Sec. 3. Enhanced drug distribution security
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Not later than 2 years after the date of the enactment of this Act, the Secretary shall establish one or more pilot projects in coordination with manufacturers, repackagers, wholesale distributors, third-party logistics providers, and dispensers to explore and evaluate methods to enhance the safety and security of the pharmaceutical distribution supply chain. The Secretary shall ensure that the pilot projects under paragraph
(1)collectively— reflect the diversity of the pharmaceutical distribution supply chain; and include participants representative of every sector within the pharmaceutical distribution supply chain, including participants representative of small businesses. The pilot projects shall be designed to— utilize the prescription drug product identifier for tracing of a prescription drug product, which utilization may include— verification of the prescription drug product identifier of a prescription drug product; and the use of aggregation and inference; improve the technical capabilities of each sector within the pharmaceutical supply chain to comply with systems and processes needed to utilize the prescription drug product identifiers to enhance tracing of a prescription drug product; and conduct such other activities as the Secretary determines appropriate to explore and evaluate methods to enhance the safety and security of the pharmaceutical distribution supply chain. Not later than 6 months after the date of the enactment of this Act, and at least every 6 months thereafter until the submission of the report required by subsection (d)(2), the Secretary shall hold a public meeting to enhance the safety and security of the pharmaceutical distribution supply chain. In conducting such meetings, the Secretary shall take all measures reasonable and practicable to ensure the protection of confidential commercial information and trade secrets. In conducting meetings under this subsection, the Secretary shall seek to address, in at least one such meeting, each of the following topics: Best practices in each of the sectors within the pharmaceutical distribution supply chain to implement the requirements of section 582 of the Federal Food, Drug, and Cosmetic Act, as added by section 2. The costs and benefits of implementation of such section 582, including the impact on each pharmaceutical distribution supply chain sector and on public health. Whether additional electronic traceability requirements, including tracing of prescription drug product at the package level, are feasible, cost effective, overly burdensome on small businesses, and needed to protect public health. The systems and processes needed to utilize the prescription drug product identifiers to enhance tracing of prescription drug product at the package level. The technical capabilities and legal authorities, if any, needed to establish an electronic system that provides for enhanced tracing of prescription drug product at the package level. The impact that the requirements, systems, processes, capabilities, and legal authorities referred to in subparagraphs (C), (D), and
(E)would have on patient safety, the drug supply, cost and regulatory burden, the timeliness of patient access to prescription drugs, and small businesses. The Comptroller General of the United States shall conduct a study to examine implementation of the requirements established under subchapter H of chapter V of the Federal Food, Drug, and Cosmetic Act, as added by section 2, in order to inform the regulations promulgated under this section. In conducting the study under this subsection, the Comptroller General shall provide for stakeholder input and shall consider the following: The implementation of the requirements established under such subchapter H with respect to— the ability of the health care system collectively to maintain patient access to medicines; the scalability of such requirements, including with respect to prescription drug product lines; and the capability of different sectors within the pharmaceutical distribution supply chain, including small businesses, to affix and utilize the prescription drug product identifier. The need for additional legal authorities and activities to address additional gaps in the pharmaceutical distribution supply chain, if any, after the implementation of the requirements established under such subchapter H with respect to— the systems and processes needed to enhance tracing of prescription drug product at the package level; the impact, feasibility, and cost effectiveness that additional requirements pursuant to this section would have on each pharmaceutical distribution supply chain sector and the public health; and the systems and processes needed to enhance interoperability among trading partners. Risks to the security and privacy of data collected, maintained, or exchanged pursuant to the requirements established under such subchapter H. Not later than 10 years after the date of the enactment of this Act, the Secretary shall enter into a contract with a private, independent consulting firm with relevant expertise to conduct a technology and software study on the feasibility of dispensers that have 25 or fewer full-time employees conducting interoperable, electronic tracing of prescription drug products at the package level. As a condition of the award of a contract under paragraph (1), the private independent consulting firm awarded such contract shall agree to consult with dispensers that have 25 or fewer full-time employees when conducting the study under such subparagraph. The study conducted under paragraph
(1)shall assess whether, with respect to conducting interoperable, electronic tracing of prescription drug products at the package level, the necessary hardware and software— is readily accessible to such dispensers; is not prohibitively expensive to obtain, install and maintain for such dispensers; and can be integrated into business practices, such as interoperability with wholesale distributors, for such dispensers. The Secretary shall publish— the statement of work for the study conducted under paragraph
(1)for public comment not later than 30 days before commencing the study; and the final version of such study for public comment not later than 30 days after such study is completed. Not later than 30 days after the date on which the study conducted under paragraph
