dispensing the compounded
sterile drug to the end user, who has been instructed by the prescribing
physician to self-administer such compounded sterile drug;
(C) as of the date of
enactment of the Pharmaceutical Compounding Quality and Accountability Act, and
at the time of such transfer, the compounding manufacturer is an entity wholly
owned by an entity that provides pharmacy benefits management services on
behalf of a health benefits plan;
(D) the compounding
manufacturer identifies itself to the Secretary upon registering under
subsection (g)(2) as an entity that qualifies for the exception under this
paragraph, and provides documentation of the compounding of such drugs as of
the date of enactment of the Pharmaceutical Compounding Quality and
Accountability Act, in a manner described by the Secretary; and
(E) the compounding
manufacturer receives confirmation from the Secretary that the compounding
manufacturer qualifies for the exception under this paragraph and the sterile
drug or drugs for which the exemption applies; and
(3) in the case of a
compounded drug offered for sale, shall be labeled not for
resale.
(g)
Other requirements
applicable to compounding manufacturers
(1)
Licensed pharmacist
oversight
A compounding manufacturer shall ensure that a
pharmacist licensed in the State where the compounding manufacturer is located
exercises direct supervision over the operations of the compounding
manufacturer.
(2)
Registration of
compounding manufacturers and reporting of drugs
(A)
Registration of
compounding manufacturers
(i)
Annual
registration
During the period beginning on October 1 and ending
on December 31 each year, each compounding manufacturer shall register with the
Secretary its name, place of business, and unique facility identifier (which
shall conform to the requirements for the unique facility identifier
established under section 510), and a point of contact e-mail address, and
shall indicate whether the compounding manufacturer intends to compound drug in
shortage pursuant to subsection (d)(3)(A)(ii).
(ii)
New compounding
manufacturers
Each compounding manufacturer, upon first engaging
in the operations described in subsection (b)(1), shall immediately register
with the Secretary and provide the information described under clause (i). The
Secretary shall establish a timeline for registration for the first year
following the effective date of the Pharmaceutical Compounding Quality and
Accountability Act. In no case may registration be required until at least 60
calendar days following publication of the timeline in the Federal
Register.
(iii)
Availability of
registration for inspection
The Secretary shall make available
for inspection, to any person so requesting, any registration filed pursuant to
this subparagraph.
(B)
Drug reporting by
compounding manufacturers
(i)
In
general
Each compounding manufacturer who registers with the
Secretary under subparagraph (A) shall submit to the Secretary, once during the
month of June of each year and once during the month of December of each year,
a report—
(I) identifying the drugs
compounded by such compounding manufacturer during the previous 6-month period;
and
(II) with respect to each
drug identified under subclause (I), providing the active ingredient, the
source of such active ingredient, the National Drug Code number, if available,
of the source drug or bulk active ingredient, the strength of the active
ingredient per unit, the dosage form and route of administration, the package
description, the number of individual units produced, the National Drug Code
number of the final product, if assigned.
(ii)
Form
Each
report under clause (i) shall be prepared in such form and manner as the
Secretary may prescribe by regulation or guidance.
(iii)
Confidentiality
Reports
submitted pursuant to this subparagraph shall be exempt from inspection under
subparagraph (A)(iii), unless the Secretary finds that such an exemption would
be inconsistent with the protection of the public health.
(C)
Electronic registration
and reporting
Registrations and drug reporting under this
paragraph (including the submission of updated information) 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 waiver.
(D)
Risk-based inspection
frequency
(i)
In
general
Compounding manufacturers shall be subject to inspection
pursuant to section 704.
(ii)
Risk-based
schedule
The Secretary, acting through one or more officers or
employees duly designated by the Secretary, shall inspect compounding
manufacturers described in clause (i) in accordance with a risk-based schedule
established by the Secretary.
(iii)
Risk
factors
In establishing the risk-based schedule under clause
(ii), the Secretary shall inspect compounding manufacturers according to the
known safety risks of such compounding manufacturers, which shall be based on
the following factors:
(I) The compliance history of
the compounding manufacturer.
(II) The record, history, and
nature of recalls linked to the compounding manufacturer.
(III) The inherent risk of
the drug compounded at the compounding manufacturer.
(IV) The inspection frequency
and history of the compounding manufacturer, including whether the compounding
manufacturer has been inspected pursuant to section 704 within the last 4
years.
(V) Whether the compounding
manufacturer has registered under subsection (g)(2) as an entity that intends
to compound pursuant to subsection (d)(3)(A)(ii).
(VI) Any other criteria
deemed necessary and appropriate by the Secretary for purposes of allocating
inspection resources.
(3)
Adverse event
reporting
(A)
Definitions
In
this paragraph:
(i)
Adverse
event
The term adverse event means any
health-related event associated with the use of a compounded drug that is
adverse, including—
(I) an event occurring in the
course of the use of the drug in professional practice;
(II) an event occurring from
an overdose of the drug, whether accidental or intentional;
(III) an event occurring from
abuse of the drug;
(IV) an event occurring from
withdrawal of the drug; and
(V) any failure of expected
pharmacological action of the drug.
(ii)
Serious adverse
event
The term serious adverse event means an
adverse event that—
(I) results in—
(aa) death;
(bb) an adverse drug event
that places the patient at immediate risk of death from the adverse drug event
as it occurred (not including an adverse drug event that might have caused
death had it occurred in a more severe form);
(cc) inpatient
hospitalization or prolongation of existing hospitalization;
(dd) a persistent or
significant incapacity or substantial disruption of the ability to conduct
normal life functions; or
(ee) a congenital anomaly or
birth defect; or
(II) based on appropriate
medical judgment, may jeopardize the patient and may require a medical or
surgical intervention to prevent an outcome described in subclause (I).
(B)
Reports
(i)
Adverse event reporting
requirement
(I)
15-day
report
If a compounding manufacturer becomes aware of any serious
adverse event, such manufacturer shall submit reports of each instance to the
Secretary as soon as practicable, but in no case later than 15 calendar days
after the initial receipt of the applicable information. Such manufacturer
shall investigate and submit to the Secretary followup reports for each such
instance not later than 15 calendar days after receipt of new information or as
requested by the Secretary. Unless and until the Secretary establishes the
content and format of adverse event reports by guidance or regulation, reports
shall be submitted in accordance with the content and format requirements under
section 310.305 of title 21, Code of Federal Regulations (or any successor
regulations) or section 600.80 of title 21, Code of Federal Regulations (or any
successor regulations).
(II)
Annual
report
Compounding manufacturers that report serious adverse
events shall submit in December of each year a narrative summary of any
analysis of each report submitted under subclause (I), including a history of
actions taken during the year because of each report, using the content,
format, and manner established by the Secretary by guidance or regulation.
Until such time as the Secretary publishes such guidance or regulation, each
compounding manufacturer shall retain such summaries as part of the records to
be maintained in accordance with subparagraph (C).
(ii)
Product quality
reporting requirement
Not later than 3 calendar days after the
compounding manufacturer becomes aware of information pertaining to sterility,
stability, or other product quality concerns that could result in serious
adverse events, the compounding manufacturer shall submit to the Secretary a
product quality report, in a form and manner established by the Secretary by
guidance or regulation.
(C)
Maintenance of
records
A compounding manufacturer shall maintain for a period of
10 years records of all serious adverse drug events known to the compound
manufacturer in accordance with section 314.80(i) of title 21, Code of Federal
Regulations (or any successor regulation), or as otherwise directed by the
Secretary in regulations.
(4)
Labeling of
drugs
(A)
Label
The
label of a drug compounded by a compounding manufacturer shall include—
(i) the statement This
is a compounded drug. or a reasonable comparable alternative statement
(as specified by the Secretary) that prominently identifies the drug as a
compounded drug;
(ii) the name, address, and
phone number of the applicable compounding manufacturer; and
(iii) with respect to the
compounded drug—
(I) the lot or batch
number;
(II) the established name of
the medication;
(III) the dosage form and
strength;
(IV) the statement of
quantity or volume, as appropriate;
(V) the date that the drug
was compounded;
(VI) the expiration
date;
(VII) storage and handling
instructions;
(VIII) the National Drug Code
number, if available;
(IX) the not for
resale statement as required by subsection (f)(3); and
(X) subject to subparagraph
(B)(i), a list of active and inactive ingredients, identified by established
name and the quantity or proportion of each ingredient.
(B)
Container
The
container from which the individual units of a drug compounded by a compounding
manufacturer are removed for dispensing or for administration (such as a
plastic bag containing individual product syringes) shall include—
(i) the information described
under subparagraph (A)(iii)(X), if there is not space on the label for such
information;
(ii) the following
information to facilitate adverse event reporting: www.fda.gov/medwatch and
1–800-FDA-1088; and
(iii) the directions for use,
including, as appropriate, dosage and administration.
(C)
Additional
information
The label and labeling of a drug compounded by a
compounding manufacturer shall include any other information as determined
necessary and specified in regulations promulgated by the Secretary.
(h)
Compounding
manufacturer establishment and reinspection fees
(1)
Definitions
In
this subsection—
(A) the term
affiliate has the meaning given such term in section
735(11);
(B) the term gross
annual sales means the total worldwide gross annual sales, in United
States dollars, for a compounding manufacturer, including the sales of all the
affiliates of the compounding manufacturer; and
(C) the term
reinspection means, with respect to a compounding manufacturer, 1
or more inspections conducted under section 704 subsequent to an inspection
conducted under such provision which identified noncompliance materially
related to an applicable requirement of this Act, specifically to determine
whether compliance has been achieved to the Secretary’s satisfaction.
(2)
Establishment and
reinspection fees
(A)
In
general
For fiscal year 2015 and each subsequent fiscal year, the
Secretary shall, in accordance with this subsection, assess and collect—
(i) an annual establishment
fee from each compounding manufacturer; and
(ii) a reinspection fee from
each compounding manufacturer subject to a reinspection in such fiscal
year.
(B)
Multiple
reinspections
A compounding manufacturer subject to multiple
reinspections in a fiscal year shall be subject to a reinspection fee for each
reinspection.
(3)
Establishment and
reinspection fee setting
The Secretary shall establish the
establishment and reinspection fee to be collected under this subsection for
each fiscal year, based on the methodology described in paragraph (4) and shall
publish such fee in a Federal Register notice not later than 60 calendar days
before the start of each such year.
(4)
Amount of establishment
fee and reinspection fee
(A)
In
general
For each compounding manufacturer in a fiscal
year—
(i) except as provided in
subparagraph (D), the amount of the annual establishment fee under paragraph
(2) shall be equal to the sum of—
(I) $15,000, multiplied by
the inflation adjustment factor described in subparagraph (B); plus
(II) the small business
adjustment factor described in subparagraph (C); and
(ii) the amount of any
reinspection fee (if applicable) under paragraph (2) shall be equal to $15,000,
multiplied by the inflation adjustment factor described in subparagraph
(B).
(B)
Inflation adjustment
factor
(i)
In
general
For fiscal year 2015 and subsequent fiscal years, the fee
amounts established in subparagraph (A) shall be adjusted by the Secretary by
notice, published in the Federal Register, for a fiscal year by the amount
equal to the sum of—
(I) one;
(II) the average annual
percent change in the cost, per full-time equivalent position of the Food and
Drug Administration, of all personnel compensation and benefits paid with
respect to such positions for the first 3 years of the preceding 4 fiscal
years, 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 3 years of the preceding 4 fiscal years;
and
(III) the average annual
percent change that occurred in the Consumer Price Index for urban consumers
(U.S. City Average; Not Seasonally Adjusted; All items; Annual Index) for the
first 3 years of the preceding 4 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 3 years of the preceding 4 fiscal years.
(ii)
Compounded
basis
The adjustment made each fiscal year under clause (i) shall
be added on a compounded basis to the sum of all adjustments made each fiscal
year after fiscal year 2014 under clause (i).
(C)
Small business
adjustment factor
The small business adjustment factor referred
to subparagraph (A)(i)(II) shall be an amount established by the Secretary for
each fiscal year based on the Secretary’s estimate of—
(i) the number of small
businesses that will pay a reduced establishment fee for such fiscal year;
and
(ii) 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 subparagraph (D).
