Report text available as:

  • TXT
  • PDF   (PDF provides a complete and accurate display of this text.) Tip ?

112th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     112-549

======================================================================



 
STRENGTHENING AND FOCUSING ENFORCEMENT TO DETER ORGANIZED STEALING AND 
                       ENHANCE SAFETY ACT OF 2012

                                _______
                                

 June 25, 2012.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

Mr. Smith of Texas, from the Committee on the Judiciary, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 4223]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on the Judiciary, to whom was referred the 
bill (H.R. 4223) to amend title 18, United States Code, to 
prohibit theft of medical products, and for other purposes, 
having considered the same, reports favorably thereon with an 
amendment and recommends that the bill as amended do pass.

                                CONTENTS

                                                                   Page
The Amendment....................................................     1
Purpose and Summary..............................................     4
Background and Need for the Legislation..........................     4
Hearings.........................................................     7
Committee Consideration..........................................     7
Committee Votes..................................................     7
Committee Oversight Findings.....................................     8
New Budget Authority and Tax Expenditures........................     9
Congressional Budget Office Cost Estimate........................     9
Performance Goals and Objectives.................................    10
Advisory on Earmarks.............................................    10
Section-by-Section Analysis......................................    10
Changes in Existing Law Made by the Bill, as Reported............    11

                             The Amendment

    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Strengthening and Focusing Enforcement 
to Deter Organized Stealing and Enhance Safety Act of 2012'' or the 
``SAFE DOSES Act''.

SEC. 2. THEFT OF MEDICAL PRODUCTS.

  (a) Prohibited Conduct and Penalties.--Chapter 31 of title 18, United 
States Code, is amended by adding at the end the following:

``Sec. 670. Theft of medical products

  ``(a) Prohibited Conduct.--Whoever, in, or using any means or 
facility of, interstate or foreign commerce--
          ``(1) embezzles, steals, or by fraud or deception obtains, or 
        knowingly and unlawfully takes, carries away, or conceals a 
        pre-retail medical product;
          ``(2) knowingly and falsely makes, alters, forges, or 
        counterfeits the labeling or documentation (including 
        documentation relating to origination or shipping) of a pre-
        retail medical product;
          ``(3) knowingly possesses, transports, or traffics in a pre-
        retail medical product that was involved in a violation of 
        paragraph (1) or (2);
          ``(4) with intent to defraud, buys, or otherwise obtains, a 
        pre-retail medical product that has expired or been stolen;
          ``(5) with intent to defraud, sells, or distributes, a pre-
        retail medical product that is expired or stolen; or
          ``(6) attempts or conspires to violate any of paragraphs (1) 
        through (5);
shall be punished as provided in subsection (c) and subject to the 
other sanctions provided in this section.
  ``(b) Aggravated Offenses.--An offense under this section is an 
aggravated offense if--
          ``(1) the defendant is employed by, or is an agent of, an 
        organization in the supply chain for the pre-retail medical 
        product; or
          ``(2) the violation--
                  ``(A) involves the use of violence, force, or a 
                threat of violence or force;
                  ``(B) involves the use of a deadly weapon;
                  ``(C) results in serious bodily injury or death, 
                including serious bodily injury or death resulting from 
                the use of the medical product involved; or
                  ``(D) is subsequent to a prior conviction for an 
                offense under this section.
  ``(c) Criminal Penalties.--Whoever violates subsection (a)--
          ``(1) if the offense is an aggravated offense under 
        subsection (b)(2)(C), shall be fined under this title or 
        imprisoned not more than 30 years, or both;
          ``(2) if the value of the medical products involved in the 
        offense is $5,000 or greater, shall be fined under this title, 
        imprisoned for not more than 15 years, or both, but if the 
        offense is an aggravated offense other than one under 
        subsection (b)(2)(C), the maximum term of imprisonment is 20 
        years; and
          ``(3) in any other case, shall be fined under this title, 
        imprisoned for not more than 3 years, or both, but if the 
        offense is an aggravated offense other than one under 
        subsection (b)(2)(C), the maximum term of imprisonment is 5 
        years.
  ``(d) Civil Penalties.--Whoever violates subsection (a) is subject to 
a civil penalty in an amount not more than the greater of--
          ``(1) three times the economic loss attributable to the 
        violation; or
          ``(2) $1,000,000.
  ``(e) Definitions.--In this section--
          ``(1) the term `pre-retail medical product' means a medical 
        product that has not yet been made available for retail 
        purchase by a consumer;
          ``(2) the term `medical product' means a drug, biological 
        product, device, medical food, or infant formula;
          ``(3) the terms `device', `drug', `infant formula', and 
        `labeling' have, respectively, the meanings given those terms 
        in section 201 of the Federal Food, Drug, and Cosmetic Act;
          ``(4) the term `biological product' has the meaning given the 
        term in section 351 of the Public Health Service Act;
          ``(5) the term `medical food' has the meaning given the term 
        in section 5(b) of the Orphan Drug Act; and
          ``(6) the term `supply chain' includes manufacturer, 
        wholesaler, repacker, own-labeled distributor, private-label 
        distributor, jobber, broker, drug trader, transportation 
        company, hospital, pharmacy, or security company.''.
  (b) Clerical Amendment.--The table of sections at the beginning of 
chapter 31 of title 18, United States Code, is amended by adding after 
the item relating to section 669 the following:

``670. Theft of medical products.''.

