I have posted links to this legislation numerous times, but for those who may need the actual text and can't open the PDF ...here are the 32 pages relating specifically to HUMAN compounding. At this time it is still believed that any federal legislation relating to veterinary compounding will be dealt with at a later date. The intent of this legislation is specifically spelled out to relate only to human drug compounding. Here is the link to the Government Printing Office version of the bill for those who prefer to print it that way. Drug Quality and Security Act
Calendar No. 236
113TH CONGRESS
1ST SESSION
H. R. 3204
IN THE SENATE OF THE UNITED STATES
SEPTEMBER 30, 2013
Received
NOVEMBER 4, 2013
Read the first time
NOVEMBER 5, 2013
Read the second time and placed on the calendar
AN ACT
To amend the Federal Food, Drug, and Cosmetic Act with
respect to human drug compounding and drug supply
chain security, and for other purposes.
1 Be it enacted by the Senate and House of Representa-
2 tives of the United States of America in Congress assembled,
3 SECTION 1. SHORT TITLE.
4 This Act may be cited as the ‘‘Drug Quality and Se-
5 curity Act’’.
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1 SEC. 2. REFERENCES IN ACT; TABLE OF CONTENTS.
2 (a) REFERENCES IN ACT.—Except as otherwise spec-
3 ified, amendments made by this Act to a section or other
4 provision of law are amendments to such section or other
5 provision of the Federal Food, Drug, and Cosmetic Act
6 (21 U.S.C. 301 et seq.).
7 (b) TABLE OF CONTENTS.—The table of contents of
8 this Act is as follows:
Sec. 1. Short title.
Sec. 2. References in Act; table of contents.
TITLE I—DRUG COMPOUNDING
Sec. 101. Short title.
Sec. 102. Voluntary outsourcing facilities.
Sec. 103. Penalties.
Sec. 104. Regulations.
Sec. 105. Enhanced communication.
Sec. 106. Severability.
Sec. 107. GAO study.
TITLE II—DRUG SUPPLY CHAIN SECURITY
Sec. 201. Short title.
Sec. 202. Pharmaceutical distribution supply chain.
Sec. 203. Enhanced drug distribution security.
Sec. 204. National standards for prescription drug wholesale distributors.
Sec. 205. National standards for third-party logistics providers; uniform national policy.
Sec. 206. Penalties.
Sec. 207. Conforming amendment.
Sec. 208. Savings clause.
9 TITLE I—DRUG COMPOUNDING
10 SEC. 101. SHORT TITLE.
11 This Act may be cited as the ‘‘Compounding Quality
12 Act’’.
13 SEC. 102. VOLUNTARY OUTSOURCING FACILITIES.
14 (a) IN GENERAL.—Subchapter A of chapter V (21
15 U.S.C. 351 et seq.) is amended—
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1 (1) by redesignating section 503B as section
2 503C; and
3 (2) by inserting after section 503A the fol-
4 lowing new section:
5 ‘‘SEC. 503B. OUTSOURCING FACILITIES.
6 ‘‘(a) IN GENERAL.—Sections 502(f)(1), 505, and 582
7 shall not apply to a drug compounded by or under the
8 direct supervision of a licensed pharmacist in a facility
9 that elects to register as an outsourcing facility if each
10 of the following conditions is met:
11 ‘‘(1) REGISTRATION AND REPORTING.—The
12 drug is compounded in an outsourcing facility that
13 is in compliance with the requirements of subsection
14 (b).
15 ‘‘(2) BULK DRUG SUBSTANCES.—The drug is
16 compounded in an outsourcing facility that does not
17 compound using bulk drug substances (as defined in
18 section 207.3(a)(4) of title 21, Code of Federal Reg-
19 ulations (or any successor regulation)), unless—
20 ‘‘(A)(i) the bulk drug substance appears on
21 a list established by the Secretary identifying
22 bulk drug substances for which there is a clin-
23 ical need, by—
24 ‘‘(I) publishing a notice in the Federal
25 Register proposing bulk drug substances to
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1 be included on the list, including the ra-
2 tionale for such proposal;
3 ‘‘(II) providing a period of not less
4 than 60 calendar days for comment on the
5 notice; and
6 ‘‘(III) publishing a notice in the Fed-
7 eral Register designating bulk drug sub-
8 stances for inclusion on the list; or
9 ‘‘(ii) the drug compounded from such bulk
10 drug substance appears on the drug shortage
11 list in effect under section 506E at the time of
12 compounding, distribution, and dispensing;
13 ‘‘(B) if an applicable monograph exists
14 under the United States Pharmacopeia, the Na-
15 tional Formulary, or another compendium or
16 pharmacopeia recognized by the Secretary for
17 purposes of this paragraph, the bulk drug sub-
18 stances each comply with the monograph;
19 ‘‘(C) the bulk drug substances are each
20 manufactured by an establishment that is reg-
21 istered under section 510 (including a foreign
22 establishment that is registered under section
23 510(i)); and
24 ‘‘(D) the bulk drug substances are each ac-
25 companied by a valid certificate of analysis.