(D)
Exception for small
businesses
(i)
In
general
In the case of a compounding manufacturer with gross
annual sales of $1,000,000 or less in the 12 months ending April 1 of the
fiscal year immediately preceding the fiscal year in which the fees under this
subsection are assessed, the amount of the establishment fee under paragraph
(2) for a fiscal year shall be equal to 1/3 of the amount
calculated under subparagraph (A)(i)(I) in such fiscal year.
(ii)
Application
To
qualify for the exception under this subparagraph, a small business shall
submit to the Secretary a written request for such exception, in a format
specified by the Secretary in guidance, certifying its gross annual sales for
the 12 months ending April 1 of the fiscal year immediately preceding the
fiscal year in which fees under this subsection are assessed. Any such
application must be submitted to the Secretary not later than April 30 for the
following fiscal year. Any statement or representation made to the Secretary
shall be subject to section 1001 of title 18, United States Code.
(E)
Crediting of
fees
In establishing the small business adjustment factor under
subparagraph (C) for a fiscal year, the Secretary shall 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 year, and consider the need to account for any adjustment of
fees and such other factors as the Secretary determines appropriate.
(5)
Use of
fees
The Secretary shall make all of the fees collected pursuant
to clauses (i) and (ii) of paragraph (2)(A) available solely to pay for the
costs of oversight of compounding manufacturers.
(6)
Supplement not
supplant
Funds received by the Secretary pursuant to this
subsection shall be used to supplement and not supplant any other Federal funds
available to carry out the activities described in this section.
(7)
Crediting and
availability of fees
Fees authorized under this subsection shall
be collected and available for obligation only to the extent and in the amount
provided in advance in appropriations Acts. Such fees are authorized to remain
available until expended. 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 limitation. The sums transferred shall be
available solely for the purpose of paying the costs of oversight of
compounding manufacturers.
(8)
Collection of
fees
(A)
Establishment
fee
A compounding manufacturer shall remit the establishment fee
due under this subsection in a fiscal year when submitting a registration
pursuant to subsection (g) for such fiscal year.
(B)
Reinspection
fee
The Secretary shall specify in the Federal Register notice
described in paragraph (3) the manner in which reinspection fees assessed under
this subsection shall be collected and the timeline for payment of such fees.
Such a fee shall be collected after the Secretary has conducted a reinspection
of the compounding manufacturer involved.
(C)
Effect of failure to
pay fees
(i)
Registration
A
compounding manufacturer shall not be considered registered under subsection
(g) in a fiscal year until the date that the compounding manufacturer remits
the establishment fee under this subsection for such fiscal year.
(ii)
Misbranding
All
drugs manufactured, prepared, propagated, compounded, or processed by a
compounding manufacturer for which any establishment fee or reinspection fee
has not been paid as required by this subsection shall be deemed misbranded
under section 502(cc) until the fees owed for such compounding manufacturer
under this subsection have been paid.
(D)
Collection of unpaid
fees
In any case where the Secretary does not receive payment of
a fee assessed under this subsection within 30 calendar days after it is due,
such fee shall be treated as a claim of the United States Government subject to
provisions of subchapter II of chapter 37 of title 31, United States
Code.
(9)
Annual report to
congress
Not later than 120 calendar days after each fiscal year
in which fees are assessed and collected under this subsection, the Secretary
shall submit a report to the Committee on Health Education Labor and Pensions
of the Senate and the Committee on Energy and Commerce of the House of
Representatives, to include a description of fees assessed and collected for
each year, a summary description of entities paying the fees, and the number of
inspections and reinspections of such entities performed each year.
(10)
Authorization of
appropriations
For fiscal year 2015 and each subsequent fiscal
year, there is authorized to be appropriated for fees under this subsection an
amount equivalent to the total amount of fees assessed for such fiscal year
under this subsection.
(i)
Action by secretary
regarding complaints from state boards of pharmacy
(1)
Identification of
compounding manufacturers
The Secretary shall encourage States to
identify to the Secretary facilities that are licensed by a State as a pharmacy
that appear to be entities that are required to be registered with the
Secretary as a compounding manufacturer.
(2)
Designation
The
Secretary shall designate a point of contact and establish a format and
procedure for a State Board of Pharmacy to notify the Secretary if it appears
to a State Board of Pharmacy that an entity licensed by a State as a pharmacy
is required to be registered with the Secretary as a compounding
manufacturer.
(3)
Determination
If
the Secretary determines that such an entity described in paragraph (2) is
required to be registered with the Secretary as a compounding manufacturer, the
Secretary shall transmit such determination to the State Board of Pharmacy in
the State in which the entity is located, and to the State Board of Pharmacy in
the notifying State, if different, within 15 calendar days of such
determination and shall make such determination publicly available on the
Internet Web site of the Food and Drug Administration.
(4)
Effect
The
Secretary shall encourage direct communications between States regarding
traditional compounders. Nothing in this subsection shall expand the
Secretary’s authority over or responsibility for traditional
compounders.
.
(c)
Prohibited
act
Section 301 (21 U.S.C. 331) is amended—
(1) in subsection (e), by
striking 417, 416, 504 and inserting 417, 416, 503A(g),
504; and
(2) by adding at the end the
following:
(ccc)
(1) The resale of a
compounded drug that is labeled not for resale as required by
section 503A.
(2) The failure to register
in accordance with subsection (g) of section 503A or the failure to submit a
report as required by subsection (g)(2)(B) or (g)(3) of such
section.
.
(d)
Report by
GAO
Not later than November 1, 2016, the Comptroller General of
the United States shall conduct a study and submit to Congress a report on the
safety of animal drug compounding and the availability of safe and effective
drugs for animals.
103.
Other
requirements
(a)
Labeling
Section
502 (21 U.S.C. 352) is amended by adding at the end the following:
(bb) If it is a compounded
drug and the labeling does not include the information as required by
subsections (f)(3) and (g)(4) of section 503A, as applicable.
(cc) If the advertising or
promotion of a compounded drug is false or misleading in any particular.
(dd) If it is a drug, and it
was manufactured, prepared, propagated, compounded, or processed by a
compounding manufacturer for which fees have not been paid as required by
section
503A(g).
.
(b)
Application of
inspection requirements to compounding manufacturers
Section
704(a)(2) (21 U.S.C. 374(a)(2)) is amended by adding at the end the following
flush text:
The
exemption in subparagraph (A) does not apply with respect to compounding
manufacturers (as such term is defined in section
503A).
.
104.
Implementation
(a)
Consultation with
stakeholders
In implementing this title (and the amendments made
by this title), the Secretary of Health and Human Services shall consult with
relevant stakeholders including pharmacists, professional associations, patient
and public health advocacy groups, manufacturers and physicians.
(b)
Regulations
In
promulgating any regulations to implement this title (and the amendments made
by this title), the Secretary of Health and Human Services shall—
(1) issue a notice of
proposed rulemaking that includes the proposed regulation;
(2) provide a period of not
less than 60 calendar days for comments on the proposed regulation; and
(3) publish the final
regulation not more than 18 months following publication of the proposed rule
and not less than 30 calendar days before the effective date of such final
regulation.
105.
Effective
date
This title (and the
amendments made by this title) shall take effect on the date that is 1 year
after the date of enactment of this Act.
II
Drug Supply Chain
Security
201.
Short
title
This title may be cited
as the Drug Supply Chain Security
Act.
202.
Pharmaceutical
distribution supply chain
Chapter V (21 U.S.C. 351 et seq.) is amended
by adding at the end the following:
H
Pharmaceutical
distribution supply chain
581.
Definitions
In this subchapter:
(1)
Authorized
The
term authorized means—
(A) in the case of a
manufacturer or repackager, having a valid registration in accordance with
section 510;
(B) in the case of a
wholesale distributor, having a valid license under State law or section 583,
in accordance with section 582(a)(6) and complying with the licensure reporting
requirements under section 503(e), as amended by the
Drug Supply Chain Security
Act;
(C) in the case of a
third-party logistics provider, having a valid license under State law or
section 584(a)(1), in accordance with section 582(a)(7) and complying with the
licensure reporting requirements under section 584(b); and
(D) in the case of a
dispenser, having a valid license under State law.
(2)
Dispenser
The
term dispenser—
(A) means a retail pharmacy,
hospital pharmacy, a group of chain pharmacies under common ownership and
control that do not act as a wholesale distributor, or any other person
authorized by law to dispense or administer prescription drugs, and the
affiliated warehouses or distribution centers of such entities under common
ownership and control that do not act as a wholesale distributor; and
(B) does not include a person
who dispenses only products to be used in animals in accordance with section
512(a)(5).
(3)
Disposition
The
term disposition, with respect to a product within the possession
or control of an entity, means the removal of such product from the
pharmaceutical distribution supply chain, which may include disposal or return
of the product for disposal or other appropriate handling and other actions,
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 agency.
(4)
Distribute or
distribution
The term distribute or
distribution means the sale, purchase, trade, delivery, handling,
storage, or receipt of a product, and does not include the dispensing of a
product pursuant to a prescription executed in accordance with section
503(b)(1) or the dispensing of a product approved under section 512(b).
(5)
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
repackager, wholesale distributor, or dispenser.
(6)
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 lot.
(7)
Illegitimate
product
The term illegitimate product means a
product for which credible evidence shows that the product—
(A) is counterfeit, diverted,
or stolen;
(B) is intentionally
adulterated such that the product would result in serious adverse health
consequences or death to humans;
(C) is the subject of a
fraudulent transaction; or
(D) appears otherwise unfit
for distribution such that the product could result in serious adverse health
consequence or death to humans.
(8)
Licensed
The
term licensed means—
(A) in the case of a
wholesale distributor, having a valid license in accordance with section 503(e)
or section 582(a)(6), as applicable;
(B) in the case of a
third-party logistics provider, having a valid license in accordance with
section 584(a) or section 582(a)(7), as applicable; and
(C) in the case of a
dispenser, having a valid license under State law.
(9)
Manufacturer
(A)
In
general
The term manufacturer means, with respect to
a product—
(i) a person that holds an
application approved under section 505 or a license issued under section 351 of
the Public Health Service Act for such product, or if such product is not the
subject of an approved application or license, the person who manufactured the
product;
(ii) a co-licensed partner of
the person described in clause (i) that obtains the product directly from a
person described in this clause or clause (i) or (iii); or
(iii) an affiliate of a
person described in clause (i) or (ii) that receives the product directly from
a person described in this clause or clause (i) or (ii).
(B)
Affiliate
For
purposes of this paragraph, the term affiliate means a member of
an affiliated group, as that term is defined in section 1504(a) of the Internal
Revenue Code, or a member of a group of corporations that would constitute an
affiliated group, as so defined, but for the fact that one or more members of
the group is a corporation described in section 1504(b)(3) of the Internal
Revenue Code.
(10)
Package
(A)
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 product.
(B)
Individual saleable
unit
For purposes of this paragraph, 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 dispenser.
(11)
Prescription
drug
The term prescription drug means a drug for
human use subject to section 503(b)(1).
(12)
Product
The
term product means a prescription drug in a finished dosage form
for administration to a patient without substantial further manufacturing (such
as capsules, tablets, and lyophilized products before reconstitution), but for
purposes of section 582, does not include blood or blood components intended
for transfusion, radioactive drugs or radioactive biological products (as
defined in section 600.3(ee) of title 21, Code of Federal Regulations) that are
regulated by the Nuclear Regulatory Commission or by a State pursuant to an
agreement with such Commission under section 274 of the Atomic Energy Act of
1954 (42 U.S.C. 2021), an intravenous product described in clause xiv, xv, or
xvi of paragraph (23), any medical gas (as defined in section 575), or a drug
compounded in compliance with section 503A.
(13)
Product
identifier
The term product identifier means a
standardized graphic that includes, 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 organization, the
standardized numerical identifier, lot number, and expiration date of the
product.
(14)
Quarantine
The
term quarantine means the storage or identification of a product,
to prevent distribution or transfer of the product, in a physically separate
area clearly identified for such use or through other procedures.
(15)
Repackager
The
term repackager means a person who owns or operates an
establishment that repacks and relabels a product or package for further
sale.