SEC. 3. CIVIL FORFEITURE.

  Section 981(a)(1)(C) of title 18, United States Code, is amended by 
inserting ``670,'' after ``657,''.

SEC. 4. PENALTIES FOR THEFT-RELATED OFFENSES.

  (a) Interstate or Foreign Shipments by Carrier.--Section 659 of title 
18, United States Code, is amended by adding at the end of the fifth 
undesignated paragraph the following: ``If the offense involves a pre-
retail medical product (as defined in section 670), it shall be 
punished under section 670 unless the penalties provided for under this 
section are greater.''.
  (b) Racketeering.--
          (1) Travel act violations.--Section 1952 of title 18, United 
        States Code, is amended by adding at the end the following:
  ``(d) If the offense under this section involves an act described in 
paragraph (1) or (3) of subsection (a) and also involves a pre-retail 
medical product (as defined in section 670), the punishment for the 
offense shall be the same as the punishment for an offense under 
section 670 unless the punishment under subsection (a) is greater.''.
          (2) Money laundering.--Section 1957(b)(1) of title 18, United 
        States Code, is amended by adding at the end the following: 
        ``If the offense involves a pre-retail medical product (as 
        defined in section 670) the punishment for the offense shall be 
        the same as the punishment for an offense under section 670 
        unless the punishment under this subsection is greater.''
  (c) Breaking or Entering Carrier Facilities.--Section 2117 of title 
18, United States Code, is amended by adding at the end of the first 
undesignated paragraph the following: ``If the offense involves a pre-
retail medical product (as defined in section 670) the punishment for 
the offense shall be the same as the punishment for an offense under 
section 670 unless the punishment under this section is greater.''.
  (d) Stolen Property.--
          (1) Transportation of stolen goods and related offenses.--
        Section 2314 of title 18, United States Code, is amended by 
        adding at the end of the sixth undesignated paragraph the 
        following: ``If the offense involves a pre-retail medical 
        product (as defined in section 670) the punishment for the 
        offense shall be the same as the punishment for an offense 
        under section 670 unless the punishment under this section is 
        greater.''.
          (2) Sale or receipt of stolen goods and related offenses.--
        Section 2315 of title 18, United States Code, is amended by 
        adding at the end of the fourth undesignated paragraph the 
        following: ``If the offense involves a pre-retail medical 
        product (as defined in section 670) the punishment for the 
        offense shall be the same as the punishment for an offense 
        under section 670 unless the punishment under this section is 
        greater.''.
  (e) Priority Given to Certain Investigations and Prosecutions.--The 
Attorney General shall give increased priority to efforts to 
investigate and prosecute offenses under section 670 of title 18, 
United States Code, that involve pre-retail medical products.

SEC. 5. AMENDMENT TO EXTEND WIRETAPPING AUTHORITY TO NEW OFFENSE.

  Section 2516(1) of title 18, United States Code, is amended--
          (1) by redesignating paragraph (s) as paragraph (t);
          (2) by striking ``or'' at the end of paragraph (r); and
          (3) by inserting after paragraph (r) the following:
          ``(s) any violation of section 670 (relating to theft of 
        medical products); or''.

SEC. 6. REQUIRED RESTITUTION.

  Section 3663A(c)(1)(A) of title 18, United States Code, is amended--
          (1) in clause (ii), by striking ``or'' at the end;
          (2) in clause (iii), by striking ``and'' at the end and 
        inserting ``or''; and
          (3) by adding at the end the following:
                  ``(iv) an offense under section 670 (relating to 
                theft of medical products); and''.

SEC. 7. DIRECTIVE TO UNITED STATES SENTENCING COMMISSION.

  (a) In General.--Pursuant to its authority under section 994 of title 
28, United States Code, and in accordance with this section, the United 
States Sentencing Commission shall review and, if appropriate, amend 
the Federal sentencing guidelines and policy statements applicable to 
persons convicted of offenses under section 670 of title 18, United 
States Code, as added by this Act, section 2118 of title 18, United 
States Code, or any another section of title 18, United States Code, 
amended by this Act, to reflect the intent of Congress that penalties 
for such offenses be sufficient to deter and punish such offenses, and 
appropriately account for the actual harm to the public from these 
offenses.
  (b) Requirements.--In carrying out this section, the United States 
Sentencing Commission shall--
          (1) consider the extent to which the Federal sentencing 
        guidelines and policy statements appropriately reflect--
                  (A) the serious nature of such offenses;
                  (B) the incidence of such offenses; and
                  (C) the need for an effective deterrent and 
                appropriate punishment to prevent such offenses;
          (2) consider establishing a minimum offense level under the 
        Federal sentencing guidelines and policy statements for 
        offenses covered by this Act;
          (3) account for any additional aggravating or mitigating 
        circumstances that might justify exceptions to the generally 
        applicable sentencing ranges;
          (4) ensure reasonable consistency with other relevant 
        directives, Federal sentencing guidelines and policy 
        statements;
          (5) make any necessary conforming changes to the Federal 
        sentencing guidelines and policy statements; and
          (6) ensure that the Federal sentencing guidelines and policy 
        statements adequately meet the purposes of sentencing set forth 
        in section 3553(a)(2) of title 18, United States Code.