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1 ‘‘(3) INGREDIENTS (OTHER THAN BULK DRUG
2 SUBSTANCES).—If any ingredients (other than bulk
3 drug substances) are used in compounding the drug,
4 such ingredients comply with the standards of the
5 applicable United States Pharmacopeia or National
6 Formulary monograph, if such monograph exists, or
7 of another compendium or pharmacopeia recognized
8 by the Secretary for purposes of this paragraph if
9 any.
10 ‘‘(4) DRUGS WITHDRAWN OR REMOVED BE-
11 CAUSE UNSAFE OR NOT EFFECTIVE.—The drug does
12 not appear on a list published by the Secretary of
13 drugs that have been withdrawn or removed from
14 the market because such drugs or components of
15 such drugs have been found to be unsafe or not ef-
16 fective.
17 ‘‘(5) ESSENTIALLY A COPY OF AN APPROVED
18 DRUG.—The drug is not essentially a copy of one or
19 more approved drugs.
20 ‘‘(6) DRUGS PRESENTING DEMONSTRABLE DIF-
21 FICULTIES FOR COMPOUNDING.—The drug—
22 ‘‘(A) is not identified (directly or as part
23 of a category of drugs) on a list published by
24 the Secretary, through the process described in
25 subsection (c), of drugs or categories of drugs
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1 that present demonstrable difficulties for
2 compounding that are reasonably likely to lead
3 to an adverse effect on the safety or effective-
4 ness of the drug or category of drugs, taking
5 into account the risks and benefits to patients;
6 or
7 ‘‘(B) is compounded in accordance with all
8 applicable conditions identified on the list de-
9 scribed in subparagraph (A) as conditions that
10 are necessary to prevent the drug or category of
11 drugs from presenting the demonstrable dif-
12 ficulties described in subparagraph (A).
13 ‘‘(7) ELEMENTS TO ASSURE SAFE USE.—In the
14 case of a drug that is compounded from a drug that
15 is the subject of a risk evaluation and mitigation
16 strategy approved with elements to assure safe use
17 pursuant to section 505–1, or from a bulk drug sub-
18 stance that is a component of such drug, the out-
19 sourcing facility demonstrates to the Secretary prior
20 to beginning compounding that such facility will uti-
21 lize controls comparable to the controls applicable
22 under the relevant risk evaluation and mitigation
23 strategy.
24 ‘‘(8) PROHIBITION ON WHOLESALING.—The
25 drug will not be sold or transferred by an entity
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1 other than the outsourcing facility that compounded
2 such drug. This paragraph does not prohibit admin-
3 istration of a drug in a health care setting or dis-
4 pensing a drug pursuant to a prescription executed
5 in accordance with section 503(b)(1).
6 ‘‘(9) FEES.—The drug is compounded in an
7 outsourcing facility that has paid all fees owed by
8 such facility pursuant to section 744K.
9 ‘‘(10) LABELING OF DRUGS.—
10 ‘‘(A) LABEL.—The label of the drug in-
11 cludes—
12 ‘‘(i) the statement ‘This is a com-
13 pounded drug.’ or a reasonable comparable
14 alternative statement (as specified by the
15 Secretary) that prominently identifies the
16 drug as a compounded drug;
17 ‘‘(ii) the name, address, and phone
18 number of the applicable outsourcing facil-
19 ity; and
20 ‘‘(iii) with respect to the drug—
21 ‘‘(I) the lot or batch number;
22 ‘‘(II) the established name of the
23 drug;
24 ‘‘(III) the dosage form and
25 strength;
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1 ‘‘(IV) the statement of quantity
2 or volume, as appropriate;
3 ‘‘(V) the date that the drug was
4 compounded;
5 ‘‘(VI) the expiration date;
6 ‘‘(VII) storage and handling in-
7 structions;
8 ‘‘(VIII) the National Drug Code
9 number, if available;
10 ‘‘(IX) the statement ‘Not for re-
11 sale’, and, if the drug is dispensed or
12 distributed other than pursuant to a
13 prescription for an individual identi-
14 fied patient, the statement ‘Office Use
15 Only’; and
16 ‘‘(X) subject to subparagraph
17 (B)(i), a list of active and inactive in-
18 gredients, identified by established
19 name and the quantity or proportion
20 of each ingredient.