(1)is completed, the Secretary shall submit to the Committee on Energy and Commerce of the House of Representatives and the Committee on Health, Education, Labor, and Pensions of the Senate, a report on the findings of the study and any recommendations to improve the technology and software available to small dispensers for purposes of conducting electronic, interoperable tracing of prescription drug products at the package level. Not later than 180 days after the date on which the study conducted under paragraph
(1)is completed, the Secretary shall hold a public meeting at which members of the public, including stakeholders, may present their views on the study. Not later than 12 years after the date of the enactment of this Act, the Comptroller General shall submit to the Committee on Energy and Commerce of the House of Representatives and the Committee on Health, Education, Labor, and Pensions of the Senate a report on the results of the study conducted under subsection (c). Not later than 12 years after the date of the enactment of this Act, the Secretary shall submit to the Committee on Energy and Commerce of the House of Representatives and the Committee on Health, Education, Labor, and Pensions of the Senate a report on the results of the pilot program conducted under subsection (a), taking into consideration— the comments received during the public meetings conducted under subsection (b); and the results of the study conducted, and the public comments received during the public meeting held, under subsection (d). Notwithstanding any other provision of this Act, including the amendments made by this Act, not earlier than January 1, 2027, and not later than March 1, 2027, the Secretary shall issue proposed regulations that establish additional requirements to prevent a suspect product, illegitimate product, or a product that is counterfeit, stolen, diverted, or otherwise unfit for distribution from entering into or being further distributed in the supply chain, including— requirements related to the use of interoperable electronic systems and technologies for enhanced tracing of prescription drug product at the package level, which may include verification of the prescription drug product identifier of a package of prescription drug product and enhanced verification of saleable returns; requirements related to the use of additional prescription drug product identifiers or prescription drug product identifier technology that meet the standards developed under section 582(a)(2) of the Federal Food, Drug, and Cosmetic Act, as added by section 2; requirements related to the use of aggregation, inference, and other methods, if determined to be necessary components of the systems and technologies referred to in subparagraph (A); and other data transmission and maintenance requirements and interoperability standards. The requirements described in paragraph
(1)shall provide for flexibility for a member of the pharmaceutical supply chain, by— with respect to dispensers, allowing a dispenser to enter into a written agreement with a third party, including an authorized wholesale distributor, under which— the third party confidentially maintains any information required to be maintained under such requirements for the dispenser; and the dispenser maintains a copy of the written agreement and is not relieved of the other obligations of the dispenser under such requirements; establishing a process by which an authorized manufacturer, repackager, wholesale distributor, or dispenser may request a waiver from any such requirements if the Secretary determines that such requirements would result in an undue economic hardship on the manufacturer, wholesale distributor, or dispenser; not requiring the adoption of specific business systems by a member of the pharmaceutical supply chain for the maintenance and transmission of prescription drug product tracing data; and prescribing alternative methods of compliance for small businesses, as specified in paragraph (4). In issuing proposed regulations under paragraph (1), the Secretary shall consider— the results of the pilot project conducted under subsection (a); the public meetings held under subsection (b); the studies conducted under subsections
(c)and (d); the reports submitted under subsection (e); the public health benefits of such regulations compared with the cost of compliance with the requirements contained in such regulations, including with respect to entities of varying sizes and capabilities; and the diversity of the pharmaceutical distribution supply chain by providing appropriate flexibility for each sector in the supply chain, including small businesses. The Secretary, taking into consideration the study conducted under paragraph (d), shall, if the Secretary determines that the requirements established pursuant to paragraph
(1)would result in an undue economic hardship on small businesses, provide for alternative methods of compliance with any such requirement by small businesses, including— establishing timelines for such compliance (including compliance by dispensers with 25 or fewer full-time employees) that do not impose undue economic hardship for small businesses, including dispensers with respect to which the study concluded has insufficient hardware and software to conduct interoperable, electronic tracing of prescription drug products at the package level; and establishing a process by which a dispenser may request a waiver from any such requirement. In issuing regulations to carry out this subsection, the Secretary shall— issue a notice of proposed rulemaking that includes a copy of the proposed rule; provide for a period of not less than 60 days for comments on the proposed rule; and provide for an effective date of the final rule that is 2 years after the date on which such final rule is published. The requirements regarding the provision and receipt of transaction history and transaction statements under section 582 of the Federal Food, Drug, and Cosmetic Act, as added by section 2, shall cease to be effective on the date on which the regulations issued under this section are fully implemented. In this section: The terms defined in section 581 of the Federal Food, Drug, and Cosmetic Act, as added by section 2, shall have the same meanings in this section as such terms are given in such section 581. The term Secretary means the Secretary of Health and Human Services, acting through the Commissioner of Food and Drugs.