To provide for the importation of prescription drugs.

SA 3156. Mr. LAUTENBERG (for himself, Mr. Carper, and Mr. Menendez)
submitted an amendment intended to be proposed to amendment SA 2786
proposed by Mr. Reid (for himself, Mr. Baucus, Mr. Dodd, and Mr.
Harkin) to the bill H.R. 3590, to amend the Internal Revenue Code of
1986 to modify the first-time homebuyers credit in the case of members
of the Armed Forces and certain other Federal employees, and for other
purposes; which was ordered to lie on the table; as follows:

At the end, add the following:

TITLE X--IMPORTATION OF PRESCRIPTION DRUGS

SEC. 10001. SHORT TITLE.

This title may be cited as the ``Pharmaceutical Market
Access and Drug Safety Act of 2009''.

SEC. 10002. FINDINGS.

Congress finds that--
(1) Americans unjustly pay up to 5 times more to fill their
prescriptions than consumers in other countries;
(2) the United States is the largest market for
pharmaceuticals in the world, yet American consumers pay the
highest prices for brand pharmaceuticals in the world;
(3) a prescription drug is neither safe nor effective to an
individual who cannot afford it;
(4) allowing and structuring the importation of
prescription drugs to ensure access to safe and affordable
drugs approved by the Food and Drug Administration will
provide a level of safety to American consumers that they do
not currently enjoy;
(5) American spend more than $200,000,000,000 on
prescription drugs every year;
(6) the Congressional Budget Office has found that the cost
of prescription drugs are between 35 to 55 percent less in
other highly-developed countries than in the United States;
and
(7) promoting competitive market pricing would both
contribute to health care savings and allow greater access to
therapy, improving health and saving lives.

SEC. 10003. REPEAL OF CERTAIN SECTION REGARDING IMPORTATION
OF PRESCRIPTION DRUGS.

Chapter VIII of the Federal Food, Drug, and Cosmetic Act
(21 U.S.C. 381 et seq.) is amended by striking section 804.

SEC. 10004. IMPORTATION OF PRESCRIPTION DRUGS; WAIVER OF
CERTAIN IMPORT RESTRICTIONS.

(a) In General.--Chapter VIII of the Federal Food, Drug,
and Cosmetic Act (21 U.S.C. 381 et seq.), as amended by
section 10003, is further amended by inserting after section
803 the following:

``SEC. 804. COMMERCIAL AND PERSONAL IMPORTATION OF
PRESCRIPTION DRUGS.

``(a) Importation of Prescription Drugs.--
``(1) In general.--In the case of qualifying drugs imported
or offered for import into the United States from registered
exporters or by registered importers--
``(A) the limitation on importation that is established in
section 801(d)(1) is waived; and
``(B) the standards referred to in section 801(a) regarding
admission of the drugs are subject to subsection (g) of this
section (including with respect to qualifying drugs to which
section 801(d)(1) does not apply).
``(2) Importers.--A qualifying drug may not be imported
under paragraph (1) unless--
``(A) the drug is imported by a pharmacy, group of
pharmacies, or a wholesaler that is a registered importer; or
``(B) the drug is imported by an individual for personal
use or for the use of a family

[[Page S12948]]

member of the individual (not for resale) from a registered
exporter.
``(3) Rule of construction.--This section shall apply only
with respect to a drug that is imported or offered for import
into the United States--
``(A) by a registered importer; or
``(B) from a registered exporter to an individual.
``(4) Definitions.--
``(A) Registered exporter; registered importer.--For
purposes of this section:
``(i) The term `registered exporter' means an exporter for
which a registration under subsection (b) has been approved
and is in effect.
``(ii) The term `registered importer' means a pharmacy,
group of pharmacies, or a wholesaler for which a registration
under subsection (b) has been approved and is in effect.
``(iii) The term `registration condition' means a condition
that must exist for a registration under subsection (b) to be
approved.
``(B) Qualifying drug.--For purposes of this section, the
term `qualifying drug' means a drug for which there is a
corresponding U.S. label drug.
``(C) U.S. label drug.--For purposes of this section, the
term `U.S. label drug' means a prescription drug that--
``(i) with respect to a qualifying drug, has the same
active ingredient or ingredients, route of administration,
dosage form, and strength as the qualifying drug;
``(ii) with respect to the qualifying drug, is manufactured
by or for the person that manufactures the qualifying drug;
``(iii) is approved under section 505(c); and
``(iv) is not--

``(I) a controlled substance, as defined in section 102 of
the Controlled Substances Act (21 U.S.C. 802);
``(II) a biological product, as defined in section 351 of
the Public Health Service Act (42 U.S.C. 262), including--

``(aa) a therapeutic DNA plasmid product;
``(bb) a therapeutic synthetic peptide product;
``(cc) a monoclonal antibody product for in vivo use; and
``(dd) a therapeutic recombinant DNA-derived product;

``(III) an infused drug, including a peritoneal dialysis
solution;
``(IV) an injected drug;
``(V) a drug that is inhaled during surgery;
``(VI) a drug that is the listed drug referred to in 2 or
more abbreviated new drug applications under which the drug
is commercially marketed; or
``(VII) a sterile opthlamic drug intended for topical use
on or in the eye.

``(D) Other definitions.--For purposes of this section:
``(i)(I) The term `exporter' means a person that is in the
business of exporting a drug to individuals in the United
States from Canada or from a permitted country designated by
the Secretary under subclause (II), or that, pursuant to
submitting a registration under subsection (b), seeks to be
in such business.
``(II) The Secretary shall designate a permitted country
under subparagraph (E) (other than Canada) as a country from
which an exporter may export a drug to individuals in the
United States if the Secretary determines that--

``(aa) the country has statutory or regulatory standards
that are equivalent to the standards in the United States and
Canada with respect to--

``(AA) the training of pharmacists;
``(BB) the practice of pharmacy; and
``(CC) the protection of the privacy of personal medical
information; and

``(bb) the importation of drugs to individuals in the
United States from the country will not adversely affect
public health.

``(ii) The term `importer' means a pharmacy, a group of
pharmacies, or a wholesaler that is in the business of
importing a drug into the United States or that, pursuant to
submitting a registration under subsection (b), seeks to be
in such business.
``(iii) The term `pharmacist' means a person licensed by a
State to practice pharmacy, including the dispensing and
selling of prescription drugs.
``(iv) The term `pharmacy' means a person that--

``(I) is licensed by a State to engage in the business of
selling prescription drugs at retail; and
``(II) employs 1 or more pharmacists.

``(v) The term `prescription drug' means a drug that is
described in section 503(b)(1).
``(vi) The term `wholesaler'--

``(I) means a person licensed as a wholesaler or
distributor of prescription drugs in the United States under
section 503(e)(2)(A); and
``(II) does not include a person authorized to import drugs
under section 801(d)(1).

``(E) Permitted country.--The term `permitted country'
means--
``(i) Australia;
``(ii) Canada;
``(iii) a member country of the European Union, but does
not include a member country with respect to which--

``(I) the country's Annex to the Treaty of Accession to the
European Union 2003 includes a transitional measure for the
regulation of human pharmaceutical products that has not
expired; or
``(II) the Secretary determines that the requirements
described in subclauses (I) and (II) of clause (vii) will not
be met by the date on which such transitional measure for the
regulation of human pharmaceutical products expires;

``(iv) Japan;
``(v) New Zealand;
``(vi) Switzerland; and
``(vii) a country in which the Secretary determines the
following requirements are met:

``(I) The country has statutory or regulatory
requirements--

``(aa) that require the review of drugs for safety and
effectiveness by an entity of the government of the country;
``(bb) that authorize the approval of only those drugs that
have been determined to be safe and effective by experts
employed by or acting on behalf of such entity and qualified
by scientific training and experience to evaluate the safety
and effectiveness of drugs on the basis of adequate and well-
controlled investigations, including clinical investigations,
conducted by experts qualified by scientific training and
experience to evaluate the safety and effectiveness of drugs;
``(cc) that require the methods used in, and the facilities
and controls used for the manufacture, processing, and
packing of drugs in the country to be adequate to preserve
their identity, quality, purity, and strength;
``(dd) for the reporting of adverse reactions to drugs and
procedures to withdraw approval and remove drugs found not to
be safe or effective; and
``(ee) that require the labeling and promotion of drugs to
be in accordance with the approval of the drug.

``(II) The valid marketing authorization system in the
country is equivalent to the systems in the countries
described in clauses (i) through (vi).
``(III) The importation of drugs to the United States from
the country will not adversely affect public health.

``(b) Registration of Importers and Exporters.--
``(1) Registration of importers and exporters.--A
registration condition is that the importer or exporter
involved (referred to in this subsection as a `registrant')
submits to the Secretary a registration containing the
following:
``(A)(i) In the case of an exporter, the name of the
exporter and an identification of all places of business of
the exporter that relate to qualifying drugs, including each
warehouse or other facility owned or controlled by, or
operated for, the exporter.
``(ii) In the case of an importer, the name of the importer
and an identification of the places of business of the
importer at which the importer initially receives a
qualifying drug after importation (which shall not exceed 3
places of business except by permission of the Secretary).
``(B) Such information as the Secretary determines to be
necessary to demonstrate that the registrant is in compliance
with registration conditions under--
``(i) in the case of an importer, subsections (c), (d),
(e), (g), and (j) (relating to the sources of imported
qualifying drugs; the inspection of facilities of the
importer; the payment of fees; compliance with the standards
referred to in section 801(a); and maintenance of records and
samples); or
``(ii) in the case of an exporter, subsections (c), (d),
(f), (g), (h), (i), and (j) (relating to the sources of
exported qualifying drugs; the inspection of facilities of
the exporter and the marking of compliant shipments; the
payment of fees; and compliance with the standards referred
to in section 801(a); being licensed as a pharmacist;
conditions for individual importation; and maintenance of
records and samples).
``(C) An agreement by the registrant that the registrant
will not under subsection (a) import or export any drug that
is not a qualifying drug.
``(D) An agreement by the registrant to--
``(i) notify the Secretary of a recall or withdrawal of a
qualifying drug distributed in a permitted country that the
registrant has exported or imported, or intends to export or
import, to the United States under subsection (a);
``(ii) provide for the return to the registrant of such
drug; and
``(iii) cease, or not begin, the exportation or importation
of such drug unless the Secretary has notified the registrant
that exportation or importation of such drug may proceed.
``(E) An agreement by the registrant to ensure and monitor
compliance with each registration condition, to promptly
correct any noncompliance with such a condition, and to
promptly report to the Secretary any such noncompliance.
``(F) A plan describing the manner in which the registrant
will comply with the agreement under subparagraph (E).
``(G) An agreement by the registrant to enforce a contract
under subsection (c)(3)(B) against a party in the chain of
custody of a qualifying drug with respect to the authority of
the Secretary under clauses (ii) and (iii) of that
subsection.
``(H) An agreement by the registrant to notify the
Secretary not more than 30 days before the registrant intends
to make the change, of--
``(i) any change that the registrant intends to make
regarding information provided under subparagraph (A) or (B);
and
``(ii) any change that the registrant intends to make in
the compliance plan under subparagraph (F).
``(I) In the case of an exporter:
``(i) An agreement by the exporter that a qualifying drug
will not under subsection (a)

[[Page S12949]]

be exported to any individual not authorized pursuant to
subsection (a)(2)(B) to be an importer of such drug.
``(ii) An agreement to post a bond, payable to the Treasury
of the United States that is equal in value to the lesser
of--

``(I) the value of drugs exported by the exporter to the
United States in a typical 4-week period over the course of a
year under this section; or
``(II) $1,000,000.

``(iii) An agreement by the exporter to comply with
applicable provisions of Canadian law, or the law of the
permitted country designated under subsection
(a)(4)(D)(i)(II) in which the exporter is located, that
protect the privacy of personal information with respect to
each individual importing a prescription drug from the
exporter under subsection (a)(2)(B).
``(iv) An agreement by the exporter to report to the
Secretary--

``(I) not later than August 1 of each fiscal year, the
total price and the total volume of drugs exported to the
United States by the exporter during the 6-month period from
January 1 through June 30 of that year; and
``(II) not later than January 1 of each fiscal year, the
total price and the total volume of drugs exported to the
United States by the exporter during the previous fiscal
year.