21 ‘‘(B) CONTAINER.—The container from
22 which the individual units of the drug are re-
23 moved for dispensing or for administration
24 (such as a plastic bag containing individual
25 product syringes) shall include—
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1 ‘‘(i) the information described under
2 subparagraph (A)(iii)(X), if there is not
3 space on the label for such information;
4 ‘‘(ii) the following information to fa-
5 cilitate adverse event reporting:
6 www.fda.gov/medwatch and 1–800–FDA–
7 1088 (or any successor Internet Web site
8 or phone number); and
9 ‘‘(iii) directions for use, including, as
10 appropriate, dosage and administration.
11 ‘‘(C) ADDITIONAL INFORMATION.—The
12 label and labeling of the drug shall include any
13 other information as determined necessary and
14 specified in regulations promulgated by the Sec-
15 retary.
16 ‘‘(11) OUTSOURCING FACILITY REQUIRE-
17 MENT.—The drug is compounded in an outsourcing
18 facility in which the compounding of drugs occurs
19 only in accordance with this section.
20 ‘‘(b) REGISTRATION OF OUTSOURCING FACILITIES
21 AND REPORTING OF DRUGS.—
22 ‘‘(1) REGISTRATION OF OUTSOURCING FACILI-
23 TIES.—
24 ‘‘(A) ANNUAL REGISTRATION.—Upon
25 electing and in order to become an outsourcing
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1 facility, and during the period beginning on Oc-
2 tober 1 and ending on December 31 of each
3 year thereafter, a facility—
4 ‘‘(i) shall register with the Secretary
5 its name, place of business, and unique fa-
6 cility identifier (which shall conform to the
7 requirements for the unique facility identi-
8 fier established under section 510), and a
9 point of contact email address; and
10 ‘‘(ii) shall indicate whether the out-
11 sourcing facility intends to compound a
12 drug that appears on the list in effect
13 under section 506E during the subsequent
14 calendar year.
15 ‘‘(B) AVAILABILITY OF REGISTRATION FOR
16 INSPECTION; LIST.—
17 ‘‘(i) REGISTRATIONS.—The Secretary
18 shall make available for inspection, to any
19 person so requesting, any registration filed
20 pursuant to this paragraph.
21 ‘‘(ii) LIST.—The Secretary shall make
22 available on the public Internet Web site of
23 the Food and Drug Administration a list
24 of the name of each facility registered
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1 cility, the State in which each such facility
2 is located, whether the facility compounds
3 from bulk drug substances, and whether
4 any such compounding from bulk drug
5 substances is for sterile or nonsterile
6 drugs.
7 ‘‘(2) DRUG REPORTING BY OUTSOURCING FA-
8 CILITIES.—
9 ‘‘(A) IN GENERAL.—Upon initially reg-
10 istering as an outsourcing facility, once during
11 the month of June of each year, and once dur-
12 ing the month of December of each year, each
13 outsourcing facility that registers with the Sec-
14 retary under paragraph (1) shall submit to the
15 Secretary a report—
16 ‘‘(i) identifying the drugs compounded
17 by such outsourcing facility during the pre-
18 vious 6-month period; and
19 ‘‘(ii) with respect to each drug identi-
20 fied under clause (i), providing the active
21 ingredient, the source of such active ingre-
22 dient, the National Drug Code number of
23 the source drug or bulk active ingredient,
24 if available, the strength of the active in-
25 gredient per unit, the dosage form and
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1 route of administration, the package de-
2 scription, the number of individual units
3 produced, and the National Drug Code
4 number of the final product, if assigned.
5 ‘‘(B) FORM.—Each report under subpara-
6 graph (A) shall be prepared in such form and
7 manner as the Secretary may prescribe by regu-
8 lation or guidance.
9 ‘‘(C) CONFIDENTIALITY.—Reports sub-
10 mitted under this paragraph shall be exempt
11 from inspection under paragraph (1)(B)(i), un-
12 less the Secretary finds that such an exemption
13 would be inconsistent with the protection of the
14 public health.
15 ‘‘(3) ELECTRONIC REGISTRATION AND REPORT-
16 ING.—Registrations and drug reporting under this
17 subsection (including the submission of updated in-
18 formation) shall be submitted to the Secretary by
19 electronic means unless the Secretary grants a re-
20 quest for waiver of such requirement because use of
21 electronic means is not reasonable for the person re-
22 questing waiver.
