Sec. 202. PHARMACEUTICAL DISTRIBUTION SUPPLY CHAIN
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## SEC. 202 PHARMACEUTICAL DISTRIBUTION SUPPLY CHAIN Chapter V (21 U.S.C. 351 et seq.) is amended by adding at the end the following: > > ### “Subchapter H Pharmaceutical Distribution Supply Chain > > > ## “SEC. 581 DEFINITIONS > > **[**[21 U.S.C. 360eee](/us/usc/t21/s360eee)**]** > > “In this subchapter: > > > #### “(1) Affiliate > > The term ‘**affiliate**’ means a business entity that has a relationship with a second business entity if, directly or indirectly— > > > ##### “(A) > > one business entity controls, or has the power to control, the other business entity; or > > > ##### “(B) > > a third party controls, or has the power to control, both of the business entities. > > > #### “(2) Authorized > > The term ‘**authorized**’ means— > > > ##### “(A) > > in the case of a manufacturer or repackager, having a valid registration in accordance with section 510; > > > ##### “(B) > > in the case of a wholesale distributor, having a valid license under State law or section 583, in accordance with section 582(a)(6), and complying with the licensure reporting requirements under section 503(e), as amended by the Drug Supply Chain Security Act; > > > ##### “(C) > > in the case of a third-party logistics provider, having a valid license under State law or section 584(a)(1), in accordance with section 582(a)(7), and complying with the licensure reporting requirements under section 584(b); and > > > ##### “(D) > > in the case of a dispenser, having a valid license under State law. > > > #### “(3) Dispenser > > The term ‘**dispenser**’— > > > ##### “(A) > > means a retail pharmacy, hospital pharmacy, a group of chain pharmacies under common ownership and control that do not act as a wholesale distributor, or any other person authorized by law to dispense or administer prescription drugs, and the affiliated warehouses or distribution centers of such entities under common ownership and control that do not act as a wholesale distributor; and > > > ##### “(B) > > does not include a person who dispenses only products to be used in animals in accordance with section 512(a)(5). > > > #### “(4) Disposition > > The term ‘**disposition**’, with respect to a product within the possession or control of an entity, means the removal of such product from the pharmaceutical distribution supply chain, which may include disposal or return of the product for disposal or other appropriate handling and other actions, such as retaining a sample of the product for further additional physical examination or laboratory analysis of the product by a manufacturer or regulatory or law enforcement agency. > > > #### “(5) Distribute or distribution > > The term ‘**distribute**’ or ‘**distribution**’ means the sale, purchase, trade, delivery, handling, storage, or receipt of a product, and does not include the dispensing of a product pursuant to a prescription executed in accordance with section 503(b)(1) or the dispensing of a product approved under section 512(b). > > > #### “(6) Exclusive distributor > > The term ‘**exclusive distributor**’ means the wholesale distributor that directly purchased the product from the manufacturer and is the sole distributor of that manufacturer’s product to a subsequent repackager, wholesale distributor, or dispenser. > > > #### “(7) Homogeneous case > > The term ‘**homogeneous case**’ means a sealed case containing only product that has a single National Drug Code number belonging to a single lot. > > > #### “(8) Illegitimate product > > The term ‘**illegitimate product**’ means a product for which credible evidence shows that the product— > > > ##### “(A) > > is counterfeit, diverted, or stolen; > > > ##### “(B) > > is intentionally adulterated such that the product would result in serious adverse health consequences or death to humans; > > > ##### “(C) > > is the subject of a fraudulent transaction; or > > > ##### “(D) > > appears otherwise unfit for distribution such that the product would be reasonably likely to result in serious adverse health consequences or death to humans. > > > #### “(9) Licensed > > The term ‘**licensed**’ means— > > > ##### “(A) > > in the case of a wholesale distributor, having a valid license in accordance with section 503(e) or section 582(a)(6), as applicable; > > > ##### “(B) > > in the case of a third-party logistics provider, having a valid license in accordance with section 584(a) or section 582(a)(7), as applicable; and > > > ##### “(C) > > in the case of a dispenser, having a valid license under State law. > > > #### “(10) Manufacturer > > The term ‘**manufacturer**’ means, with respect to a product— > > > ##### “(A) > > a person that holds an application approved under section 505 or a license issued under section 351 of the Public Health Service Act for such product, or if such product is not the subject of an approved application or license, the person who manufactured the product; > > > ##### “(B) > > a co-licensed partner of the person described in subparagraph
(A)that obtains the product directly from a person described in this subparagraph or subparagraph
(A)or (C); or > > > ##### “(C) > > an affiliate of a person described in subparagraph
(A)or
(B)that receives the product directly from a person described in this subparagraph or subparagraph
(A)or (B). > > > #### “(11) Package > > > ##### “(A) In general > > The term ‘**package**’ means the smallest individual saleable unit of product for distribution by a manufacturer or repackager that is intended by the manufacturer for ultimate sale to the dispenser of such product. > > > ##### “(B) Individual saleable unit > > For purposes of this paragraph, an ‘**individual saleable unit**’ is the smallest container of product introduced into commerce by the manufacturer or repackager that is intended by the manufacturer or repackager for individual sale to a dispenser. > > > #### “(12) Prescription drug > > The term ‘**prescription drug**’ means a drug for human use subject to section 503(b)(1). > > > #### “(13) Product > > The term ‘**product**’ means a prescription drug in a finished dosage form for administration to a patient without substantial further manufacturing (such as capsules, tablets, and lyophilized products before reconstitution), but for purposes of section 582, does not include blood or blood components intended for transfusion, radioactive drugs or radioactive biological products (as defined in section 600.3(ee) of title 21, Code of Federal Regulations) that are regulated by the Nuclear Regulatory Commission or by a State pursuant to an agreement with such Commission under section 274 of the Atomic Energy Act of 1954 (42 U.S.C. 2021), imaging drugs, an intravenous product described in clause (xiv), (xv), or
(xvi)of paragraph (24)(B), any medical gas (as defined in section 575), homeopathic drugs marketed in accordance with applicable guidance under this Act, or a drug compounded in compliance with section 503A or 503B. > > > #### “(14) Product identifier > > The term ‘**product identifier**’ means a standardized graphic that includes, in both human-readable form and on a machine-readable data carrier that conforms to the standards developed by a widely recognized international standards development organization, the standardized numerical identifier, lot number, and expiration date of the product. > > > #### “(15) Quarantine > > The term ‘**quarantine**’ means the storage or identification of a product, to prevent distribution or transfer of the product, in a physically separate area clearly identified for such use or through other procedures. > > > #### “(16) Repackager > > The term ‘**repackager**’ means a person who owns or operates an establishment that repacks and relabels a product or package for— > > > ##### “(A) > > further sale; or > > > ##### “(B) > > distribution without a further transaction. > > > #### “(17) Return > > The term ‘**return**’ means providing product to the authorized immediate trading partner from which such product was purchased or received, or to a returns processor or reverse logistics provider for handling of such product. > > > #### “(18) Returns processor or reverse logistics provider > > The term ‘**returns processor**’ or ‘**reverse logistics provider**’ means a person who owns or operates an establishment that dispositions or otherwise processes saleable or nonsaleable product received from an authorized trading partner such that the product may be processed for credit to the purchaser, manufacturer, or seller or disposed of for no further distribution. > > > #### “(19) Specific patient need > > The term ‘**specific patient need**’ refers to the transfer of a product from one pharmacy to another to fill a prescription for an identified patient. Such term does not include the transfer of a product from one pharmacy to another for the purpose of increasing or replenishing stock in anticipation