``(J) In the case of an importer, an agreement by the
importer to report to the Secretary--
``(i) not later than August 1 of each fiscal year, the
total price and the total volume of drugs imported to the
United States by the importer during the 6-month period from
January 1 through June 30 of that fiscal year; and
``(ii) not later than January 1 of each fiscal year, the
total price and the total volume of drugs imported to the
United States by the importer during the previous fiscal
year.
``(K) Such other provisions as the Secretary may require by
regulation to protect the public health while permitting--
``(i) the importation by pharmacies, groups of pharmacies,
and wholesalers as registered importers of qualifying drugs
under subsection (a); and
``(ii) importation by individuals of qualifying drugs under
subsection (a).
``(2) Approval or disapproval of registration.--
``(A) In general.--Not later than 90 days after the date on
which a registrant submits to the Secretary a registration
under paragraph (1), the Secretary shall notify the
registrant whether the registration is approved or is
disapproved. The Secretary shall disapprove a registration if
there is reason to believe that the registrant is not in
compliance with one or more registration conditions, and
shall notify the registrant of such reason. In the case of a
disapproved registration, the Secretary shall subsequently
notify the registrant that the registration is approved if
the Secretary determines that the registrant is in compliance
with such conditions.
``(B) Changes in registration information.--Not later than
30 days after receiving a notice under paragraph (1)(H) from
a registrant, the Secretary shall determine whether the
change involved affects the approval of the registration of
the registrant under paragraph (1), and shall inform the
registrant of the determination.
``(3) Publication of contact information for registered
exporters.--Through the Internet website of the Food and Drug
Administration and a toll-free telephone number, the
Secretary shall make readily available to the public a list
of registered exporters, including contact information for
the exporters. Promptly after the approval of a registration
submitted under paragraph (1), the Secretary shall update the
Internet website and the information provided through the
toll-free telephone number accordingly.
``(4) Suspension and termination.--
``(A) Suspension.--With respect to the effectiveness of a
registration submitted under paragraph (1):
``(i) Subject to clause (ii), the Secretary may suspend the
registration if the Secretary determines, after notice and
opportunity for a hearing, that the registrant has failed to
maintain substantial compliance with a registration
condition.
``(ii) If the Secretary determines that, under color of the
registration, the exporter has exported a drug or the
importer has imported a drug that is not a qualifying drug,
or a drug that does not comply with subsection (g)(2)(A) or
(g)(4), or has exported a qualifying drug to an individual in
violation of subsection (i), the Secretary shall immediately
suspend the registration. A suspension under the preceding
sentence is not subject to the provision by the Secretary of
prior notice, and the Secretary shall provide to the
registrant an opportunity for a hearing not later than 10
days after the date on which the registration is suspended.
``(iii) The Secretary may reinstate the registration,
whether suspended under clause (i) or (ii), if the Secretary
determines that the registrant has demonstrated that further
violations of registration conditions will not occur.
``(B) Termination.--The Secretary, after notice and
opportunity for a hearing, may terminate the registration
under paragraph (1) of a registrant if the Secretary
determines that the registrant has engaged in a pattern or
practice of violating 1 or more registration conditions, or
if on 1 or more occasions the Secretary has under
subparagraph (A)(ii) suspended the registration of the
registrant. The Secretary may make the termination permanent,
or for a fixed period of not less than 1 year. During the
period in which the registration is terminated, any
registration submitted under paragraph (1) by the registrant,
or a person that is a partner in the export or import
enterprise, or a principal officer in such enterprise, and
any registration prepared with the assistance of the
registrant or such a person, has no legal effect under this
section.
``(5) Default of bond.--A bond required to be posted by an
exporter under paragraph (1)(I)(ii) shall be defaulted and
paid to the Treasury of the United States if, after
opportunity for an informal hearing, the Secretary determines
that the exporter has--
``(A) exported a drug to the United States that is not a
qualifying drug or that is not in compliance with subsection
(g)(2)(A), (g)(4), or (i); or
``(B) failed to permit the Secretary to conduct an
inspection described under subsection (d).
``(c) Sources of Qualifying Drugs.--A registration
condition is that the exporter or importer involved agrees
that a qualifying drug will under subsection (a) be exported
or imported into the United States only if there is
compliance with the following:
``(1) The drug was manufactured in an establishment--
``(A) required to register under subsection (h) or (i) of
section 510; and
``(B)(i) inspected by the Secretary; or
``(ii) for which the Secretary has elected to rely on a
satisfactory report of a good manufacturing practice
inspection of the establishment from a permitted country
whose regulatory system the Secretary recognizes as
equivalent under a mutual recognition agreement, as provided
for under section 510(i)(3), section 803, or part 26 of title
21, Code of Federal Regulations (or any corresponding
successor rule or regulation).
``(2) The establishment is located in any country, and the
establishment manufactured the drug for distribution in the
United States or for distribution in 1 or more of the
permitted countries (without regard to whether in addition
the drug is manufactured for distribution in a foreign
country that is not a permitted country).
``(3) The exporter or importer obtained the drug--
``(A) directly from the establishment; or
``(B) directly from an entity that, by contract with the
exporter or importer--
``(i) provides to the exporter or importer a statement (in
such form and containing such information as the Secretary
may require) that, for the chain of custody from the
establishment, identifies each prior sale, purchase, or trade
of the drug (including the date of the transaction and the
names and addresses of all parties to the transaction);
``(ii) agrees to permit the Secretary to inspect such
statements and related records to determine their accuracy;
``(iii) agrees, with respect to the qualifying drugs
involved, to permit the Secretary to inspect warehouses and
other facilities, including records, of the entity for
purposes of determining whether the facilities are in
compliance with any standards under this Act that are
applicable to facilities of that type in the United States;
and
``(iv) has ensured, through such contractual relationships
as may be necessary, that the Secretary has the same
authority regarding other parties in the chain of custody
from the establishment that the Secretary has under clauses
(ii) and (iii) regarding such entity.
``(4)(A) The foreign country from which the importer will
import the drug is a permitted country; or
``(B) The foreign country from which the exporter will
export the drug is the permitted country in which the
exporter is located.
``(5) During any period in which the drug was not in the
control of the manufacturer of the drug, the drug did not
enter any country that is not a permitted country.
``(6) The exporter or importer retains a sample of each lot
of the drug for testing by the Secretary.
``(d) Inspection of Facilities; Marking of Shipments.--
``(1) Inspection of facilities.--A registration condition
is that, for the purpose of assisting the Secretary in
determining whether the exporter involved is in compliance
with all other registration conditions--
``(A) the exporter agrees to permit the Secretary--
``(i) to conduct onsite inspections, including monitoring
on a day-to-day basis, of places of business of the exporter
that relate to qualifying drugs, including each warehouse or
other facility owned or controlled by, or operated for, the
exporter;
``(ii) to have access, including on a day-to-day basis,
to--

``(I) records of the exporter that relate to the export of
such drugs, including financial records; and
``(II) samples of such drugs;

``(iii) to carry out the duties described in paragraph (3);
and
``(iv) to carry out any other functions determined by the
Secretary to be necessary regarding the compliance of the
exporter; and
``(B) the Secretary has assigned 1 or more employees of the
Secretary to carry out the functions described in this
subsection for the Secretary randomly, but not less than 12
times annually, on the premises of places of businesses
referred to in subparagraph (A)(i),

[[Page S12950]]

and such an assignment remains in effect on a continuous
basis.
``(2) Marking of compliant shipments.--A registration
condition is that the exporter involved agrees to affix to
each shipping container of qualifying drugs exported under
subsection (a) such markings as the Secretary determines to
be necessary to identify the shipment as being in compliance
with all registration conditions. Markings under the
preceding sentence shall--
``(A) be designed to prevent affixation of the markings to
any shipping container that is not authorized to bear the
markings; and
``(B) include anticounterfeiting or track-and-trace
technologies, taking into account the economic and technical
feasibility of those technologies.
``(3) Certain duties relating to exporters.--Duties of the
Secretary with respect to an exporter include the following:
``(A) Inspecting, randomly, but not less than 12 times
annually, the places of business of the exporter at which
qualifying drugs are stored and from which qualifying drugs
are shipped.
``(B) During the inspections under subparagraph (A),
verifying the chain of custody of a statistically significant
sample of qualifying drugs from the establishment in which
the drug was manufactured to the exporter, which shall be
accomplished or supplemented by the use of anticounterfeiting
or track-and-trace technologies, taking into account the
economic and technical feasibility of those technologies,
except that a drug that lacks such technologies from the
point of manufacture shall not for that reason be excluded
from importation by an exporter.
``(C) Randomly reviewing records of exports to individuals
for the purpose of determining whether the drugs are being
imported by the individuals in accordance with the conditions
under subsection (i). Such reviews shall be conducted in a
manner that will result in a statistically significant
determination of compliance with all such conditions.
``(D) Monitoring the affixing of markings under paragraph
(2).
``(E) Inspecting as the Secretary determines is necessary
the warehouses and other facilities, including records, of
other parties in the chain of custody of qualifying drugs.
``(F) Determining whether the exporter is in compliance
with all other registration conditions.
``(4) Prior notice of shipments.--A registration condition
is that, not less than 8 hours and not more than 5 days in
advance of the time of the importation of a shipment of
qualifying drugs, the importer involved agrees to submit to
the Secretary a notice with respect to the shipment of drugs
to be imported or offered for import into the United States
under subsection (a). A notice under the preceding sentence
shall include--
``(A) the name and complete contact information of the
person submitting the notice;
``(B) the name and complete contact information of the
importer involved;
``(C) the identity of the drug, including the established
name of the drug, the quantity of the drug, and the lot
number assigned by the manufacturer;
``(D) the identity of the manufacturer of the drug,
including the identity of the establishment at which the drug
was manufactured;
``(E) the country from which the drug is shipped;
``(F) the name and complete contact information for the
shipper of the drug;
``(G) anticipated arrival information, including the port
of arrival and crossing location within that port, and the
date and time;
``(H) a summary of the chain of custody of the drug from
the establishment in which the drug was manufactured to the
importer;
``(I) a declaration as to whether the Secretary has ordered
that importation of the drug from the permitted country cease
under subsection (g)(2)(C) or (D); and
``(J) such other information as the Secretary may require
by regulation.
``(5) Marking of compliant shipments.--A registration
condition is that the importer involved agrees, before
wholesale distribution (as defined in section 503(e)) of a
qualifying drug that has been imported under subsection (a),
to affix to each container of such drug such markings or
other technology as the Secretary determines necessary to
identify the shipment as being in compliance with all
registration conditions, except that the markings or other
technology shall not be required on a drug that bears
comparable, compatible markings or technology from the
manufacturer of the drug. Markings or other technology under
the preceding sentence shall--
``(A) be designed to prevent affixation of the markings or
other technology to any container that is not authorized to
bear the markings; and
``(B) shall include anticounterfeiting or track-and-trace
technologies, taking into account the economic and technical
feasibility of such technologies.
``(6) Certain duties relating to importers.--Duties of the
Secretary with respect to an importer include the following:
``(A) Inspecting, randomly, but not less than 12 times
annually, the places of business of the importer at which a
qualifying drug is initially received after importation.
``(B) During the inspections under subparagraph (A),
verifying the chain of custody of a statistically significant
sample of qualifying drugs from the establishment in which
the drug was manufactured to the importer, which shall be
accomplished or supplemented by the use of anticounterfeiting
or track-and-trace technologies, taking into account the
economic and technical feasibility of those technologies,
except that a drug that lacks such technologies from the
point of manufacture shall not for that reason be excluded
from importation by an importer.
``(C) Reviewing notices under paragraph (4).
``(D) Inspecting as the Secretary determines is necessary
the warehouses and other facilities, including records of
other parties in the chain of custody of qualifying drugs.
``(E) Determining whether the importer is in compliance
with all other registration conditions.
``(e) Importer Fees.--
``(1) Registration fee.--A registration condition is that
the importer involved pays to the Secretary a fee of $10,000
due on the date on which the importer first submits the
registration to the Secretary under subsection (b).
``(2) Inspection fee.--A registration condition is that the
importer involved pays a fee to the Secretary in accordance
with this subsection. Such fee shall be paid not later than
October 1 and April 1 of each fiscal year in the amount
provided for under paragraph (3).
``(3) Amount of inspection fee.--
``(A) Aggregate total of fees.--Not later than 30 days
before the start of each fiscal year, the Secretary, in
consultation with the Secretary of Homeland Security and the
Secretary of the Treasury, shall establish an aggregate total
of fees to be collected under paragraph (2) for importers for
that fiscal year that is sufficient, and not more than
necessary, to pay the costs for that fiscal year of
administering this section with respect to registered
importers, including the costs associated with--
``(i) inspecting the facilities of registered importers,
and of other entities in the chain of custody of a qualifying
drug as necessary, under subsection (d)(6);
``(ii) developing, implementing, and operating under such
subsection an electronic system for submission and review of
the notices required under subsection (d)(4) with respect to
shipments of qualifying drugs under subsection (a) to assess
compliance with all registration conditions when such
shipments are offered for import into the United States; and
``(iii) inspecting such shipments as necessary, when
offered for import into the United States to determine if
such a shipment should be refused admission under subsection
(g)(5).
``(B) Limitation.--Subject to subparagraph (C), the
aggregate total of fees collected under paragraph (2) for a
fiscal year shall not exceed 2.5 percent of the total price
of qualifying drugs imported during that fiscal year into the
United States by registered importers under subsection (a).
``(C) Total price of drugs.--
``(i) Estimate.--For the purposes of complying with the
limitation described in subparagraph (B) when establishing
under subparagraph (A) the aggregate total of fees to be
collected under paragraph (2) for a fiscal year, the
Secretary shall estimate the total price of qualifying drugs
imported into the United States by registered importers
during that fiscal year by adding the total price of
qualifying drugs imported by each registered importer during
the 6-month period from January 1 through June 30 of the
previous fiscal year, as reported to the Secretary by each
registered importer under subsection (b)(1)(J).
``(ii) Calculation.--Not later than March 1 of the fiscal
year that follows the fiscal year for which the estimate
under clause (i) is made, the Secretary shall calculate the
total price of qualifying drugs imported into the United
States by registered importers during that fiscal year by
adding the total price of qualifying drugs imported by each
registered importer during that fiscal year, as reported to
the Secretary by each registered importer under subsection
(b)(1)(J).
``(iii) Adjustment.--If the total price of qualifying drugs
imported into the United States by registered importers
during a fiscal year as calculated under clause (ii) is less
than the aggregate total of fees collected under paragraph
(2) for that fiscal year, the Secretary shall provide for a
pro-rata reduction in the fee due from each registered
importer on April 1 of the subsequent fiscal year so that the
limitation described in subparagraph (B) is observed.
``(D) Individual importer fee.--Subject to the limitation
described in subparagraph (B), the fee under paragraph (2) to
be paid on October 1 and April 1 by an importer shall be an
amount that is proportional to a reasonable estimate by the
Secretary of the semiannual share of the importer of the
volume of qualifying drugs imported by importers under
subsection (a).
``(4) Use of fees.--
``(A) In general.--Fees collected by the Secretary under
paragraphs (1) and (2) shall be credited to the appropriation
account for salaries and expenses of the Food and Drug
Administration until expended (without fiscal year
limitation), and the Secretary may, in consultation with the
Secretary of Homeland Security and the Secretary of the
Treasury, transfer some proportion of such fees to the
appropriation account for salaries and expenses of the Bureau
of Customs and Border Protection until expended (without
fiscal year limitation).
``(B) Availability.--Fees collected by the Secretary under
paragraphs (1) and (2) shall be made available to the Food
and Drug Administration.