23 ‘‘(4) RISK-BASED INSPECTION FREQUENCY.—
24 ‘‘(A) IN GENERAL.—Outsourcing facili-
25 ties—
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1 ‘‘(i) shall be subject to inspection pur-
2 suant to section 704; and
3 ‘‘(ii) shall not be eligible for the ex-
4 emption under section 704(a)(2)(A).
5 ‘‘(B) RISK-BASED SCHEDULE.—The Sec-
6 retary, acting through one or more officers or
7 employees duly designated by the Secretary,
8 shall inspect outsourcing facilities in accordance
9 with a risk-based schedule established by the
10 Secretary.
11 ‘‘(C) RISK FACTORS.—In establishing the
12 risk-based schedule, the Secretary shall inspect
13 outsourcing facilities according to the known
14 safety risks of such outsourcing facilities, which
15 shall be based on the following factors:
16 ‘‘(i) The compliance history of the
17 outsourcing facility.
18 ‘‘(ii) The record, history, and nature
19 of recalls linked to the outsourcing facility.
20 ‘‘(iii) The inherent risk of the drugs
21 compounded at the outsourcing facility.
22 ‘‘(iv) The inspection frequency and
23 history of the outsourcing facility, includ-
24 ing whether the outsourcing facility has
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1 been inspected pursuant to section 704
2 within the last 4 years.
3 ‘‘(v) Whether the outsourcing facility
4 has registered under this paragraph as an
5 entity that intends to compound a drug
6 that appears on the list in effect under sec-
7 tion 506E.
8 ‘‘(vi) Any other criteria deemed nec-
9 essary and appropriate by the Secretary
10 for purposes of allocating inspection re-
11 sources.
12 ‘‘(5) ADVERSE EVENT REPORTING.—Outsourc-
13 ing facilities shall submit adverse event reports to
14 the Secretary in accordance with the content and
15 format requirements established through guidance or
16 regulation under section 310.305 of title 21, Code of
17 Federal Regulations (or any successor regulations).
18 ‘‘(c) REGULATIONS.—
19 ‘‘(1) IN GENERAL.—The Secretary shall imple-
20 ment the list described in subsection (a)(6) through
21 regulations.
22 ‘‘(2) ADVISORY COMMITTEE ON
23 COMPOUNDING.—Before issuing regulations to im-
24 plement subsection (a)(6), the Secretary shall con-
25 vene and consult an advisory committee on
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1 compounding. The advisory committee shall include
2 representatives from the National Association of
3 Boards of Pharmacy, the United States Pharma-
4 copeia, pharmacists with current experience and ex-
5 pertise in compounding, physicians with background
6 and knowledge in compounding, and patient and
7 public health advocacy organizations.
8 ‘‘(3) INTERIM LIST.—
9 ‘‘(A) IN GENERAL.—Before the effective
10 date of the regulations finalized to implement
11 subsection (a)(6), the Secretary may designate
12 drugs, categories of drugs, or conditions as de-
13 scribed such subsection by—
14 ‘‘(i) publishing a notice of such sub-
15 stances, drugs, categories of drugs, or con-
16 ditions proposed for designation, including
17 the rationale for such designation, in the
18 Federal Register;
19 ‘‘(ii) providing a period of not less
20 than 60 calendar days for comment on the
21 notice; and
22 ‘‘(iii) publishing a notice in the Fed-
23 eral Register designating such drugs, cat-
24 egories of drugs, or conditions.
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1 ‘‘(B) SUNSET OF NOTICE.—Any notice
2 provided under subparagraph (A) shall not be
3 effective after the earlier of—
4 ‘‘(i) the date that is 5 years after the
5 date of enactment of the Compounding
6 Quality Act; or
7 ‘‘(ii) the effective date of the final reg-
8 ulations issued to implement subsection
9 (a)(6).
10 ‘‘(4) UPDATES.—The Secretary shall review,
11 and update as necessary, the regulations containing
12 the lists of drugs, categories of drugs, or conditions
13 described in subsection (a)(6) regularly, but not less
14 than once every 4 years. Nothing in the previous
15 sentence prohibits submissions to the Secretary, be-
16 fore or during any 4-year period described in such
17 sentence, requesting updates to such lists.
18 ‘‘(d) DEFINITIONS.—In this section:
19 ‘‘(1) The term ‘compounding’ includes the com-
20 bining, admixing, mixing, diluting, pooling, reconsti-
21 tuting, or otherwise altering of a drug or bulk drug
22 substance to create a drug.