                          Purpose and Summary

    This bill combats large-scale theft of pre-retail medical 
cargo, including life-saving drugs on which millions of 
Americans rely to cure illness, before it enters the stream of 
commerce. Specifically, the legislation: increases sentences 
for the theft, transportation, and storage of medical product 
cargo; enhances penalties for those who knowingly obtain stolen 
medical products for resale into the supply chain; increases 
sentences when injury or death results from ingestion of a 
stolen substance or where the defendant is employed by an 
organization in the supply chain; provides law enforcement 
tools such as wiretaps; and provides restitution to victims 
injured by stolen medical products.

                Background and Need for the Legislation

    Medical product cargo theft poses significant health risks 
to patients who are unaware that their medicines have been 
stolen and improperly cared for before being sold back into the 
legitimate supply chain.
    Sophisticated and enterprising criminal organizations are 
stealing large quantities of medical products and selling them 
via the wholesale market into legitimate pharmacies and 
hospitals. They are putting patient safety at risk because 
improperly cared-for medical products can be ineffective or 
harmful, and such damaged products are often impossible for 
health care professionals to identify. High-value 
pharmaceuticals, including treatments for serious diseases, are 
frequent targets. Unfortunately, these high-value items are the 
very type of sensitive products that need the most careful 
handling and temperature control. Many medical products can 
become ineffective if stored at the wrong temperature, even for 
a brief time. Yet, under current law, the theft of life-saving 
medical supplies is punished to the same degree as the theft of 
stereo equipment or clothing.
    The criminal organizations hijack tractor-trailers at rest 
stops, break into warehouses and evade alarm systems, forge 
shipping documents, produce high-quality counterfeit labels 
with altered expiration dates and lot numbers, and otherwise 
thwart the intense security measures used by the industry. Some 
employ sophisticated surveillance equipment and techniques in 
order to learn exactly when and where they can steal the 
particular shipments they want.
    Some prominent examples include:

         LIn 2009, thieves stole 129,000 vials of 
        insulin (worth approximately $11 million) in North 
        Carolina. A few months later (in June), the Food and 
        Drug Administration (FDA) received a report that some 
        of the vials had been reintroduced into the supply 
        chain when a diabetic patient reported to a medical 
        center in Houston with an adverse reaction after using 
        insulin from the stolen lot. The FDA issued a warning 
        that the insulin had likely not been kept refrigerated 
        correctly and could still be in the market. The spoiled 
        product was ultimately found in pharmacies in 17 
        states, with at least 2 additional patients 
        experiencing adverse reactions. An investigation linked 
        the theft to an organized crime ring, and while some 
        arrests have been made, more than 125,000 vials of 
        insulin remain unaccounted for.

         LOver $75 million of prescription drugs, 
        including treatments for cancer, heart disease, and 
        neurological disorders including depression, ADHD and 
        schizophrenia, were stolen from a warehouse in Enfield, 
        Connecticut in March 2010.\1\ The burglary was one of 
        the largest pharmaceutical heists in history. The 
        criminals broke into the secure facility on a weekend 
        by cutting a hole in the roof and repelling into the 
        storage area. They disabled the alarm system and loaded 
        dozens of crates onto a tractor-trailer. Arrests and 
        indictments were made in May 2012 and fortunately, 
        nearly all the stolen product was recovered.\2\
---------------------------------------------------------------------------
    \1\Amir Efrati & Peter Loftus, Lilly Drugs Stolen in Warehouse 
Heist, Wall St. J., Mar. 17, 2010; Ian Yarett, The $75 Million 
Pharmaceutical Heist, Newsweek, Mar. 17, 2010.
    \2\Peter Applebome & Kristin Hussey, 2 Brothers Accused in Huge 
Theft of Prescription Drugs, N. Y. Times, May 3, 2012.

         LA truckload of insulin worth $39 million was 
        stolen in 2009 from a truck stop near Somerset, 
        Pennsylvania. The trailer was eventually located with 
---------------------------------------------------------------------------
        the product still inside but no arrests were made.

         LDrugs that treat kidney failure, ADHD, 
        schizophrenia, rheumatoid arthritis and ovarian cancer 
        were stolen in three separate incidents between 2008 
        and 2009. The prescription drugs, worth over $3 million 
        in total, were taken during a distribution center 
        break-in and in two separate trailer break-ins. The FBI 
        made an arrest in only one of the three incidents, and 
        the criminal was convicted.

         LA trailer containing insulin and hormone 
        therapy medication was stolen from a truck yard in 
        Plainfield, Indiana in 2007. The investigation yielded 
        evidence that a Cuban theft ring located in South 
        Florida may have been responsible. Items from this 
        theft have shown up in transaction records and 
        warehouse seizures in other investigations--
        demonstrating a possible connection between different 
        organized theft rings.