[[Page S12951]]

``(C) Sole purpose.--Fees collected by the Secretary under
paragraphs (1) and (2) are only available to the Secretary
and, if transferred, to the Secretary of Homeland Security,
and are for the sole purpose of paying the costs referred to
in paragraph (3)(A).
``(5) Collection of fees.--In any case where the Secretary
does not receive payment of a fee assessed under paragraph
(1) or (2) within 30 days after it is due, such fee shall be
treated as a claim of the United States Government subject to
subchapter II of chapter 37 of title 31, United States Code.
``(f) Exporter Fees.--
``(1) Registration fee.--A registration condition is that
the exporter involved pays to the Secretary a fee of $10,000
due on the date on which the exporter first submits that
registration to the Secretary under subsection (b).
``(2) Inspection fee.--A registration condition is that the
exporter involved pays a fee to the Secretary in accordance
with this subsection. Such fee shall be paid not later than
October 1 and April 1 of each fiscal year in the amount
provided for under paragraph (3).
``(3) Amount of inspection fee.--
``(A) Aggregate total of fees.--Not later than 30 days
before the start of each fiscal year, the Secretary, in
consultation with the Secretary of Homeland Security and the
Secretary of the Treasury, shall establish an aggregate total
of fees to be collected under paragraph (2) for exporters for
that fiscal year that is sufficient, and not more than
necessary, to pay the costs for that fiscal year of
administering this section with respect to registered
exporters, including the costs associated with--
``(i) inspecting the facilities of registered exporters,
and of other entities in the chain of custody of a qualifying
drug as necessary, under subsection (d)(3);
``(ii) developing, implementing, and operating under such
subsection a system to screen marks on shipments of
qualifying drugs under subsection (a) that indicate
compliance with all registration conditions, when such
shipments are offered for import into the United States; and
``(iii) screening such markings, and inspecting such
shipments as necessary, when offered for import into the
United States to determine if such a shipment should be
refused admission under subsection (g)(5).
``(B) Limitation.--Subject to subparagraph (C), the
aggregate total of fees collected under paragraph (2) for a
fiscal year shall not exceed 2.5 percent of the total price
of qualifying drugs imported during that fiscal year into the
United States by registered exporters under subsection (a).
``(C) Total price of drugs.--
``(i) Estimate.--For the purposes of complying with the
limitation described in subparagraph (B) when establishing
under subparagraph (A) the aggregate total of fees to be
collected under paragraph (2) for a fiscal year, the
Secretary shall estimate the total price of qualifying drugs
imported into the United States by registered exporters
during that fiscal year by adding the total price of
qualifying drugs exported by each registered exporter during
the 6-month period from January 1 through June 30 of the
previous fiscal year, as reported to the Secretary by each
registered exporter under subsection (b)(1)(I)(iv).
``(ii) Calculation.--Not later than March 1 of the fiscal
year that follows the fiscal year for which the estimate
under clause (i) is made, the Secretary shall calculate the
total price of qualifying drugs imported into the United
States by registered exporters during that fiscal year by
adding the total price of qualifying drugs exported by each
registered exporter during that fiscal year, as reported to
the Secretary by each registered exporter under subsection
(b)(1)(I)(iv).
``(iii) Adjustment.--If the total price of qualifying drugs
imported into the United States by registered exporters
during a fiscal year as calculated under clause (ii) is less
than the aggregate total of fees collected under paragraph
(2) for that fiscal year, the Secretary shall provide for a
pro-rata reduction in the fee due from each registered
exporter on April 1 of the subsequent fiscal year so that the
limitation described in subparagraph (B) is observed.
``(D) Individual exporter fee.--Subject to the limitation
described in subparagraph (B), the fee under paragraph (2) to
be paid on October 1 and April 1 by an exporter shall be an
amount that is proportional to a reasonable estimate by the
Secretary of the semiannual share of the exporter of the
volume of qualifying drugs exported by exporters under
subsection (a).
``(4) Use of fees.--
``(A) In general.--Fees collected by the Secretary under
paragraphs (1) and (2) shall be credited to the appropriation
account for salaries and expenses of the Food and Drug
Administration until expended (without fiscal year
limitation), and the Secretary may, in consultation with the
Secretary of Homeland Security and the Secretary of the
Treasury, transfer some proportion of such fees to the
appropriation account for salaries and expenses of the Bureau
of Customs and Border Protection until expended (without
fiscal year limitation).
``(B) Availability.--Fees collected by the Secretary under
paragraphs (1) and (2) shall be made available to the Food
and Drug Administration.
``(C) Sole purpose.--Fees collected by the Secretary under
paragraphs (1) and (2) are only available to the Secretary
and, if transferred, to the Secretary of Homeland Security,
and are for the sole purpose of paying the costs referred to
in paragraph (3)(A).
``(5) Collection of fees.--In any case where the Secretary
does not receive payment of a fee assessed under paragraph
(1) or (2) within 30 days after it is due, such fee shall be
treated as a claim of the United States Government subject to
subchapter II of chapter 37 of title 31, United States Code.
``(g) Compliance With Section 801(a).--
``(1) In general.--A registration condition is that each
qualifying drug exported under subsection (a) by the
registered exporter involved or imported under subsection (a)
by the registered importer involved is in compliance with the
standards referred to in section 801(a) regarding admission
of the drug into the United States, subject to paragraphs
(2), (3), and (4).
``(2) Section 505; approval status.--
``(A) In general.--A qualifying drug that is imported or
offered for import under subsection (a) shall comply with the
conditions established in the approved application under
section 505(b) for the U.S. label drug as described under
this subsection.
``(B) Notice by manufacturer; general provisions.--
``(i) In general.--The person that manufactures a
qualifying drug that is, or will be, introduced for
commercial distribution in a permitted country shall in
accordance with this paragraph submit to the Secretary a
notice that--

``(I) includes each difference in the qualifying drug from
a condition established in the approved application for the
U.S. label drug beyond--

``(aa) the variations provided for in the application; and
``(bb) any difference in labeling (except ingredient
labeling); or

``(II) states that there is no difference in the qualifying
drug from a condition established in the approved application
for the U.S. label drug beyond--

``(aa) the variations provided for in the application; and
``(bb) any difference in labeling (except ingredient
labeling).
``(ii) Information in notice.--A notice under clause (i)(I)
shall include the information that the Secretary may require
under section 506A, any additional information the Secretary
may require (which may include data on bioequivalence if such
data are not required under section 506A), and, with respect
to the permitted country that approved the qualifying drug
for commercial distribution, or with respect to which such
approval is sought, include the following:

``(I) The date on which the qualifying drug with such
difference was, or will be, introduced for commercial
distribution in the permitted country.
``(II) Information demonstrating that the person submitting
the notice has also notified the government of the permitted
country in writing that the person is submitting to the
Secretary a notice under clause (i)(I), which notice
describes the difference in the qualifying drug from a
condition established in the approved application for the
U.S. label drug.
``(III) The information that the person submitted or will
submit to the government of the permitted country for
purposes of obtaining approval for commercial distribution of
the drug in the country which, if in a language other than
English, shall be accompanied by an English translation
verified to be complete and accurate, with the name, address,
and a brief statement of the qualifications of the person
that made the translation.

``(iii) Certifications.--The chief executive officer and
the chief medical officer of the manufacturer involved shall
each certify in the notice under clause (i) that--

``(I) the information provided in the notice is complete
and true; and
``(II) a copy of the notice has been provided to the
Federal Trade Commission and to the State attorneys general.

``(iv) Fee.--

``(I) In general.--If a notice submitted under clause (i)
includes a difference that would, under section 506A, require
the submission of a supplemental application if made as a
change to the U.S. label drug, the person that submits the
notice shall pay to the Secretary a fee in the same amount as
would apply if the person were paying a fee pursuant to
section 736(a)(1)(A)(ii). Fees collected by the Secretary
under the preceding sentence are available only to the
Secretary and are for the sole purpose of paying the costs of
reviewing notices submitted under clause (i).
``(II) Fee amount for certain years.--If no fee amount is
in effect under section 736(a)(1)(A)(ii) for a fiscal year,
then the amount paid by a person under subclause (I) shall--

``(aa) for the first fiscal year in which no fee amount
under such section in effect, be equal to the fee amount
under section 736(a)(1)(A)(ii) for the most recent fiscal
year for which such section was in effect, adjusted in
accordance with section 736(c); and
``(bb) for each subsequent fiscal year in which no fee
amount under such section is effect, be equal to the
applicable fee amount for the previous fiscal year, adjusted
in accordance with section 736(c).
``(v) Timing of submission of notices.--

``(I) Prior approval notices.--A notice under clause (i) to
which subparagraph (C) applies shall be submitted to the
Secretary not later than 120 days before the qualifying drug
with the difference is introduced for commercial distribution
in a permitted

[[Page S12952]]

country, unless the country requires that distribution of the
qualifying drug with the difference begin less than 120 days
after the country requires the difference.
``(II) Other approval notices.--A notice under clause (i)
to which subparagraph (D) applies shall be submitted to the
Secretary not later than the day on which the qualifying drug
with the difference is introduced for commercial distribution
in a permitted country.
``(III) Other notices.--A notice under clause (i) to which
subparagraph (E) applies shall be submitted to the Secretary
on the date that the qualifying drug is first introduced for
commercial distribution in a permitted country and annually
thereafter.

``(vi) Review by secretary.--

``(I) In general.--In this paragraph, the difference in a
qualifying drug that is submitted in a notice under clause
(i) from the U.S. label drug shall be treated by the
Secretary as if it were a manufacturing change to the U.S.
label drug under section 506A.
``(II) Standard of review.--Except as provided in subclause
(III), the Secretary shall review and approve or disapprove
the difference in a notice submitted under clause (i), if
required under section 506A, using the safe and effective
standard for approving or disapproving a manufacturing change
under section 506A.
``(III) Bioequivalence.--If the Secretary would approve the
difference in a notice submitted under clause (i) using the
safe and effective standard under section 506A and if the
Secretary determines that the qualifying drug is not
bioequivalent to the U.S. label drug, the Secretary shall--

``(aa) include in the labeling provided under paragraph (3)
a prominent advisory that the qualifying drug is safe and
effective but is not bioequivalent to the U.S. label drug if
the Secretary determines that such an advisory is necessary
for health care practitioners and patients to use the
qualifying drug safely and effectively; or
``(bb) decline to approve the difference if the Secretary
determines that the availability of both the qualifying drug
and the U.S. label drug would pose a threat to the public
health.

``(IV) Review by the secretary.--The Secretary shall review
and approve or disapprove the difference in a notice
submitted under clause (i), if required under section 506A,
not later than 120 days after the date on which the notice is
submitted.
``(V) Establishment inspection.--If review of such
difference would require an inspection of the establishment
in which the qualifying drug is manufactured--

``(aa) such inspection by the Secretary shall be
authorized; and
``(bb) the Secretary may rely on a satisfactory report of a
good manufacturing practice inspection of the establishment
from a permitted country whose regulatory system the
Secretary recognizes as equivalent under a mutual recognition
agreement, as provided under section 510(i)(3), section 803,
or part 26 of title 21, Code of Federal Regulations (or any
corresponding successor rule or regulation).
``(vii) Publication of information on notices.--

``(I) In general.--Through the Internet website of the Food
and Drug Administration and a toll-free telephone number, the
Secretary shall readily make available to the public a list
of notices submitted under clause (i).
``(II) Contents.--The list under subclause (I) shall
include the date on which a notice is submitted and whether--

``(aa) a notice is under review;
``(bb) the Secretary has ordered that importation of the
qualifying drug from a permitted country cease; or
``(cc) the importation of the drug is permitted under
subsection (a).

``(III) Update.--The Secretary shall promptly update the
Internet website with any changes to the list.

``(C) Notice; drug difference requiring prior approval.--In
the case of a notice under subparagraph (B)(i) that includes
a difference that would, under subsection (c) or (d)(3)(B)(i)
of section 506A, require the approval of a supplemental
application before the difference could be made to the U.S.
label drug the following shall occur:
``(i) Promptly after the notice is submitted, the Secretary
shall notify registered exporters, registered importers, the
Federal Trade Commission, and the State attorneys general
that the notice has been submitted with respect to the
qualifying drug involved.
``(ii) If the Secretary has not made a determination
whether such a supplemental application regarding the U.S.
label drug would be approved or disapproved by the date on
which the qualifying drug involved is to be introduced for
commercial distribution in a permitted country, the Secretary
shall--

``(I) order that the importation of the qualifying drug
involved from the permitted country not begin until the
Secretary completes review of the notice; and
``(II) promptly notify registered exporters, registered
importers, the Federal Trade Commission, and the State
attorneys general of the order.

``(iii) If the Secretary determines that such a
supplemental application regarding the U.S. label drug would
not be approved, the Secretary shall--

``(I) order that the importation of the qualifying drug
involved from the permitted country cease, or provide that an
order under clause (ii), if any, remains in effect;
``(II) notify the permitted country that approved the
qualifying drug for commercial distribution of the
determination; and
``(III) promptly notify registered exporters, registered
importers, the Federal Trade Commission, and the State
attorneys general of the determination.

``(iv) If the Secretary determines that such a supplemental
application regarding the U.S. label drug would be approved,
the Secretary shall--

``(I) vacate the order under clause (ii), if any;
``(II) consider the difference to be a variation provided
for in the approved application for the U.S. label drug;
``(III) permit importation of the qualifying drug under
subsection (a); and
``(IV) promptly notify registered exporters, registered
importers, the Federal Trade Commission, and the State
attorneys general of the determination.

``(D) Notice; drug difference not requiring prior
approval.--In the case of a notice under subparagraph (B)(i)
that includes a difference that would, under section
506A(d)(3)(B)(ii), not require the approval of a supplemental
application before the difference could be made to the U.S.
label drug the following shall occur:
``(i) During the period in which the notice is being
reviewed by the Secretary, the authority under this
subsection to import the qualifying drug involved continues
in effect.
``(ii) If the Secretary determines that such a supplemental
application regarding the U.S. label drug would not be
approved, the Secretary shall--

``(I) order that the importation of the qualifying drug
involved from the permitted country cease;
``(II) notify the permitted country that approved the
qualifying drug for commercial distribution of the
determination; and
``(III) promptly notify registered exporters, registered
importers, the Federal Trade Commission, and the State
attorneys general of the determination.