of a potential need. > > > #### “(20) Standardized numerical identifier > > The term ‘**standardized numerical identifier**’ means a set of numbers or characters used to uniquely identify each package or homogenous case that is composed of the National Drug Code that corresponds to the specific product (including the particular package configuration) combined with a unique alphanumeric serial number of up to 20 characters. > > > #### “(21) Suspect product > > The term ‘**suspect product**’ means a product for which there is reason to believe that such product— > > > ##### “(A) > > is potentially counterfeit, diverted, or stolen; > > > ##### “(B) > > is potentially intentionally adulterated such that the product would result in serious adverse health consequences or death to humans; > > > ##### “(C) > > is potentially the subject of a fraudulent transaction; or > > > ##### “(D) > > appears otherwise unfit for distribution such that the product would result in serious adverse health consequences or death to humans. > > > #### “(22) Third-party logistics provider > > The term ‘**third-party logistics provider**’ means an entity that provides or coordinates warehousing, or other logistics services of a product in interstate commerce on behalf of a manufacturer, wholesale distributor, or dispenser of a product, but does not take ownership of the product, nor have responsibility to direct the sale or disposition of the product. > > > #### “(23) Trading partner > > The term ‘**trading partner**’ means— > > > ##### “(A) > > a manufacturer, repackager, wholesale distributor, or dispenser from whom a manufacturer, repackager, wholesale distributor, or dispenser accepts direct ownership of a product or to whom a manufacturer, repackager, wholesale distributor, or dispenser transfers direct ownership of a product; or > > > ##### “(B) > > a third-party logistics provider from whom a manufacturer, repackager, wholesale distributor, or dispenser accepts direct possession of a product or to whom a manufacturer, repackager, wholesale distributor, or dispenser transfers direct possession of a product. > > > #### “(24) Transaction > > > ##### “(A) In general > > The term ‘**transaction**’ means the transfer of product between persons in which a change of ownership occurs. > > > ##### “(B) Exemptions > > The term ‘**transaction**’ does not include— > > > ###### “(i) > > intracompany distribution of any product between members of an affiliate or within a manufacturer; > > > ###### “(ii) > > the distribution of a product among hospitals or other health care entities that are under common control; > > > ###### “(iii) > > the distribution of a product for emergency medical reasons including a public health emergency declaration pursuant to section 319 of the Public Health Service Act, except that a drug shortage not caused by a public health emergency shall not constitute an emergency medical reason; > > > ###### “(iv) > > the dispensing of a product pursuant to a prescription executed in accordance with section 503(b)(1); > > > ###### “(v) > > the distribution of product samples by a manufacturer or a licensed wholesale distributor in accordance with section 503(d); > > > ###### “(vi) > > the distribution of blood or blood components intended for transfusion; > > > ###### “(vii) > > the distribution of minimal quantities of product by a licensed retail pharmacy to a licensed practitioner for office use; > > > ###### “(viii) > > the sale, purchase, or trade of a drug or an offer to sell, purchase, or trade a drug by a charitable organization described in section 501(c)(3) of the Internal Revenue Code of 1986 to a nonprofit affiliate of the organization to the extent otherwise permitted by law; > > > ###### “(ix) > > the distribution of a product pursuant to the sale or merger of a pharmacy or pharmacies or a wholesale distributor or wholesale distributors, except that any records required to be maintained for the product shall be transferred to the new owner of the pharmacy or pharmacies or wholesale distributor or wholesale distributors; > > > ###### “(x) > > the dispensing of a product approved under section 512(c); > > > ###### “(xi) > > products transferred to or from any facility that is licensed by the Nuclear Regulatory Commission or by a State pursuant to an agreement with such Commission under section 274 of the Atomic Energy Act of 1954 (42 U.S.C. 2021); > > > ###### “(xii) > > a combination product that is not subject to approval under section 505 or licensure under section 351 of the Public Health Service Act, and that is— > > > ###### “(I) > > a product comprised of a device and 1 or more other regulated components (such as a drug/device, biologic/device, or drug/device/biologic) that are physically, chemically, or otherwise combined or mixed and produced as a single entity; > > > ###### “(II) > > 2 or more separate products packaged together in a single package or as a unit and comprised of a drug and device or device and biological product; or > > > ###### “(III) > > 2 or more finished medical devices plus one or more drug or biological products that are packaged together in what is referred to as a ‘**medical convenience kit**’ as described in clause (xiii); > > > ###### “(xiii) > > the distribution of a collection of finished medical devices, which may include a product or biological product, assembled in kit form strictly for the convenience of the purchaser or user (referred to in this clause as a ‘**medical convenience kit**’) if— > > > ###### “(I) > > the medical convenience kit is assembled in an establishment that is registered with the Food and Drug Administration as a device manufacturer in accordance with section 510(b)(2); > > > ###### “(II) > > the medical convenience kit does not contain a controlled substance that appears in a schedule contained in the Comprehensive Drug Abuse Prevention and Control Act of 1970; > > > ###### “(III) > > in the case of a medical convenience kit that includes a product, the person that manufacturers the kit— > > > ###### “(aa) > > purchased such product directly from the pharmaceutical manufacturer or from a wholesale distributor that purchased the product directly from the pharmaceutical manufacturer; and > > > ###### “(bb) > > does not alter the primary container or label of the product as purchased from the manufacturer or wholesale distributor; and > > > ###### “(IV) > > in the case of a medical convenience kit that includes a product, the product is— > > > ###### “(aa) > > an intravenous solution intended for the replenishment of fluids and electrolytes; > > > ###### “(bb) > > a product intended to maintain the equilibrium of water and minerals in the body; > > > ###### “(cc) > > a product intended for irrigation or reconstitution; > > > ###### “(dd) > > an anesthetic; > > > ###### “(ee) > > an anticoagulant; > > > ###### “(ff) > > a vasopressor; or > > > ###### “(gg) > > a sympathomimetic; > > > ###### “(xiv) > > the distribution of an intravenous product that, by its formulation, is intended for the replenishment of fluids and electrolytes (such as sodium, chloride, and potassium) or calories (such as dextrose and amino acids); > > > ###### “(xv) > > the distribution of an intravenous product used to maintain the equilibrium of water and minerals in the body, such as dialysis solutions; > > > ###### “(xvi) > > the distribution of a product that is intended for irrigation, or sterile water, whether intended for such purposes or for injection; > > > ###### “(xvii) > > the distribution of a medical gas (as defined in section 575); or > > > ###### “(xviii) > > the distribution or sale of any licensed product under section 351 of the Public Health Service Act that meets the definition of a device under section 201(h). > > > #### “(25) Transaction history > > The term ‘**transaction history**’ means a statement in paper or electronic form, including the transaction information for each prior transaction going back to the manufacturer of the product. > > > #### “(26) Transaction information > > The term ‘**transaction information**’ means— > > > ##### “(A) > > the proprietary or established name or names of the product; > > > ##### “(B) > > the strength and dosage form of the product; > > > ##### “(C) > > the National Drug Code number of the product; > > > ##### “(D) > > the container size; > > > ##### “(E) > > the number of containers; > > > ##### “(F) > > the lot number of the product; > > > ##### “(G) > > the date of the transaction; > > > ##### “(H) > > the date of the shipment, if more than 24 hours after the date of the transaction; > > > ##### “(I) > > the business name and address of the person from whom ownership is being transferred; and > > > ##### “(J) > > the business name and address of the person to whom ownership is being transferred. > > > #### “(27) Transaction statement > > The ‘**transaction statement**’ is a statement, in paper or electronic form, that the