         LIn 2008, a truck container in the custody of 
        a third-party shipper was stolen from its storage lot. 
        Police tracked the container and eventually recovered 
        the contents--but no arrests were made.

         LIn at least 10 separate incidents between 
        2006 and 2010, thieves have stolen large amounts of 
        infant formula from tractor-trailers. Such thefts have 
        occurred in multiple states. Only two arrests and 
        prosecutions have resulted. The product was recovered 
        in a handful of the incidents.

    In order to deter future incidents such as these, and to 
provide law enforcement with the tools necessary to disrupt and 
dismantle the criminal organizations that are carrying them 
out, the SAFE DOSES Act:

         LIncreases sentences for the theft, 
        transportation and storage of medical product cargo, 
        including: a maximum sentence of 30 years where serious 
        injury or death result; 20 years for the other 
        aggravated offenses (unless the value is less than 
        $5,000, in which case the maximum is 5 years); 15 years 
        for products worth more than $5,000; and 3 years for 
        products worth less than $5,000;

         LEnhances penalties for the ``fences'' who 
        knowingly obtain stolen medical products for resale 
        into the supply chain;

         LProvides law enforcement an ability to access 
        tools such as wiretaps in appropriate cases;

         LProvides restitution to victims injured by 
        stolen medical products;

         LCreates an aggravated felony where the 
        defendant is an ``insider'' (employee or agent) of a 
        company in the supply chain; uses violence or force or 
        a deadly weapon; causes serious bodily injury; or is a 
        repeat offender of this law;

         LProvides for civil penalties; and

         LChanges other theft-related offenses to make 
        sure that a person charged under such offenses for 
        theft of pre-retail medical products shall be sentenced 
        in accordance with (the new) section 670, unless the 
        penalties provided for under the amended section are 
        otherwise higher.

    This legislation is supported by the Coalition for Patient 
Safety and Medicine Integrity, a group of pharmaceutical, 
medical device and medical products companies whose purpose is 
to protect patients from the risks posed by stolen and 
inappropriately handled medical products re-entering the 
legitimate supply chain. Members of the Coalition include 
Abbott, Eli Lilly, GlaxoSmithKline, Johnson & Johnson, 
Novartis, Novo Nordisk, Sanofi, PhRMA and the Healthcare 
Distribution Management Association (HDMA). The Coalition's 
efforts are supported by the Pharmaceutical Security Institute, 
the National Insurance Crime Bureau (NICB), and the 
Biotechnology Industry Organization (BIO). The Committee on the 
Judiciary received letters of support for H.R. 4223 from: the 
following organizations: Alliance for Patient Access; Global 
Healthy Living Foundation; Men's Health Network; National 
Council for Community Behavioral Healthcare; Prostate Health 
Education Network (PHEN); and National Community Pharmacists 
Association.
    On March 28, 2012, the Committee on the Judiciary held a 
hearing on H.R. 4223. Testifying in favor of H.R. 4223, Tom 
Kubic, President and CEO of the Pharmaceutical Security 
Institute (``PSI''), said that, ``[l]arge-scale medical product 
theft is a significant problem,'' and that passage of H.R. 4223 
``will allow law enforcement to utilize well-established 
investigative tools against an increasingly sophisticated 
criminal element that traffic in stolen medical products 
without regard for public safety.''
    H.R. 4223 creates a new section within Title 18 to 
establish penalties for the theft and trafficking of pre-retail 
medical products. The bill is targeted to address those who 
knowingly steal medical products before they enter the stream 
of commerce, and traffic in them before they reach authorized 
providers. The bill is not intended to address those who do not 
have knowledge of the nature of the products they steal. The 
bill is structured in such a way that mens rea is required for 
all elements of the offense, including the knowledge that the 
contraband in question are pre-retail medical products.
    The Senate Judiciary Committee unanimously approved a 
companion bill on March 8, 2012.

                                Hearings

    The Committee's Subcommittee on Crime, Terrorism and 
Homeland Security held 1 day of hearings on H.R. 4223, on March 
28, 2012. Testimony was received from Thomas T. Kubic, 
President and CEO, Pharmaceutical Security Institute.

                        Committee Consideration

    On June 6, 2012, the Committee on the Judiciary met in open 
session and ordered the bill H.R. 4223 favorably reported, with 
an amendment, by voice vote, a quorum being present.

                            Committee Votes

    Mr. Sensenbrenner offered a manager's amendment, agreed to 
by voice vote, which made several small changes to track 
language in the Senate version of the bill, S. 1002. The 
manager's amendment clarified the mens rea standard to ensure 
that the law would not capture inadvertent or unknowing 
conduct. It did so by inserting ``knowingly,'' in paragraphs 
(1) and (2) of the new Section 670.
    The manager's amendment also clarified that the aggravated 
offense can apply in thefts of less than $3,000 and that the 
maximum penalty for such crimes is 5 years. Also in the 
aggravated offense section, the manager's amendment changed the 
wording slightly to reflect the effect of prior convictions. 
The manager's amendment also made a minor jurisdictional change 
so the interstate commerce nexus reads: ``In, or using any 
means or facility of, interstate or foreign commerce.''
    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that the 
following rollcall vote occurred during the Committee's 
consideration of H.R. 4223:
    1. Amendment by Mr. Polis to include ``medical marijuana'' 
as a pre-retail medical product for the purposes of the Act. 
Defeated 10-15.