``(iii) If the Secretary determines that such a
supplemental application regarding the U.S. label drug would
be approved, the difference shall be considered to be a
variation provided for in the approved application for the
U.S. label drug.
``(E) Notice; drug difference not requiring approval; no
difference.--In the case of a notice under subparagraph
(B)(i) that includes a difference for which, under section
506A(d)(1)(A), a supplemental application would not be
required for the difference to be made to the U.S. label
drug, or that states that there is no difference, the
Secretary--
``(i) shall consider such difference to be a variation
provided for in the approved application for the U.S. label
drug;
``(ii) may not order that the importation of the qualifying
drug involved cease; and
``(iii) shall promptly notify registered exporters and
registered importers.
``(F) Differences in active ingredient, route of
administration, dosage form, or strength.--
``(i) In general.--A person who manufactures a drug
approved under section 505(b) shall submit an application
under section 505(b) for approval of another drug that is
manufactured for distribution in a permitted country by or
for the person that manufactures the drug approved under
section 505(b) if--

``(I) there is no qualifying drug in commercial
distribution in permitted countries whose combined population
represents at least 50 percent of the total population of all
permitted countries with the same active ingredient or
ingredients, route of administration, dosage form, and
strength as the drug approved under section 505(b); and
``(II) each active ingredient of the other drug is related
to an active ingredient of the drug approved under section
505(b), as defined in clause (v).

``(ii) Application under section 505(b).--The application
under section 505(b) required under clause (i) shall--

``(I) request approval of the other drug for the indication
or indications for which the drug approved under section
505(b) is labeled;
``(II) include the information that the person submitted to
the government of the permitted country for purposes of
obtaining approval for commercial distribution of the other
drug in that country, which if in a language other than
English, shall be accompanied by an English translation
verified to be complete and accurate, with the name, address,
and a brief statement of the qualifications of the person
that made the translation;
``(III) include a right of reference to the application for
the drug approved under section 505(b); and
``(IV) include such additional information as the Secretary
may require.

``(iii) Timing of submission of application.--An
application under section 505(b) required under clause (i)
shall be submitted to the Secretary not later than the day on
which the information referred to in clause (ii)(II) is
submitted to the government of the permitted country.
``(iv) Notice of decision on application.--The Secretary
shall promptly notify registered exporters, registered
importers, the Federal Trade Commission, and the State
attorneys general of a determination to approve or to
disapprove an application under section 505(b) required under
clause (i).

[[Page S12953]]

``(v) Related active ingredients.--For purposes of clause
(i)(II), 2 active ingredients are related if they are--

``(I) the same; or
``(II) different salts, esters, or complexes of the same
moiety.

``(3) Section 502; labeling.--
``(A) Importation by registered importer.--
``(i) In general.--In the case of a qualifying drug that is
imported or offered for import by a registered importer, such
drug shall be considered to be in compliance with section 502
and the labeling requirements under the approved application
for the U.S. label drug if the qualifying drug bears--

``(I) a copy of the labeling approved for the U.S. label
drug under section 505, without regard to whether the copy
bears any trademark involved;
``(II) the name of the manufacturer and location of the
manufacturer;
``(III) the lot number assigned by the manufacturer;
``(IV) the name, location, and registration number of the
importer; and
``(V) the National Drug Code number assigned to the
qualifying drug by the Secretary.

``(ii) Request for copy of the labeling.--The Secretary
shall provide such copy to the registered importer involved,
upon request of the importer.
``(iii) Requested labeling.--The labeling provided by the
Secretary under clause (ii) shall--

``(I) include the established name, as defined in section
502(e)(3), for each active ingredient in the qualifying drug;
``(II) not include the proprietary name of the U.S. label
drug or any active ingredient thereof;
``(III) if required under paragraph (2)(B)(vi)(III), a
prominent advisory that the qualifying drug is safe and
effective but not bioequivalent to the U.S. label drug; and
``(IV) if the inactive ingredients of the qualifying drug
are different from the inactive ingredients for the U.S.
label drug, include--

``(aa) a prominent notice that the ingredients of the
qualifying drug differ from the ingredients of the U.S. label
drug and that the qualifying drug must be dispensed with an
advisory to people with allergies about this difference and a
list of ingredients; and
``(bb) a list of the ingredients of the qualifying drug as
would be required under section 502(e).
``(B) Importation by individual.--
``(i) In general.--In the case of a qualifying drug that is
imported or offered for import by a registered exporter to an
individual, such drug shall be considered to be in compliance
with section 502 and the labeling requirements under the
approved application for the U.S. label drug if the packaging
and labeling of the qualifying drug complies with all
applicable regulations promulgated under sections 3 and 4 of
the Poison Prevention Packaging Act of 1970 (15 U.S.C. 1471
et seq.) and the labeling of the qualifying drug includes--

``(I) directions for use by the consumer;
``(II) the lot number assigned by the manufacturer;
``(III) the name and registration number of the exporter;
``(IV) if required under paragraph (2)(B)(vi)(III), a
prominent advisory that the drug is safe and effective but
not bioequivalent to the U.S. label drug;
``(V) if the inactive ingredients of the drug are different
from the inactive ingredients for the U.S. label drug--

``(aa) a prominent advisory that persons with an allergy
should check the ingredient list of the drug because the
ingredients of the drug differ from the ingredients of the
U.S. label drug; and
``(bb) a list of the ingredients of the drug as would be
required under section 502(e); and

``(VI) a copy of any special labeling that would be
required by the Secretary had the U.S. label drug been
dispensed by a pharmacist in the United States, without
regard to whether the special labeling bears any trademark
involved.

``(ii) Packaging.--A qualifying drug offered for import to
an individual by an exporter under this section that is
packaged in a unit-of-use container (as those items are
defined in the United States Pharmacopeia and National
Formulary) shall not be repackaged, provided that--

``(I) the packaging complies with all applicable
regulations under sections 3 and 4 of the Poison Prevention
Packaging Act of 1970 (15 U.S.C. 1471 et seq.); or
``(II) the consumer consents to waive the requirements of
such Act, after being informed that the packaging does not
comply with such Act and that the exporter will provide the
drug in packaging that is compliant at no additional cost.

``(iii) Request for copy of special labeling and ingredient
list.--The Secretary shall provide to the registered exporter
involved a copy of the special labeling, the advisory, and
the ingredient list described under clause (i), upon request
of the exporter.
``(iv) Requested labeling and ingredient list.--The
labeling and ingredient list provided by the Secretary under
clause (iii) shall--

``(I) include the established name, as defined in section
502(e)(3), for each active ingredient in the drug; and
``(II) not include the proprietary name of the U.S. label
drug or any active ingredient thereof.

``(4) Section 501; adulteration.--A qualifying drug that is
imported or offered for import under subsection (a) shall be
considered to be in compliance with section 501 if the drug
is in compliance with subsection (c).
``(5) Standards for refusing admission.--A drug exported
under subsection (a) from a registered exporter or imported
by a registered importer may be refused admission into the
United States if 1 or more of the following applies:
``(A) The drug is not a qualifying drug.
``(B) A notice for the drug required under paragraph (2)(B)
has not been submitted to the Secretary.
``(C) The Secretary has ordered that importation of the
drug from the permitted country cease under subparagraph (C)
or (D) of paragraph (2).
``(D) The drug does not comply with paragraph (3) or (4).
``(E) The shipping container appears damaged in a way that
may affect the strength, quality, or purity of the drug.
``(F) The Secretary becomes aware that--
``(i) the drug may be counterfeit;
``(ii) the drug may have been prepared, packed, or held
under insanitary conditions; or
``(iii) the methods used in, or the facilities or controls
used for, the manufacturing, processing, packing, or holding
of the drug do not conform to good manufacturing practice.
``(G) The Secretary has obtained an injunction under
section 302 that prohibits the distribution of the drug in
interstate commerce.
``(H) The Secretary has under section 505(e) withdrawn
approval of the drug.
``(I) The manufacturer of the drug has instituted a recall
of the drug.
``(J) If the drug is imported or offered for import by a
registered importer without submission of a notice in
accordance with subsection (d)(4).
``(K) If the drug is imported or offered for import from a
registered exporter to an individual and 1 or more of the
following applies:
``(i) The shipping container for such drug does not bear
the markings required under subsection (d)(2).
``(ii) The markings on the shipping container appear to be
counterfeit.
``(iii) The shipping container or markings appear to have
been tampered with.
``(h) Exporter Licensure in Permitted Country.--A
registration condition is that the exporter involved agrees
that a qualifying drug will be exported to an individual only
if the Secretary has verified that--
``(1) the exporter is authorized under the law of the
permitted country in which the exporter is located to
dispense prescription drugs; and
``(2) the exporter employs persons that are licensed under
the law of the permitted country in which the exporter is
located to dispense prescription drugs in sufficient number
to dispense safely the drugs exported by the exporter to
individuals, and the exporter assigns to those persons
responsibility for dispensing such drugs to individuals.
``(i) Individuals; Conditions for Importation.--
``(1) In general.--For purposes of subsection (a)(2)(B),
the importation of a qualifying drug by an individual is in
accordance with this subsection if the following conditions
are met:
``(A) The drug is accompanied by a copy of a prescription
for the drug, which prescription--
``(i) is valid under applicable Federal and State laws; and
``(ii) was issued by a practitioner who, under the law of a
State of which the individual is a resident, or in which the
individual receives care from the practitioner who issues the
prescription, is authorized to administer prescription drugs.
``(B) The drug is accompanied by a copy of the
documentation that was required under the law or regulations
of the permitted country in which the exporter is located, as
a condition of dispensing the drug to the individual.
``(C) The copies referred to in subparagraphs (A)(i) and
(B) are marked in a manner sufficient--
``(i) to indicate that the prescription, and the equivalent
document in the permitted country in which the exporter is
located, have been filled; and
``(ii) to prevent a duplicative filling by another
pharmacist.
``(D) The individual has provided to the registered
exporter a complete list of all drugs used by the individual
for review by the individuals who dispense the drug.
``(E) The quantity of the drug does not exceed a 90-day
supply.
``(F) The drug is not an ineligible subpart H drug. For
purposes of this section, a prescription drug is an
`ineligible subpart H drug' if the drug was approved by the
Secretary under subpart H of part 314 of title 21, Code of
Federal Regulations (relating to accelerated approval), with
restrictions under section 520 of such part to assure safe
use, and the Secretary has published in the Federal Register
a notice that the Secretary has determined that good cause
exists to prohibit the drug from being imported pursuant to
this subsection.
``(2) Notice regarding drug refused admission.--If a
registered exporter ships a drug to an individual pursuant to
subsection (a)(2)(B) and the drug is refused admission to the
United States, a written notice shall be

[[Page S12954]]