23 ‘‘(2) The term ‘essentially a copy of an ap-
24 proved drug’ means—
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1 ‘‘(A) a drug that is identical or nearly
2 identical to an approved drug, or a marketed
3 drug not subject to section 503(b) and not sub-
4 ject to approval in an application submitted
5 under section 505, unless, in the case of an ap-
6 proved drug, the drug appears on the drug
7 shortage list in effect under section 506E at the
8 time of compounding, distribution, and dis-
9 pensing; or
10 ‘‘(B) a drug, a component of which is a
11 bulk drug substance that is a component of an
12 approved drug or a marketed drug that is not
13 subject to section 503(b) and not subject to ap-
14 proval in an application submitted under sec-
15 tion 505, unless there is a change that produces
16 for an individual patient a clinical difference, as
17 determined by the prescribing practitioner, be-
18 tween the compounded drug and the com-
19 parable approved drug.
20 ‘‘(3) The term ‘approved drug’ means a drug
21 that is approved under section 505 and does not ap-
22 pear on the list described in subsection (a)(4) of
23 drugs that have been withdrawn or removed from
24 the market because such drugs or components of
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1 such drugs have been found to be unsafe or not ef-
2 fective.
3 ‘‘(4)(A) The term ‘outsourcing facility’ means a
4 facility at one geographic location or address that—
5 ‘‘(i) is engaged in the compounding of ster-
6 ile drugs;
7 ‘‘(ii) has elected to register as an outsourc-
8 ing facility; and
9 ‘‘(iii) complies with all of the requirements
10 of this section.
11 ‘‘(B) An outsourcing facility is not required to
12 be a licensed pharmacy.
13 ‘‘(C) An outsourcing facility may or may not
14 obtain prescriptions for identified individual pa-
15 tients.
16 ‘‘(5) The term ‘sterile drug’ means a drug that
17 is intended for parenteral administration, an oph-
18 thalmic or oral inhalation drug in aqueous format,
19 or a drug that is required to be sterile under Federal
20 or State law.’’.
21 ‘‘(d) OBLIGATION TO PAY FEES.—Payment of the fee
22 under section 744K, as described in subsection (a)(9),
23 shall not relieve an outsourcing facility that is licensed as
24 a pharmacy in any State that requires pharmacy licensing
25 fees of its obligation to pay such State fees.’’.
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1 (b) FEES.—Subchapter C of chapter VII (21 U.S.C.
2 379f et seq.) is amended by adding at the end the fol-
3 lowing:
4 ‘‘PART 9—FEES RELATING TO OUTSOURCING
5 FACILITIES
6 ‘‘SEC. 744J. DEFINITIONS.
7 ‘‘In this part:
8 ‘‘(1) The term ‘affiliate’ has the meaning given
9 such term in section 735(11).
10 ‘‘(2) The term ‘gross annual sales’ means the
11 total worldwide gross annual sales, in United States
12 dollars, for an outsourcing facility, including the
13 sales of all the affiliates of the outsourcing facility.
14 ‘‘(3) The term ‘outsourcing facility’ has the
15 meaning given to such term in section 503B(d)(4).
16 ‘‘(4) The term ‘reinspection’ means, with re-
17 spect to an outsourcing facility, 1 or more inspec-
18 tions conducted under section 704 subsequent to an
19 inspection conducted under such provision which
20 identified noncompliance materially related to an ap-
21 plicable requirement of this Act, specifically to deter-
22 mine whether compliance has been achieved to the
23 Secretary’s satisfaction.
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1 ‘‘SEC. 744K. AUTHORITY TO ASSESS AND USE OUTSOURC-
2 ING FACILITY FEES.
3 ‘‘(a) ESTABLISHMENT AND REINSPECTION FEES.—
4 ‘‘(1) IN GENERAL.—For fiscal year 2015 and
5 each subsequent fiscal year, the Secretary shall, in
6 accordance with this subsection, assess and collect—
7 ‘‘(A) an annual establishment fee from
8 each outsourcing facility; and
9 ‘‘(B) a reinspection fee from each out-
10 sourcing facility subject to a reinspection in
11 such fiscal year.
12 ‘‘(2) MULTIPLE REINSPECTIONS.—An outsourc-
13 ing facility subject to multiple reinspections in a fis-
14 cal year shall be subject to a reinspection fee for
15 each reinspection.
16 ‘‘(b) ESTABLISHMENT AND REINSPECTION FEE SET-
17 TING.—The Secretary shall—
18 ‘‘(1) establish the amount of the establishment
19 fee and reinspection fee to be collected under this
20 section for each fiscal year based on the method-
21 ology described in subsection (c); and
22 ‘‘(2) publish such fee amounts in a Federal
23 Register notice not later than 60 calendar days be-
24 fore the start of each such year.