                             ROLLCALL NO. 1
------------------------------------------------------------------------
                                                 Ayes     Nays   Present
------------------------------------------------------------------------
Mr. Smith, Chairman..........................                X
Mr. Sensenbrenner, Jr........................                X
Mr. Coble....................................
Mr. Gallegly.................................
Mr. Goodlatte................................
Mr. Lungren..................................
Mr. Chabot...................................                X
Mr. Issa.....................................
Mr. Pence....................................
Mr. Forbes...................................                X
Mr. King.....................................                X
Mr. Franks...................................                X
Mr. Gohmert..................................
Mr. Jordan...................................
Mr. Poe......................................
Mr. Chaffetz.................................                X
Mr. Griffin..................................                X
Mr. Marino...................................                X
Mr. Gowdy....................................                X
Mr. Ross.....................................                X
Ms. Adams....................................                X
Mr. Quayle...................................                X
Mr. Amodei...................................                X

Mr. Conyers, Jr., Ranking Member.............       X
Mr. Berman...................................
Mr. Nadler...................................       X
Mr. Scott....................................       X
Mr. Watt.....................................       X
Ms. Lofgren..................................
Ms. Jackson Lee..............................       X
Ms. Waters...................................
Mr. Cohen....................................       X
Mr. Johnson, Jr..............................                X
Mr. Pierluisi................................       X
Mr. Quigley..................................
Ms. Chu......................................
Mr. Deutch...................................       X
Ms. Sanchez..................................       X
Mr. Polis....................................       X
                                              --------------------------
    Total....................................      10       15
------------------------------------------------------------------------

                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of rule XIII of the Rules 
of the House of Representatives, the Committee advises that the 
findings and recommendations of the Committee, based on 
oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

               New Budget Authority and Tax Expenditures

    Clause 3(c)(2) of rule XIII of the Rules of the House of 
Representatives is inapplicable because this legislation does 
not provide new budgetary authority or increased tax 
expenditures.

               Congressional Budget Office Cost Estimate

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, the Committee sets forth, with 
respect to the bill, H.R. 4223, the following estimate and 
comparison prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act of 
1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, June 14, 2012.
Hon. Lamar Smith, Chairman,
Committee on the Judiciary,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 4223, the ``SAFE 
DOSES Act.''
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Mark 
Grabowicz, who can be reached at 226-2860.
            Sincerely,
                                      Douglas W. Elmendorf,
                                                  Director.

Enclosure

cc:
        Honorable John Conyers, Jr.
        Ranking Member




                       H.R. 4223--SAFE DOSES Act.

      As ordered reported by the House Committee on the Judiciary 
                            on June 6, 2012.




    CBO estimates that implementing H.R. 4223 would have no 
significant cost to the Federal Government. Enacting the bill 
could affect direct spending and revenues; therefore, pay-as-
you-go procedures apply. However, CBO estimates that any 
effects would be insignificant for each year.
    H.R. 4223 would establish new Federal crimes relating to 
the theft of certain medical products. As a result, the 
government might be able to pursue cases that it otherwise 
would not be able to prosecute. CBO expects that H.R. 4223 
would apply to a relatively small number of additional 
offenders, however, so any increase in costs for law 
enforcement, court proceedings, or prison operations would not 
be significant. Any such costs would be subject to the 
availability of appropriated funds.
    Because those prosecuted and convicted under H.R. 4223 
could be subject to civil and criminal fines, the Federal 
Government might collect additional fines if the legislation is 
enacted. Civil and criminal fines are recorded as revenues. 
Criminal fines are deposited in the Crime Victims Fund and 
later spent. CBO expects that any additional revenues and 
direct spending would not be significant because of the 
relatively small number of cases likely to be affected.
    H.R. 4223 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would impose no costs on State, local, or tribal governments.
    On March 16, 2012, CBO transmitted a cost estimate for S. 
1002, the Safe Doses Act, as ordered reported by the Senate 
Committee on the Judiciary on March 8, 2012. The two bills are 
similar and the cost estimates are the same.
    The CBO staff contact for this estimate is Mark Grabowicz. 
The estimate was approved by Theresa Gullo, Deputy Assistant 
Director for Budget Analysis.

                    Performance Goals and Objectives

    The Committee states that pursuant to clause 3(c)(4) of 
rule XIII of the Rules of the House of Representatives, H.R. 
4223, makes improvements to the criminal code that will help 
law enforcement officials pursue those who steal and traffic 
pre-retail medical cargo.