sent to the individual and to the exporter that informs the
individual and the exporter of such refusal and the reason
for the refusal.
``(j) Maintenance of Records and Samples.--
``(1) In general.--A registration condition is that the
importer or exporter involved shall--
``(A) maintain records required under this section for not
less than 2 years; and
``(B) maintain samples of each lot of a qualifying drug
required under this section for not more than 2 years.
``(2) Place of record maintenance.--The records described
under paragraph (1) shall be maintained--
``(A) in the case of an importer, at the place of business
of the importer at which the importer initially receives the
qualifying drug after importation; or
``(B) in the case of an exporter, at the facility from
which the exporter ships the qualifying drug to the United
States.
``(k) Drug Recalls.--
``(1) Manufacturers.--A person that manufactures a
qualifying drug imported from a permitted country under this
section shall promptly inform the Secretary--
``(A) if the drug is recalled or withdrawn from the market
in a permitted country;
``(B) how the drug may be identified, including lot number;
and
``(C) the reason for the recall or withdrawal.
``(2) Secretary.--With respect to each permitted country,
the Secretary shall--
``(A) enter into an agreement with the government of the
country to receive information about recalls and withdrawals
of qualifying drugs in the country; or
``(B) monitor recalls and withdrawals of qualifying drugs
in the country using any information that is available to the
public in any media.
``(3) Notice.--The Secretary may notify, as appropriate,
registered exporters, registered importers, wholesalers,
pharmacies, or the public of a recall or withdrawal of a
qualifying drug in a permitted country.
``(l) Drug Labeling and Packaging.--
``(1) In general.--When a qualifying drug that is imported
into the United States by an importer under subsection (a) is
dispensed by a pharmacist to an individual, the pharmacist
shall provide that the packaging and labeling of the drug
complies with all applicable regulations promulgated under
sections 3 and 4 of the Poison Prevention Packaging Act of
1970 (15 U.S.C. 1471 et seq.) and shall include with any
other labeling provided to the individual the following:
``(A) The lot number assigned by the manufacturer.
``(B) The name and registration number of the importer.
``(C) If required under paragraph (2)(B)(vi)(III) of
subsection (g), a prominent advisory that the drug is safe
and effective but not bioequivalent to the U.S. label drug.
``(D) If the inactive ingredients of the drug are different
from the inactive ingredients for the U.S. label drug--
``(i) a prominent advisory that persons with allergies
should check the ingredient list of the drug because the
ingredients of the drug differ from the ingredients of the
U.S. label drug; and
``(ii) a list of the ingredients of the drug as would be
required under section 502(e).
``(2) Packaging.--A qualifying drug that is packaged in a
unit-of-use container (as those terms are defined in the
United States Pharmacopeia and National Formulary) shall not
be repackaged, provided that--
``(A) the packaging complies with all applicable
regulations under sections 3 and 4 of the Poison Prevention
Packaging Act of 1970 (15 U.S.C. 1471 et seq.); or
``(B) the consumer consents to waive the requirements of
such Act, after being informed that the packaging does not
comply with such Act and that the pharmacist will provide the
drug in packaging that is compliant at no additional cost.
``(m) Charitable Contributions.--Notwithstanding any other
provision of this section, this section does not authorize
the importation into the United States of a qualifying drug
donated or otherwise supplied for free or at nominal cost by
the manufacturer of the drug to a charitable or humanitarian
organization, including the United Nations and affiliates, or
to a government of a foreign country.
``(n) Unfair and Discriminatory Acts and Practices.--
``(1) In general.--It is unlawful for a manufacturer,
directly or indirectly (including by being a party to a
licensing agreement or other agreement), to--
``(A) discriminate by charging a higher price for a
prescription drug sold to a registered exporter or other
person in a permitted country that exports a qualifying drug
to the United States under this section than the price that
is charged, inclusive of rebates or other incentives to the
permitted country or other person, to another person that is
in the same country and that does not export a qualifying
drug into the United States under this section;
``(B) discriminate by charging a higher price for a
prescription drug sold to a registered importer or other
person that distributes, sells, or uses a qualifying drug
imported into the United States under this section than the
price that is charged to another person in the United States
that does not import a qualifying drug under this section, or
that does not distribute, sell, or use such a drug;
``(C) discriminate by denying, restricting, or delaying
supplies of a prescription drug to a registered exporter or
other person in a permitted country that exports a qualifying
drug to the United States under this section or to a
registered importer or other person that distributes, sells,
or uses a qualifying drug imported into the United States
under this section;
``(D) discriminate by publicly, privately, or otherwise
refusing to do business with a registered exporter or other
person in a permitted country that exports a qualifying drug
to the United States under this section or with a registered
importer or other person that distributes, sells, or uses a
qualifying drug imported into the United States under this
section;
``(E) knowingly fail to submit a notice under subsection
(g)(2)(B)(i), knowingly fail to submit such a notice on or
before the date specified in subsection (g)(2)(B)(v) or as
otherwise required under paragraphs (3), (4), and (5) of
section 10004(e) of the Pharmaceutical Market Access and Drug
Safety Act of 2009, knowingly submit such a notice that makes
a materially false, fictitious, or fraudulent statement, or
knowingly fail to provide promptly any information requested
by the Secretary to review such a notice;
``(F) knowingly fail to submit an application required
under subsection (g)(2)(F), knowingly fail to submit such an
application on or before the date specified in subsection
(g)(2)(F)(iii), knowingly submit such an application that
makes a materially false, fictitious, or fraudulent
statement, or knowingly fail to provide promptly any
information requested by the Secretary to review such an
application;
``(G) cause there to be a difference (including a
difference in active ingredient, route of administration,
dosage form, strength, formulation, manufacturing
establishment, manufacturing process, or person that
manufactures the drug) between a prescription drug for
distribution in the United States and the drug for
distribution in a permitted country;
``(H) refuse to allow an inspection authorized under this
section of an establishment that manufactures a qualifying
drug that is, or will be, introduced for commercial
distribution in a permitted country;
``(I) fail to conform to the methods used in, or the
facilities used for, the manufacturing, processing, packing,
or holding of a qualifying drug that is, or will be,
introduced for commercial distribution in a permitted country
to good manufacturing practice under this Act;
``(J) become a party to a licensing agreement or other
agreement related to a qualifying drug that fails to provide
for compliance with all requirements of this section with
respect to such drug;
``(K) enter into a contract that restricts, prohibits, or
delays the importation of a qualifying drug under this
section;
``(L) engage in any other action to restrict, prohibit, or
delay the importation of a qualifying drug under this
section; or
``(M) engage in any other action that the Federal Trade
Commission determines to discriminate against a person that
engages or attempts to engage in the importation of a
qualifying drug under this section.
``(2) Referral of potential violations.--The Secretary
shall promptly refer to the Federal Trade Commission each
potential violation of subparagraph (E), (F), (G), (H), or
(I) of paragraph (1) that becomes known to the Secretary.
``(3) Affirmative defense.--
``(A) Discrimination.--It shall be an affirmative defense
to a charge that a manufacturer has discriminated under
subparagraph (A), (B), (C), (D), or (M) of paragraph (1) that
the higher price charged for a prescription drug sold to a
person, the denial, restriction, or delay of supplies of a
prescription drug to a person, the refusal to do business
with a person, or other discriminatory activity against a
person, is not based, in whole or in part, on--
``(i) the person exporting or importing a qualifying drug
into the United States under this section; or
``(ii) the person distributing, selling, or using a
qualifying drug imported into the United States under this
section.
``(B) Drug differences.--It shall be an affirmative defense
to a charge that a manufacturer has caused there to be a
difference described in subparagraph (G) of paragraph (1)
that--
``(i) the difference was required by the country in which
the drug is distributed;
``(ii) the Secretary has determined that the difference was
necessary to improve the safety or effectiveness of the drug;
``(iii) the person manufacturing the drug for distribution
in the United States has given notice to the Secretary under
subsection (g)(2)(B)(i) that the drug for distribution in the
United States is not different from a drug for distribution
in permitted countries whose combined population represents
at least 50 percent of the total population of all permitted
countries; or
``(iv) the difference was not caused, in whole or in part,
for the purpose of restricting importation of the drug into
the United States under this section.
``(4) Effect of subsection.--
``(A) Sales in other countries.--This subsection applies
only to the sale or distribution of a prescription drug in a
country if the manufacturer of the drug chooses to sell or
distribute the drug in the country. Nothing in this
subsection shall be construed to compel the manufacturer of a
drug to distribute or sell the drug in a country.

[[Page S12955]]

``(B) Discounts to insurers, health plans, pharmacy benefit
managers, and covered entities.--Nothing in this subsection
shall be construed to--
``(i) prevent or restrict a manufacturer of a prescription
drug from providing discounts to an insurer, health plan,
pharmacy benefit manager in the United States, or covered
entity in the drug discount program under section 340B of the
Public Health Service Act (42 U.S.C. 256b) in return for
inclusion of the drug on a formulary;
``(ii) require that such discounts be made available to
other purchasers of the prescription drug; or
``(iii) prevent or restrict any other measures taken by an
insurer, health plan, or pharmacy benefit manager to
encourage consumption of such prescription drug.
``(C) Charitable contributions.--Nothing in this subsection
shall be construed to--
``(i) prevent a manufacturer from donating a prescription
drug, or supplying a prescription drug at nominal cost, to a
charitable or humanitarian organization, including the United
Nations and affiliates, or to a government of a foreign
country; or
``(ii) apply to such donations or supplying of a
prescription drug.
``(5) Enforcement.--
``(A) Unfair or deceptive act or practice.--A violation of
this subsection shall be treated as a violation of a rule
defining an unfair or deceptive act or practice prescribed
under section 18(a)(1)(B) of the Federal Trade Commission Act
(15 U.S.C. 57a(a)(1)(B)).
``(B) Actions by the commission.--The Federal Trade
Commission--
``(i) shall enforce this subsection in the same manner, by
the same means, and with the same jurisdiction, powers, and
duties as though all applicable terms and provisions of the
Federal Trade Commission Act (15 U.S.C. 41 et seq.) were
incorporated into and made a part of this section; and
``(ii) may seek monetary relief threefold the damages
sustained, in addition to any other remedy available to the
Federal Trade Commission under the Federal Trade Commission
Act (15 U.S.C. 41 et seq.).
``(6) Actions by states.--
``(A) In general.--
``(i) Civil actions.--In any case in which the attorney
general of a State has reason to believe that an interest of
the residents of that State have been adversely affected by
any manufacturer that violates paragraph (1), the attorney
general of a State may bring a civil action on behalf of the
residents of the State, and persons doing business in the
State, in a district court of the United States of
appropriate jurisdiction to--

``(I) enjoin that practice;
``(II) enforce compliance with this subsection;
``(III) obtain damages, restitution, or other compensation
on behalf of residents of the State and persons doing
business in the State, including threefold the damages; or
``(IV) obtain such other relief as the court may consider
to be appropriate.

``(ii) Notice.--

``(I) In general.--Before filing an action under clause
(i), the attorney general of the State involved shall provide
to the Federal Trade Commission--

``(aa) written notice of that action; and
``(bb) a copy of the complaint for that action.

``(II) Exemption.--Subclause (I) shall not apply with
respect to the filing of an action by an attorney general of
a State under this paragraph, if the attorney general
determines that it is not feasible to provide the notice
described in that subclause before filing of the action. In
such case, the attorney general of a State shall provide
notice and a copy of the complaint to the Federal Trade
Commission at the same time as the attorney general files the
action.

``(B) Intervention.--
``(i) In general.--On receiving notice under subparagraph
(A)(ii), the Federal Trade Commission shall have the right to
intervene in the action that is the subject of the notice.
``(ii) Effect of intervention.--If the Federal Trade
Commission intervenes in an action under subparagraph (A), it
shall have the right--

``(I) to be heard with respect to any matter that arises in
that action; and
``(II) to file a petition for appeal.

``(C) Construction.--For purposes of bringing any civil
action under subparagraph (A), nothing in this subsection
shall be construed to prevent an attorney general of a State
from exercising the powers conferred on the attorney general
by the laws of that State to--
``(i) conduct investigations;
``(ii) administer oaths or affirmations; or
``(iii) compel the attendance of witnesses or the
production of documentary and other evidence.
``(D) Actions by the commission.--In any case in which an
action is instituted by or on behalf of the Federal Trade
Commission for a violation of paragraph (1), a State may not,
during the pendency of that action, institute an action under
subparagraph (A) for the same violation against any defendant
named in the complaint in that action.
``(E) Venue.--Any action brought under subparagraph (A) may
be brought in the district court of the United States that
meets applicable requirements relating to venue under section
1391 of title 28, United States Code.
``(F) Service of process.--In an action brought under
subparagraph (A), process may be served in any district in
which the defendant--
``(i) is an inhabitant; or
``(ii) may be found.
``(G) Measurement of damages.--In any action under this
paragraph to enforce a cause of action under this subsection
in which there has been a determination that a defendant has
violated a provision of this subsection, damages may be
proved and assessed in the aggregate by statistical or
sampling methods, by the computation of illegal overcharges
or by such other reasonable system of estimating aggregate
damages as the court in its discretion may permit without the
necessity of separately proving the individual claim of, or
amount of damage to, persons on whose behalf the suit was
brought.
``(H) Exclusion on duplicative relief.--The district court
shall exclude from the amount of monetary relief awarded in
an action under this paragraph brought by the attorney
general of a State any amount of monetary relief which
duplicates amounts which have been awarded for the same
injury.
``(7) Effect on antitrust laws.--Nothing in this subsection
shall be construed to modify, impair, or supersede the
operation of the antitrust laws. For the purpose of this
subsection, the term `antitrust laws' has the meaning given
it in the first section of the Clayton Act, except that it
includes section 5 of the Federal Trade Commission Act to the
extent that such section 5 applies to unfair methods of
competition.
``(8) Manufacturer.--In this subsection, the term
`manufacturer' means any entity, including any affiliate or
licensee of that entity, that is engaged in--
``(A) the production, preparation, propagation,
compounding, conversion, or processing of a prescription
drug, either directly or indirectly by extraction from
substances of natural origin, or independently by means of
chemical synthesis, or by a combination of extraction and
chemical synthesis; or
``(B) the packaging, repackaging, labeling, relabeling, or
distribution of a prescription drug.''.
(b) Prohibited Acts.--The Federal Food, Drug, and Cosmetic
Act is amended--
(1) in section 301 (21 U.S.C. 331), by striking paragraph
(aa) and inserting the following:
``(aa)(1) The sale or trade by a pharmacist, or by a
business organization of which the pharmacist is a part, of a
qualifying drug that under section 804(a)(2)(A) was imported
by the pharmacist, other than--
``(A) a sale at retail made pursuant to dispensing the drug
to a customer of the pharmacist or organization; or
``(B) a sale or trade of the drug to a pharmacy or a
wholesaler registered to import drugs under section 804.
``(2) The sale or trade by an individual of a qualifying
drug that under section 804(a)(2)(B) was imported by the
individual.
``(3) The making of a materially false, fictitious, or
fraudulent statement or representation, or a material
omission, in a notice under clause (i) of section
804(g)(2)(B) or in an application required under section
804(g)(2)(F), or the failure to submit such a notice or
application.
``(4) The importation of a drug in violation of a
registration condition or other requirement under section
804, the falsification of any record required to be
maintained, or provided to the Secretary, under such section,
or the violation of any registration condition or other
requirement under such section.''; and
(2) in section 303(a) (21 U.S.C. 333(a)), by striking
paragraph (6) and inserting the following:
``(6) Notwithstanding subsection (a), any person that
knowingly violates section 301(i) (2) or (3) or section
301(aa)(4) shall be imprisoned not more than 10 years, or
fined in accordance with title 18, United States Code, or
both.''.
(c) Amendment of Certain Provisions.--
(1) In general.--Section 801 of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 381) is amended by striking
subsection (g) and inserting the following:
``(g) With respect to a prescription drug that is imported
or offered for import into the United States by an individual
who is not in the business of such importation, that is not
shipped by a registered exporter under section 804, and that
is refused admission under subsection (a), the Secretary
shall notify the individual that--
``(1) the drug has been refused admission because the drug
was not a lawful import under section 804;
``(2) the drug is not otherwise subject to a waiver of the
requirements of subsection (a);
``(3) the individual may under section 804 lawfully import
certain prescription drugs from exporters registered with the
Secretary under section 804; and
``(4) the individual can find information about such
importation, including a list of registered exporters, on the
Internet website of the Food and Drug Administration or
through a toll-free telephone number required under section
804.''.
(2) Establishment registration.--Section 510(i) of the
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360(i)) is
amended in paragraph (1) by inserting after ``import into the
United States'' the following: ``, including a drug that is,
or may be, imported or offered for import into the United
States under section 804,''.
(3) Effective date.--The amendments made by this subsection
shall take effect on the date that is 90 days after the date
of enactment of this Act.
(d) Exhaustion.--

[[Page S12956]]