25 ‘‘(c) AMOUNT OF ESTABLISHMENT FEE AND REIN-
26 SPECTION FEE.—
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1 ‘‘(1) IN GENERAL.—For each outsourcing facil-
2 ity in a fiscal year—
3 ‘‘(A) except as provided in paragraph (4),
4 the amount of the annual establishment fee
5 under subsection (b) shall be equal to the sum
6 of—
7 ‘‘(i) $15,000, multiplied by the infla-
8 tion adjustment factor described in para-
9 graph (2); plus
10 ‘‘(ii) the small business adjustment
11 factor described in paragraph (3); and
12 ‘‘(B) the amount of any reinspection fee (if
13 applicable) under subsection (b) shall be equal
14 to $15,000, multiplied by the inflation adjust-
15 ment factor described in paragraph (2).
16 ‘‘(2) INFLATION ADJUSTMENT FACTOR.—
17 ‘‘(A) IN GENERAL.—For fiscal year 2015
18 and subsequent fiscal years, the fee amounts es-
19 tablished in paragraph (1) shall be adjusted by
20 the Secretary by notice, published in the Fed-
21 eral Register, for a fiscal year by the amount
22 equal to the sum of—
23 ‘‘(i) 1;
24 ‘‘(ii) the average annual percent
25 change in the cost, per full-time equivalent
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1 position of the Food and Drug Administra-
2 tion, of all personnel compensation and
3 benefits paid with respect to such positions
4 for the first 3 years of the preceding 4 fis-
5 cal years, multiplied by the proportion of
6 personnel compensation and benefits costs
7 to total costs of an average full-time equiv-
8 alent position of the Food and Drug Ad-
9 ministration for the first 3 years of the
10 preceding 4 fiscal years; plus
11 ‘‘(iii) the average annual percent
12 change that occurred in the Consumer
13 Price Index for urban consumers (U.S.
14 City Average; Not Seasonally Adjusted; All
15 items; Annual Index) for the first 3 years
16 of the preceding 4 years of available data
17 multiplied by the proportion of all costs
18 other than personnel compensation and
19 benefits costs to total costs of an average
20 full-time equivalent position of the Food
21 and Drug Administration for the first 3
22 years of the preceding 4 fiscal years.
23 ‘‘(B) COMPOUNDED BASIS.—The adjust-
24 ment made each fiscal year under subparagraph
25 (A) shall be added on a compounded basis to
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1 the sum of all adjustments made each fiscal
2 year after fiscal year 2014 under subparagraph
3 (A).
4 ‘‘(3) SMALL BUSINESS ADJUSTMENT FACTOR.—
5 The small business adjustment factor described in
6 this paragraph shall be an amount established by
7 the Secretary for each fiscal year based on the Sec-
8 retary’s estimate of—
9 ‘‘(A) the number of small businesses that
10 will pay a reduced establishment fee for such
11 fiscal year; and
12 ‘‘(B) the adjustment to the establishment
13 fee necessary to achieve total fees equaling the
14 total fees that the Secretary would have col-
15 lected if no entity qualified for the small busi-
16 ness exception in paragraph (4).
17 ‘‘(4) EXCEPTION FOR SMALL BUSINESSES.—
18 ‘‘(A) IN GENERAL.—In the case of an out-
19 sourcing facility with gross annual sales of
20 $1,000,000 or less in the 12 months ending
21 April 1 of the fiscal year immediately preceding
22 the fiscal year in which the fees under this sec-
23 tion are assessed, the amount of the establish-
24 ment fee under subsection (b) for a fiscal year
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1 shall be equal to \1/3\ of the amount calculated
2 under paragraph (1)(A)(i) for such fiscal year.
3 ‘‘(B) APPLICATION.—To qualify for the ex-
4 ception under this paragraph, a small business
5 shall submit to the Secretary a written request
6 for such exception, in a format specified by the
7 Secretary in guidance, certifying its gross an-
8 nual sales for the 12 months ending April 1 of
9 the fiscal year immediately preceding the fiscal
10 year in which fees under this subsection are as-
11 sessed. Any such application shall be submitted
12 to the Secretary not later than April 30 of such
13 immediately preceding fiscal year.
14 ‘‘(5) CREDITING OF FEES.—In establishing the
15 small business adjustment factor under paragraph
16 (3) for a fiscal year, the Secretary shall—
17 ‘‘(A) provide for the crediting of fees from
18 the previous year to the next year if the Sec-
19 retary overestimated the amount of the small
20 business adjustment factor for such previous
21 fiscal year; and
22 ‘‘(B) consider the need to account for any
23 adjustment of fees and such other factors as
24 the Secretary determines appropriate.