                          Advisory on Earmarks

    In accordance with clause 9 of rule XXI of the Rules of the 
House of Representatives, H.R. 4223 does not contain any 
congressional earmarks, limited tax benefits, or limited tariff 
benefits as defined in clause 9(e), 9(f), or 9(g) of Rule XXI.

                      Section-by-Section Analysis

Section 1. Short Title
    This section cites the short title of the Act as the 
``Strengthening and Focusing Enforcement to Deter Organized 
Stealing and Enhance Safety Act'' or ``SAFE DOSES'' Act of 
2012.
Section 2. Theft of Medical Products
    This section adds a new section 670 to Title 18, ``Theft of 
medical products.''

(a)
        LProhibited Conduct. This subsection establishes the 
        offenses of (1) stealing a ``pre-retail medical 
        product'' or obtaining it by fraud; (2) falsifying the 
        labeling or shipping documents of pre-retail medical 
        products; (3) possessing, transporting or trafficking 
        in a pre-retail medical product involved in a violation 
        of (1) or (2); (4) fraudulently obtaining an expired or 
        stolen pre-retail medical product; (5) fraudulently 
        selling or distributing an expired or stolen pre-retail 
        medical product; or (6) attempting or conspiring to 
        violate (1) through (5).

(b)
        LAggravated Offenses. This subsection establishes an 
        aggravated offense where (1) the defendant is an 
        employee or agent of an organization in the supply 
        chain for the pre-retail medical product or (2) the 
        violation involves violence or a deadly weapon, or 
        causes serious bodily injury or death, or is the 
        defendant's second offense under this section.
(c)
        LCriminal Penalties. This subsection establishes that 
        the penalty for a violation of this section shall be 
        (1) up to 30 years if the offense causes serious bodily 
        injury or death; (2) up to 20 years for the other 
        aggravated offenses (unless the value is less than 
        $5,000, in which case the maximum is 5 years); (3) 15 
        years for products worth more than $5,000; and (4) 3 
        years for products worth less than $5,000.

(d)
        LCivil Penalties. This subsection allows whoever 
        violates subsection (a) to be subject to a civil 
        penalty up to three times the economic loss 
        attributable to the violation, or one million dollars, 
        whichever is greater.

(e)
        LDefinitions. This subsection defines the term ``pre-
        retail medical product'' as a medical product that has 
        not yet been made available for retail purchase by a 
        consumer; it defines a ``medical product'' as a drug, 
        biological product, device, medical food or infant 
        formula, and incorporates existing US Code definitions 
        for each of those terms; it defines ``supply chain'' to 
        include manufacturers, wholesalers, distributors, 
        brokers, pharmacies, hospitals and security companies.
Section 3. Civil Forfeiture.
    This section adds theft of medical products to the list of 
offenses for which civil forfeiture is available.
Section 4. Penalties for Theft Related Offenses.
    This section amends a handful of statutes that prosecutors 
presently use in cases of large-scale cargo theft to say that, 
when the offenses charged under those sections involve pre-
retail medical products, they shall be punished under Section 
670. This section also instructs the Attorney General to give 
increased priority to investigating and prosecuting crimes 
involving pre-retail medical products.
Section 5. Amendment to Extend Wiretapping Authority to New Offense.
    This section adds theft of medical products to the list of 
offenses eligible for Title III wiretaps.
Section 6. Required Restitution.
    This section adds theft of medical products to the list of 
crimes requiring a restitution order.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italics, existing law in which no change 
is proposed is shown in roman):

                      TITLE 18, UNITED STATES CODE



           *       *       *       *       *       *       *
PART I--CRIMES

           *       *       *       *       *       *       *


                   CHAPTER 31--EMBEZZLEMENT AND THEFT

Sec.
641. Public money, property or records.
     * * * * * * *
670. Theft of medical products.

           *       *       *       *       *       *       *


Sec. 659. Interstate or foreign shipments by carrier; State 
                    prosecutions

    Whoever embezzles, steals, or unlawfully takes, carries 
away, or conceals, or by fraud or deception obtains from any 
pipeline system, railroad car, wagon, motortruck, trailer, or 
other vehicle, or from any tank or storage facility, station, 
station house, platform or depot or from any steamboat, vessel, 
or wharf, or from any aircraft, air cargo container, air 
terminal, airport, aircraft terminal or air navigation 
facility, or from any intermodal container, trailer, container 
freight station, warehouse, or freight consolidation facility, 
with intent to convert to his own use any goods or chattels 
moving as or which are a part of or which constitute an 
interstate or foreign shipment of freight, express, or other 
property; or

           *       *       *       *       *       *       *

    Shall be fined under this title or imprisoned not more than 
10 years, or both, but if the amount or value of such money, 
baggage, goods, or chattels is less than $1,000, shall be fined 
under this title or imprisoned for not more than 3 years, or 
both. If the offense involves a pre-retail medical product (as 
defined in section 670), it shall be punished under section 670 
unless the penalties provided for under this section are 
greater.

