21 USC 360 - National standards for third-party logistics providers

Collapse to view only § 360eee-3. National standards for third-party logistics providers

§ 360eee. Definitions
§ 360eee-1. Requirements
§ 360eee-2. National standards for prescription drug wholesale distributors
§ 360eee-3. National standards for third-party logistics providers
§ 360eee-4. Uniform national policy

§ 360eee. DefinitionsIn this part:

(1) AffiliateThe 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) AuthorizedThe term “authorized” means—

(A) in the case of a manufacturer or repackager, having a valid registration in accordance with section 360 of this title;

(B) in the case of a wholesale distributor, having a valid license under State law or section 360eee–2 of this title, in accordance with section 360eee–1(a)(6) of this title, and complying with the licensure reporting requirements under section 353(e) of this title;

(C) in the case of a third-party logistics provider, having a valid license under State law or section 360eee–3(a)(1) of this title, in accordance with section 360eee–1(a)(7) of this title, and complying with the licensure reporting requirements under section 360eee–3(b) of this title; and

(D) in the case of a dispenser, having a valid license under State law.

(3) DispenserThe 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 360b(a)(5) of this title.

(4) Disposition

(5) Distribute or distribution

(6) Exclusive distributor

(7) Homogeneous case

(8) Illegitimate productThe 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;

(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) LicensedThe term “licensed” means—

(A) in the case of a wholesale distributor, having a valid license in accordance with section 353(e) of this title or section 360eee–1(a)(6) of this title, as applicable;

(B) in the case of a third-party logistics provider, having a valid license in accordance with section 360eee–3(a) of this title or section 360eee–1(a)(7) of this title, as applicable; and

(10) ManufacturerThe term “manufacturer” means, with respect to a product—

(A) a person that holds an application approved under section 355 of this title or a license issued under section 262 of title 42 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

(B) Individual saleable unit

(12) Prescription drug

(13) Product

(14) Product identifier

(15) Quarantine

(16) RepackagerThe 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

(18) Returns processor or reverse logistics provider

(19) Specific patient need

(20) Standardized numerical identifier

(21) Suspect productThe 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;

(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

(23) Trading partnerThe 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

(B) ExemptionsThe 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 247d of title 42, 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 353(b)(1) of this title;

(v) the distribution of product samples by a manufacturer or a licensed wholesale distributor in accordance with section 353(d) of this title;

(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 title 26 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 360b(c) of this title;

(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 2021 of title 42;

(xii) a combination product that is not subject to approval under section 355 of this title or licensure under section 262 of title 42, 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 360(b)(2) of this title;(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 [21 U.S.C. 801 et seq.];(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 360ddd of this title); or

(xviii) the distribution or sale of any licensed product under section 262 of title 42 that meets the definition of a device under section 321(h) of this title.

(25) Transaction history

(26) Transaction informationThe term “transaction information” means—

(A) the proprietary or established name or names of the product;

(B) the strength and dosage form 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 statementThe “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 360eee–1 of this title;

(D) did not knowingly ship a suspect or illegitimate product;

(E) had systems and processes in place to comply with verification requirements under section 360eee–1 of this title;

(F) did not knowingly provide false transaction information; and

(G) did not knowingly alter the transaction history.

(28) Verification or verify

(29) Wholesale distributor

(June 25, 1938, ch. 675, § 581, as added Pub. L. 113–54, title II, § 202, Nov. 27, 2013, 127 Stat. 599.)

§ 360eee–1. Requirements

(a) In general

(1) Other activities

(2) Initial standards

(A) In general

(B) Public input

(3) Waivers, exceptions, and exemptions

(A) In generalNot later than 2 years after November 27, 2013, 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 247d of title 42;

(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

(4) Self-executing requirements

(5) Grandfathering product

(A) Product identifier

(B) TracingFor 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

(7) Third-party logistics provider licenses

(8) Label changes

(9) Product identifiersWith respect to any requirement relating to product identifiers under this part—

(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 generalBeginning 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 2

2 So in original. Probably should be “a”.

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

(i) In general

(ii) Exception

(2) Product identifier

(A) In general

(B) Exception

(3) Authorized trading partners

(4) VerificationBeginning 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 generalUpon 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 November 27, 2013, verifying the product at the package level, including the standardized numerical identifier.