entity transferring ownership in a transaction— > > > ##### “(A) > > is authorized as required under the Drug Supply Chain Security Act; > > > ##### “(B) > > received the product from a person that is authorized as required under the Drug Supply Chain Security Act; > > > ##### “(C) > > received transaction information and a transaction statement from the prior owner of the product, as required under section 582; > > > ##### “(D) > > did not knowingly ship a suspect or illegitimate product; > > > ##### “(E) > > had systems and processes in place to comply with verification requirements under section 582; > > > ##### “(F) > > did not knowingly provide false transaction information; and > > > ##### “(G) > > did not knowingly alter the transaction history. > > > #### “(28) Verification or verify > > The term ‘**verification**’ or ‘**verify**’ means determining whether the product identifier affixed to, or imprinted upon, a package or homogeneous case corresponds to the standardized numerical identifier or lot number and expiration date assigned to the product by the manufacturer or the repackager, as applicable in accordance with section 582. > > > #### “(29) Wholesale distributor > > The term ‘**wholesale distributor**’ means a person (other than a manufacturer, a manufacturer’s co-licensed partner, a third-party logistics provider, or repackager) engaged in wholesale distribution (as defined in section 503(e)(4), as amended by the Drug Supply Chain Security Act). > > > ## “SEC. 582 REQUIREMENTS > > > ### “(a) In General > > > #### “(1) Other activities > > Each manufacturer, repackager, wholesale distributor, and dispenser shall comply with the requirements set forth in this section with respect to the role of such manufacturer, repackager, wholesale distributor, or dispenser in a transaction involving product. If an entity meets the definition of more than one of the entities listed in the preceding sentence, such entity shall comply with all applicable requirements in this section, but shall not be required to duplicate requirements. > > > #### “(2) Initial standards > > > ##### “(A) In general > > The Secretary shall, in consultation with other appropriate Federal officials, manufacturers, repackagers, wholesale distributors, dispensers, and other pharmaceutical distribution supply chain stakeholders, issue a draft guidance document that establishes standards for the interoperable exchange of transaction information, transaction history, and transaction statements, in paper or electronic format, for compliance with this subsection and subsections (b), (c), (d), and (e). In establishing such standards, the Secretary shall consider the feasibility of establishing standardized documentation to be used by members of the pharmaceutical distribution supply chain to convey the transaction information, transaction history, and transaction statement to the subsequent purchaser of a product and to facilitate the exchange of lot level data. The standards established under this paragraph shall take into consideration the standards established under section 505D and shall comply with a form and format developed by a widely recognized international standards development organization. > > > ##### “(B) Public input > > Prior to issuing the draft guidance under subparagraph (A), the Secretary shall gather comments and information from stakeholders and maintain such comments and information in a public docket for at least 60 days prior to issuing such guidance. > > > ##### “(C) Publication > > The Secretary shall publish the standards established under subparagraph
(A)not later than 1 year after the date of enactment of the Drug Supply Chain Security Act. > > > #### “(3) Waivers, exceptions, and exemptions > > > ##### “(A) In general > > Not later than 2 years after the date of enactment of the Drug Supply Chain Security Act, the Secretary shall, by guidance— > > > ###### “(i) > > establish a process by which an authorized manufacturer, repackager, wholesale distributor, or dispenser may request a waiver from any of the requirements set forth in this section, which the Secretary may grant if the Secretary determines that such requirements would result in an undue economic hardship or for emergency medical reasons, including a public health emergency declaration pursuant to section 319 of the Public Health Service Act; > > > ###### “(ii) > > establish a process by which the Secretary determines exceptions, and a process through which a manufacturer or repackager may request such an exception, to the requirements relating to product identifiers if a product is packaged in a container too small or otherwise unable to accommodate a label with sufficient space to bear the information required for compliance with this section; and > > > ###### “(iii) > > establish a process by which the Secretary may determine other products or transactions that shall be exempt from the requirements of this section. > > > ##### “(B) Content > > The guidance issued under subparagraph
(A)shall include a process for the biennial review and renewal of such waivers, exceptions, and exemptions, as applicable. > > > ##### “(C) Process > > In issuing the guidance under this paragraph, the Secretary shall provide an effective date that is not later than 180 days prior to the date on which manufacturers are required to affix or imprint a product identifier to each package and homogenous case of product intended to be introduced in a transaction into commerce consistent with this section. > > > #### “(4) Self-executing requirements > > Except where otherwise specified, the requirements of this section may be enforced without further regulations or guidance from the Secretary. > > > #### “(5) Grandfathering product > > > ##### “(A) Product identifier > > Not later than 2 years after the date of enactment of the Drug Supply Chain Security Act, the Secretary shall finalize guidance specifying whether and under what circumstances product that is not labeled with a product identifier and that is in the pharmaceutical distribution supply chain at the time of the effective date of the requirements of this section shall be exempted from the requirements of this section. > > > ##### “(B) Tracing > > For a product that entered the pharmaceutical distribution supply chain prior to January 1, 2015— > > > ###### “(i) > > authorized trading partners shall be exempt from providing transaction information as required under subsections (b)(1)(A)(i), (c)(1)(A)(ii), (d)(1)(A)(ii), and (e)(1)(A)(ii); > > > ###### “(ii) > > transaction history required under this section shall begin with the owner of such product on such date; and > > > ###### “(iii) > > the owners of such product on such date shall be exempt from asserting receipt of transaction information and transaction statement from the prior owner as required under this section. > > > #### “(6) Wholesale distributor licenses > > Notwithstanding section 581(9)(A), until the effective date of the wholesale distributor licensing regulations under section 583, the term ‘licensed’ or ‘authorized’, as it relates to a wholesale distributor with respect to prescription drugs, shall mean a wholesale distributor with a valid license under State law. > > > #### “(7) Third-party logistics provider licenses > > Until the effective date of the third-party logistics provider licensing regulations under section 584, a third-party logistics provider shall be considered ‘licensed’ under section 581(9)(B) unless the Secretary has made a finding that the third-party logistics provider does not utilize good handling and distribution practices and publishes notice thereof. > > > #### “(8) Label changes > > Changes made to package labels solely to incorporate the product identifier may be submitted to the Secretary in the annual report of an establishment, in accordance with section 314.70(d) of chapter 21, Code of Federal Regulations (or any successor regulation). > > > #### “(9) Product identifiers > > With respect to any requirement relating to product identifiers under this subchapter— > > > ##### “(A) > > unless the Secretary allows, through guidance, the use of other technologies for data instead of or in addition to the technologies described in clauses