           *       *       *       *       *       *       *


Sec. 670. Theft of medical products

    (a) Prohibited Conduct.--Whoever, in, or using any means or 
facility of, interstate or foreign commerce--
            (1) embezzles, steals, or by fraud or deception 
        obtains, or knowingly and unlawfully takes, carries 
        away, or conceals a pre-retail medical product;
            (2) knowingly and falsely makes, alters, forges, or 
        counterfeits the labeling or documentation (including 
        documentation relating to origination or shipping) of a 
        pre-retail medical product;
            (3) knowingly possesses, transports, or traffics in 
        a pre-retail medical product that was involved in a 
        violation of paragraph (1) or (2);
            (4) with intent to defraud, buys, or otherwise 
        obtains, a pre-retail medical product that has expired 
        or been stolen;
            (5) with intent to defraud, sells, or distributes, 
        a pre-retail medical product that is expired or stolen; 
        or
            (6) attempts or conspires to violate any of 
        paragraphs (1) through (5);
shall be punished as provided in subsection (c) and subject to 
the other sanctions provided in this section.
    (b) Aggravated Offenses.--An offense under this section is 
an aggravated offense if--
            (1) the defendant is employed by, or is an agent 
        of, an organization in the supply chain for the pre-
        retail medical product; or
            (2) the violation--
                    (A) involves the use of violence, force, or 
                a threat of violence or force;
                    (B) involves the use of a deadly weapon;
                    (C) results in serious bodily injury or 
                death, including serious bodily injury or death 
                resulting from the use of the medical product 
                involved; or
                    (D) is subsequent to a prior conviction for 
                an offense under this section.
    (c) Criminal Penalties.--Whoever violates subsection (a)--
            (1) if the offense is an aggravated offense under 
        subsection (b)(2)(C), shall be fined under this title 
        or imprisoned not more than 30 years, or both;
            (2) if the value of the medical products involved 
        in the offense is $5,000 or greater, shall be fined 
        under this title, imprisoned for not more than 15 
        years, or both, but if the offense is an aggravated 
        offense other than one under subsection (b)(2)(C), the 
        maximum term of imprisonment is 20 years; and
            (3) in any other case, shall be fined under this 
        title, imprisoned for not more than 3 years, or both, 
        but if the offense is an aggravated offense other than 
        one under subsection (b)(2)(C), the maximum term of 
        imprisonment is 5 years.
    (d) Civil Penalties.--Whoever violates subsection (a) is 
subject to a civil penalty in an amount not more than the 
greater of--
            (1) three times the economic loss attributable to 
        the violation; or
            (2) $1,000,000.
    (e) Definitions.--In this section--
            (1) the term ``pre-retail medical product'' means a 
        medical product that has not yet been made available 
        for retail purchase by a consumer;
            (2) the term ``medical product'' means a drug, 
        biological product, device, medical food, or infant 
        formula;
            (3) the terms ``device'', ``drug'', ``infant 
        formula'', and ``labeling'' have, respectively, the 
        meanings given those terms in section 201 of the 
        Federal Food, Drug, and Cosmetic Act;
            (4) the term ``biological product'' has the meaning 
        given the term in section 351 of the Public Health 
        Service Act;
            (5) the term ``medical food'' has the meaning given 
        the term in section 5(b) of the Orphan Drug Act; and
            (6) the term ``supply chain'' includes 
        manufacturer, wholesaler, repacker, own-labeled 
        distributor, private-label distributor, jobber, broker, 
        drug trader, transportation company, hospital, 
        pharmacy, or security company.

           *       *       *       *       *       *       *


CHAPTER 46--FORFEITURE

           *       *       *       *       *       *       *


Sec. 981. Civil forfeiture

    (a)(1) The following property is subject to forfeiture to 
the United States:
            (A) * * *

           *       *       *       *       *       *       *

            (C) Any property, real or personal, which 
        constitutes or is derived from proceeds traceable to a 
        violation of section 215, 471, 472, 473, 474, 476, 477, 
        478, 479, 480, 481, 485, 486, 487, 488, 501, 502, 510, 
        542, 545, 656, 657, 670, 842, 844, 1005, 1006, 1007, 
        1014, 1028, 1029, 1030, 1032, or 1344 of this title or 
        any offense constituting ``specified unlawful 
        activity'' (as defined in section 1956(c)(7) of this 
        title), or a conspiracy to commit such offense.

           *       *       *       *       *       *       *


CHAPTER 95--RACKETEERING

           *       *       *       *       *       *       *


Sec. 1952. Interstate and foreign travel or transportation in aid of 
                    racketeering enterprises

    (a) * * *

           *       *       *       *       *       *       *

    (d) If the offense under this section involves an act 
described in paragraph (1) or (3) of subsection (a) and also 
involves a pre-retail medical product (as defined in section 
670), the punishment for the offense shall be the same as the 
punishment for an offense under section 670 unless the 
punishment under subsection (a) is greater.

           *       *       *       *       *       *       *


Sec. 1957. Engaging in monetary transactions in property derived from 
                    specified unlawful activity

    (a) * * *
    (b)(1) Except as provided in paragraph (2), the punishment 
for an offense under this section is a fine under title 18, 
United States Code, or imprisonment for not more than ten years 
or both. If the offense involves a pre-retail medical product 
(as defined in section 670) the punishment for the offense 
shall be the same as the punishment for an offense under 
section 670 unless the punishment under this subsection is 
greater.