(ii) Cleared product

(iii) Records

(B) Illegitimate product

(i) In generalUpon 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(II) High risk of illegitimacy

(iii) Responding to a notification

(iv) Terminating a notification

(v) Records

(D) Electronic database

(E) Saleable returned product

(F) Nonsaleable returned product

(1) Product tracing

(A) In generalBeginning 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)(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 360eee(26) of this title).

(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 returnsNotwithstanding subparagraph (A)(i), the following shall apply:(I) Requirements(II) Enhanced requirements

(ii) Nonsaleable returns

(D) Trading partner agreements

(2) Product identifier

(3) Authorized trading partners

(4) VerificationBeginning 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 generalUpon 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 November 27, 2013 (except as provided pursuant to subsection (a)(5)), verifying the product at the package level, including the standardized numerical identifier.

(ii) Cleared product

(iii) Records

(B) Illegitimate product

(i) In generalUpon 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

(iii) Responding to a notification

(iv) Terminating a notification

(v) Records

(D) Verification of saleable returned product

(d) Dispenser requirements

(1) Product tracing

(A) In generalBeginning 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

(i) Saleable returns

(ii) Nonsaleable returns

(D) Requests for information

(2) Product identifier

(3) Authorized trading partners

(4) VerificationBeginning 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 generalUpon 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) InvestigationAn investigation conducted under clause (i)(II) shall include—(I) beginning 7 years after November 27, 2013, verifying whether the lot number of a suspect product corresponds with the lot number for such product;(II) beginning 7 years after November 27, 2013, 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

(iv) Records

(B) Illegitimate product

(i) In generalUpon 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

(iii) Responding to a notification

(iv) Terminating a notification

(v) Records

(5) Exception

(e) Repackager requirements

(1) Product tracing

(A) In generalBeginning not later than January 1, 2015, a repackager described in section 360eee(16)(A) of this title 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

(ii) Saleable or nonsaleable product

(2) Product identifier

(A) In generalBeginning not later than 5 years after November 27, 2013, a repackager described in section 360eee(16)(A) of this title—

(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

(3) Authorized trading partners

(4) VerificationBeginning not later than January 1, 2015, a repackager described in section 360eee(16)(A) of this title shall have systems in place to enable the repackager to comply with the following requirements:

(A) Suspect product

(i) In generalUpon 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 November 27, 2013 (except as provided pursuant to subsection (a)(5)), verifying the product at the package level, including the standardized numerical identifier.

(ii) Cleared product

(iii) Records

(B) Illegitimate product

(i) In generalUpon 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

(iii) Responding to a notification

(iv) Terminating a notification

(v) Records

(D) Electronic database

(E) Verification of saleable returned product

(f) Drop shipments

(1) In general

(2) Clarification

(g) Enhanced drug distribution security

(1) In generalOn the date that is 10 years after November 27, 2013, the following interoperable, electronic tracing of product at the package level requirements shall go into effect:

(A) The transaction information and the transaction statements as required under this section shall be exchanged in a secure, interoperable, electronic manner in accordance with the standards established under the guidance issued pursuant to paragraphs (3) and (4) of subsection (h), including any revision of such guidance issued in accordance with paragraph (5) of such subsection.

(B) The transaction information required under this section shall include the product identifier at the package level for each package included in the transaction.

(C) Systems and processes for verification of product at the package level, including the standardized numerical identifier, shall be required in accordance with the standards established under the guidance issued pursuant to subsection (a)(2) and the guidances issued pursuant to paragraphs (2), (3), and (4) of subsection (h), including any revision of such guidances issued in accordance with paragraph (5) of such subsection, which may include the use of aggregation and inference as necessary.

(D) The systems and processes necessary to promptly respond with the transaction information and transaction statement for a product upon a request by the Secretary (or other appropriate Federal or State official) in the event of a recall or for the purposes of investigating a suspect product or an illegitimate product shall be required.

(E) The systems and processes necessary to promptly facilitate gathering the information necessary to produce the transaction information for each transaction going back to the manufacturer, as applicable, shall be required—

(i) in the event of a request by the Secretary (or other appropriate Federal or State official), on account of a recall or for the purposes of investigating a suspect product or an illegitimate product; or

(ii) in the event of a request by an authorized trading partner, in a secure manner that ensures the protection of confidential commercial information and trade secrets, for purposes of investigating a suspect product or assisting the Secretary (or other appropriate Federal or State official) with a request described in clause (i).

(F) Each person accepting a saleable return shall have systems and processes in place to allow acceptance of such product and may accept saleable returns only if such person can associate the saleable return product with the transaction information and transaction statement associated with that product.