(16)
Return
The
term return means providing product to the authorized immediate
trading partner from which such product was purchased, or to a returns
processor or reverse logistics provider for handling of such product.
(17)
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 purchaser,
manufacturer, or seller or disposed of for no further distribution.
(18)
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 patient. 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 need.
(19)
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 (including the particular package
configuration) combined with a unique alphanumeric serial number of up to 20
characters.
(20)
Suspect
product
The term suspect product means a product for
which there is reason to believe that such product—
(A) is potentially
counterfeit, diverted, or stolen;
(B) is potentially
intentionally adulterated such that the product would result in serious adverse
health consequences or death to humans;
(C) is potentially the
subject of a fraudulent transaction; or
(D) appears otherwise unfit
for distribution such that the product would result in serious adverse health
consequences or death to humans.
(21)
Third-party logistics
provider
The term third-party logistics provider
means an entity that provides or coordinates warehousing, or other logistics
services of a product in interstate commerce on behalf of a manufacturer,
wholesale distributor, or dispenser of a product, but does not take ownership
of the product, nor have responsibility to direct the sale or disposition of
the product.
(22)
Trading
partner
The term trading partner means—
(A) a manufacturer,
repackager, wholesale distributor, or dispenser from whom a manufacturer,
repackager, wholesale distributor, or dispenser accepts direct ownership of a
product or to whom a manufacturer, repackager, wholesale distributor, or
dispenser transfers direct ownership of a product; or
(B) a third-party logistics
provider from whom a manufacturer, repackager, wholesale distributor, or
dispenser accepts direct possession of a product or to whom a manufacturer,
repackager, wholesale distributor, or dispenser transfers direct possession of
a product.
(23)
Transaction
(A)
In
general
The term transaction means the transfer of
product between persons in which a change of ownership occurs.
(B)
Exemptions
The
term transaction does not include—
(i) intracompany distribution
of any product between members of an affiliated group (as defined in section
1504(a) of the Internal Revenue Code of 1986) or within a manufacturer;
(ii) the distribution of a
product among hospitals or other health care entities that are under common
control;
(iii) the distribution of a
product for emergency medical reasons including a public health emergency
declaration pursuant to section 319 of the Public Health Service Act, except
that a drug shortage not caused by a public health emergency shall not
constitute an emergency medical reason;
(iv) the dispensing of a
product pursuant to a valid prescription executed in accordance with section
503(b)(1);
(v) the distribution of
product samples by a manufacturer or a licensed wholesale distributor in
accordance with section 503(d);
(vi) the distribution of
blood or blood components intended for transfusion;
(vii) the distribution of
minimal quantities of product by a licensed retail pharmacy to a licensed
practitioner for office use;
(viii) the sale, purchase, or
trade of a drug or an offer to sell, purchase, or trade a drug by a charitable
organization described in section 501(c)(3) of the Internal Revenue Code of
1954 to a nonprofit affiliate of the organization to the extent otherwise
permitted by law;
(ix) the distribution of a
product pursuant to the sale or merger of a pharmacy or pharmacies or a
wholesale distributor or wholesale distributors, 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
distributors;
(x) the dispensing of a
product approved under section 512(b);
(xi) 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 274 of
the Atomic Energy Act of 1954 (42 U.S.C. 2021);
(xii) a combination product
that is—
(I) a product comprised of a
device and 1 or more other regulated components (such as a drug/device,
biologic/device, or drug/device/biologic) that are physically, chemically, or
otherwise combined or mixed and produced as a single entity;
(II) 2 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 product; or
(III) 2 or more finished
medical devices plus one or more drug or biological products which are packaged
together in what is referred to as a medical convenience kit as
described in clause (xiii);
(xiii) the distribution of a
collection of finished medical devices or a collection of finished drug or
biological products assembled in kit form strictly for the convenience of the
purchaser or user (to be known as a medical convenience kit)
if—
(I) 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
510(b)(2);
(II) the person who
manufacturers a medical convenience kit purchased the product contained in the
medical convenience kit directly from the pharmaceutical manufacturer or from a
wholesale distributor that purchased the product directly from the
pharmaceutical manufacturer;
(III) the person who
manufacturers a medical convenience kit does not alter the primary container or
label of the product as purchased from the manufacturer or wholesale
distributor;
(IV) 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 1970;
and
(V) the products contained in
the medical convenience kit are—
(aa) intravenous solutions
intended for the replenishment of fluids and electrolytes;
(bb) products intended to
maintain the equilibrium of water and minerals in the body;
(cc) products intended for
irrigation or reconstitution;
(dd) anesthetics;
(ee) anticoagulants;
(ff) vasopressors; or
(gg) sympathicomimetics;
(xiv) the distribution of an
intravenous product that, by its formulation, is intended for the replenishment
of fluids and electrolytes (such as sodium, chloride, and potassium) or
calories (such as dextrose and amino acids);
(xv) the distribution of an
intravenous product used to maintain the equilibrium of water and minerals in
the body, such as dialysis solutions;
(xvi) the distribution of a
product that is intended for irrigation or reconstitution, or sterile water,
whether intended for such purposes or for injection;
(xvii) the distribution of a
medical gas (as defined in section 575); or
(xviii) the distribution or
sale of any licensed product under section 351 of the Public Health Service Act
that meets the definition of a device under section 201(h).
(24)
Transaction
history
The term transaction history means a
statement in paper or electronic form, including the transaction information
for each prior transaction going back to the manufacturer of the
product.
(25)
Transaction
information
The term transaction information
means—
(A) the proprietary or
established name or names of the product;
(B) the strength and dosage
form of the product;
(C) the National Drug Code
number of the product;
(D) the container
size;
(E) the number of
containers;
(F) the lot number of the
product;
(G) the date of the
transaction;
(H) the date of the shipment,
if different from the date of the transaction;
(I) the business name and
address of the person from whom ownership is being transferred; and
(J) the business name and
address of the person to whom ownership is being transferred.
(26)
Transaction
statement
The transaction statement is a statement,
in paper or electronic form, that the entity transferring ownership in a
transaction—
(A) is authorized as required
under the Drug Supply Chain Security
Act;
(B) received the product from
a person that is authorized as required under the
Drug Supply Chain Security
Act;
(C) received transaction
information and a transaction statement from the prior owner of the product, as
required under section 582;
(D) did not knowingly ship a
suspect or illegitimate product;
(E) had systems and processes
in place to comply with verification requirements under section 582;
(F) did not knowingly provide
false transaction information; and
(G) did not knowingly alter
the transaction history.
(27)
Verification or
verify
The term verification or
verify means determining whether the product identifier affixed
to, or imprinted upon, 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 repackager, as applicable in accordance
with section 582.
(28)
Wholesale
distributor
The term wholesale distributor means a
person (other than a manufacturer, a manufacturer's co-licensed partner, a
third-party logistics provider, or repackager) engaged in wholesale
distribution (as defined in section 503(e)(4), as amended by the
Drug Supply Chain Security
Act).
582.
Requirements
(a)
In general
(1)
Other
activities
Each manufacturer, repackager, wholesale distributor,
third-party logistics provider, and dispenser shall comply with the
requirements set forth in this section with respect to the role of such
manufacturer, repackager, wholesale distributor, third-party logistics
provider, or dispenser in a transaction involving product. If an entity meets
the definition of more than one of the entities listed in the preceding
sentence, such entity shall comply with all applicable requirements in this
section, but shall not be required to duplicate requirements.
(2)
Initial
standards
(A)
In
general
The Secretary shall, in consultation with other
appropriate Federal officials, manufacturers, repackagers, wholesale
distributors, third-party logistics providers, dispensers, and other
pharmaceutical distribution supply chain stakeholders, issue a draft guidance
document that establishes standards for the interoperable exchange of
transaction information, transaction history, and transaction statements, in
paper or electronic format, for compliance with subsections (a), (b), (c), (d),
(e), and (f). In establishing such standards, 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
information, transaction history, and transaction statement to the subsequent
purchaser of a product and to facilitate the exchange of lot level data. The
standards established under this paragraph shall take into consideration the
standards established under section 505D and shall comply with a form and
format developed by a widely recognized international standards development
organization.
(B)
Public
input
Prior to issuing the draft guidance under subparagraph (A),
the Secretary shall gather comments and information from stakeholders and
maintain such comments and information in a public docket for at least 60 days
prior to issuing such guidance.
(C)
Publication
The
Secretary shall publish the standards established under subparagraph (A) not
later than 1 year after the date of enactment of the
Drug Supply Chain Security
Act.
(3)
Waivers, exceptions,
and exemptions
(A)
In
general
Not later than 2 years after the date of enactment of the
Drug Supply Chain Security Act,
the Secretary shall, by guidance—
(i) establish a process by
which an authorized manufacturer, repackager, wholesale distributor, or
dispenser may request a waiver from any of the requirements set forth in this
section if the Secretary determines that such requirements would result in an
undue economic hardship or for emergency medical reasons, including a public
health emergency declaration pursuant to section 319 of the Public Health
Service Act;
(ii) establish a process by
which the Secretary determines exceptions, and a process through which a
manufacturer or repackager may request such an exception, 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 section; and
(iii) establish a process by
which the Secretary may determine other products or transactions that shall be
exempt from the requirements of this section.
(B)
Content
The
guidance issued under subparagraph (A) shall include a process for the biennial
review and renewal of such waivers, exceptions, and exemptions, as
applicable.
(C)
Process
In
issuing the guidance under this paragraph, the Secretary shall provide an
effective date that is not later than 180 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 section.
(4)
Self-executing
requirements
Except where otherwise specified, the requirements
of this section may be enforced without further regulations or guidance from
the Secretary.
(5)
Grandfathering
product
(A)
Product
identifier
Not later than 2 years after the date of enactment of
the Drug Supply Chain Security
Act, 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 section.
(B)
Tracing
For
a product that entered the pharmaceutical distribution supply chain prior to
the date that is 1 year after the date of enactment of the
Drug Supply Chain Security
Act—
(i) authorized trading
partners shall be exempt from providing transaction information as required
under subsections (b)(1)(A)(i), (c)(1)(A)(ii), (d)(1)(A)(ii), and
(e)(1)(A)(ii);
(ii) transaction history
required under this section shall begin with the owner of such product on such
date; and
(iii) 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 section.
(6)
Wholesale distributor
licenses
Notwithstanding section 581(8)(A), until the effective
date of the wholesale distributor licensing regulations under section 583, the
term licensed or authorized, as it relates to a
wholesale distributor with respect to prescription drugs, shall mean a
wholesale distributor with a valid license under State law.
(7)
Third-party logistics
provider licenses
Until the effective date of the third-party
logistics provider licensing regulations under section 584, a third-party
logistics provider shall be considered licensed under section
581(8)(B) unless the Secretary has made a finding that the third-party
logistics provider does not utilize good handling and distribution practices
and publishes notice thereof.
(8)
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
establishment, in accordance with section 314.70(d) of chapter 21, Code of
Federal Regulations (or any successor regulation).
(9)
Product
identifiers
With respect to any requirement relating to product
identifiers under this subchapter—
(A) unless the Secretary
allows, through guidance, the use of other technologies for data instead of or
in addition to the technologies described in clauses (i) and (ii), the
applicable data—
(i) shall be included in a
2-dimensional data matrix barcode when affixed to, or imprinted upon, a
package; and
(ii) shall be included in a
linear or 2-dimensional data matrix barcode when affixed to, or imprinted upon,
a homogeneous case; and
(B) verification of the
product identifier may occur by using human-readable or machine-readable
methods.
(b)
Manufacturer
requirements
(1)
Product
tracing
(A)
In
general
Beginning not later than 1 year after the date of
enactment of the Drug Supply Chain Security
Act, a manufacturer shall—
(i) prior to, or at the time
of, each transaction in which such manufacturer transfers—
(I) ownership of a product,
provide the subsequent recipient with transaction history, transaction
information, and a transaction statement, in a single document in an electronic
or paper format; or
(II) possession of a product
to a third-party logistics provider for the purpose of transferring ownership
as part of a transaction to a subsequent recipient, provide to the third-party
logistics provider the transaction history, transaction information, and a
transaction statement for such transaction to a subsequent recipient;
and
(ii) maintain the transaction
information, transaction history, and transaction statement for each
transaction for not less than 6 years after the date of the transaction.