(1) In general.--Section 271 of title 35, United States
Code, is amended--
(A) by redesignating subsections (h) and (i) as (i) and
(j), respectively; and
(B) by inserting after subsection (g) the following:
``(h) It shall not be an act of infringement to use, offer
to sell, or sell within the United States or to import into
the United States any patented invention under section 804 of
the Federal Food, Drug, and Cosmetic Act that was first sold
abroad by or under authority of the owner or licensee of such
patent.''.
(2) Rule of construction.--Nothing in the amendment made by
paragraph (1) shall be construed to affect the ability of a
patent owner or licensee to enforce their patent, subject to
such amendment.
(e) Effect of Section 804.--
(1) In general.--Section 804 of the Federal Food, Drug, and
Cosmetic Act, as added by subsection (a), shall permit the
importation of qualifying drugs (as defined in such section
804) into the United States without regard to the status of
the issuance of implementing regulations--
(A) from exporters registered under such section 804 on the
date that is 90 days after the date of enactment of this Act;
and
(B) from permitted countries, as defined in such section
804, by importers registered under such section 804 on the
date that is 1 year after the date of enactment of this Act.
(2) Review of registration by certain exporters.--
(A) Review priority.--In the review of registrations
submitted under subsection (b) of such section 804,
registrations submitted by entities in Canada that are
significant exporters of prescription drugs to individuals in
the United States as of the date of enactment of this Act
will have priority during the 90 day period that begins on
such date of enactment.
(B) Period for review.--During such 90-day period, the
reference in subsection (b)(2)(A) of such section 804 to 90
days (relating to approval or disapproval of registrations)
is, as applied to such entities, deemed to be 30 days.
(C) Limitation.--That an exporter in Canada exports, or has
exported, prescription drugs to individuals in the United
States on or before the date that is 90 days after the date
of enactment of this Act shall not serve as a basis, in whole
or in part, for disapproving a registration under such
section 804 from the exporter.
(D) First year limit on number of exporters.--During the 1-
year period beginning on the date of enactment of this Act,
the Secretary of Health and Human Services (referred to in
this section as the ``Secretary'') may limit the number of
registered exporters under such section 804 to not less than
50, so long as the Secretary gives priority to those
exporters with demonstrated ability to process a high volume
of shipments of drugs to individuals in the United States.
(E) Second year limit on number of exporters.--During the
1-year period beginning on the date that is 1 year after the
date of enactment of this Act, the Secretary may limit the
number of registered exporters under such section 804 to not
less than 100, so long as the Secretary gives priority to
those exporters with demonstrated ability to process a high
volume of shipments of drugs to individuals in the United
States.
(F) Further limit on number of exporters.--During any 1-
year period beginning on a date that is 2 or more years after
the date of enactment of this Act, the Secretary may limit
the number of registered exporters under such section 804 to
not less than 25 more than the number of such exporters
during the previous 1-year period, so long as the Secretary
gives priority to those exporters with demonstrated ability
to process a high volume of shipments of drugs to individuals
in the United States.
(3) Limits on number of importers.--
(A) First year limit on number of importers.--During the 1-
year period beginning on the date that is 1 year after the
date of enactment of this Act, the Secretary may limit the
number of registered importers under such section 804 to not
less than 100 (of which at least a significant number shall
be groups of pharmacies, to the extent feasible given the
applications submitted by such groups), so long as the
Secretary gives priority to those importers with demonstrated
ability to process a high volume of shipments of drugs
imported into the United States.
(B) Second year limit on number of importers.--During the
1-year period beginning on the date that is 2 years after the
date of enactment of this Act, the Secretary may limit the
number of registered importers under such section 804 to not
less than 200 (of which at least a significant number shall
be groups of pharmacies, to the extent feasible given the
applications submitted by such groups), so long as the
Secretary gives priority to those importers with demonstrated
ability to process a high volume of shipments of drugs into
the United States.
(C) Further limit on number of importers.--During any 1-
year period beginning on a date that is 3 or more years after
the date of enactment of this Act, the Secretary may limit
the number of registered importers under such section 804 to
not less than 50 more (of which at least a significant number
shall be groups of pharmacies, to the extent feasible given
the applications submitted by such groups) than the number of
such importers during the previous 1-year period, so long as
the Secretary gives priority to those importers with
demonstrated ability to process a high volume of shipments of
drugs to the United States.
(4) Notices for drugs for import from canada.--The notice
with respect to a qualifying drug introduced for commercial
distribution in Canada as of the date of enactment of this
Act that is required under subsection (g)(2)(B)(i) of such
section 804 shall be submitted to the Secretary not later
than 30 days after the date of enactment of this Act if--
(A) the U.S. label drug (as defined in such section 804)
for the qualifying drug is 1 of the 100 prescription drugs
with the highest dollar volume of sales in the United States
based on the 12 calendar month period most recently completed
before the date of enactment of this Act; or
(B) the notice is a notice under subsection
(g)(2)(B)(i)(II) of such section 804.
(5) Notice for drugs for import from other countries.--The
notice with respect to a qualifying drug introduced for
commercial distribution in a permitted country other than
Canada as of the date of enactment of this Act that is
required under subsection (g)(2)(B)(i) of such section 804
shall be submitted to the Secretary not later than 180 days
after the date of enactment of this Act if--
(A) the U.S. label drug for the qualifying drug is 1 of the
100 prescription drugs with the highest dollar volume of
sales in the United States based on the 12 calendar month
period that is first completed on the date that is 120 days
after the date of enactment of this Act; or
(B) the notice is a notice under subsection
(g)(2)(B)(i)(II) of such section 804.
(6) Notice for other drugs for import.--
(A) Guidance on submission dates.--The Secretary shall by
guidance establish a series of submission dates for the
notices under subsection (g)(2)(B)(i) of such section 804
with respect to qualifying drugs introduced for commercial
distribution as of the date of enactment of this Act and that
are not required to be submitted under paragraph (4) or (5).
(B) Consistent and efficient use of resources.--The
Secretary shall establish the dates described under
subparagraph (A) so that such notices described under
subparagraph (A) are submitted and reviewed at a rate that
allows consistent and efficient use of the resources and
staff available to the Secretary for such reviews. The
Secretary may condition the requirement to submit such a
notice, and the review of such a notice, on the submission by
a registered exporter or a registered importer to the
Secretary of a notice that such exporter or importer intends
to import such qualifying drug to the United States under
such section 804.
(C) Priority for drugs with higher sales.--The Secretary
shall establish the dates described under subparagraph (A) so
that the Secretary reviews the notices described under such
subparagraph with respect to qualifying drugs with higher
dollar volume of sales in the United States before the
notices with respect to drugs with lower sales in the United
States.
(7) Notices for drugs approved after effective date.--The
notice required under subsection (g)(2)(B)(i) of such section
804 for a qualifying drug first introduced for commercial
distribution in a permitted country (as defined in such
section 804) after the date of enactment of this Act shall be
submitted to and reviewed by the Secretary as provided under
subsection (g)(2)(B) of such section 804, without regard to
paragraph (4), (5), or (6).
(8) Report.--Beginning with the first full fiscal year
after the date of enactment of this Act, not later than 90
days after the end of each fiscal year during which the
Secretary reviews a notice referred to in paragraph (4), (5),
or (6), the Secretary shall submit a report to Congress
concerning the progress of the Food and Drug Administration
in reviewing the notices referred to in paragraphs (4), (5),
and (6).
(9) User fees.--
(A) Exporters.--When establishing an aggregate total of
fees to be collected from exporters under subsection (f)(2)
of such section 804, the Secretary shall, under subsection
(f)(3)(C)(i) of such section 804, estimate the total price of
drugs imported under subsection (a) of such section 804 into
the United States by registered exporters during the first
fiscal year in which this title takes effect to be an amount
equal to the amount which bears the same ratio to
$1,000,000,000 as the number of days in such fiscal year
during which this title is effective bears to 365.
(B) Importers.--When establishing an aggregate total of
fees to be collected from importers under subsection (e)(2)
of such section 804, the Secretary shall, under subsection
(e)(3)(C)(i) of such section 804, estimate the total price of
drugs imported under subsection (a) of such section 804 into
the United States by registered importers during--
(i) the first fiscal year in which this title takes effect
to be an amount equal to the amount which bears the same
ratio to $1,000,000,000 as the number of days in such fiscal
year during which this title is effective bears to 365; and
(ii) the second fiscal year in which this title is in
effect to be $3,000,000,000.
(C) Second year adjustment.--
(i) Reports.--Not later than February 20 of the second
fiscal year in which this title is in effect, registered
importers shall report to the Secretary the total price and
the total

[[Page S12957]]

volume of drugs imported to the United States by the importer
during the 4-month period from October 1 through January 31
of such fiscal year.
(ii) Reestimate.--Notwithstanding subsection (e)(3)(C)(ii)
of such section 804 or subparagraph (B), the Secretary shall
reestimate the total price of qualifying drugs imported under
subsection (a) of such section 804 into the United States by
registered importers during the second fiscal year in which
this title is in effect. Such reestimate shall be equal to--

(I) the total price of qualifying drugs imported by each
importer as reported under clause (i); multiplied by
(II) 3.

(iii) Adjustment.--The Secretary shall adjust the fee due
on April 1 of the second fiscal year in which this title is
in effect, from each importer so that the aggregate total of
fees collected under subsection (e)(2) for such fiscal year
does not exceed the total price of qualifying drugs imported
under subsection (a) of such section 804 into the United
States by registered importers during such fiscal year as
reestimated under clause (ii).
(D) Failure to pay fees.--Notwithstanding any other
provision of this section, the Secretary may prohibit a
registered importer or exporter that is required to pay user
fees under subsection (e) or (f) of such section 804 and that
fails to pay such fees within 30 days after the date on which
it is due, from importing or offering for importation a
qualifying drug under such section 804 until such fee is
paid.
(E) Annual report.--
(i) Food and drug administration.--Not later than 180 days
after the end of each fiscal year during which fees are
collected under subsection (e), (f), or (g)(2)(B)(iv) of such
section 804, the Secretary shall prepare and submit to the
House of Representatives and the Senate a report on the
implementation of the authority for such fees during such
fiscal year and the use, by the Food and Drug Administration,
of the fees collected for the fiscal year for which the
report is made and credited to the Food and Drug
Administration.
(ii) Customs and border protection.--Not later than 180
days after the end of each fiscal year during which fees are
collected under subsection (e) or (f) of such section 804,
the Secretary of Homeland Security, in consultation with the
Secretary of the Treasury, shall prepare and submit to the
House of Representatives and the Senate a report on the use,
by the Bureau of Customs and Border Protection, of the fees,
if any, transferred by the Secretary to the Bureau of Customs
and Border Protection for the fiscal year for which the
report is made.
(10) Special rule regarding importation by individuals.--
(A) In general.--Notwithstanding any provision of this
title (or an amendment made by this title), the Secretary
shall expedite the designation of any additional permitted
countries from which an individual may import a qualifying
drug into the United States under such section 804 if any
action implemented by the Government of Canada has the effect
of limiting or prohibiting the importation of qualifying
drugs into the United States from Canada.
(B) Timing and criteria.--The Secretary shall designate
such additional permitted countries under subparagraph (A)--
(i) not later than 6 months after the date of the action by
the Government of Canada described under such subparagraph;
and
(ii) using the criteria described under subsection
(a)(4)(D)(i)(II) of such section 804.
(f) Implementation of Section 804.--
(1) Interim rule.--The Secretary may promulgate an interim
rule for implementing section 804 of the Federal Food, Drug,
and Cosmetic Act, as added by subsection (a) of this section.
(2) No notice of proposed rulemaking.--The interim rule
described under paragraph (1) may be developed and
promulgated by the Secretary without providing general notice
of proposed rulemaking.
(3) Final rule.--Not later than 1 year after the date on
which the Secretary promulgates an interim rule under
paragraph (1), the Secretary shall, in accordance with
procedures under section 553 of title 5, United States Code,
promulgate a final rule for implementing such section 804,
which may incorporate by reference provisions of the interim
rule provided for under paragraph (1), to the extent that
such provisions are not modified.
(g) Consumer Education.--The Secretary shall carry out
activities that educate consumers--
(1) with regard to the availability of qualifying drugs for
import for personal use from an exporter registered with and
approved by the Food and Drug Administration under section
804 of the Federal Food, Drug, and Cosmetic Act, as added by
this section, including information on how to verify whether
an exporter is registered and approved by use of the Internet
website of the Food and Drug Administration and the toll-free
telephone number required by this title;
(2) that drugs that consumers attempt to import from an
exporter that is not registered with and approved by the Food
and Drug Administration can be seized by the United States
Customs Service and destroyed, and that such drugs may be
counterfeit, unapproved, unsafe, or ineffective;
(3) with regard to the suspension and termination of any
registration of a registered importer or exporter under such
section 804; and
(4) with regard to the availability at domestic retail
pharmacies of qualifying drugs imported under such section
804 by domestic wholesalers and pharmacies registered with
and approved by the Food and Drug Administration.
(h) Effect on Administration Practices.--Notwithstanding
any provision of this title (and the amendments made by this
title), the practices and policies of the Food and Drug
Administration and Bureau of Customs and Border Protection,
in effect on January 1, 2004, with respect to the importation
of prescription drugs into the United States by an
individual, on the person of such individual, for personal
use, shall remain in effect.
(i) Report to Congress.--The Federal Trade Commission
shall, on an annual basis, submit to Congress a report that
describes any action taken during the period for which the
report is being prepared to enforce the provisions of section
804(n) of the Federal Food, Drug, and Cosmetic Act (as added
by this title), including any pending investigations or civil
actions under such section.

SEC. 10005. DISPOSITION OF CERTAIN DRUGS DENIED ADMISSION
INTO UNITED STATES.

(a) In General.--Chapter VIII of the Federal Food, Drug,
and Cosmetic Act (21 U.S.C. 381 et seq.), as amended by
section 10004, is further amended by adding at the end the
following section:

``SEC. 805. DISPOSITION OF CERTAIN DRUGS DENIED ADMISSION.

``(a) In General.--The Secretary of Homeland Security shall
deliver to the Secretary a shipment of drugs that is imported
or offered for import into the United States if--
``(1) the shipment has a declared value of less than
$10,000; and
``(2)(A) the shipping container for such drugs does not
bear the markings required under section 804(d)(2); or
``(B) the Secretary has requested delivery of such shipment
of drugs.
``(b) No Bond or Export.--Section 801(b) does not authorize
the delivery to the owner or consignee of drugs delivered to
the Secretary under subsection (a) pursuant to the execution
of a bond, and such drugs may not be exported.
``(c) Destruction of Violative Shipment.--The Secretary
shall destroy a shipment of drugs delivered by the Secretary
of Homeland Security to the Secretary under subsection (a)
if--
``(1) in the case of drugs that are imported or offered for
import from a registered exporter under section 804, the
drugs are in violation of any standard described in section
804(g)(5); or
``(2) in the case of drugs that are not imported or offered
for import from a registered exporter under section 804, the
drugs are in violation of a standard referred to in section
801(a) or 801(d)(1).
``(d) Certain Procedures.--
``(1) In general.--The delivery and destruction of drugs
under this section may be carried out without notice to the
importer, owner, or consignee of the drugs except as required
by section 801(g) or section 804(i)(2). The issuance of
receipts for the drugs, and recordkeeping activities
regarding the drugs, may be carried out on a summary basis.
``(2) Objective of procedures.--Procedures promulgated
under paragraph (1) shall be designed toward the objective of
ensuring that, with respect to efficiently utilizing Federal
resources available for carrying out this section, a
substantial majority of shipments of drugs subject to
described in subsection (c) are identified and destroyed.
``(e) Evidence Exception.--Drugs may not be destroyed under
subsection (c) to the extent that the Attorney General of the
United States determines that the drugs should be preserved
as evidence or potential evidence with respect to an offense
against the United States.
``(f) Rule of Construction.--This section may not be
construed as having any legal effect on applicable law with
respect to a shipment of drugs that is imported or offered
for import into the United States and has a declared value
equal to or greater than $10,000.''.
(b) Procedures.--Procedures for carrying out section 805 of
the Federal Food, Drug, and Cosmetic Act, as added by
subsection (a), shall be established not later than 90 days
after the date of the enactment of this Act.
(c) Effective Date.--The amendments made by this section
shall take effect on the date that is 90 days after the date
of enactment of this Act.