(2) Compliance

(A) Information maintenance agreement

(B) Alternative methodsThe Secretary, taking into consideration the assessment conducted under paragraph (3), shall provide for alternative methods of compliance with any of the requirements set forth in paragraph (1), including—

(i) establishing timelines for compliance by small businesses (including small business dispensers with 25 or fewer full-time employees) with such requirements, in order to ensure that such requirements do not impose undue economic hardship for small businesses, including small business dispensers for whom the criteria set forth in the assessment under paragraph (3) is not met, if the Secretary determines that such requirements under paragraph (1) would result in undue economic hardship; and

(ii) establishing a process by which a dispenser may request a waiver from any of the requirements set forth in paragraph (1) if the Secretary determines that such requirements would result in an undue economic hardship, which shall include a process for the biennial review and renewal of any such waiver.

(3) Assessment

(A) In general

(B) Condition

(i) the necessary software and hardware is readily accessible to such dispensers;

(ii) the necessary software and hardware is prohibitively expensive to obtain, install, and maintain for such dispensers; and

(iii) the necessary hardware and software can be integrated into business practices, such as interoperability with wholesale distributors, for such dispensers.

(D) PublicationThe Secretary shall—

(i) publish the statement of work for the assessment under subparagraph (A) for public comment prior to beginning the assessment;

(ii) publish the final assessment for public comment not later than 30 calendar days after receiving such assessment; and

(iii) hold a public meeting not later than 180 calendar days after receiving the final assessment at which public stakeholders may present their views on the assessment.

(4) ProcedureNotwithstanding section 553 of title 5, the Secretary, in promulgating any regulation pursuant to this section, shall—

(A) provide appropriate flexibility by—

(i) not requiring the adoption of specific business systems for the maintenance and transmission of data;

(ii) prescribing alternative methods of compliance for any of the requirements set forth in paragraph (1) or set forth in regulations implementing such requirements, including—(I) timelines for small businesses to comply with the requirements set forth in the regulations in order to ensure that such requirements do not impose undue economic hardship for small businesses (including small business dispensers for whom the criteria set forth in the assessment under paragraph (3) is not met), if the Secretary determines that such requirements would result in undue economic hardship; and(II) the establishment of a process by which a dispenser may request a waiver from any of the requirements set forth in such regulations if the Secretary determines that such requirements would result in an undue economic hardship; and

(iii) taking into consideration—(I) the results of pilot projects, including pilot projects pursuant to this section and private sector pilot projects, including those involving the use of aggregation and inference;(II) the public meetings held and related guidance documents issued under this section;(III) the public health benefits of any additional regulations in comparison to the cost of compliance with such requirements, including on entities of varying sizes and capabilities;(IV) the diversity of the pharmaceutical distribution supply chain by providing appropriate flexibility for each sector, including both large and small businesses; and(V) the assessment pursuant to paragraph (3) with respect to small business dispensers, including related public comment and the public meeting, and requirements under this section;

(B) issue a notice of proposed rulemaking that includes a copy of the proposed regulation;

(D) publish in the Federal Register the final regulation not less than 2 years prior to the effective date of the regulation.

(h) Guidance documents

(1) In general

(2) Suspect and illegitimate product

(A) In generalNot later than 180 days after November 27, 2013, the Secretary shall issue a guidance document to aid trading partners in the identification of a suspect product and notification termination. Such guidance document shall—

(i) identify specific scenarios that could significantly increase the risk of a suspect product entering the pharmaceutical distribution supply chain;

(ii) provide recommendation on how trading partners may identify such product and make a determination on whether the product is a suspect product as soon as practicable; and

(iii) set forth the process by which manufacturers, repackagers, wholesale distributors, and dispensers shall terminate notifications in consultation with the Secretary regarding illegitimate product pursuant to subsections (b)(4)(B), (c)(4)(B), (d)(4)(B), and (e)(4)(B).

(B) Revised guidance

(3) Unit level tracing

(A) In generalIn order to enhance drug distribution security at the package level, not later than 18 months after conducting a public meeting on the system attributes necessary to enable secure tracing of product at the package level, including allowing for the use of verification, inference, and aggregation, as necessary, the Secretary shall issue a final guidance document that outlines and makes recommendations with respect to the system attributes necessary to enable secure tracing at the package level as required under the requirements established under subsection (g). Such guidance document shall—

(i) define the circumstances under which the sectors within the pharmaceutical distribution supply chain may, in the most efficient manner practicable, infer the contents of a case, pallet, tote, or other aggregate of individual packages or containers of product, from a product identifier associated with the case, pallet, tote, or other aggregate, without opening each case, pallet, tote, or other aggregate or otherwise individually scanning each package;

(ii) identify methods and processes to enhance secure tracing of product at the package level, such as secure processes to facilitate the use of inference, enhanced verification activities, the use of aggregation and inference, processes that utilize the product identifiers to enhance tracing of product at the package level, including the standardized numerical identifier, or package security features; and

(iii) ensure the protection of confidential commercial information and trade secrets.