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1 ‘‘(d) USE OF FEES.—The Secretary shall make all
2 of the fees collected pursuant to subparagraphs (A) and
3 (B) of subsection (a)(1) available solely to pay for the
4 costs of oversight of outsourcing facilities.
5 ‘‘(e) SUPPLEMENT NOT SUPPLANT.—Funds received
6 by the Secretary pursuant to this section shall be used
7 to supplement and not supplant any other Federal funds
8 available to carry out the activities described in this sec-
9 tion.
10 ‘‘(f) CREDITING AND AVAILABILITY OF FEES.—Fees
11 authorized under this section shall be collected and avail-
12 able for obligation only to the extent and in the amount
13 provided in advance in appropriations Acts. Such fees are
14 authorized to remain available until expended. Such sums
15 as may be necessary may be transferred from the Food
16 and Drug Administration salaries and expenses appropria-
17 tion account without fiscal year limitation to such appro-
18 priation account for salaries and expenses with such fiscal
19 year limitation. The sums transferred shall be available
20 solely for the purpose of paying the costs of oversight of
21 outsourcing facilities.
22 ‘‘(g) COLLECTION OF FEES.—
23 ‘‘(1) ESTABLISHMENT FEE.—An outsourcing
24 facility shall remit the establishment fee due under
25 this section in a fiscal year when submitting a regmstockstill on DSK4VPTVN1PROD with BILLS
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1 istration pursuant to section 503B(b) for such fiscal
2 year.
3 ‘‘(2) REINSPECTION FEE.—The Secretary shall
4 specify in the Federal Register notice described in
5 subsection (b)(2) the manner in which reinspection
6 fees assessed under this section shall be collected
7 and the timeline for payment of such fees. Such a
8 fee shall be collected after the Secretary has con-
9 ducted a reinspection of the outsourcing facility in-
10 volved.
11 ‘‘(3) EFFECT OF FAILURE TO PAY FEES.—
12 ‘‘(A) REGISTRATION.—An outsourcing fa-
13 cility shall not be considered registered under
14 section 503B(b) in a fiscal year until the date
15 that the outsourcing facility remits the estab-
16 lishment fee under this subsection for such fis-
17 cal year.
18 ‘‘(B) MISBRANDING.—All drugs manufac-
19 tured, prepared, propagated, compounded, or
20 processed by an outsourcing facility for which
21 any establishment fee or reinspection fee has
22 not been paid, as required by this section, shall
23 be deemed misbranded under section 502 until
24 the fees owed for such outsourcing facility
25 under this section have been paid.
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1 ‘‘(4) COLLECTION OF UNPAID FEES.—In any
2 case where the Secretary does not receive payment
3 of a fee assessed under this section within 30 cal-
4 endar days after it is due, such fee shall be treated
5 as a claim of the United States Government subject
6 to provisions of subchapter II of chapter 37 of title
7 31, United States Code.
8 ‘‘(h) ANNUAL REPORT TO CONGRESS.—Not later
9 than 120 calendar days after each fiscal year in which fees
10 are assessed and collected under this section, the Sec-
11 retary shall submit a report to the Committee on Health,
12 Education, Labor, and Pensions of the Senate and the
13 Committee on Energy and Commerce of the House of
14 Representatives, to include a description of fees assessed
15 and collected for such year, a summary description of enti-
16 ties paying the fees, a description of the hiring and place-
17 ment of new staff, a description of the use of fee resources
18 to support inspecting outsourcing facilities, and the num-
19 ber of inspections and reinspections of such facilities per-
20 formed each year.
21 ‘‘(i) AUTHORIZATION OF APPROPRIATIONS.—For fis-
22 cal year 2014 and each subsequent fiscal year, there is
23 authorized to be appropriated for fees under this section
24 an amount equivalent to the total amount of fees assessed
25 for such fiscal year under this section.’’.
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1 SEC. 103. PENALTIES.
2 (a) PROHIBITED ACTS.—Section 301 (21 U.S.C.
3 331) is amended by adding at the end the following:
4 ‘‘(ccc)(1) The resale of a compounded drug that is
5 labeled ‘not for resale’ in accordance with section 503B.
6 ‘‘(2) With respect to a drug to be compounded pursu-
7 ant to section 503A or 503B, the intentional falsification
8 of a prescription, as applicable.
9 ‘‘(3) The failure to report drugs or adverse events
10 by an entity that is registered in accordance with sub-
11 section (b) of section 503B.’’.
12 (b) MISBRANDED DRUGS.—Section 502 (21 U.S.C.