(B)
Requests for
information
Upon a request by the Secretary or other appropriate
Federal or State official, in the event of a recall or for the purpose of
investigating a suspect product or an illegitimate product, a manufacturer
shall, not later than 24 hours after receiving the request or in other such
reasonable time as determined by the Secretary, based on the circumstances of
the request, provide the applicable transaction information, transaction
history, and transaction statement for the product.
(2)
Product
identifier
Beginning not later than 4 years after the date of
enactment of the Drug Supply Chain Security
Act, 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 commerce. Such manufacturer shall maintain the product
identifier information for such product for not less than 6 years after the
date of the transaction.
(3)
Authorized trading
partners
Beginning not later than 1 year after the date of
enactment of the Drug Supply Chain Security
Act, the trading partners of a manufacturer may be only
authorized trading partners.
(4)
Verification
Beginning
not later than 1 year after the date of enactment of the
Drug Supply Chain Security Act,
a manufacturer shall have systems in place to enable the manufacturer to comply
with the following requirements:
(A)
Suspect
product
(i)
In
general
Upon making a determination that a product in the
possession or control of the manufacturer is a suspect product, 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 product, a manufacturer shall—
(I) quarantine such product
within the possession or control of the manufacturer from product intended for
distribution until such product is cleared or dispositioned; and
(II) promptly conduct an
investigation in coordination with trading partners, as applicable, to
determine whether the product is an illegitimate product, 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 product, and, beginning 4 years after
the date of enactment of the Drug Supply
Chain Security Act, verifying the product at the package level,
including the standardized numerical identifier.
(ii)
Cleared
product
If the manufacturer makes the determination that a
suspect product is not an illegitimate product, the manufacturer shall promptly
notify the Secretary, if applicable, of such determination and such product may
be further distributed.
(iii)
Records
A
manufacturer shall keep records of the investigation of a suspect product for
not less than 6 years after the conclusion of the investigation.
(B)
Illegitimate
product
(i)
In
general
Upon determining that a product in the possession or
control of a manufacturer is an illegitimate product, the manufacturer shall,
in a manner consistent with the systems and processes of such
manufacturer—
(I) quarantine such product
within the possession or control of the manufacturer from product intended for
distribution until such product is dispositioned;
(II) disposition the
illegitimate product within the possession or control of the
manufacturer;
(III) take reasonable and
appropriate steps to assist a trading partner to disposition an illegitimate
product not in the possession or control of the manufacturer; and
(IV) retain a sample of the
product for further physical examination or laboratory analysis of the product
by the manufacturer or Secretary (or other appropriate Federal or State
official) upon request by the Secretary (or other appropriate Federal or State
official), as necessary and appropriate.
(ii)
Making a
notification
(I)
Illegitimate
product
Upon determining that a product in the possession or
control of the manufacturer is an illegitimate product, 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 24 hours after making such determination.
(II)
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 by, or purported to
be a product manufactured by, the manufacturer not later than 24 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 product. For purposes of
this subclause, 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 (i).
(iii)
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 product, a manufacturer shall identify all
illegitimate product subject to such notification that is in the possession or
control of the manufacturer, including any product that is subsequently
received, and shall perform the activities described in subparagraph
(A).
(iv)
Terminating a
notification
Upon making a determination, in consultation with
the Secretary, that a notification is no longer necessary, a manufacturer shall
promptly notify immediate trading partners that the manufacturer notified
pursuant to clause (ii) that such notification has been terminated.
(v)
Records
A
manufacturer shall keep records of the disposition of an illegitimate product
for not less than 6 years after the conclusion of the disposition.
(C)
Requests for
verification
Beginning 4 years after the date of enactment of the
Drug Supply Chain Security Act,
upon receiving a request for verification from an authorized repackager,
wholesale distributor, or dispenser that is in possession or control of a
product such person believes to be manufactured by such manufacturer, a
manufacturer shall, not later than 24 hours after receiving the verification
request or in other such reasonable time as determined by the Secretary, based
on the circumstances of the request, notify the person making the request
whether the product identifier, including the standardized numerical
identifier, that is the subject of the request corresponds to the product
identifier affixed or imprinted by the manufacturer. If a manufacturer
responding to a verification request identifies a product identifier that does
not correspond to that affixed or imprinted by the manufacturer, the
manufacturer shall treat such product as suspect product and conduct an
investigation as described in subparagraph (A). If the manufacturer has reason
to believe the product is an illegitimate product, the manufacturer shall
advise the person making the request of such belief at the time such
manufacturer responds to the verification request.
(D)
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 entity. 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 chain, as appropriate. The development and operation of
such a database shall not relieve a manufacturer of the requirement under this
paragraph to respond to a verification request submitted by means other than a
secure electronic database.
(E)
Saleable returned
product
Beginning 4 years after the date of enactment of the
Drug Supply Chain Security Act
(except as provided pursuant to subsection (a)(5)), upon receipt of a returned
product that the manufacturer intends to further distribute, before further
distributing such product, the manufacturer shall verify the product
identifier, including the standardized numerical identifier, for each sealed
homogeneous case of such product or, if such product is not in a sealed
homogeneous case, verify the product identifier, including the standardized
numerical identifier, on each package.
(F)
Nonsaleable returned
product
A manufacturer may return a nonsaleable product to the
manufacturer or repackager, to the wholesale distributor from whom such product
was purchased, or to a person acting on behalf of such a person, including a
returns processor, without providing the information described in paragraph
(1)(A)(i).
(c)
Wholesale distributor
requirements
(1)
Product
tracing
(A)
In
general
Beginning not later than 1 year after the date of
enactment of the Drug Supply Chain Security
Act, the following requirements shall apply to wholesale
distributors:
(i) A wholesale distributor
shall not accept ownership of a product unless the previous owner prior to, or
at the time of, the transaction provides the transaction history, transaction
information, and a transaction statement for the product, as applicable under
this subparagraph.
(ii)
(I)
(aa) If the wholesale
distributor purchased a product directly from the manufacturer, the exclusive
distributor of the manufacturer, or a repackager that purchased directly from
the manufacturer, then prior to, or at the time of, each transaction in which
the wholesale distributor transfers ownership of a product, the wholesale
distributor shall provide to the subsequent purchaser—
(AA) a transaction statement,
which shall state that such wholesale distributor, or a member of the
affiliated group of such wholesale distributor, purchased the product directly
from the manufacturer, exclusive distributor of the manufacturer, or repackager
that purchased directly from the manufacturer; and
(BB) subject to subclause
(II), the transaction history and transaction information.
(bb) The wholesale
distributor shall provide the transaction history, transaction information, and
transaction statement under item (aa)—
(AA) if provided to a
dispenser, on a single document in an electronic or paper format; and
(BB) if provided to a
wholesale distributor, through any combination of self-generated paper,
electronic data, or manufacturer-provided information on the product
package.
(II) For purposes of
transactions described in subclause (I), transaction history and transaction
information shall not be required to include the lot number of the product, the
initial transaction date, or the initial shipment date from the manufacturer
(as defined in subparagraphs (F), (G), and (H) of section 581(25)).
(iii) If the wholesale
distributor did not purchase a product directly from the manufacturer, the
exclusive distributor of the manufacturer, or a repackager that purchased
directly from the manufacturer, as described in clause (ii), then prior to, or
at the time of, each transaction or subsequent transaction, the wholesale
distributor shall provide to the subsequent purchaser a transaction statement,
transaction history, and transaction information, in a paper or electronic
format that complies with the guidance document issued under subsection
(a)(2).
(iv) For the purposes of
clause (iii), the transaction history supplied shall begin only with the
wholesale distributor described in clause (ii)(I), but the wholesale
distributor described in clause (iii) shall inform the subsequent purchaser
that such wholesale distributor received a direct purchase statement from a
wholesale distributor described in clause (ii)(I).
(v) A wholesale distributor
shall maintain the transaction information, transaction history, and
transaction statement for each transaction described in clauses (i), (ii), and
(iii) for not less than 6 years after the date of the transaction.
(B)
Returns
(i)
Saleable
returns
Notwithstanding subparagraph (A)(i), the following shall
apply:
(I)
Requirements
Until
the date that is 6 years after the date of enactment of the
Drug Supply Chain Security Act
(except as provided pursuant to subsection (a)(5)), a wholesale distributor may
accept returned product from a dispenser pursuant to the terms and conditions
of any agreement between the parties, and, notwithstanding subparagraph
(A)(ii), may distribute such returned product without providing the transaction
history. For transactions subsequent to the return, the transaction history of
such product shall begin with the wholesale distributor that accepted the
returned product, consistent with the requirements of this subsection.
(II)
Enhanced
requirements
Beginning 6 years after the date of enactment of the
Drug Supply Chain Security Act
(except as provided pursuant to subsection (a)(5)), a wholesale distributor may
accept returned product from a dispenser only if the wholesale distributor can
associate returned product with the transaction information and transaction
statement associated with that product. For all transactions after such date,
the transaction history, as applicable, of such product shall begin with the
wholesale distributor that accepted and verified the returned product. For
purposes of this subparagraph, the transaction information and transaction
history, as applicable, need not include transaction dates if it is not
reasonably practicable to obtain such dates.
(ii)
Nonsaleable
returns
A wholesale distributor may return a nonsaleable
prescription drug to the manufacturer or repackager, to the wholesale
distributor from whom such prescription drug was purchased, or to a person
acting on behalf of such a person, including a returns processor, without
providing the information required under subparagraph (A)(i).
(C)
Requests for
information
Upon a request by the Secretary or other appropriate
Federal or State official, in the event of a recall or for the purpose of
investigating a suspect product or an illegitimate product a wholesale
distributor shall, not later than 24 hours after receiving the request or in
other such reasonable time as determined by the Secretary, based on the
circumstances of the request, provide the applicable transaction information,
transaction history, and transaction statement for the product.
(2)
Product
identifier
Beginning 6 years after the date of enactment of the
Drug Supply Chain Security Act,
a wholesale distributor may engage in transactions involving a product only if
such product is encoded with a product identifier (except as provided pursuant
to subsection (a)(5)).
(3)
Authorized trading
partners
Beginning not later than 1 year after the date of
enactment of the Drug Supply Chain Security
Act, the trading partners of a wholesale distributor may be only
authorized trading partners.
(4)
Verification
Beginning
not later than 1 year after the date of enactment of the
Drug Supply Chain Security Act,
a wholesale distributor shall have systems in place to enable the wholesale
distributor to comply with the following requirements:
(A)
Suspect
product
(i)
In
general
Upon making a determination that a product in the
possession or control of the wholesale distributor is a suspect product, 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 product, a wholesale distributor shall—
(I) quarantine such product
within the possession or control of the wholesale distributor from product
intended for distribution until such product is cleared or dispositioned;
and
(II) promptly conduct an
investigation in coordination with trading partners, as applicable, to
determine whether the product is an illegitimate product, 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 product, and, beginning 6
years after the date of enactment of the Drug
Supply Chain Security Act (except as provided pursuant to
subsection (a)(5)), verifying the product at the package level, including the
standardized numerical identifier.
(ii)
Cleared
product
If the wholesale distributor determines that a suspect
product is not an illegitimate product, the wholesale distributor shall
promptly notify the Secretary, if applicable, of such determination and such
product may be further distributed.
(iii)
Records
A
wholesale distributor shall keep records of the investigation of a suspect
product for not less than 6 years after the conclusion of the
investigation.
(B)
Illegitimate
product
(i)
In
general
Upon determining, in coordination with the manufacturer,
that a product in the possession or control of a wholesale distributor is an
illegitimate product, the wholesale distributor shall, in a manner that is
consistent with the systems and processes of such wholesale distributor—
(I) quarantine such product
within the possession or control of the wholesale distributor from product
intended for distribution until such product is dispositioned;
(II) disposition the
illegitimate product within the possession or control of the wholesale
distributor;
(III) take reasonable and
appropriate steps to assist a trading partner to disposition an illegitimate
product not in the possession or control of the wholesale distributor;
and
(IV) retain a sample of the
product for further physical examination or laboratory analysis of the product
by the manufacturer or Secretary (or other appropriate Federal or State
official) upon request by the manufacturer or Secretary (or other appropriate
Federal or State official), as necessary and appropriate.