(B) Procedure

(4) Standards for interoperable data exchange

(A) In generalIn order to enhance secure tracing of a product at the package level, the Secretary, not later than 18 months after conducting a public meeting on the interoperable standards necessary to enhance the security of the pharmaceutical distribution supply chain, shall update the guidance issued pursuant to subsection (a)(2), as necessary and appropriate, and finalize such guidance document so that the guidance document—

(i) identifies and makes recommendations with respect to the standards necessary for adoption in order to support the secure, interoperable electronic data exchange among the pharmaceutical distribution supply chain that comply with a form and format developed by a widely recognized international standards development organization;

(ii) takes into consideration standards established pursuant to subsection (a)(2) and section 355e of this title;

(iii) facilitates the creation of a uniform process or methodology for product tracing; and

(iv) ensures the protection of confidential commercial information and trade secrets.

(B) Procedure

(5) ProcedureIn issuing or revising any guidance issued pursuant to this subsection or subsection (g), except the initial guidance issued under paragraph (2)(A), the Secretary shall—

(A) publish a notice in the Federal Register for a period not less than 30 days announcing that the draft or revised draft guidance is available;

(B) post the draft guidance document on the Internet Web site of the Food and Drug Administration and make such draft guidance document available in hard copy;

(D) revise the draft guidance, as appropriate;

(E) publish a notice in the Federal Register for a period not less than 30 days announcing that the final guidance or final revised guidance is available;

(F) post the final guidance document on the Internet Web site of the Food and Drug Administration and make such final guidance document available in hard copy; and

(G) provide for an effective date of not earlier than 1 year after such guidance becomes final.

(i) Public meetings

(1) In generalThe Secretary shall hold not less than 5 public meetings to enhance the safety and security of the pharmaceutical distribution supply chain and provide for comment. The Secretary may hold the first such public meeting not earlier than 1 year after November 27, 2013. In carrying out the public meetings described in this paragraph, the Secretary shall—

(A) prioritize topics necessary to inform the issuance of the guidance described in paragraphs (3) and (4) of subsection (h); and

(B) take all measures reasonable and practicable to ensure the protection of confidential commercial information and trade secrets.

(2) ContentEach of the following topics shall be addressed in at least one of the public meetings described in paragraph (1):

(A) An assessment of the steps taken under subsections (b) through (e) to build capacity for a unit-level system, including the impact of the requirements of such subsections on—

(i) the ability of the health care system collectively to maintain patient access to medicines;

(ii) the scalability of such requirements, including as it relates to product lines; and

(iii) the capability of different sectors and subsectors, including both large and small businesses, to affix and utilize the product identifier.

(B) The system attributes necessary to support the requirements set forth under subsection (g), including the standards necessary for adoption in order to support the secure, interoperable electronic data exchange among sectors within the pharmaceutical distribution supply chain.

(C) Best practices in each of the different sectors within the pharmaceutical distribution supply chain to implement the requirements of this section.

(D) The costs and benefits of the implementation of this section, including the impact on each pharmaceutical distribution supply chain sector and on public health.

(E) Whether electronic tracing requirements, including tracing of product at the package level, are feasible, cost effective, and needed to protect the public health.

(F) The systems and processes needed to utilize the product identifiers to enhance tracing of product at the package level, including allowing for verification, aggregation, and inference, as necessary.

(G) The technical capabilities and legal authorities, if any, needed to establish an interoperable, electronic system that provides for tracing of product at the package level.

(H) The impact that such additional requirements would have on patient safety, the drug supply, cost and regulatory burden, and timely patient access to prescription drugs.

(I) Other topics, as determined appropriate by the Secretary.

(j) Pilot projects

(1) In general

(2) Content

(A) In general

(B) Project designThe pilot projects under paragraph (1) shall be designed to—

(i) utilize the product identifier for tracing of a product, which may include verification of the product identifier of a product, including the use of aggregation and inference;

(ii) improve the technical capabilities of each sector and subsector to comply with systems and processes needed to utilize the product identifiers to enhance tracing of a product;

(iii) identify system attributes that are necessary to implement the requirements established under this section; and

(iv) complete other activities as determined by the Secretary.