SEC. 10006. WHOLESALE DISTRIBUTION OF DRUGS; STATEMENTS
REGARDING PRIOR SALE, PURCHASE, OR TRADE.

(a) Striking of Exemptions; Applicability to Registered
Exporters.--Section 503(e) of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 353(e)) is amended--
(1) in paragraph (1)--
(A) by striking ``and who is not the manufacturer or an
authorized distributor of record of such drug'';
(B) by striking ``to an authorized distributor of record
or''; and
(C) by striking subparagraph (B) and inserting the
following:
``(B) The fact that a drug subject to subsection (b) is
exported from the United States does not with respect to such
drug exempt any person that is engaged in the business of the
wholesale distribution of the drug from providing the
statement described in subparagraph (A) to the person that
receives the drug pursuant to the export of the drug.

[[Page S12958]]

``(C)(i) The Secretary shall by regulation establish
requirements that supersede subparagraph (A) (referred to in
this subparagraph as `alternative requirements') to identify
the chain of custody of a drug subject to subsection (b) from
the manufacturer of the drug throughout the wholesale
distribution of the drug to a pharmacist who intends to sell
the drug at retail if the Secretary determines that the
alternative requirements, which may include standardized
anti-counterfeiting or track-and-trace technologies, will
identify such chain of custody or the identity of the
discrete package of the drug from which the drug is dispensed
with equal or greater certainty to the requirements of
subparagraph (A), and that the alternative requirements are
economically and technically feasible.
``(ii) When the Secretary promulgates a final rule to
establish such alternative requirements, the final rule in
addition shall, with respect to the registration condition
established in clause (i) of section 804(c)(3)(B), establish
a condition equivalent to the alternative requirements, and
such equivalent condition may be met in lieu of the
registration condition established in such clause (i).'';
(2) in paragraph (2)(A), by adding at the end the
following: ``The preceding sentence may not be construed as
having any applicability with respect to a registered
exporter under section 804.''; and
(3) in paragraph (3), by striking ``and subsection (d)--''
in the matter preceding subparagraph (A) and all that follows
through ``the term `wholesale distribution' means'' in
subparagraph (B) and inserting the following: ``and
subsection (d), the term `wholesale distribution' means''.
(b) Conforming Amendment.--Section 503(d) of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 353(d)) is amended by
adding at the end the following:
``(4) Each manufacturer of a drug subject to subsection (b)
shall maintain at its corporate offices a current list of the
authorized distributors of record of such drug.
``(5) For purposes of this subsection, the term `authorized
distributors of record' means those distributors with whom a
manufacturer has established an ongoing relationship to
distribute such manufacturer's products.''.
(c) Effective Date.--
(1) In general.--The amendments made by paragraphs (1) and
(3) of subsection (a) and by subsection (b) shall take effect
on January 1, 2012.
(2) Drugs imported by registered importers under section
804.--Notwithstanding paragraph (1), the amendments made by
paragraphs (1) and (3) of subsection (a) and by subsection
(b) shall take effect on the date that is 90 days after the
date of enactment of this Act with respect to qualifying
drugs imported under section 804 of the Federal Food, Drug,
and Cosmetic Act, as added by section 10004.
(3) Effect with respect to registered exporters.--The
amendment made by subsection (a)(2) shall take effect on the
date that is 90 days after the date of enactment of this Act.
(4) Alternative requirements.--The Secretary shall issue
regulations to establish the alternative requirements,
referred to in the amendment made by subsection (a)(1), that
take effect not later than January 1, 2012.
(5) Intermediate requirements.--The Secretary shall by
regulation require the use of standardized anti-
counterfeiting or track-and-trace technologies on
prescription drugs at the case and pallet level effective not
later than 1 year after the date of enactment of this Act.
(6) Additional requirements.--
(A) In general.--Notwithstanding any other provision of
this section, the Secretary shall, not later than 18 months
after the date of enactment of this Act, require that the
packaging of any prescription drug incorporates--
(i) a standardized numerical identifier unique to each
package of such drug, applied at the point of manufacturing
and repackaging (in which case the numerical identifier shall
be linked to the numerical identifier applied at the point of
manufacturing); and
(ii)(I) overt optically variable counterfeit-resistant
technologies that--

(aa) are visible to the naked eye, providing for visual
identification of product authenticity without the need for
readers, microscopes, lighting devices, or scanners;
(bb) are similar to that used by the Bureau of Engraving
and Printing to secure United States currency;
(cc) are manufactured and distributed in a highly secure,
tightly controlled environment; and
(dd) incorporate additional layers of nonvisible convert
security features up to and including forensic capability, as
described in subparagraph (B); or

(II) technologies that have a function of security
comparable to that described in subclause (I), as determined
by the Secretary.
(B) Standards for packaging.--For the purpose of making it
more difficult to counterfeit the packaging of drugs subject
to this paragraph, the manufacturers of such drugs shall
incorporate the technologies described in subparagraph (A)
into at least 1 additional element of the physical packaging
of the drugs, including blister packs, shrink wrap, package
labels, package seals, bottles, and boxes.

SEC. 10007. INTERNET SALES OF PRESCRIPTION DRUGS.

(a) In General.--Chapter V of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 351 et seq.) is amended by inserting
after section 503B the following:

``SEC. 503C. INTERNET SALES OF PRESCRIPTION DRUGS.

``(a) Requirements Regarding Information on Internet
Site.--
``(1) In general.--A person may not dispense a prescription
drug pursuant to a sale of the drug by such person if--
``(A) the purchaser of the drug submitted the purchase
order for the drug, or conducted any other part of the sales
transaction for the drug, through an Internet site;
``(B) the person dispenses the drug to the purchaser by
mailing or shipping the drug to the purchaser; and
``(C) such site, or any other Internet site used by such
person for purposes of sales of a prescription drug, fails to
meet each of the requirements specified in paragraph (2),
other than a site or pages on a site that--
``(i) are not intended to be accessed by purchasers or
prospective purchasers; or
``(ii) provide an Internet information location tool within
the meaning of section 231(e)(5) of the Communications Act of
1934 (47 U.S.C. 231(e)(5)).
``(2) Requirements.--With respect to an Internet site, the
requirements referred to in subparagraph (C) of paragraph (1)
for a person to whom such paragraph applies are as follows:
``(A) Each page of the site shall include either the
following information or a link to a page that provides the
following information:
``(i) The name of such person.
``(ii) Each State in which the person is authorized by law
to dispense prescription drugs.
``(iii) The address and telephone number of each place of
business of the person with respect to sales of prescription
drugs through the Internet, other than a place of business
that does not mail or ship prescription drugs to purchasers.
``(iv) The name of each individual who serves as a
pharmacist for prescription drugs that are mailed or shipped
pursuant to the site, and each State in which the individual
is authorized by law to dispense prescription drugs.
``(v) If the person provides for medical consultations
through the site for purposes of providing prescriptions, the
name of each individual who provides such consultations; each
State in which the individual is licensed or otherwise
authorized by law to provide such consultations or practice
medicine; and the type or types of health professions for
which the individual holds such licenses or other
authorizations.
``(B) A link to which paragraph (1) applies shall be
displayed in a clear and prominent place and manner, and
shall include in the caption for the link the words
`licensing and contact information'.
``(b) Internet Sales Without Appropriate Medical
Relationships.--
``(1) In general.--Except as provided in paragraph (2), a
person may not dispense a prescription drug, or sell such a
drug, if--
``(A) for purposes of such dispensing or sale, the
purchaser communicated with the person through the Internet;
``(B) the patient for whom the drug was dispensed or
purchased did not, when such communications began, have a
prescription for the drug that is valid in the United States;
``(C) pursuant to such communications, the person provided
for the involvement of a practitioner, or an individual
represented by the person as a practitioner, and the
practitioner or such individual issued a prescription for the
drug that was purchased;
``(D) the person knew, or had reason to know, that the
practitioner or the individual referred to in subparagraph
(C) did not, when issuing the prescription, have a qualifying
medical relationship with the patient; and
``(E) the person received payment for the dispensing or
sale of the drug.

For purposes of subparagraph (E), payment is received if
money or other valuable consideration is received.
``(2) Exceptions.--Paragraph (1) does not apply to--
``(A) the dispensing or selling of a prescription drug
pursuant to telemedicine practices sponsored by--
``(i) a hospital that has in effect a provider agreement
under title XVIII of the Social Security Act (relating to the
Medicare program); or
``(ii) a group practice that has not fewer than 100
physicians who have in effect provider agreements under such
title; or
``(B) the dispensing or selling of a prescription drug
pursuant to practices that promote the public health, as
determined by the Secretary by regulation.
``(3) Qualifying medical relationship.--
``(A) In general.--With respect to issuing a prescription
for a drug for a patient, a practitioner has a qualifying
medical relationship with the patient for purposes of this
section if--
``(i) at least one in-person medical evaluation of the
patient has been conducted by the practitioner; or
``(ii) the practitioner conducts a medical evaluation of
the patient as a covering practitioner.
``(B) In-person medical evaluation.--A medical evaluation
by a practitioner is an in-person medical evaluation for
purposes of this section if the practitioner is in the
physical presence of the patient as part of conducting the
evaluation, without regard to

[[Page S12959]]