(ii)
Making a
notification
Upon determining that a product in the possession or
control of the wholesale distributor is an illegitimate product, 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 24 hours after making
such determination.
(iii)
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 product, a wholesale distributor shall identify all
illegitimate product subject to such notification that is in the possession or
control of the wholesale distributor, including any product that is
subsequently received, and shall perform the activities described in
subparagraph (A).
(iv)
Terminating a
notification
Upon a determination, in consultation with the
Secretary, that a notification is no longer necessary, a wholesale distributor
shall promptly notify immediate trading partners that the wholesale distributor
notified pursuant to clause (ii) that such notification has been
terminated.
(v)
Records
A
wholesale distributor shall keep records of the disposition of an illegitimate
product for not less than 6 years after the conclusion of the
disposition.
(C)
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 entity. 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 chain, as appropriate. 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 database.
(D)
Verification of
saleable returned product
Beginning 6 years after the date of
enactment of the Drug Supply Chain Security
Act, upon receipt of a returned product that the wholesale
distributor intends to further distribute, before further distributing such
product, the wholesale distributor shall verify the product identifier,
including the standardized numerical identifier, for each sealed homogeneous
case of such product or, if such product is not in a sealed homogeneous case,
verify the product identifier, including the standardized numerical identifier,
on each package.
(d)
Dispenser
requirements
(1)
Product
tracing
(A)
In
general
Beginning 1 year after the date of enactment of the
Drug Supply Chain Security Act,
a dispenser—
(i) shall not accept
ownership of a product, unless the previous owner prior to, or at the time of,
the transaction, provides transaction history, transaction information, and a
transaction statement;
(ii) prior to, or at the time
of, each transaction in which the dispenser transfers ownership of a product
(but not including dispensing to a patient or returns) shall provide the
subsequent owner with transaction history, transaction information, and a
transaction statement for the product, except that the requirements of this
clause shall not apply to sales by a dispenser to another dispenser to fulfill
a specific patient need; and
(iii) shall maintain
transaction information, transaction history, and transaction statements, as
necessary to investigate a suspect product, for not less than 6 years after the
transaction.
(B)
Agreements with third
parties
A dispenser may enter into a written agreement with a
third party, including an authorized wholesale distributor, under which the
third party confidentially maintains the transaction information, transaction
history, and transaction statements required to be maintained under this
subsection on behalf of the dispenser. If a dispenser enters into such an
agreement, the dispenser shall maintain a copy of the written agreement and
shall not be relieved of the obligations of the dispenser under this
subsection.
(C)
Returns
(i)
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 (A).
(ii)
Nonsaleable
returns
A dispenser may return a nonsaleable product to the
manufacturer or repackager, to the wholesale distributor from whom such product
was purchased, to a returns processor, or to a person acting on behalf of such
a person without providing the information required under subparagraph
(A)(i).
(D)
Requests for
information
Upon a request by the Secretary or other appropriate
Federal or State official, in the event of a recall or for the purpose of
investigating a suspect or an illegitimate product, a dispenser shall, not
later than 2 business days after receiving the request or in another such
reasonable time as determined by the Secretary, based on the circumstances of
the request, provide the applicable transaction information, transaction
statement, and transaction history which the dispenser received from the
previous owner, which shall not include the lot number of the product, the
initial transaction date, or the initial shipment date from the manufacturer
unless such information was included in the transaction information,
transaction statement, and transaction history provided by the manufacturer or
wholesale distributor to the dispenser. The dispenser may respond to the
request by providing the applicable information in either paper or electronic
format.
(2)
Product
identifier
Beginning not later than 7 years after the date of
enactment of the Drug Supply Chain Security
Act, a dispenser may engage in transactions involving a product
only if such product is encoded with a product identifier (except as provided
pursuant to subsection (a)(5)).
(3)
Authorized trading
partners
Beginning not later than 1 year after the date of
enactment of the Drug Supply Chain Security
Act, the trading partners of a dispenser may be only authorized
trading partners.
(4)
Verification
Beginning
not later than 1 year after the date of enactment of the
Drug Supply Chain Security Act,
a dispenser shall have systems in place to enable the dispenser to comply with
the following requirements:
(A)
Suspect
product
(i)
In
general
Upon making a determination that a product in the
possession or control of the dispenser is a suspect product, 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
product, a dispenser shall—
(I) quarantine such product
within the possession or control of the dispenser from product intended for
distribution until such product is cleared or dispositioned; and
(II) promptly conduct an
investigation in coordination with trading partners, as applicable, to
determine whether the product is an illegitimate product.
(ii)
Investigation
An
investigation conducted under clause (i)(II) shall include—
(I) beginning 7 years after
the date of enactment of the Drug Supply
Chain Security Act, verifying whether the lot number of a suspect
product corresponds with the lot number for such product;
(II) beginning 7 years after
the date of enactment of such Act, verifying that the product identifier,
including the standardized numerical identifier, of at least 3 packages or 10
percent of such suspect product, whichever is greater, or all packages, if
there are fewer than 3, corresponds with the product identifier for such
product;
(III) validating any
applicable transaction history and transaction information in the possession of
the dispenser; and
(IV) otherwise investigating
to determine whether the product is an illegitimate product.
(iii)
Cleared
product
If the dispenser makes the determination that a suspect
product is not an illegitimate product, the dispenser shall promptly notify the
Secretary, if applicable, of such determination and such product may be further
distributed or dispensed.
(iv)
Records
A
dispenser shall keep records of the investigation of a suspect product for not
less than 6 years after the conclusion of the investigation.
(B)
Illegitimate
product
(i)
In
general
Upon determining, in coordination with the manufacturer,
that a product in the possession or control of a dispenser is an illegitimate
product, the dispenser shall—
(I) disposition the
illegitimate product within the possession or control of the dispenser;
(II) take reasonable and
appropriate steps to assist a trading partner to disposition an illegitimate
product not in the possession or control of the dispenser; and
(III) retain a sample of the
product for further physical examination or laboratory analysis of the product
by the manufacturer or Secretary (or other appropriate Federal or State
official) upon request by the manufacturer or Secretary (or other appropriate
Federal or State official), as necessary and appropriate.
(ii)
Making a
notification
Upon determining that a product in the possession or
control of the dispenser is an illegitimate product, 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 24 hours after making such determination.
(iii)
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 product, a dispenser shall identify all illegitimate
product subject to such notification that is in the possession or control of
the dispenser, including any product that is subsequently received, and shall
perform the activities described in subparagraph (A).
(iv)
Terminating a
notification
Upon making a determination, in consultation with
the Secretary, that a notification is no longer necessary, a dispenser shall
promptly notify immediate trading partners that the dispenser notified pursuant
to clause (ii) that such notification has been terminated.
(v)
Records
A
dispenser shall keep records of the disposition of an illegitimate product for
not less than 6 years after the conclusion of the disposition.
(C)
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 entity.
(e)
Repackager
requirements
(1)
Product
tracing
(A)
In
general
Beginning not later than 1 year after the date of
enactment of the Drug Supply Chain Security
Act, a repackager shall—
(i) not accept ownership of a
product unless the previous owner, prior to, or at the time of, the
transaction, provides transaction history, transaction information, and a
transaction statement for the product;
(ii) prior to, or at the time
of, each transaction in which the repackager transfers ownership of a product,
or transfers possession of a product to a third-party logistics provider,
provide the subsequent owner with transaction history, transaction information,
and a transaction statement; and
(iii) maintain the
transaction information, transaction history, and transaction statement for
each transaction described in clauses (i) and (ii) for not less than 6 years
after the transaction.
(B)
Nonsaleable
returns
A repackager may return a nonsaleable product to the
manufacturer or repackager, or to the wholesale distributor from whom such
product was purchased, or to a person acting on behalf of such a person,
including a returns processor, without providing the information required under
subparagraph (A)(ii).
(C)
Requests for
information
Upon a request by the Secretary or other appropriate
Federal or State official, in the event of a recall or for the purpose of
investigating a suspect product or an illegitimate product, a repackager shall,
not later than 24 hours after receiving the request or in other such reasonable
time as determined by the Secretary, based on the circumstances of the request,
provide the applicable transaction information, transaction history and
transaction statement for the product.
(2)
Product
identifier
Beginning not later than 5 years after the date of
enactment of the Drug Supply Chain Security
Act, a repackager—
(A) shall affix or imprint a
product identifier to each package and homogenous case of product intended to
be introduced in a transaction in commerce;
(B) shall maintain the
product identifier information for such product for not less than 6 years after
the date of the transaction;
(C) may engage in
transactions involving a product only if such product is encoded with a product
identifier (except as provided pursuant to subsection (a)(5)); and
(D) maintain records for not
less than 6 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 product.
(3)
Authorized trading
partners
Beginning 1 year after the date of enactment of the
Drug Supply Chain Security Act,
the trading partners of a repackager may be only authorized trading
partners.
(4)
Verification
Beginning
not later than 1 year after the date of enactment of the
Drug Supply Chain Security Act,
a repackager shall have systems in place to enable the repackager to comply
with the following requirements:
(A)
Suspect
product
(i)
In
general
Upon making a determination that a product in the
possession or control of the repackager is a suspect product, 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
product, a repackager shall—
(I) quarantine such product
within the possession or control of the repackager from product intended for
distribution until such product is cleared or dispositioned; and
(II) promptly conduct an
investigation in coordination with trading partners, as applicable, to
determine whether the product is an illegitimate product, 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 product, and, beginning 5 years after
the date of enactment of the Drug Supply
Chain Security Act (except as provided pursuant to subsection
(a)(5)), verifying the product at the package level, including the standardized
numerical identifier.
(ii)
Cleared
product
If the repackager makes the determination that a suspect
product is not an illegitimate product, the repackager shall promptly notify
the Secretary, if applicable, of such determination and such product may be
further distributed.
(iii)
Records
A
repackager shall keep records of the investigation of a suspect product for not
less than 6 years after the conclusion of the investigation.
(B)
Illegitimate
product
(i)
In
general
Upon determining, in coordination with the manufacturer,
that a product in the possession or control of a repackager is an illegitimate
product, the repackager shall, in a manner that is consistent with the systems
and processes of such repackager—
(I) quarantine such product
within the possession or control of the repackager from product intended for
distribution until such product is dispositioned;
(II) disposition the
illegitimate product within the possession or control of the repackager;
(III) take reasonable and
appropriate steps to assist a trading partner to disposition an illegitimate
product not in the possession or control of the repackager; and
(IV) retain a sample of the
product for further physical examination or laboratory analysis of the product
by the manufacturer or Secretary (or other appropriate Federal or State
official) upon request by the manufacturer or Secretary (or other appropriate
Federal or State official), as necessary and appropriate.
(ii)
Making a
notification
Upon determining that a product in the possession or
control of the repackager is an illegitimate product, 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 24 hours after making such determination.
(iii)
Responding to a
notification
Upon the receipt of a notification from the
Secretary or a trading partner, a repackager shall identify all illegitimate
product subject to such notification that is in the possession or control of
the repackager, including any product that is subsequently received, and shall
perform the activities described in subparagraph (A).
(iv)
Terminating a
notification
Upon a determination, in consultation with the
Secretary, that a notification is no longer necessary, a repackager shall
promptly notify immediate trading partners that the repackager notified
pursuant to clause (ii) that such notification has been terminated.
(v)
Records
A
repackager shall keep records of the disposition of an illegitimate product for
not less than 6 years after the conclusion of the disposition.
(C)
Requests for
verification
Beginning 5 years after the date of enactment of the
Drug Supply Chain Security Act,
upon receiving a request for verification from an authorized manufacturer,
wholesale distributor, or dispenser that is in possession or control of a
product they believe to be repackaged by such repackager, a repackager shall,
not later than 24 hours after receiving the verification request or in other
such reasonable time as determined by the Secretary, based on the circumstances
of the request, notify the person making the request whether the product
identifier, including the standardized numerical identifier, that is the
subject of the request corresponds to the product identifier affixed or
imprinted by the repackager. If a repackager responding to a verification
request identifies a product identifier that does not correspond to that
affixed or imprinted by the repackager, the repackager shall treat such product
as suspect product and conduct an investigation as described in subparagraph
(A). If the repackager has reason to believe the product is an illegitimate
product, the repackager shall advise the person making the request of such
belief at the time such manufacturer responds to the verification
request.