(i)and (ii), the applicable data— > > > ###### “(i) > > shall be included in a 2-dimensional data matrix barcode when affixed to, or imprinted upon, a package; and > > > ###### “(ii) > > shall be included in a linear or 2-dimensional data matrix barcode when affixed to, or imprinted upon, a homogeneous case; and > > > ##### “(B) > > verification of the product identifier may occur by using human-readable or machine-readable methods. > > > ### “(b) Manufacturer Requirements > > > #### “(1) Product tracing > > > ##### “(A) In general > > Beginning not later than January 1, 2015, a manufacturer shall— > > > ###### “(i) > > prior to, or at the time of, each transaction in which such manufacturer transfers ownership of a product, provide the subsequent owner with transaction history, transaction information, and a transaction statement, in a single document in an paper or electronic format; and > > > ###### “(ii) > > capture the transaction information (including lot level information), transaction history, and transaction statement for each transaction and maintain such information, history, and statement for not less than 6 years after the date of the transaction. > > > ##### “(B) Requests for information > > Upon a request by the Secretary or other appropriate Federal or State official, in the event of a recall or for the purpose of investigating a suspect product or an illegitimate product, a manufacturer shall, not later than 1 business day, and not to exceed 48 hours, after receiving the request, or in other such reasonable time as determined by the Secretary, based on the circumstances of the request, provide the applicable transaction information, transaction history, and transaction statement for the product. > > > ##### “(C) Electronic format > > > ###### “(i) In general > > Beginning not later than 4 years after the date of enactment of the Drug Supply Chain Security Act, except as provided under clause (ii), a manufacturer shall provide the transaction information, transaction history, and transaction statement required under subparagraph (A)(i) in electronic format. > > > ###### “(ii) Exception > > A manufacturer may continue to provide the transaction information, transaction history, and transaction statement required under subparagraph (A)(i) in a paper format to a licensed health care practitioner authorized to prescribe medication under State law or other licensed individual under the supervision or direction of such a practitioner who dispenses product in the usual course of professional practice. > > > #### “(2) Product identifier > > > ##### “(A) In general > > Beginning not later than 4 years after the date of enactment of the Drug Supply Chain Security Act, a manufacturer shall affix or imprint a product identifier to each package and homogenous case of a product intended to be introduced in a transaction into commerce. Such manufacturer shall maintain the product identifier information for such product for not less than 6 years after the date of the transaction. > > > ##### “(B) Exception > > A package that is required to have a standardized numerical identifier is not required to have a unique device identifier. > > > #### “(3) Authorized trading partners > > Beginning not later than January 1, 2015, the trading partners of a manufacturer may be only authorized trading partners. > > > #### “(4) Verification > > Beginning not later than January 1, 2015, a manufacturer shall have systems in place to enable the manufacturer to comply with the following requirements: > > > ##### “(A) Suspect product > > > ###### “(i) In general > > Upon making a determination that a product in the possession or control of the manufacturer is a suspect product, or upon receiving a request for verification from the Secretary that has made a determination that a product within the possession or control of a manufacturer is a suspect product, a manufacturer shall— > > > ###### “(I) > > quarantine such product within the possession or control of the manufacturer from product intended for distribution until such product is cleared or dispositioned; and > > > ###### “(II) > > promptly conduct an investigation in coordination with trading partners, as applicable, to determine whether the product is an illegitimate product, which shall include validating any applicable transaction history and transaction information in the possession of the manufacturer and otherwise investigating to determine whether the product is an illegitimate product, and, beginning 4 years after the date of enactment of the Drug Supply Chain Security Act, verifying the product at the package level, including the standardized numerical identifier. > > > ###### “(ii) Cleared product > > If the manufacturer makes the determination that a suspect product is not an illegitimate product, the manufacturer shall promptly notify the Secretary, if applicable, of such determination and such product may be further distributed. > > > ###### “(iii) Records > > A manufacturer shall keep records of the investigation of a suspect product for not less than 6 years after the conclusion of the investigation. > > > ##### “(B) Illegitimate product > > > ###### “(i) In general > > Upon determining that a product in the possession or control of a manufacturer is an illegitimate product, the manufacturer shall, in a manner consistent with the systems and processes of such manufacturer— > > > ###### “(I) > > quarantine such product within the possession or control of the manufacturer from product intended for distribution until such product is dispositioned; > > > ###### “(II) > > disposition the illegitimate product within the possession or control of the manufacturer; > > > ###### “(III) > > take reasonable and appropriate steps to assist a trading partner to disposition an illegitimate product not in the possession or control of the manufacturer; and > > > ###### “(IV) > > retain a sample of the product for further physical examination or laboratory analysis of the product by the manufacturer or Secretary (or other appropriate Federal or State official) upon request by the Secretary (or other appropriate Federal or State official), as necessary and appropriate. > > > ###### “(ii) Making a notification > > > ###### “(I) Illegitimate product > > Upon determining that a product in the possession or control of the manufacturer is an illegitimate product, the manufacturer shall notify the Secretary and all immediate trading partners that the manufacturer has reason to believe may have received such illegitimate product of such determination not later than 24 hours after making such determination. > > > ###### “(II) High risk of illegitimacy > > A manufacturer shall notify the Secretary and immediate trading partners that the manufacturer has reason to believe may have in the trading partner’s possession a product manufactured by, or purported to be a product manufactured by, the manufacturer not later than 24 hours after determining or being notified by the Secretary or a trading partner that there is a high risk that such product is an illegitimate product. For purposes of this subclause, a ‘high risk’ may include a specific high risk that could increase the likelihood that illegitimate product will enter the pharmaceutical distribution supply chain and other high risks as determined by the Secretary in guidance pursuant to subsection (h). > > > ###### “(iii) Responding to a notification > > Upon the receipt of a notification from the Secretary or a trading partner that a determination has been made that a product is an illegitimate product, a manufacturer shall identify all illegitimate product subject to such notification that is in the possession or control of the manufacturer, including any product that is subsequently received, and shall perform the activities described in subparagraph (A). > > > ###### “(iv) Terminating a notification > > Upon making a determination, in consultation with the Secretary, that a notification is no longer necessary, a manufacturer shall promptly notify immediate trading partners that the manufacturer notified pursuant to clause
(ii)that such notification has been terminated. > > > ###### “(v) Records > > A manufacturer shall keep records of the disposition of an illegitimate product for not less than 6 years after the conclusion of the disposition. > > > ##### “(C) Requests for verification > > Beginning 4 years after the date of enactment of the Drug Supply Chain Security Act, upon receiving a request for verification from an authorized repackager, wholesale distributor, or dispenser that is in possession or control of a product such person believes to be manufactured by such manufacturer, a manufacturer shall, not later than 24 hours after receiving the request for verification or in other such reasonable time as determined by the Secretary, based on the circumstances of the request, notify the person making the request whether the product identifier, including the standardized numerical identifier, that is the subject of the request corresponds to the product identifier affixed or imprinted by the manufacturer. If a manufacturer responding to a request for verification identifies a product identifier that does not correspond to that affixed or imprinted by the manufacturer, the manufacturer shall treat such product as suspect product and conduct an investigation as described in subparagraph (A). If the manufacturer has reason to believe the product is an illegitimate product, the manufacturer shall advise the person making the request of such belief at the time such manufacturer responds to the request for verification. > > > ##### “(D) Electronic