whether portions of the evaluation are conducted by other
health professionals.
``(C) Covering practitioner.--With respect to a patient, a
practitioner is a covering practitioner for purposes of this
section if the practitioner conducts a medical evaluation of
the patient at the request of a practitioner who has
conducted at least one in-person medical evaluation of the
patient and is temporarily unavailable to conduct the
evaluation of the patient. A practitioner is a covering
practitioner without regard to whether the practitioner has
conducted any in-person medical evaluation of the patient
involved.
``(4) Rules of construction.--
``(A) Individuals represented as practitioners.--A person
who is not a practitioner (as defined in subsection (e)(1))
lacks legal capacity under this section to have a qualifying
medical relationship with any patient.
``(B) Standard practice of pharmacy.--Paragraph (1) may not
be construed as prohibiting any conduct that is a standard
practice in the practice of pharmacy.
``(C) Applicability of requirements.--Paragraph (3) may not
be construed as having any applicability beyond this section,
and does not affect any State law, or interpretation of State
law, concerning the practice of medicine.
``(c) Actions by States.--
``(1) In general.--Whenever an attorney general of any
State has reason to believe that the interests of the
residents of that State have been or are being threatened or
adversely affected because any person has engaged or is
engaging in a pattern or practice that violates section
301(l), the State may bring a civil action on behalf of its
residents in an appropriate district court of the United
States to enjoin such practice, to enforce compliance with
such section (including a nationwide injunction), to obtain
damages, restitution, or other compensation on behalf of
residents of such State, to obtain reasonable attorneys fees
and costs if the State prevails in the civil action, or to
obtain such further and other relief as the court may deem
appropriate.
``(2) Notice.--The State shall serve prior written notice
of any civil action under paragraph (1) or (5)(B) upon the
Secretary and provide the Secretary with a copy of its
complaint, except that if it is not feasible for the State to
provide such prior notice, the State shall serve such notice
immediately upon instituting such action. Upon receiving a
notice respecting a civil action, the Secretary shall have
the right--
``(A) to intervene in such action;
``(B) upon so intervening, to be heard on all matters
arising therein; and
``(C) to file petitions for appeal.
``(3) Construction.--For purposes of bringing any civil
action under paragraph (1), nothing in this chapter shall
prevent an attorney general of a State from exercising the
powers conferred on the attorney general by the laws of such
State to conduct investigations or to administer oaths or
affirmations or to compel the attendance of witnesses or the
production of documentary and other evidence.
``(4) Venue; service of process.--Any civil action brought
under paragraph (1) in a district court of the United States
may be brought in the district in which the defendant is
found, is an inhabitant, or transacts business or wherever
venue is proper under section 1391 of title 28, United States
Code. Process in such an action may be served in any district
in which the defendant is an inhabitant or in which the
defendant may be found.
``(5) Actions by other state officials.--
``(A) Nothing contained in this section shall prohibit an
authorized State official from proceeding in State court on
the basis of an alleged violation of any civil or criminal
statute of such State.
``(B) In addition to actions brought by an attorney general
of a State under paragraph (1), such an action may be brought
by officers of such State who are authorized by the State to
bring actions in such State on behalf of its residents.
``(d) Effect of Section.--This section shall not apply to a
person that is a registered exporter under section 804.
``(e) General Definitions.--For purposes of this section:
``(1) The term `practitioner' means a practitioner referred
to in section 503(b)(1) with respect to issuing a written or
oral prescription.
``(2) The term `prescription drug' means a drug that is
described in section 503(b)(1).
``(3) The term `qualifying medical relationship', with
respect to a practitioner and a patient, has the meaning
indicated for such term in subsection (b).
``(f) Internet-Related Definitions.--
``(1) In general.--For purposes of this section:
``(A) The term `Internet' means collectively the myriad of
computer and telecommunications facilities, including
equipment and operating software, which comprise the
interconnected world-wide network of networks that employ the
transmission control protocol/internet protocol, or any
predecessor or successor protocols to such protocol, to
communicate information of all kinds by wire or radio.
``(B) The term `link', with respect to the Internet, means
one or more letters, words, numbers, symbols, or graphic
items that appear on a page of an Internet site for the
purpose of serving, when activated, as a method for executing
an electronic command--
``(i) to move from viewing one portion of a page on such
site to another portion of the page;
``(ii) to move from viewing one page on such site to
another page on such site; or
``(iii) to move from viewing a page on one Internet site to
a page on another Internet site.
``(C) The term `page', with respect to the Internet, means
a document or other file accessed at an Internet site.
``(D)(i) The terms `site' and `address', with respect to
the Internet, mean a specific location on the Internet that
is determined by Internet Protocol numbers. Such term
includes the domain name, if any.
``(ii) The term `domain name' means a method of
representing an Internet address without direct reference to
the Internet Protocol numbers for the address, including
methods that use designations such as `.com', `.edu', `.gov',
`.net', or `.org'.
``(iii) The term `Internet Protocol numbers' includes any
successor protocol for determining a specific location on the
Internet.
``(2) Authority of secretary.--The Secretary may by
regulation modify any definition under paragraph (1) to take
into account changes in technology.
``(g) Interactive Computer Service; Advertising.--No
provider of an interactive computer service, as defined in
section 230(f)(2) of the Communications Act of 1934 (47
U.S.C. 230(f)(2)), or of advertising services shall be liable
under this section for dispensing or selling prescription
drugs in violation of this section on account of another
person's selling or dispensing such drugs, provided that the
provider of the interactive computer service or of
advertising services does not own or exercise corporate
control over such person.
``(h) No Effect on Other Requirements; Coordination.--The
requirements of this section are in addition to, and do not
supersede, any requirements under the Controlled Substances
Act or the Controlled Substances Import and Export Act (or
any regulation promulgated under either such Act) regarding
Internet pharmacies and controlled substances. In
promulgating regulations to carry out this section, the
Secretary shall coordinate with the Attorney General to
ensure that such regulations do not duplicate or conflict
with the requirements described in the previous sentence, and
that such regulations and requirements coordinate to the
extent practicable.''.
(b) Inclusion as Prohibited Act.--Section 301 of the
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 331) is
amended by inserting after paragraph (k) the following:
``(l) The dispensing or selling of a prescription drug in
violation of section 503C.''.
(c) Internet Sales of Prescription Drugs; Consideration by
Secretary of Practices and Procedures for Certification of
Legitimate Businesses.--In carrying out section 503C of the
Federal Food, Drug, and Cosmetic Act (as added by subsection
(a) of this section), the Secretary of Health and Human
Services shall take into consideration the practices and
procedures of public or private entities that certify that
businesses selling prescription drugs through Internet sites
are legitimate businesses, including practices and procedures
regarding disclosure formats and verification programs.
(d) Reports Regarding Internet-Related Violations of
Federal and State Laws on Dispensing of Drugs.--
(1) In general.--The Secretary of Health and Human Services
(referred to in this subsection as the ``Secretary'') shall,
pursuant to the submission of an application meeting the
criteria of the Secretary, make an award of a grant or
contract to the National Clearinghouse on Internet
Prescribing (operated by the Federation of State Medical
Boards) for the purpose of--
(A) identifying Internet sites that appear to be in
violation of Federal or State laws concerning the dispensing
of drugs;
(B) reporting such sites to State medical licensing boards
and State pharmacy licensing boards, and to the Attorney
General and the Secretary, for further investigation; and
(C) submitting, for each fiscal year for which the award
under this subsection is made, a report to the Secretary
describing investigations undertaken with respect to
violations described in subparagraph (A).
(2) Authorization of appropriations.--For the purpose of
carrying out paragraph (1), there is authorized to be
appropriated $100,000 for each of the first 3 fiscal years in
which this section is in effect.
(e) Effective Date.--The amendments made by subsections (a)
and (b) take effect 90 days after the date of enactment of
this Act, without regard to whether a final rule to implement
such amendments has been promulgated by the Secretary of
Health and Human Services under section 701(a) of the Federal
Food, Drug, and Cosmetic Act. The preceding sentence may not
be construed as affecting the authority of such Secretary to
promulgate such a final rule.

SEC. 10008. PROHIBITING PAYMENTS TO UNREGISTERED FOREIGN
PHARMACIES.

(a) In General.--Section 303 of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 333) is amended by adding at the end
the following:
``(h) Restricted Transactions.--
``(1) In general.--The introduction of restricted
transactions into a payment system or the completion of
restricted transactions using a payment system is prohibited.
``(2) Payment system.--
``(A) In general.--The term `payment system' means a system
used by a person described in subparagraph (B) to effect a
credit

[[Page S12960]]

transaction, electronic fund transfer, or money transmitting
service that may be used in connection with, or to
facilitate, a restricted transaction, and includes--
``(i) a credit card system;
``(ii) an international, national, regional, or local
network used to effect a credit transaction, an electronic
fund transfer, or a money transmitting service; and
``(iii) any other system that is centrally managed and is
primarily engaged in the transmission and settlement of
credit transactions, electronic fund transfers, or money
transmitting services.
``(B) Persons described.--A person referred to in
subparagraph (A) is--
``(i) a creditor;
``(ii) a credit card issuer;
``(iii) a financial institution;
``(iv) an operator of a terminal at which an electronic
fund transfer may be initiated;
``(v) a money transmitting business; or
``(vi) a participant in an international, national,
regional, or local network used to effect a credit
transaction, electronic fund transfer, or money transmitting
service.
``(3) Restricted transaction.--The term `restricted
transaction' means a transaction or transmittal, on behalf of
an individual who places an unlawful drug importation request
to any person engaged in the operation of an unregistered
foreign pharmacy, of--
``(A) credit, or the proceeds of credit, extended to or on
behalf of the individual for the purpose of the unlawful drug
importation request (including credit extended through the
use of a credit card);
``(B) an electronic fund transfer or funds transmitted by
or through a money transmitting business, or the proceeds of
an electronic fund transfer or money transmitting service,
from or on behalf of the individual for the purpose of the
unlawful drug importation request;
``(C) a check, draft, or similar instrument which is drawn
by or on behalf of the individual for the purpose of the
unlawful drug importation request and is drawn on or payable
at or through any financial institution; or
``(D) the proceeds of any other form of financial
transaction (identified by the Board by regulation) that
involves a financial institution as a payor or financial
intermediary on behalf of or for the benefit of the
individual for the purpose of the unlawful drug importation
request.
``(4) Unlawful drug importation request.--The term
`unlawful drug importation request' means the request, or
transmittal of a request, made to an unregistered foreign
pharmacy for a prescription drug by mail (including a private
carrier), facsimile, phone, or electronic mail, or by a means
that involves the use, in whole or in part, of the Internet.
``(5) Unregistered foreign pharmacy.--The term
`unregistered foreign pharmacy' means a person in a country
other than the United States that is not a registered
exporter under section 804.
``(6) Other definitions.--
``(A) Credit; creditor; credit card.--The terms `credit',
`creditor', and `credit card' have the meanings given the
terms in section 103 of the Truth in Lending Act (15 U.S.C.
1602).
``(B) Access device; electronic fund transfer.--The terms
`access device' and `electronic fund transfer'--
``(i) have the meaning given the term in section 903 of the
Electronic Fund Transfer Act (15 U.S.C. 1693a); and
``(ii) the term `electronic fund transfer' also includes
any fund transfer covered under Article 4A of the Uniform
Commercial Code, as in effect in any State.
``(C) Financial institution.--The term `financial
institution'--
``(i) has the meaning given the term in section 903 of the
Electronic Transfer Fund Act (15 U.S.C. 1693a); and
``(ii) includes a financial institution (as defined in
section 509 of the Gramm-Leach-Bliley Act (15 U.S.C. 6809)).
``(D) Money transmitting business; money transmitting
service.--The terms `money transmitting business' and `money
transmitting service' have the meaning given the terms in
section 5330(d) of title 31, United States Code.
``(E) Board.--The term `Board' means the Board of Governors
of the Federal Reserve System.
``(7) Policies and procedures required to prevent
restricted transactions.--
``(A) Regulations.--The Board shall promulgate regulations
requiring--
``(i) an operator of a credit card system;
``(ii) an operator of an international, national, regional,
or local network used to effect a credit transaction, an
electronic fund transfer, or a money transmitting service;
``(iii) an operator of any other payment system that is
centrally managed and is primarily engaged in the
transmission and settlement of credit transactions,
electronic transfers or money transmitting services where at
least one party to the transaction or transfer is an
individual; and
``(iv) any other person described in paragraph (2)(B) and
specified by the Board in such regulations,

to establish policies and procedures that are reasonably
designed to prevent the introduction of a restricted
transaction into a payment system or the completion of a
restricted transaction using a payment system
``(B) Requirements for policies and procedures.--In
promulgating regulations under subparagraph (A), the Board
shall--
``(i) identify types of policies and procedures, including
nonexclusive examples, that shall be considered to be
reasonably designed to prevent the introduction of restricted
transactions into a payment system or the completion of
restricted transactions using a payment system; and
``(ii) to the extent practicable, permit any payment
system, or person described in paragraph (2)(B), as
applicable, to choose among alternative means of preventing
the introduction or completion of restricted transactions.
``(C) No liability for blocking or refusing to honor
restricted transaction.--
``(i) In general.--A payment system, or a person described
in paragraph (2)(B) that is subject to a regulation issued
under this subsection, and any participant in such payment
system that prevents or otherwise refuses to honor
transactions in an effort to implement the policies and
procedures required under this subsection or to otherwise
comply with this subsection shall not be liable to any party
for such action.
``(ii) Compliance.--A person described in paragraph (2)(B)
meets the requirements of this subsection if the person
relies on and complies with the policies and procedures of a
payment system of which the person is a member or in which
the person is a participant, and such policies and procedures
of the payment system comply with the requirements of the
regulations promulgated under subparagraph (A).
``(D) Enforcement.--
``(i) In general.--This subsection, and the regulations
promulgated under this subsection, shall be enforced
exclusively by the Federal functional regulators and the
Federal Trade Commission under applicable law in the manner
provided in section 505(a) of the Gramm-Leach-Bliley Act (15
U.S.C. 6805(a)).
``(ii) Factors to be considered.--In considering any
enforcement action under this subsection against a payment
system or person described in paragraph (2)(B), the Federal
functional regulators and the Federal Trade Commission shall
consider the following factors:

``(I) The extent to which the payment system or person
knowingly permits restricted transactions.
``(II) The history of the payment system or person in
connection with permitting restricted transactions.
``(III) The extent to which the payment system or person
has established and is maintaining policies and procedures in
compliance with regulations prescribed under this subsection.

``(8) Transactions permitted.--A payment system, or a
person described in paragraph (2)(B) that is subject to a
regulation issued under this subsection, is authorized to
engage in transactions with foreign pharmacies in connection
with investigating violations or potential violations of any
rule or requirement adopted by the payment system or person
in connection with complying with paragraph (7). A payment
system, or such a person, and its agents and employees shall
not be found to be in violation of, or liable under, any
Federal, State or other law by virtue of engaging in any such
transaction.
``(9) Relation to state laws.--No requirement, prohibition,
or liability may be imposed on a payment system, or a person
described in paragraph (2)(B) that is subject to a regulation
issued under this subsection, under the laws of any state
with respect to any payment transaction by an individual
because the payment transaction involves a payment to a
foreign pharmacy.
``(10) Timing of requirements.--A payment system, or a
person described in paragraph (2)(B) that is subject to a
regulation issued under this subsection, must adopt policies
and procedures reasonably designed to comply with any
regulations required under paragraph (7) within 60 days after
such regulations are issued in final form.
``(11) Compliance.--A payment system, and any person
described in paragraph (2)(B), shall not be deemed to be in
violation of paragraph (1)--
``(A)(i) if an alleged violation of paragraph (1) occurs
prior to the mandatory compliance date of the regulations
issued under paragraph (7); and
``(ii) such entity has adopted or relied on policies and
procedures that are reasonably designed to prevent the
introduction of restricted transactions into a payment system
or the completion of restricted transactions using a payment
system; or
``(B)(i) if an alleged violation of paragraph (1) occurs
after the mandatory compliance date of such regulations; and
``(ii) such entity is in compliance with such
regulations.''.
(b) Effective Date.--The amendment made by this section
shall take effect on the day that is 90 days after the date
of enactment of this Act.
(c) Implementation.--The Board of Governors of the Federal
Reserve System shall promulgate regulations as required by
subsection (h)(7) of section 303 of the Federal Food, Drug,
and Cosmetic Act (21 U.S.C. 333), as added by subsection (a),
not later than 90 days after the date of enactment of this
Act.

SEC. 10009. IMPORTATION EXEMPTION UNDER CONTROLLED SUBSTANCES
IMPORT AND EXPORT ACT.

Section 1006(a)(2) of the Controlled Substances Import and
Export Act (21 U.S.C. 956(a)(2)) is amended by striking ``not
import the controlled substance into the United States in an
amount that exceeds 50 dosage

[[Page S12961]]

units of the controlled substance.'' and inserting ``import
into the United States not more than 10 dosage units combined
of all such controlled substances.''.

SEC. 10010. SEVERABILITY.

If any provision of this title, an amendment by this title,
or the application of such provision or amendment to any
person or circumstance is held to be unconstitutional, the
remainder of this title, the amendments made by this title,
and the application of the provisions of such to any person
or circumstance shall not affected thereby.

SEC. 10011. CERTIFICATION.

(a) In General.--This title (other than this section), and
the amendments made by this title, shall become effective
only if the Secretary of Health and Human Services certifies
to Congress that the implementation of this title, and the
amendments made by this title, will--
(1) pose no additional risk to the public's health and
safety; and
(2) result in a significant reduction in the cost of
covered products to the American consumer.
(b) Effective Date.--Notwithstanding any other provision of
this title, or of any amendment made by this title--
(1) any reference in this title, or in such amendments, to
the date of enactment of this title shall be deemed to be a
reference to the date of the certification under subsection
(a); and
(2) each reference to ``January 1, 2012'' in section
10006(c) shall be substituted with ``90 days after the
effective date of this title''.
______