13 352) is amended by adding at the end the following:
14 ‘‘(bb) If the advertising or promotion of a com-
15 pounded drug is false or misleading in any particular.’’.
16 SEC. 104. REGULATIONS.
17 In promulgating any regulations to implement this
18 title (and the amendments made by this title), the Sec-
19 retary of Health and Human Services shall—
20 (1) issue a notice of proposed rulemaking that
21 includes the proposed regulation;
22 (2) provide a period of not less than 60 cal-
23 endar days for comments on the proposed regula-
24 tion; and
25 (3) publish the final regulation not more than
26 18 months following publication of the proposed rule
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1 and not less than 30 calendar days before the effec-
2 tive date of such final regulation.
3 SEC. 105. ENHANCED COMMUNICATION.
4 (a) SUBMISSIONS FROM STATE BOARDS OF PHAR-
5 MACY.—In a manner specified by the Secretary of Health
6 and Human Services (referred to in this section as the
7 ‘‘Secretary’’), the Secretary shall receive submissions from
8 State boards of pharmacy—
9 (1) describing actions taken against
10 compounding pharmacies, as described in subsection
11 (b); or
12 (2) expressing concerns that a compounding
13 pharmacy may be acting contrary to section 503A of
14 the Federal Food, Drug, and Cosmetic Act (21
15 U.S.C. 353a).
16 (b) CONTENT OF SUBMISSIONS FROM STATE
17 BOARDS OF PHARMACY.—An action referred to in sub-
18 section (a)(1) is, with respect to a pharmacy that com-
19 pounds drugs, any of the following:
20 (1) The issuance of a warning letter, or the im-
21 position of sanctions or penalties, by a State for vio-
22 lations of a State’s pharmacy regulations pertaining
23 to compounding.
24 (2) The suspension or revocation of a State-
25 issued pharmacy license or registration for violations
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1 of a State’s pharmacy regulations pertaining to
2 compounding.
3 (3) The recall of a compounded drug due to
4 concerns relating to the quality or purity of such
5 drug.
6 (c) CONSULTATION.—The Secretary shall implement
7 subsection (a) in consultation with the National Associa-
8 tion of Boards of Pharmacy.
9 (d) NOTIFYING STATE BOARDS OF PHARMACY.—The
10 Secretary shall immediately notify State boards of phar-
11 macy when—
12 (1) the Secretary receives a submission under
13 subsection (a)(1); or
14 (2) the Secretary makes a determination that a
15 pharmacy is acting contrary to section 503A of the
16 Federal Food, Drug, and Cosmetic Act.
17 SEC. 106. SEVERABILITY.
18 (a) IN GENERAL.—Section 503A (21 U.S.C. 353a)
19 is amended —
20 (1) in subsection (a), in the matter preceding
21 paragraph (1), by striking ‘‘unsolicited’’;
22 (2) by striking subsection (c);
23 (3) by redesignating subsections (d) through (f)
24 as subsections (c) through (e), respectively; and
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1 (4) in subsection (b)(1)(A)(i)(III), by striking
2 ‘‘subsection (d)’’ and inserting ‘‘subsection (c)’’.
3 (b) SEVERABILITY.—If any provision of this Act (in-
4 cluding the amendments made by this Act) is declared un-
5 constitutional, or the applicability of this Act (including
6 the amendments made by this Act) to any person or cir-
7 cumstance is held invalid, the constitutionality of the re-
8 mainder of this Act (including the amendments made by
9 this Act) and the applicability thereof to other persons and
10 circumstances shall not be affected.
11 SEC. 107. GAO STUDY.
12 (a) STUDY.—Not later than 36 months after the date
13 of the enactment of this Act, the Comptroller General of
14 the United States shall submit to Congress a report on
15 pharmacy compounding and the adequacy of State and
16 Federal efforts to assure the safety of compounded drugs.
17 (b) CONTENTS.—The report required under this sec-
18 tion shall include—
19 (1) a review of pharmacy compounding in each
20 State, and the settings in which such compounding
21 occurs;
22 (2) a review of the State laws and policies gov-
23 erning pharmacy compounding, including enforce-
24 ment of State laws and policies;
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1 (3) an assessment of the available tools to per-
2 mit purchasers of compounded drugs to determine
3 the safety and quality of such drugs;
4 (4) an evaluation of the effectiveness of the
5 communication among States and between States
6 and the Food and Drug Administration regarding
7 compounding; and
8 (5) an evaluation of the Food and Drug Admin-
9 istration’s implementation of sections 503A and
10 503B of the Federal Food, Drug, and Cosmetic Act.
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