           *       *       *       *       *       *       *


CHAPTER 103--ROBBERY AND BURGLARY

           *       *       *       *       *       *       *


Sec. 2117. Breaking or entering carrier facilities

    Whoever breaks the seal or lock of any railroad car, 
vessel, aircraft, motortruck, wagon or other vehicle or of any 
pipeline system, containing interstate or foreign shipments of 
freight or express or other property, or enters any such 
vehicle or pipeline system with intent in either case to commit 
larceny therein, shall be fined under this title or imprisoned 
not more than ten years, or both. If the offense involves a 
pre-retail medical product (as defined in section 670) the 
punishment for the offense shall be the same as the punishment 
for an offense under section 670 unless the punishment under 
this section is greater.

           *       *       *       *       *       *       *


CHAPTER 113--STOLEN PROPERTY

           *       *       *       *       *       *       *


Sec. 2314. Transportation of stolen goods, securities, moneys, 
                    fraudulent State tax stamps, or articles used in 
                    counterfeiting

    Whoever transports, transmits, or transfers in interstate 
or foreign commerce any goods, wares, merchandise, securities 
or money, of the value of $5,000 or more, knowing the same to 
have been stolen, converted or taken by fraud; or

           *       *       *       *       *       *       *

    Shall be fined under this title or imprisoned not more than 
ten years, or both. If the offense involves a pre-retail 
medical product (as defined in section 670) the punishment for 
the offense shall be the same as the punishment for an offense 
under section 670 unless the punishment under this section is 
greater.

           *       *       *       *       *       *       *


Sec. 2315. Sale or receipt of stolen goods, securities, moneys, or 
                    fraudulent State tax stamps

    Whoever receives, possesses, conceals, stores, barters, 
sells, or disposes of any goods, wares, or merchandise, 
securities, or money of the value of $5,000 or more, or pledges 
or accepts as security for a loan any goods, wares, or 
merchandise, or securities, of the value of $500 or more, which 
have crossed a State or United States boundary after being 
stolen, unlawfully converted, or taken, knowing the same to 
have been stolen, unlawfully converted, or taken; or

           *       *       *       *       *       *       *

    Shall be fined under this title or imprisoned not more than 
ten years, or both. If the offense involves a pre-retail 
medical product (as defined in section 670) the punishment for 
the offense shall be the same as the punishment for an offense 
under section 670 unless the punishment under this section is 
greater.

           *       *       *       *       *       *       *


   CHAPTER 119--WIRE AND ELECTRONIC COMMUNICATIONS INTERCEPTION AND 
INTERCEPTION OF ORAL COMMUNICATIONS

           *       *       *       *       *       *       *


Sec. 2516. Authorization for interception of wire, oral, or electronic 
                    communications

    (1) The Attorney General, Deputy Attorney General, 
Associate Attorney General, or any Assistant Attorney General, 
any acting Assistant Attorney General, or any Deputy Assistant 
Attorney General or acting Deputy Assistant Attorney General in 
the Criminal Division or National Security Division specially 
designated by the Attorney General, may authorize an 
application to a Federal judge of competent jurisdiction for, 
and such judge may grant in conformity with section 2518 of 
this chapter an order authorizing or approving the interception 
of wire or oral communications by the Federal Bureau of 
Investigation, or a Federal agency having responsibility for 
the investigation of the offense as to which the application is 
made, when such interception may provide or has provided 
evidence of--
            (a) * * *

           *       *       *       *       *       *       *

            (r) any criminal violation of section 1 (relating 
        to illegal restraints of trade or commerce), 2 
        (relating to illegal monopolizing of trade or 
        commerce), or 3 (relating to illegal restraints of 
        trade or commerce in territories or the District of 
        Columbia) of the Sherman Act (15 U.S.C. 1, 2, 3); [or]
            (s) any violation of section 670 (relating to theft 
        of medical products); or
            [(s)] (t) any conspiracy to commit any offense 
        described in any subparagraph of this paragraph.

           *       *       *       *       *       *       *


PART II--CRIMINAL PROCEDURE

           *       *       *       *       *       *       *


CHAPTER 232--MISCELLANEOUS SENTENCING PROVISIONS

           *       *       *       *       *       *       *


Sec. 3663A. Mandatory restitution to victims of certain crimes

    (a) * * *

           *       *       *       *       *       *       *

    (c)(1) This section shall apply in all sentencing 
proceedings for convictions of, or plea agreements relating to 
charges for, any offense--
            (A) that is--
                    (i) * * *
                    (ii) an offense against property under this 
                title, or under section 416(a) of the 
                Controlled Substances Act (21 U.S.C. 856(a)), 
                including any offense committed by fraud or 
                deceit; [or]
                    (iii) an offense described in section 1365 
                (relating to tampering with consumer products); 
                [and] or
                    (iv) an offense under section 670 (relating 
                to theft of medical products); and

           *       *       *       *       *       *       *