(D)
Electronic
database
A repackager may satisfy the requirements of paragraph
(4) by developing a secure electronic database or utilizing a secure electronic
database developed or operated by another entity. 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 chain, as appropriate. The development and operation of such a database
shall not relieve a repackager of the requirement under subparagraph (C) to
respond to a verification request submitted by means other than a secure
electronic database.
(E)
Verification of
saleable returned product
Beginning 5 years after the date of
enactment of the Drug Supply Chain Security
Act, upon receipt of a returned product that the repackager
intends to further distribute, before further distributing such product, the
repackager shall verify the product identifier for each sealed homogeneous case
of such product or, if such product is not in a sealed homogeneous case, verify
the product identifier on each package.
(f)
Third-party logistics
provider requirements
(1)
In
general
Beginning not later than 1 year after the date of
enactment of the Drug Supply Chain Security
Act, a third-party logistics provider shall—
(A) not accept possession of
a product unless the owner of the product provides the transaction history,
transaction information, and a transaction statement for the product;
(B) maintain a copy of the
information described in subparagraph (A) for not less than 6 years after the
transfer of possession; and
(C) upon a request by the
Secretary or other appropriate Federal or State official, in the event of a
recall or for the purpose of investigating a suspect product or an illegitimate
product, not later than 24 hours after receiving the request or in other such
reasonable time as determined by the Secretary based on the circumstances of
the request, provide the applicable transaction information, transaction
history, and transaction statement for the product.
(2)
Product
tracing
Beginning not later than 6 years after the date of
enactment of the Drug Supply Chain Security
Act, a third-party logistics provider may accept possession of
product only if such product is encoded with a product identifier (except as
provided pursuant to subsection (a)(5)).
(3)
Authorized trading
partners
Beginning 1 year after the date of enactment of the
Drug Supply Chain Security Act,
the trading partners of a third-party logistics provider may be only authorized
trading partners.
(4)
Verification
Beginning
not later than 1 year after the date of enactment of the
Drug Supply Chain Security Act,
a third-party logistics provider shall have systems in place to enable the
third-party logistics provider to comply with the following
requirements:
(A)
Suspect
product
(i)
In
general
Upon making a determination that a product in the
possession or control of a third-party logistics provider is a suspect product,
a third-party logistics provider shall—
(I) quarantine such product
within the possession or control of the third-party logistics provider from
product intended for distribution until such product is cleared or transferred
to the owner of such product for disposition of the product; and
(II) promptly notify the
owner of such product of the need to conduct an investigation to determine
whether the product is an illegitimate product.
(ii)
Cleared
product
If the owner of the product notifies the third-party
logistics provider of the determination that a suspect product is not an
illegitimate product, such product may be further distributed.
(iii)
Records
A
third-party logistics provider shall keep records of the activities described
in subclauses (I) and (II) of clause (i), as such subclauses relate to a
suspect product, for not less than 6 years after the conclusion of the
investigation.
(B)
Illegitimate
product
(i)
In
general
Upon determining, in coordination with the manufacturer,
that a product in the possession or control of a third-party logistics provider
is an illegitimate product, the third-party logistics provider shall—
(I) promptly notify the owner
of such product of the need to disposition such product; and
(II) promptly transfer
possession of the product to the owner of such product to disposition the
product.
(ii)
Making a
notification
Upon determining that a product in the possession or
control of the third-party logistics provider is an illegitimate product, the
third-party logistics provider shall notify the Secretary not later than 24
hours after making such determination.
(iii)
Responding to a
notification
Upon the receipt of a notification from the
Secretary, a third-party logistics provider shall identify all illegitimate
product subject to such notification that is in the possession or control of
the third-party logistics provider, including any product that is subsequently
received, and shall perform the activities described in subparagraph
(A).
(iv)
Terminating a
notification
Upon making a determination, in consultation with
the Secretary and the owner of such product, that a notification is no longer
necessary, a third-party logistics provider shall promptly terminate such
notification.
(v)
Records
A
third-party logistics provider shall keep records of the activities described
in subclauses (I) and (II) of clause (i) as such subclauses relate to an
illegitimate product for not less than 6 years after the conclusion of the
disposition.
(g)
Drop shipments
(1)
In
general
A wholesale distributor that does not physically handle
or store product shall be exempt from the provisions of this section, except
the notification requirements under clauses (ii), (iii), and (iv) of subsection
(c)(4)(B), provided that the manufacturer, repackager, or other wholesale
distributor that distributes the product to the dispenser by means of 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 information, transaction
history, and transaction statement directly to the dispenser.
(2)
Clarification
For
purposes of this subsection, providing administrative services, including
processing of orders and payments, shall not by itself, be construed as being
involved in the handling, distribution, or storage of a
product.
.
203.
Enhanced drug
distribution security
Section
582, as added by section 202, is amended by adding at the end the
following:
(h)
Enhanced drug
distribution security
(1)
In
general
On the date that is 10 years after the date of enactment
of the Drug Supply Chain Security
Act, the following interoperable, electronic tracing of product
at the package level requirements shall go into effect:
(A) The transaction
information and the transaction statements as required under this section shall
be exchanged in a secure, interoperable, electronic manner in accordance with
the standards established under the guidance issued pursuant to paragraphs (3)
and (4) of subsection (i), including any revision of such guidance issued in
accordance with paragraph (5) of such subsection.
(B) The transaction
information required under this section shall include the product identifier at
the package level for each package included in the transaction.
(C) Systems and processes for
verification of product at the package level, including the standardized
numerical identifier, shall be required in accordance with the standards
established under the guidance issued pursuant to subsection (a)(2) and the
guidances issued pursuant to paragraphs (2), (3), and (4) of subsection (i),
including any revision of such guidances issued in accordance with paragraph
(5) of such subsection, which may include the use of aggregation and inference
as necessary.
(D) The systems and processes
necessary to promptly respond with the transaction information and transaction
statement for a product upon a request by the Secretary (or other appropriate
Federal or State official) in the event of a recall or for the purposes of
investigating a suspect product or an illegitimate product shall be
required.
(E) The systems and processes
necessary to promptly facilitate gathering the information necessary to produce
the transaction information for each transaction going back to the
manufacturer, as applicable, shall be required—
(i) in the event of a request
by the Secretary (or other appropriate Federal or State official), on account
of a recall or for the purposes of investigating a suspect product or an
illegitimate product; or
(ii) in the event of a
request by an authorized trading partner, in a secure manner that ensures the
protection of confidential commercial information and trade secrets, for
purposes of investigating a suspect product or assisting the Secretary (or
other appropriate Federal or State official) with a request described in clause
(i).
(F) 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 product.
(2)
Compliance
(A)
Information maintenance
agreement
A dispenser may enter into a written agreement with a
third party, including an authorized wholesale distributor, under which the
third party shall confidentially maintain any information and statements
required to be maintained under this section. If a dispenser enters into such
an agreement, the dispenser shall maintain a copy of the written agreement and
shall not be relieved of the obligations of the dispenser under this
subsection.
(B)
Alternative
methods
The Secretary, taking into consideration the assessment
conducted under paragraph (3), shall provide for alternative methods of
compliance with any of the requirements set forth in paragraph (1),
including—
(i) establishing timelines
for compliance by small businesses (including small business dispensers with 25
or fewer full time employees) with such requirements, in order to ensure that
such requirements do not impose undue economic hardship for small businesses,
including small business dispensers for whom the criteria set forth in the
assessment under paragraph (3) is not met, if the Secretary determines that
such requirements under paragraph (1) would result in undue economic hardship;
and
(ii) establishing a process
by which a dispenser may request a waiver from any of the requirements set
forth in paragraph (1) if the Secretary determines that such requirements would
result in an undue economic hardship, which shall include a process for the
biennial review and renewal of any such waiver.
(3)
Assessment
(A)
In
general
Not later than the date that is 18 months after the
Secretary issues the final guidance required under subsection (i), the
Secretary shall enter into contract with a private, independent consulting firm
with expertise to conduct a technology and software assessment that looks at
the feasibility of dispensers with 25 or fewer full-time employees conducting
interoperable, electronic tracing of products at the package level. In no case
may such assessment commence later than 7½ years after the date of enactment of
the Drug Supply Chain Security
Act.
(B)
Condition
As
a condition of the award of the contract under subparagraph (A), the private,
independent consulting firm shall agree to consult with dispensers with 25 or
fewer full-time employees when conducting the assessment under such
subparagraph.
(C)
Content
The
assessment conducted under subparagraph (A) shall assess whether—
(i) the necessary software
and hardware is readily accessible to such dispensers;
(ii) the necessary software
and hardware is prohibitively expensive to obtain, install, and maintain for
such dispensers; and
(iii) the necessary hardware
and software can be integrated into business practices, such as
interoperability with wholesale distributors, for such dispensers.
(D)
Publication
The
Secretary shall—
(i) publish the statement of
work for the assessment conducted under subparagraph (A) for public comment
prior to beginning the assessment;
(ii) publish the final
assessment for public comment not later than 30 calendar days after receiving
such assessment; and
(iii) hold a public meeting
not later than 180 calendar days after receiving the final assessment at which
public stakeholders may present their views on the assessment.
(4)
Procedure
Notwithstanding
section 553 of title 5, United States Code, the Secretary, in promulgating any
regulation pursuant to this section, shall—
(A) provide appropriate
flexibility by—
(i) not requiring the
adoption of specific business systems for the maintenance and transmission of
data;
(ii) prescribing alternative
methods of compliance for any of the requirements set forth in paragraph (1) or
set forth in regulations implementing such requirements, including
timelines—
(I) 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 (including small business dispensers for whom the criteria set forth
in the assessment under paragraph (3) is not met), if the Secretary determines
that such requirements would result in undue economic hardship; and
(II) which shall include
establishing 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 hardship; and
(iii) taking into
consideration—
(I) the results of pilot
projects, including pilot projects pursuant to this section;
(II) the public meetings held
and related guidance documents issued under this section;
(III) the public health
benefits of any additional regulations in comparison to the cost of compliance
with such requirements, including on entities of varying sizes and
capabilities;
(IV) the diversity of the
pharmaceutical distribution supply chain by providing appropriate flexibility
for each sector, including both large and small businesses; and
(V) the assessment pursuant
to paragraph (3) with respect to small business dispensers, including related
public comment and the public meeting, and requirements under this
section;
(B) issue a notice of
proposed rulemaking that includes a copy of the proposed regulation;
(C) provide a period of not
less than 60 days for comments on the proposed regulation; and
(D) publish the final
regulation not less than 2 years prior to the effective date of the
regulation.
(i)
Guidance
documents
(1)
In
general
For the purposes of facilitating the successful and
efficient adoption of secure, interoperable product tracing at the package
level in order to enhance drug distribution security and further protect the
public health, the Secretary shall issue the guidance documents as provided for
in this subsection.
(2)
Suspect and
illegitimate product
(A)
In
general
Not later than 180 days after the date of enactment of
the Drug Supply Chain Security
Act, the Secretary shall issue a guidance document to aid trading
partners in the identification of a suspect product and notification
termination. Such guidance document shall—
(i) identify specific
scenarios that could significantly increase the risk of a suspect product
entering the pharmaceutical distribution supply chain;
(ii) provide recommendation
on how trading partners may identify such product and make a determination if
the product is a suspect product as soon as practicable; and
(iii) set forth the process
by which manufacturers, repackagers, wholesale distributors, dispensers, and
third-party logistics providers shall terminate notifications in consultation
with the Secretary regarding illegitimate product pursuant to subsections
(b)(4)(B), (c)(4)(B), (d)(4)(B), (e)(4)(B), and (f)(4)(B).
(B)
Revised
guidance
If the Secretary revises the guidance issued under
subparagraph (A), the Secretary shall follow the procedure set forth in
paragraph (5).