(k) SunsetThe following requirements shall have no force or effect beginning on the date that is 10 years after November 27, 2013:

(1) The provision and receipt of transaction history under this section.

(2) The requirements set forth for returns under subsections (b)(4)(E), (c)(1)(B)(i), (d)(1)(C)(i), and (e)(4)(E).

(3) The requirements set forth under subparagraphs (A)(v)(II) and (D) of subsection (c)(1), as applied to lot level information only.

(l) Rule of construction

(m) Requests for information

(June 25, 1938, ch. 675, § 582, as added and amended Pub. L. 113–54, title II, §§ 202, 203, Nov. 27, 2013, 127 Stat. 605, 623.)

§ 360eee–2. National standards for prescription drug wholesale distributors

(a) In general

(b) ContentFor the purpose of ensuring uniformity with respect to standards set forth in this section, the standards established under subsection (a) shall apply to all State and Federal licenses described under section 353(e)(1) of this title and shall include standards for the following:

(1) The storage and handling of prescription drugs, including facility requirements.

(2) The establishment and maintenance of records of the distributions of such drugs.

(3) The furnishing of a bond or other equivalent means of security, as follows:

(A)

(i) For the issuance or renewal of a wholesale distributor license, an applicant that is not a government owned and operated wholesale distributor shall submit a surety bond of $100,000 or other equivalent means of security acceptable to the State.

(ii) For purposes of clause (i), the State or other applicable authority may accept a surety bond in the amount of $25,000 if the annual gross receipts of the previous tax year for the wholesaler is $10,000,000 or less.

(B) If a wholesale distributor can provide evidence that it possesses the required bond in a State, the requirement for a bond in another State shall be waived.

(4) Mandatory background checks and fingerprinting of facility managers or designated representatives.

(5) The establishment and implementation of qualifications for key personnel.

(6) The mandatory physical inspection of any facility to be used in wholesale distribution within a reasonable time frame from the initial application of the facility and to be conducted by the licensing authority or by the State, consistent with subsection (c).

(7) In accordance with subsection (d), the prohibition of certain persons from receiving or maintaining licensure for wholesale distribution.

(d) Prohibited personsThe standards established under subsection (a) shall include requirements to prohibit a person from receiving or maintaining licensure for wholesale distribution if the person—

(1) has been convicted of any felony for conduct relating to wholesale distribution, any felony violation of subsection (i) or (k) of section 331 of this title, or any felony violation of section 1365 of title 18 relating to product tampering; or

(2) has engaged in a pattern of violating the requirements of this section, or State requirements for licensure, that presents a threat of serious adverse health consequences or death to humans.

(e) RequirementsThe Secretary, in promulgating any regulation pursuant to this section, shall, notwithstanding section 553 of title 5—

(1) issue a notice of proposed rulemaking that includes a copy of the proposed regulation;

(2) provide a period of not less than 60 days for comments on the proposed regulation; and

(3) provide that the final regulation take effect on the date that is 2 years after the date such final regulation is published.

(June 25, 1938, ch. 675, § 583, as added Pub. L. 113–54, title II, § 204(a)(5), Nov. 27, 2013, 127 Stat. 634.)

§ 360eee–3. National standards for third-party logistics providers

(a) RequirementsNo third-party logistics provider in any State may conduct activities in any State unless each facility of such third-party logistics provider—

(1)

(A) is licensed by the State from which the drug is distributed by the third-party logistics provider, in accordance with the regulations promulgated under subsection (d); or

(B) if the State from which the drug distributed by the third-party logistics provider has not established a licensure requirement, is licensed by the Secretary, in accordance with the regulations promulgated under subsection (d); and

(2) if the drug is distributed interstate, is licensed by the State into which the drug is distributed by the third-party logistics provider if such State licenses third-party logistics providers that distribute drugs into the State and the third-party logistics provider is not licensed by the Secretary as described in paragraph (1)(B).

(b) ReportingBeginning 1 year after November 27, 2013, a facility of a third-party logistics provider shall report to the Secretary, on an annual basis pursuant to a schedule determined by the Secretary—

(1) the State by which the facility is licensed and the appropriate identification number of such license; and

(2) the name and address of the facility and all trade names under which such facility conducts business.