database > > A manufacturer may satisfy the requirements of this paragraph by developing a secure electronic database or utilizing a secure electronic database developed or operated by another entity. The owner of such database shall establish the requirements and processes to respond to requests and may provide for data access to other members of the pharmaceutical distribution supply chain, as appropriate. The development and operation of such a database shall not relieve a manufacturer of the requirement under this paragraph to respond to a request for verification submitted by means other than a secure electronic database. > > > ##### “(E) Saleable returned product > > Beginning 4 years after the date of enactment of the Drug Supply Chain Security Act (except as provided pursuant to subsection (a)(5)), upon receipt of a returned product that the manufacturer intends to further distribute, before further distributing such product, the manufacturer shall verify the product identifier, including the standardized numerical identifier, for each sealed homogeneous case of such product or, if such product is not in a sealed homogeneous case, verify the product identifier, including the standardized numerical identifier, on each package. > > > ##### “(F) Nonsaleable returned product > > A manufacturer may return a nonsaleable product to the manufacturer or repackager, to the wholesale distributor from whom such product was purchased, or to a person acting on behalf of such a person, including a returns processor, without providing the information described in paragraph (1)(A)(i). > > > ### “(c) Wholesale Distributor Requirements > > > #### “(1) Product tracing > > > ##### “(A) In general > > Beginning not later than January 1, 2015, the following requirements shall apply to wholesale distributors: > > > ###### “(i) > > A wholesale distributor shall not accept ownership of a product unless the previous owner prior to, or at the time of, the transaction provides the transaction history, transaction information, and a transaction statement for the product, as applicable under this subparagraph. > > > ###### “(ii) > > > ######
(I)> > > ######
(aa)> > If the wholesale distributor purchased a product directly from the manufacturer, the exclusive distributor of the manufacturer, or a repackager that purchased directly from the manufacturer, then prior to, or at the time of, each transaction in which the wholesale distributor transfers ownership of a product, the wholesale distributor shall provide to the subsequent purchaser— > > > ###### “(AA) > > a transaction statement, which shall state that such wholesale distributor, or a member of the affiliate of such wholesale distributor, purchased the product directly from the manufacturer, exclusive distributor of the manufacturer, or repackager that purchased the product directly from the manufacturer; and > > > ###### “(BB) > > subject to subclause (II), the transaction history and transaction information. > > > ###### “(bb) > > The wholesale distributor shall provide the transaction history, transaction information, and transaction statement under item (aa)— > > > ###### “(AA) > > if provided to a dispenser, on a single document in a paper or electronic format; and > > > ###### “(BB) > > if provided to a wholesale distributor, through any combination of self-generated paper, electronic data, or manufacturer-provided information on the product package. > > > ###### “(II) > > For purposes of transactions described in subclause (I), transaction history and transaction information shall not be required to include the lot number of the product, the initial transaction date, or the initial shipment date from the manufacturer (as defined in subparagraphs (F), (G), and
(H)of section 581(26)). > > > ###### “(iii) > > If the wholesale distributor did not purchase a product directly from the manufacturer, the exclusive distributor of the manufacturer, or a repackager that purchased directly from the manufacturer, as described in clause (ii), then prior to, or at the time of, each transaction or subsequent transaction, the wholesale distributor shall provide to the subsequent purchaser a transaction statement, transaction history, and transaction information, in a paper or electronic format that complies with the guidance document issued under subsection (a)(2). > > > ###### “(iv) > > For the purposes of clause (iii), the transaction history supplied shall begin only with the wholesale distributor described in clause (ii)(I), but the wholesale distributor described in clause
(iii)shall inform the subsequent purchaser that such wholesale distributor received a direct purchase statement from a wholesale distributor described in clause (ii)(I). > > > ###### “(v) > > A wholesale distributor shall— > > > ###### “(I) > > capture the transaction information (including lot level information) consistent with the requirements of this section, transaction history, and transaction statement for each transaction described in clauses (i), (ii), and
(iii)and maintain such information, history, and statement for not less than 6 years after the date of the transaction; and > > > ###### “(II) > > maintain the confidentiality of the transaction information (including any lot level information consistent with the requirements of this section), transaction history, and transaction statement for a product in a manner that prohibits disclosure to any person other than the Secretary or other appropriate Federal or State official, except to comply with clauses
(ii)and (iii), and, as applicable, pursuant to an agreement under subparagraph (D). > > > ##### “(B) Returns > > > ###### “(i) Saleable returns > > Notwithstanding subparagraph (A)(i), the following shall apply: > > > ###### “(I) Requirements > > Until the date that is 6 years after the date of enactment of the Drug Supply Chain Security Act (except as provided pursuant to subsection (a)(5)), a wholesale distributor may accept returned product from a dispenser or repackager pursuant to the terms and conditions of any agreement between the parties, and, notwithstanding subparagraph (A)(ii), may distribute such returned product without providing the transaction history. For transactions subsequent to the return, the transaction history of such product shall begin with the wholesale distributor that accepted the returned product, consistent with the requirements of this subsection. > > > ###### “(II) Enhanced requirements > > Beginning 6 years after the date of enactment of the Drug Supply Chain Security Act (except as provided pursuant to subsection (a)(5)), a wholesale distributor may accept returned product from a dispenser or repackager only if the wholesale distributor can associate returned product with the transaction information and transaction statement associated with that product. For all transactions after such date, the transaction history, as applicable, of such product shall begin with the wholesale distributor that accepted and verified the returned product. For purposes of this subparagraph, the transaction information and transaction history, as applicable, need not include transaction dates if it is not reasonably practicable to obtain such dates. > > > ###### “(ii) Nonsaleable returns > > A wholesale distributor may return a nonsaleable product to the manufacturer or repackager, to the wholesale distributor from whom such product was purchased, or to a person acting on behalf of such a person, including a returns processor, without providing the information required under subparagraph (A)(i). > > > ##### “(C) Requests for information > > Upon a request by the Secretary or other appropriate Federal or State official, in the event of a recall or for the purpose of investigating a suspect product or an illegitimate product, a wholesale distributor shall, not later than 1 business day, and not to exceed 48 hours, after receiving the request or in other such reasonable time as determined by the Secretary, based on the circumstances of the request, provide the applicable transaction information, transaction history, and transaction statement for the product. > > > ##### “(D) Trading partner agreements > > Beginning 6 years after the date of enactment of the Drug Supply Chain Security Act, a wholesale distributor may disclose the transaction information, including lot level information, transaction history, or transaction statement of a product to the subsequent purchaser of the product, pursuant to a written agreement between such wholesale distributor and such subsequent purchaser. Nothing in this subparagraph shall be construed to limit the applicability of subparagraphs