(3)
Unit level
tracing
(A)
In
general
In order to enhance drug distribution security at the
package level, not later than 18 months after conducting a public meeting on
the system attributes necessary to enable secure tracing of product at the
package level, including allowing for the use of verification, inference, and
aggregation, as necessary, 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 (h). Such guidance document
shall—
(i) define the circumstances
under which the sectors within the pharmaceutical distribution supply chain
may, in the most efficient manner practicable, infer the contents of a case,
pallet, tote, or other aggregate of individual packages or containers of
product, from a product identifier associated with the case, pallet, tote, or
other aggregate, without opening each case, pallet, tote, or other aggregate or
otherwise individually scanning each package;
(ii) identify methods and
processes to enhance secure tracing of product at the package level, such as
secure processes to facilitate the use of inference, enhanced verification
activities, the use of aggregation and inference, processes that utilize the
product identifiers to enhance tracing of product at the package level,
including the standardized numerical identifier, or package security features;
and
(iii) ensure the protection
of confidential commercial information and trade secrets.
(B)
Procedure
In
issuing the guidance under subparagraph (A), and in revising such guidance, if
applicable, the Secretary shall follow the procedure set forth in paragraph
(5).
(4)
Standards for
interoperable data exchange
(A)
In
general
In order to enhance secure tracing of a product at the
package level, the Secretary, not later than 18 months after conducting a
public meeting on the interoperable standards necessary to enhance the security
of the pharmaceutical distribution supply chain, shall update the guidance
issued pursuant to subsection (a)(2), as necessary and appropriate, and
finalize such guidance document so that the guidance document—
(i) identifies and makes
recommendations with respect to the standards necessary for adoption in order
to support the secure, 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
organization;
(ii) takes into consideration
standards established pursuant to subsection (a)(2) and section 505D;
(iii) facilitates the
creation of a uniform process or methodology for product tracing; and
(iv) ensures the protection
of confidential commercial information and trade secrets.
(B)
Procedure
In
issuing the guidance under subparagraph (A), and in revising such guidance, if
applicable, the Secretary shall follow the procedure set forth in paragraph
(5).
(5)
Procedure
In
issuing or revising any guidance issued pursuant to this subsection or
subsection (h), except the initial guidance issued under paragraph (2)(A), the
Secretary shall—
(A) publish a notice in the
Federal Register for a period not less than 30 days announcing that the draft
or revised draft guidance is available;
(B) 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 copy;
(C) provide an opportunity
for comment and review and take into consideration any comments
received;
(D) revise the draft
guidance, as appropriate;
(E) publish a notice in the
Federal Register for a period not less than 30 days announcing that the final
guidance or final revised guidance is available;
(F) post the final guidance
document on the Internet Website of the Food and Drug Administration and make
such final guidance document available in hard copy; and
(G) provide for an effective
date of not earlier than 1 year after such guidance becomes final.
(j)
Public
meetings
(1)
In
general
The Secretary shall hold not less than 3 public meetings
to enhance the safety and security of the pharmaceutical distribution supply
chain and provide for comment. The Secretary may hold the first such public
meeting not earlier than 1 year after the date of enactment of the
Drug Supply Chain Security Act.
In carrying out the public meetings described in this paragraph, the Secretary
shall—
(A) prioritize topics
necessary to inform the issuance of the guidance described in paragraphs (3)
and (4) of subsection (i); and
(B) take all measures
reasonable and practicable to ensure the protection of confidential commercial
information and trade secrets.
(2)
Content
Each
of the following topics shall be addressed in at least one of the public
meetings described in paragraph (1):
(A) An assessment of the
steps taken under subsections (b) through (f) to build capacity for a
unit-level system, including the impact of the requirements of such subsections
on—
(i) the ability of the health
care system collectively to maintain patient access to medicines;
(ii) the scalability of such
requirements, including as it relates to product lines; and
(iii) the capability of
different sectors and subsectors, including both large and small businesses, to
affix and utilize the product identifier.
(B) The system attributes
necessary to support the requirements set forth under subsection (h), including
the standards necessary for adoption in order to support the secure,
interoperable electronic data exchange among sectors within the pharmaceutical
distribution supply chain.
(C) Best practices in each of
the different sectors within the pharmaceutical distribution supply chain to
implement the requirements of this section.
(D) The costs and benefits of
the implementation of this section, including the impact on each pharmaceutical
distribution supply chain sector and on public health.
(E) Whether electronic
tracing requirements, including tracing of product at the package level, are
feasible, cost-effective, and needed to protect the public health.
(F) The systems and processes
needed to utilize the product identifiers to enhance tracing of product at the
package level, including allowing for verification, aggregation, and inference,
as necessary.
(G) The technical
capabilities and legal authorities, if any, needed to establish an
interoperable, electronic system that provides for tracing of product at the
package level.
(H) The impact that such
additional requirements would have on patient safety, the drug supply, cost and
regulatory burden, and timely patient access to prescription drugs.
(I) Other topics, as
determined appropriate by the Secretary.
(k)
Pilot projects
(1)
In
general
The Secretary shall establish 1 or more pilot projects,
in coordination with authorized manufacturers, repackagers, wholesale
distributors, third-party logistics providers, and dispensers, to explore and
evaluate methods to enhance the safety and security of the pharmaceutical
distribution supply chain. Such projects shall build upon efforts, in existence
as of the date of enactment of the Drug
Supply Chain Security Act, to enhance the safety and security of
the pharmaceutical distribution supply chain, take into consideration any pilot
projects conducted prior to such date of enactment, and inform the draft and
final guidance under paragraphs (3) and (4) of subsection (i).
(2)
Content
(A)
In
general
The Secretary shall ensure that the pilot projects under
paragraph (1) reflect the diversity of the pharmaceutical distribution supply
chain and that the pilot projects, when taken as a whole, include participants
representative of every sector, including both large and small
businesses.
(B)
Project
design
The pilot projects under paragraph (1) shall be designed
to—
(i) utilize the product
identifier for tracing of a product, which may include verification of the
product identifier of a product, including the use of aggregation and
inference;
(ii) 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
product;
(iii) identify system
attributes that are necessary to implement the requirements established under
this section; and
(iv) complete other
activities as determined by the Secretary.
(l)
Sunset
The
following requirements shall have no force or effect beginning on the date that
is 10 years after the date of enactment of the
Drug Supply Chain Security
Act:
(1) The provision and receipt
of transaction history under this section.
(2) The requirements set
forth for returns under subsections (b)(4)(E), (c)(1)(B)(i), (d)(1)(C)(i), and
(e)(4)(E).
(m)
Rule of
construction
The requirements set forth in subsections (h)(4),
(j), and (k) shall not be construed as a condition, prohibition, or precedent
for precluding or delaying the provisions becoming effective pursuant to
subsection
(h).
.
204.
National licensure
standards for prescription drug wholesale distributors
(a)
Amendments
(1)
License
requirement
Section 503(e) (21 U.S.C. 353(e)) is amended by
striking paragraphs (1), (2), and (3) and inserting the following:
(1)
License
requirement
Subject to section 583:
(A)
In
general
No person may engage in wholesale distribution of a drug
subject to subsection (b)(1) in any State unless such person—
(i)
(I) is licensed by the
State from which the drug is distributed; or
(II) if the State from which
the drug distributed has not established a licensure requirement, is licensed
by the Secretary; and
(ii) if the drug is
distributed interstate, 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 State.
(B)
License
standards
Each Federal and State license described in
subparagraph (A) shall meet the standards, terms, and conditions established by
the Secretary under section 583.
(2)
Licensure reporting and
database
(A)
Licensure
reporting
Beginning 1 year after the date of enactment of the
Drug Supply Chain Security Act,
any person who owns or operates an establishment that engages in wholesale
distribution shall report to the Secretary, on an annual basis pursuant to a
schedule determined by the Secretary—
(i) each State by which the
person is licensed and the appropriate identification number of each such
license; and
(ii) the name, address, and
contact information of each facility at which, and all trade names under which,
the person conducts business.
(B)
Database
Not
later than 1 year after the date of enactment of the
Drug Supply Chain Security Act,
the Secretary shall establish a database of licensed wholesale distributors.
Such database shall—
(i) identify each wholesale
distributor by name, contact information, and each State where such wholesale
distributor is appropriately licensed to engage in wholesale
distribution;
(ii) be available to the
public on the Internet Web site of the Food and Drug Administration; and
(iii) be regularly updated on
a schedule determined by the Secretary.
(3)
Costs
(A)
Authorized licensure
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 (b), 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 section. The Secretary shall adjust fee rates as needed
on an annual basis to generate only the amount of revenue needed to perform
this service. 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 Acts. Such fees are authorized to remain available
until expended.
(B)
State licensing
fees
Nothing in this Act shall prohibit States from collecting
fees from wholesale distributors in connection with State licensing of such
distributors.
.
(2)
Wholesale
distribution
Section 503(e) (21 U.S.C. 353(e)), as amended by
paragraph (1), is further amended by adding at the end the following:
(4) For the purposes of this
subsection and subsection (d), the term wholesale distribution
means the distribution of a drug subject to subsection (b) to a person other
than a consumer or patient, or receipt of a drug subject to subsection (b) by a
person other than the consumer or patient, but does not include—
(A) intracompany distribution
of any drug between members of an affiliated group (as defined in section
1504(a) of the Internal Revenue Code of 1986) or within a manufacturer;
(B) the distribution of a
drug, or an offer to distribute a drug among hospitals or other health care
entities which are under common control;
(C) the distribution of a
drug or an offer to distribute a drug for emergency medical reasons, including
a public health emergency declaration pursuant to section 319 of the Public
Health Service Act, except that, for purposes of this paragraph, a drug
shortage not caused by a public health emergency shall not constitute an
emergency medical reason;
(D) the dispensing of a drug
pursuant to a valid prescription executed in accordance with section
503(b)(1);
(E) the distribution of
minimal quantities of drug by a licensed retail pharmacy to a licensed
practitioner for office use;
(F) 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
law;
(G) the purchase or other
acquisition by a dispenser, hospital, or other health care entity of a drug for
use by such dispenser, hospital, or other health care entity;
(H) the distribution of a
drug by the manufacturer of such drug;
(I) 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 drug;
(J) a common carrier that
transports a drug, provided that the common carrier does not take ownership of
the drug;
(K) the distribution of a
drug, 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 582(e);
(L) salable drug returns when
conducted by a dispenser;
(M) the distribution of a
medical convenience kit which is a collection of finished medical devices or a
collection of drug or biologic products assembled in kit form strictly for the
convenience of the purchaser or user if—
(i) 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
510(b)(2);
(ii) the person who
manufacturers the medical convenience kit purchased the finished drug or
biologic product contained in the medical convenience kit directly from the
pharmaceutical manufacturer or from a wholesale distributor that purchased the
product directly from the pharmaceutical manufacturer;
(iii) the person who
manufacturers a medical convenience kit does not alter the primary container or
label of the product as purchased from the manufacturer or wholesale
distributor;
(iv) 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 1970
(21 U.S.C. 801, et seq); and
(v) the products contained in
the medical convenience kit are—
(I) intravenous solutions
intended for the replenishment of fluids and electrolytes;
(II) drugs intended to
maintain the equilibrium of water and minerals in the body;
(III) drugs intended for
irrigation or reconstitution;
(IV) anesthetics;
(V) anticoagulants;
(VI) vasopressors; or
(VII) sympathicomimetics;
(N) the distribution of an
intravenous drug that, by its formulation, is intended for the replenishment of
fluids and electrolytes (such as sodium, chloride, and potassium) or calories
(such as dextrose and amino acids);
(O) the distribution of an
intravenous drug used to maintain the equilibrium of water and minerals in the
body, such as dialysis solutions;
(P) the distribution of a
drug that is intended for irrigation or reconstitution, or sterile water,
whether intended for such purposes or for injection;
(Q) the distribution of
medical gas, as defined in section 575;
(R) facilitating the
distribution of a product by providing solely administrative services,
including processing of orders and payments; or
(S) the transfer of a product
by a hospital or other health care entity to a repackager registered under
section 510 for the purpose of repackaging the drug for use by that hospital,
or other health care entity and other health care entities that are under
common control, if ownership of the drug remains with the hospital or other
health care entity at all
times.
.