(1) Authorized fees of Secretary

(2) State licensing fees

(A) State established program

(B) No State established program

(d) Regulations

(1) In general

(2) ContentSuch regulations shall—

(A) establish a process by which a third-party accreditation program approved by the Secretary shall, upon request by a third-party logistics provider, issue a license to each third-party logistics provider that meets the requirements set forth in this section;

(B) establish a process by which the Secretary shall issue a license to each third-party logistics provider that meets the requirements set forth in this section if the Secretary is not able to approve a third-party accreditation program because no such program meets the Secretary’s requirements necessary for approval of such a third-party accreditation program;

(C) require that the entity complies with storage practices, as determined by the Secretary for such facility, including—

(i) maintaining access to warehouse space of suitable size to facilitate safe operations, including a suitable area to quarantine suspect product;

(ii) maintaining adequate security; and

(iii) having written policies and procedures to—(I) address receipt, security, storage, inventory, shipment, and distribution of a product;(II) identify, record, and report confirmed losses or thefts in the United States;(III) correct errors and inaccuracies in inventories;(IV) provide support for manufacturer recalls;(V) prepare for, protect against, and address any reasonably foreseeable crisis that affects security or operation at the facility, such as a strike, fire, or flood;(VI) ensure that any expired product is segregated from other products and returned to the manufacturer or repackager or destroyed;(VII) maintain the capability to trace the receipt and outbound distribution of a product, and supplies and records of inventory; and(VIII) quarantine or destroy a suspect product if directed to do so by the respective manufacturer, wholesale distributor, dispenser, or an authorized government agency;

(D) provide for periodic inspection by the licensing authority, as determined by the Secretary, of such facility warehouse space to ensure compliance with this section;

(E) prohibit a facility from having as a manager or designated representative anyone convicted of any felony violation of subsection (i) or (k) of section 331 of this title or any violation of section 1365 of title 18, relating to product tampering;

(F) provide for mandatory background checks of a facility manager or a designated representative of such manager;

(G) require a third-party logistics provider to provide the applicable licensing authority, upon a request by such authority, a list of all product manufacturers, wholesale distributors, and dispensers for whom the third-party logistics provider provides services at such facility; and

(H) include procedures under which any third-party logistics provider license—

(i) expires on the date that is 3 years after issuance of the license; and

(ii) may be renewed for additional 3-year periods.

(3) ProcedureIn promulgating the regulations under this subsection, the Secretary shall, notwithstanding section 553 of title 5—

(A) issue a notice of proposed rulemaking that includes a copy of the proposed regulation;

(B) provide a period of not less than 60 days for comments on the proposed regulation; and

(C) provide that the final regulation takes effect upon the expiration of 1 year after the date that such final regulation is issued.

(e) Validity

(June 25, 1938, ch. 675, § 584, as added Pub. L. 113–54, title II, § 205, Nov. 27, 2013, 127 Stat. 636.)

§ 360eee–4. Uniform national policy

(a) Product tracing and other requirements

Beginning on November 27, 2013, no State or political subdivision of a State may establish or continue in effect any requirements for tracing products through the distribution system (including any requirements with respect to statements of distribution history, transaction history, transaction information, or transaction statement of a product as such product changes ownership in the supply chain, or verification, investigation, disposition, notification, or recordkeeping relating to such systems, including paper or electronic pedigree systems or for tracking and tracing drugs throughout the distribution system) which are inconsistent with, more stringent than, or in addition to, any requirements ap

(1) any waiver, exception, or exemption pursuant to section 360eee or 360eee–1 of this title; or

(2) any restrictions specified in section 360eee–1 of this title.

(b) Wholesale distributor and third-party logistics provider standards

(1) In general

(2) State regulation of third-party logistics providers

(3) Administration fees

(4) Enforcement, suspension, and revocation

Notwithstanding paragraph (1), a State—

(A) may take administrative action, including fines, to enforce a requirement promulgated by the State in accordance with section 353(e) of this title or this part;

(B) may provide for the suspension or revocation of licenses issued by the State for violations of the laws of such State;

(C) upon conviction of violations of Federal, State, or local drug laws or regulations, may provide for fines, imprisonment, or civil penalties; and

(D) may regulate activities of licensed entities in a manner that is consistent with product tracing requirements under section 360eee–1 of this title.

(June 25, 1938, ch. 675, § 585, as added Pub. L. 113–54, title II, § 205, Nov. 27, 2013, 127 Stat. 638.)