(A)through (C). > > > #### “(2) Product identifier > > Beginning 6 years after the date of enactment of the Drug Supply Chain Security Act, a wholesale distributor may engage in transactions involving a product only if such product is encoded with a product identifier (except as provided pursuant to subsection (a)(5)). > > > #### “(3) Authorized trading partners > > Beginning not later than January 1, 2015, the trading partners of a wholesale distributor may be only authorized trading partners. > > > #### “(4) Verification > > Beginning not later than January 1, 2015, a wholesale distributor shall have systems in place to enable the wholesale distributor to comply with the following requirements: > > > ##### “(A) Suspect product > > > ###### “(i) In general > > Upon making a determination that a product in the possession or control of a wholesale distributor is a suspect product, or upon receiving a request for verification from the Secretary that has made a determination that a product within the possession or control of a wholesale distributor is a suspect product, a wholesale distributor shall— > > > ###### “(I) > > quarantine such product within the possession or control of the wholesale distributor from product intended for distribution until such product is cleared or dispositioned; and > > > ###### “(II) > > promptly conduct an investigation in coordination with trading partners, as applicable, to determine whether the product is an illegitimate product, which shall include validating any applicable transaction history and transaction information in the possession of the wholesale distributor and otherwise investigating to determine whether the product is an illegitimate product, and, beginning 6 years after the date of enactment of the Drug Supply Chain Security Act (except as provided pursuant to subsection (a)(5)), verifying the product at the package level, including the standardized numerical identifier. > > > ###### “(ii) Cleared product > > If the wholesale distributor determines that a suspect product is not an illegitimate product, the wholesale distributor shall promptly notify the Secretary, if applicable, of such determination and such product may be further distributed. > > > ###### “(iii) Records > > A wholesale distributor shall keep records of the investigation of a suspect product for not less than 6 years after the conclusion of the investigation. > > > ##### “(B) Illegitimate product > > > ###### “(i) In general > > Upon determining, in coordination with the manufacturer, that a product in the possession or control of a wholesale distributor is an illegitimate product, the wholesale distributor shall, in a manner that is consistent with the systems and processes of such wholesale distributor— > > > ###### “(I) > > quarantine such product within the possession or control of the wholesale distributor from product intended for distribution until such product is dispositioned; > > > ###### “(II) > > disposition the illegitimate product within the possession or control of the wholesale distributor; > > > ###### “(III) > > take reasonable and appropriate steps to assist a trading partner to disposition an illegitimate product not in the possession or control of the wholesale distributor; and > > > ###### “(IV) > > retain a sample of the product for further physical examination or laboratory analysis of the product by the manufacturer or Secretary (or other appropriate Federal or State official) upon request by the manufacturer or Secretary (or other appropriate Federal or State official), as necessary and appropriate. > > > ###### “(ii) Making a notification > > Upon determining that a product in the possession or control of the wholesale distributor is an illegitimate product, the wholesale distributor shall notify the Secretary and all immediate trading partners that the wholesale distributor has reason to believe may have received such illegitimate product of such determination not later than 24 hours after making such determination. > > > ###### “(iii) Responding to a notification > > Upon the receipt of a notification from the Secretary or a trading partner that a determination has been made that a product is an illegitimate product, a wholesale distributor shall identify all illegitimate product subject to such notification that is in the possession or control of the wholesale distributor, including any product that is subsequently received, and shall perform the activities described in subparagraph (A). > > > ###### “(iv) Terminating a notification > > Upon making a determination, in consultation with the Secretary, that a notification is no longer necessary, a wholesale distributor shall promptly notify immediate trading partners that the wholesale distributor notified pursuant to clause
(ii)that such notification has been terminated. > > > ###### “(v) Records > > A wholesale distributor shall keep records of the disposition of an illegitimate product for not less than 6 years after the conclusion of the disposition. > > > ##### “(C) Electronic database > > A wholesale distributor may satisfy the requirements of this paragraph by developing a secure electronic database or utilizing a secure electronic database developed or operated by another entity. The owner of such database shall establish the requirements and processes to respond to requests and may provide for data access to other members of the pharmaceutical distribution supply chain, as appropriate. The development and operation of such a database shall not relieve a wholesale distributor of the requirement under this paragraph to respond to a verification request submitted by means other than a secure electronic database. > > > ##### “(D) Verification of saleable returned product > > Beginning 6 years after the date of enactment of the Drug Supply Chain Security Act, upon receipt of a returned product that the wholesale distributor intends to further distribute, before further distributing such product, the wholesale distributor shall verify the product identifier, including the standardized numerical identifier, for each sealed homogeneous case of such product or, if such product is not in a sealed homogeneous case, verify the product identifier, including the standardized numerical identifier, on each package. > > > ### “(d) Dispenser Requirements > > > #### “(1) Product tracing > > > ##### “(A) In general > > Beginning July 1, 2015, a dispenser— > > > ###### “(i) > > shall not accept ownership of a product, unless the previous owner prior to, or at the time of, the transaction, provides transaction history, transaction information, and a transaction statement; > > > ###### “(ii) > > prior to, or at the time of, each transaction in which the dispenser transfers ownership of a product (but not including dispensing to a patient or returns) shall provide the subsequent owner with transaction history, transaction information, and a transaction statement for the product, except that the requirements of this clause shall not apply to sales by a dispenser to another dispenser to fulfill a specific patient need; and > > > ###### “(iii) > > shall capture transaction information (including lot level information, if provided), transaction history, and transaction statements, as necessary to investigate a suspect product, and maintain such information, history, and statements for not less than 6 years after the transaction. > > > ##### “(B) Agreements with third parties > > A dispenser may enter into a written agreement with a third party, including an authorized wholesale distributor, under which the third party confidentially maintains the transaction information, transaction history, and transaction statements required to be maintained under this subsection on behalf of the dispenser. If a dispenser enters into such an agreement, the dispenser shall maintain a copy of the written agreement and shall not be relieved of the obligations of the dispenser under this subsection. > > > ##### “(C) Returns > > > ###### “(i) Saleable returns > > A dispenser may return product to the trading partner from which the dispenser obtained the product without providing the information required under subparagraph (A). > > > ###### “(ii) Nonsaleable returns > > A dispenser may return a nonsaleable product to the manufacturer or repackager, to the wholesale distributor from whom such product was purchased, to a returns processor, or to a person acting on behalf of such a person without providing the information required under subparagraph (A). > > > ##### “(D) Requests for information > > Upon a request by the Secretary or other appropriate Federal or State official, in the event of a recall or for the purpose of investigating a suspect or an illegitimate product, a dispenser shall, not later than 2 business days after receiving the request or in another such reasonable time as determined by the Secretary, based on the circumstances of the request, provide the applicable transaction information, transaction statement, and transaction history which the dispenser received from the previous owner, which shall not include the lot number of the product, the initial transaction date, or the initial shipment date from the manufacturer unless such information was included in the transaction information, transaction statement, and transaction history provided by the manufacturer or wholesale distributor to the dispenser. The dispenser may respond to the request by providing the applicable information in either paper or electronic format. Until the date that is 4 years after the date of enactment of the Drug Supply Chain Security Act, the Secretary or other appropriate Federal or State official shall grant a dispenser additional time, as necessary, only with respect to a request to provide lot level information described in subparagraph