(3)
Third-party logistics
providers
Section 503(e)(21 U.S.C. 353(e)), as amended by
paragraph (2), is further amended by adding at the end the following:
(5)
Third-party logistics
providers
Notwithstanding paragraphs (1) through (4), each entity
that meets the definition of a third-party logistics provider under section
581(21) shall obtain a license as a third-party logistics provider as described
in section 584(a) and is not required to obtain a license as a wholesale
distributor if the entity never assumes an ownership interest in the product it
handles.
.
(4)
Licensure
standards
Subchapter H of chapter V, as added by section 202, is
amended by adding at the end the following:
583.
National licensure
standards for prescription drug wholesale distributors
(a)
In
general
The Secretary shall, not later than 2 years after the
date of enactment of the Drug Supply Chain
Security Act, establish by regulation minimum standards, terms,
and conditions for the licensing of persons under section 503(e)(1) (as amended
by the Drug Supply Chain Security
Act), including the revocation, reissuance, and renewal of such
license.
(b)
Content
The
standards established under subsection (a) shall apply to all State and Federal
licenses described under section 503(e)(1) (as amended by the
Drug Supply Chain Security Act)
and shall prescribe minimum requirements for the following:
(1) The storage and handling
of such drugs, including facility requirements.
(2) The establishment and
maintenance of records of the distributions of such drugs.
(3) The furnishing of a bond
or other equivalent means of security, as follows:
(A)
(i) For the issuance or
renewal of a wholesale distributor license, an applicant that is not a
government owned and operated wholesale distributor shall submit a surety bond
of $100,000 or other equivalent means of security acceptable to the
State.
(ii) For purposes of clause
(i), the State or other applicable authority may accept a surety bond in the
amount of $25,000 if the annual gross receipts of the previous tax year for the
wholesaler is $10,000,000 or less.
(B) If a wholesale
distributor can provide evidence that it possesses the required bond in a
State, the requirement for a bond in another State shall be waived.
(4) Mandatory background
checks and fingerprinting of facility managers or designated
representatives.
(5) The establishment and
implementation of qualifications for key personnel.
(6) 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 State, consistent with
subsection (c).
(7) In accordance with
subsection (d), the prohibition of certain persons from receiving or
maintaining licensure for wholesale distribution.
(c)
Inspections
To
satisfy the inspection requirement under subsection (b)(6), the Federal or
State licensing authority may conduct the inspection or may accept an
inspection by the State in which the facility is located, or by a third-party
accreditation or inspection service approved by the Secretary or the State
licensing such wholesale distributor.
(d)
Prohibited
persons
The standards established under subsection (a) shall
include requirements to prohibit a person from receiving or maintaining
licensure for wholesale distribution if the person—
(1) has been convicted of any
felony for conduct relating to wholesale distribution, any felony violation of
subsection (i) or (k) of section 301, or any felony violation of section 1365
of title 18, United States Code, relating to product tampering; or
(2) has engaged in a pattern
of violating the requirements of this section, or State requirements for
licensure, that presents a threat of serious adverse health consequences or
death to humans.
(e)
Requirements
The
Secretary, in promulgating any regulation pursuant to this section, shall,
notwithstanding section 553 of title 5, United States Code—
(1) issue a notice of
proposed rulemaking that includes a copy of the proposed regulation;
(2) provide a period of not
less than 60 days for comments on the proposed regulation; and
(3) provide that the final
regulation take effect on the date that is 2 years after the date such final
regulation is
published.
.
(b)
Authorized distributors
of record
Section 503(d) (21 U.S.C. 353(d)) is amended by adding
at the end the following:
(4) In this subsection, the
term authorized distributors of record means those distributors
with whom a manufacturer has established an ongoing relationship to distribute
such manufacturer's
products.
.
(c)
Effective
date
The amendments made by subsections (a) and (b) shall take
effect on the day that is 1 year after the date of enactment of this
Act.
205.
National licensure
standards for third-party logistics providers; uniform national
policy
Subchapter H of chapter
V, as amended by section 204, is further amended by adding at the end the
following:
584.
National licensure
standards for third-party logistics providers
(a)
License
requirements
No third-party logistics provider in any State may
conduct activities in any State unless each facility of such third-party
logistics provider—
(1)
(A) is licensed by the
State from which the drug is distributed by the third-party logistics provider,
in accordance with the regulations promulgated under subsection (d); or
(B) if the State from which
the drug distributed by the third-party logistics provider has not established
a licensure requirement, is licensed by the Secretary, in accordance with the
regulations promulgated under subsection (d); and
(2) if the drug is
distributed interstate, 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 (1)(B).
(b)
Licensure
reporting
Beginning 1 year after the date of enactment of the
Drug Supply Chain Security Act,
a facility of a third-party logistics provider shall report to the Secretary,
on an annual basis pursuant to a schedule determined by the Secretary—
(1) the State by which the
facility is licensed and the appropriate identification number of such license;
and
(2) the name and address of
the facility, and all trade names under which, such facility conducts
business.
(c)
Costs
(1)
Authorized licensure
fees of secretary
If a State does not establish a licensing
program for a third-party logistics provider, 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 section. The Secretary shall adjust
fee rates as needed on an annual basis to generate only the amount of revenue
needed to perform this service. 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 Acts. Such fees are authorized to remain
available until expended.
(2)
State licensing
fees
(A)
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
license.
(B)
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
provider.
(d)
License
regulations
(1)
In
general
Not later than 2 years after the date of enactment of the
Drug Supply Chain Security Act,
the Secretary shall issue regulations regarding the minimum issuance and
eligibility requirements for licensing under subsection (a), including the
revocation and reissuance of such license, to third-party logistics providers
under this section.
(2)
Content
Such
regulations shall—
(A) establish a process by
which a third-party accreditation program approved by the Secretary shall, upon
request by a third-party logistics provider, issue a license to each
third-party logistics provider that meets the minimum requirements set forth in
this section;
(B) establish a process by
which the Secretary shall issue a license to each third-party logistics
provider that meets the minimum 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 program;
(C) require that the entity
complies with storage practices, as determined by the Secretary for such
facility, including—
(i) maintaining access to
warehouse space of suitable size to facilitate safe operations, including a
suitable area to quarantine suspect product;
(ii) maintaining adequate
security; and
(iii) having written policies
and procedures to—
(I) address receipt,
security, storage, inventory, shipment, and distribution of a product;
(II) identify, record, and
report confirmed losses or thefts in the United States;
(III) correct errors and
inaccuracies in inventories;
(IV) provide support for
manufacturer recalls;
(V) prepare for, protect
against, and address any reasonably foreseeable crisis that affects security or
operation at the facility, such as a strike, fire, or flood;
(VI) ensure that any expired
product is segregated from other products and returned to the manufacturer or
re-packager or destroyed;
(VII) maintain the capability
to trace the receipt and outbound distribution of a product, and supplies and
records of inventory; and
(VIII) quarantine or destroy
a suspect product if directed to do so by the respective manufacturer,
wholesale distributor, dispenser or an authorized government agency;
(D) provide for periodic
inspection by the licensing authority, as determined by the Secretary, of such
facility warehouse space to ensure compliance with this section;
(E) prohibit a facility from
having as a manager or designated representative anyone convicted of any felony
violation of subsection (i) or (k) of section 301 or any violation of section
1365 of title 18, United States Code relating to product tampering;
(F) provide for mandatory
background checks of a facility manager or a designated representative of such
manager; and
(G) require a third-party
logistics provider to provide the Secretary, upon a request by the Secretary, a
list of all product manufacturers, wholesale distributors, and dispensers for
whom the third-party logistics provider provides services at such
facility.
(3)
Procedure
In
promulgating the regulations under this subsection, the Secretary shall,
notwithstanding section 553 of title 5, United States Code—
(A) issue a notice of
proposed rulemaking that includes a copy of the proposed regulation;
(B) provide a period of not
less than 60 days for comments on the proposed regulation; and
(C) provide that the final
regulation takes effect upon the expiration of 1 year after the date that such
final regulation is issued.
(e)
Renewal of
licenses
The Secretary shall develop procedures for license
renewal. Licenses issued under this section shall expire on the date that is 3
years after issuance of the license. Such an expired license may be renewed for
additional 3-year periods according to procedures developed by the
Secretary.
585.
Uniform national
policy
(a)
Product tracing and
other requirements
Beginning on the date of enactment of the
Drug Supply Chain Security Act,
no State or political subdivision of a State may establish or continue in
effect any requirements for tracing products through the distribution system
(including any requirements with respect to statements of distribution history,
transaction history, transaction information, or transaction statement of a
product as such product changes ownership in the supply chain, or verification,
investigation, disposition, notification, or record-keeping relating to such
systems, including paper or electronic pedigree systems or for tracking and
tracing drugs throughout the distribution system) which are inconsistent with,
more stringent than, or in addition to, any requirements applicable under
section 503(e) (as amended by such Act) or this subchapter (or regulations
issued thereunder), or which are inconsistent with—
(1) any waiver, exception, or
exemption pursuant to section 581 or 582; or
(2) any restrictions
specified in section 582.
(b)
Distribution and
licensing standards
(1)
In
general
Beginning on the date of enactment of the
Drug Supply Chain Security Act,
no State or political subdivision of a State may establish or continue any
standards, requirements, or regulations with respect to wholesale prescription
drug distributor or third-party logistics provider licensure that are less
stringent than the standards and requirements applicable under section 503(e)
(as amended by such Act), in the case of a wholesale distributor, or section
584, in the case of a third-party logistics provider.
(2)
State regulation of
third-party logistics providers
No State shall regulate
third-party logistics providers as wholesale distributors.
(3)
Administration
fees
Notwithstanding paragraph (1), a State may administer fee
collections for effectuating the wholesale drug distributor and third-party
logistics provider licensure requirements under sections 503(e) (as amended by
the Drug Supply Chain Security
Act), 583, and 584.
(4)
Enforcement,
suspension, and revocation of licenses
Notwithstanding paragraph
(1), a State—
(A) may take administrative
action, including fines, to enforce a licensure requirement promulgated by the
State in accordance with section 503(e) (as amended by the
Drug Supply Chain Security Act)
or this subchapter;
(B) may provide for the
suspension or revocation of licenses issued by the State for violations of the
laws of such State;
(C) upon conviction of
violations of Federal, State, or local drug laws or regulations, may provide
for fines, imprisonment, or civil penalties; and
(D) may regulate activities
of licensed entities in a manner that is consistent with product tracing
requirements under section 582.
(c)
Exception
Nothing
in subsection (a) or (b) 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 (a), including any
requirements applicable under section 503(e) (as amended by the
Drug Supply Chain Security Act)
or this subchapter (or regulations issued
thereunder).
.
206.
Penalties
(a)
Prohibited
act
Section 301(t)(21 U.S.C. 331(t)), is amended—
(1) by striking
or after the requirements of section 503(d),;
and
(2) by inserting ,
failure to comply with the requirements under section 582, the failure to
comply with the requirements under section 584, as applicable, after
in violation of section 503(e).
(b)
Misbranding
Section
502 (21 U.S.C. 352), as amended by section 103, is further amended by adding at
the end the following:
(ee) If it is a drug and it
fails to bear the product identifier as required by section
582.
.
207.
Conforming
amendment
(a)
In
general
Section
303(b)(1)(D)(21 U.S.C. 333(b)(1)(D)) is amended by striking
503(e)(2)(A) and inserting 503(e)(1).
(b)
Effective
date
The amendment made by subsection (a) shall take effect on
the day that is 1 year after the date of enactment of this Act.
208.
Savings
clause
Except as provided in
the amendments made by paragraphs (1), (2), and (3) of section 204(a) and by
section 206(a), nothing in this title (including the amendments made by this
title) shall be construed as altering any authority of the Secretary of Health
and Human Services with respect to a drug subject to section 503(b)(1) of the
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 353(b)(1)) under any other
provision of such Act or the Public Health Service Act (42 U.S.C. 201 et
seq.).
Amend the title so as to read:
A bill to amend the Federal Food, Drug, and Cosmetic Act with respect to
compounding drugs and the pharmaceutical distribution supply
chain..
June 19, 2013
Reported with an amendment and an amendment to the
title