(F)of section 581(26) that was provided to the dispenser in paper format, limit the request time period to the 6 months preceding the request or other relevant date, and, in the event of a recall, the Secretary, or other appropriate Federal or State official may request information only if such recall involves a serious adverse health consequence or death to humans. > > > #### “(2) Product identifier > > Beginning not later than 7 years after the date of enactment of the Drug Supply Chain Security Act, a dispenser may engage in transactions involving a product only if such product is encoded with a product identifier (except as provided pursuant to subsection (a)(5)). > > > #### “(3) Authorized trading partners > > Beginning not later than January 1, 2015, the trading partners of a dispenser may be only authorized trading partners. > > > #### “(4) Verification > > Beginning not later than January 1, 2015, a dispenser shall have systems in place to enable the dispenser to comply with the following requirements: > > > ##### “(A) Suspect product > > > ###### “(i) In general > > Upon making a determination that a product in the possession or control of the dispenser is a suspect product, or upon receiving a request for verification from the Secretary that has made a determination that a product within the possession or control of a dispenser is a suspect product, a dispenser shall— > > > ###### “(I) > > quarantine such product within the possession or control of the dispenser from product intended for distribution until such product is cleared or dispositioned; and > > > ###### “(II) > > promptly conduct an investigation in coordination with trading partners, as applicable, to determine whether the product is an illegitimate product. > > > ###### “(ii) Investigation > > An investigation conducted under clause (i)(II) shall include— > > > ###### “(I) > > beginning 7 years after the date of enactment of the Drug Supply Chain Security Act, verifying whether the lot number of a suspect product corresponds with the lot number for such product; > > > ###### “(II) > > beginning 7 years after the date of enactment of such Act, verifying that the product identifier, including the standardized numerical identifier, of at least 3 packages or 10 percent of such suspect product, whichever is greater, or all packages, if there are fewer than 3, corresponds with the product identifier for such product; > > > ###### “(III) > > validating any applicable transaction history and transaction information in the possession of the dispenser; and > > > ###### “(IV) > > otherwise investigating to determine whether the product is an illegitimate product. > > > ###### “(iii) Cleared product > > If the dispenser makes the determination that a suspect product is not an illegitimate product, the dispenser shall promptly notify the Secretary, if applicable, of such determination and such product may be further distributed or dispensed. > > > ###### “(iv) Records > > A dispenser shall keep records of the investigation of a suspect product for not less than 6 years after the conclusion of the investigation. > > > ##### “(B) Illegitimate product > > > ###### “(i) In general > > Upon determining, in coordination with the manufacturer, that a product in the possession or control of a dispenser is an illegitimate product, the dispenser shall— > > > ###### “(I) > > disposition the illegitimate product within the possession or control of the dispenser; > > > ###### “(II) > > take reasonable and appropriate steps to assist a trading partner to disposition an illegitimate product not in the possession or control of the dispenser; and > > > ###### “(III) > > retain a sample of the product for further physical examination or laboratory analysis of the product by the manufacturer or Secretary (or other appropriate Federal or State official) upon request by the manufacturer or Secretary (or other appropriate Federal or State official), as necessary and appropriate. > > > ###### “(ii) Making a notification > > Upon determining that a product in the possession or control of the dispenser is an illegitimate product, the dispenser shall notify the Secretary and all immediate trading partners that the dispenser has reason to believe may have received such illegitimate product of such determination not later than 24 hours after making such determination. > > > ###### “(iii) Responding to a notification > > Upon the receipt of a notification from the Secretary or a trading partner that a determination has been made that a product is an illegitimate product, a dispenser shall identify all illegitimate product subject to such notification that is in the possession or control of the dispenser, including any product that is subsequently received, and shall perform the activities described in subparagraph (A). > > > ###### “(iv) Terminating a notification > > Upon making a determination, in consultation with the Secretary, that a notification is no longer necessary, a dispenser shall promptly notify immediate trading partners that the dispenser notified pursuant to clause
(ii)that such notification has been terminated. > > > ###### “(v) Records > > A dispenser shall keep records of the disposition of an illegitimate product for not less than 6 years after the conclusion of the disposition. > > > ##### “(C) Electronic database > > A dispenser may satisfy the requirements of this paragraph by developing a secure electronic database or utilizing a secure electronic database developed or operated by another entity. > > > #### “(5) Exception > > Notwithstanding any other provision of law, the requirements under paragraphs
(1)and
(4)shall not apply to licensed health care practitioners authorized to prescribe or administer medication under State law or other licensed individuals under the supervision or direction of such practitioners who dispense or administer product in the usual course of professional practice. > > > ### “(e) Repackager Requirements > > > #### “(1) Product tracing > > > ##### “(A) In general > > Beginning not later than January 1, 2015, a repackager described in section 581(16)(A) shall— > > > ###### “(i) > > not accept ownership of a product unless the previous owner, prior to, or at the time of, the transaction, provides transaction history, transaction information, and a transaction statement for the product; > > > ###### “(ii) > > prior to, or at the time of, each transaction in which the repackager transfers ownership of a product, provide the subsequent owner with transaction history, transaction information, and a transaction statement for the product; and > > > ###### “(iii) > > capture the transaction information (including lot level information), transaction history, and transaction statement for each transaction described in clauses
(i)and
(ii)and maintain such information, history, and statement for not less than 6 years after the transaction. > > > ##### “(B) Returns > > > ###### “(i) Nonsaleable product > > A repackager described in section 581(16)(A) may return a nonsaleable product to the manufacturer or repackager, or to the wholesale distributor from whom such product was purchased, or to a person acting on behalf of such a person, including a returns processor, without providing the information required under subparagraph (A)(ii). > > > ###### “(ii) Saleable or nonsaleable product > > A repackager described in section 581(16)(B) may return a saleable or nonsaleable product to the manufacturer, repackager, or to the wholesale distributor from whom such product was received without providing the information required under subparagraph (A)(ii) on behalf of the hospital or other health care entity that took ownership of such product pursuant to the terms and conditions of any agreement between such repackager and the entity that owns the product. > > > ##### “(C) Requests for information > > Upon a request by the Secretary or other appropriate Federal or State official, in the event of a recall or for the purpose of investigating a suspect product or an illegitimate product, a repackager described in section 581(16)(A) shall, not later than 1 business day, and not to exceed 48 hours, after receiving the request or in other such reasonable time as determined by the Secretary, provide the applicable transaction information, transaction history, and transaction statement for the product. > > > #### “(2) Product identifier > > > ##### “(A) In general > > Beginning not later than 5 years after the date of enactment of the Drug Supply Chain Security Act, a repackager described in section 581(16)(A)— > > > ###### “(i) > > shall affix or imprint a product identifier to each package and homogenous case of product intended to be introduced in a transaction in commerce; > > > ###### “(ii) > > shall maintain the product identifier information for such product for not less than 6 years after the date of the transaction; > > > ###### “(iii) > > may engage in transactions involving a product only if such product is encoded with a product identifier (except as provided pursuant to subsection (a)(5)); and > > > ###### “(iv) > > shall maintain records for not less than 6 years to allow the repackager to associate the product identifier the repackager affixes or imprints with the product identifier assigned by the original manufacturer of the product. > > > ##### “(B) Exception > > A package that is required to have a standardized numerical identifier is not required to have a unique device identifier. > > > #### “(3) Authorized trading partners > > Beginning January 1, 2015, the trading partners of a repackager described in section 581(16) may be only authorized trading partners. > > > #### “(4) Verification > > Beginning not later than January 1, 2015, a repackager described in section 581(16)(A) shall have systems in place to enable the repackager to comply with the following requirements: > > > ##### “(A) Suspect product > > > ###### “(i) In general > > Upon making a determination that a product in the possession or control of the repackager is a suspect product, or upon receiving a request for verification from the Secretary that has made a determination that a product within the possession or control of a repackager is a suspect product, a repackager shall— > > > ###### “(I) > > quarantine such product within the possession or control of the repackager from product intended for distribution until such product is cleared or dispositioned; and > > > ###### “(II) > > promptly conduct an investigation in coordination with trading partners, as applicable, to determine whether the product is an illegitimate product, which shall include validating any applicable transaction history and transaction information in the possession of the repackager and otherwise investigating to determine whether the product is an illegitimate product, and, beginning 5 years after the date of enactment of the Drug Supply Chain Security Act (except as provided pursuant to subsection (a)(5)), verifying the product at the package level, including the standardized numerical identifier. > > > ###### “(ii) Cleared product > > If the repackager makes the determination that a suspect product is not an illegitimate product, the repackager shall promptly notify the Secretary, if applicable, of such determination and such product may be further distributed. > > > ###### “(iii) Records > > A repackager shall keep records of the investigation of a suspect product for not less than 6 years after the conclusion of the investigation. > > > ##### “(B) Illegitimate product > > > ###### “(i) In general > > Upon determining, in coordination with the manufacturer, that a product in the possession or control of a repackager is an illegitimate product, the repackager shall, in a manner that is consistent with the systems and processes of such repackager— > > > ###### “(I) > > quarantine such product within the possession or control of the repackager from product intended for distribution until such product is dispositioned; > > > ###### “(II) > > disposition the illegitimate product within the possession or control of the repackager; > > > ###### “(III) > > take reasonable and appropriate steps to assist a trading partner to disposition an illegitimate product not in the possession or control of the repackager; and > > > ###### “(IV) > > retain a sample of the product for further physical examination or laboratory analysis of the product by the manufacturer or Secretary (or other appropriate Federal or State official) upon request by the manufacturer or Secretary (or other appropriate Federal or State official), as necessary and appropriate. > > > ###### “(ii) Making a notification > > Upon determining that a product in the possession or control of the repackager is an illegitimate product, the repackager shall notify the Secretary and all immediate trading partners that the repackager has reason to believe may have received the illegitimate product of such determination not later than 24 hours after making such determination. > > > ###### “(iii) Responding to a notification > > Upon the receipt of a notification from the Secretary or a trading partner, a repackager shall identify all illegitimate product subject to such notification that is in the possession or control of the repackager, including any product that is subsequently received, and shall perform the activities described in subparagraph (A). > > > ###### “(iv) Terminating a notification > > Upon making a determination, in consultation with the Secretary, that a notification is no longer necessary, a repackager shall promptly notify immediate trading partners that the repackager notified pursuant to clause
(ii)that such notification has been terminated. > > > ###### “(v) Records > > A repackager shall keep records of the disposition of an illegitimate product for not less than 6 years after the conclusion of the disposition. > > > ##### “(C) Requests for verification > > Beginning 5 years after the date of enactment of the Drug Supply Chain Security Act, upon receiving a request for verification from an authorized manufacturer, wholesale distributor, or dispenser that is in possession or control of a product they believe to be repackaged by such repackager, a repackager shall, not later than 24 hours after receiving the verification request or in other such reasonable time as determined by the Secretary, based on the circumstances of the request, notify the person making the request whether the product identifier, including the standardized numerical identifier, that is the subject of the request corresponds to the product identifier affixed or imprinted by the repackager. If a repackager responding to a verification request identifies a product identifier that does not correspond to that affixed or imprinted by the repackager, the repackager shall treat such product as suspect product and conduct an investigation as described in subparagraph (A). If the repackager has reason to believe the product is an illegitimate product, the repackager shall advise the person making the request of such belief at the time such repackager responds to the verification request. > > > ##### “(D) Electronic database > > A repackager may satisfy the requirements of paragraph
(4)by developing a secure electronic database or utilizing a secure electronic database developed or operated by another entity. The owner of such database shall establish the requirements and processes to respond to requests and may provide for data access to other members of the pharmaceutical distribution supply chain, as appropriate. The development and operation of such a database shall not relieve a repackager of the requirement under subparagraph
(C)to respond to a verification request submitted by means other than a secure electronic database. > > > ##### “(E) Verification of saleable returned product > > Beginning 5 years after the date of enactment of the Drug Supply Chain Security Act, upon receipt of a returned product that the repackager intends to further distribute, before further distributing such product, the repackager shall verify the product identifier for each sealed homogeneous case of such product or, if such product is not in a sealed homogeneous case, verify the product identifier on each package. > > > ### “(f) Drop Shipments > > > #### “(1) In general > > A wholesale distributor that does not physically handle or store product shall be exempt from the provisions of this section, except the notification requirements under clauses (ii), (iii), and
(iv)of subsection (c)(4)(B), provided that the manufacturer, repackager, or other wholesale distributor that distributes the product to the dispenser by means of a drop shipment for such wholesale distributor includes on the transaction information and transaction history to the dispenser the contact information of such wholesale distributor and provides the transaction information, transaction history, and transaction statement directly to the dispenser. > > > #### “(2) Clarification > > For purposes of this subsection, providing administrative services, including processing of orders and payments, shall not by itself, be construed as being involved in the handling, distribution, or storage of a product.” > .
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