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113th Congress                                            Rept. 113-605
                        HOUSE OF REPRESENTATIVES
 2d Session                                                      Part 1

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



 
   ENSURING PATIENT ACCESS AND EFFECTIVE DRUG ENFORCEMENT ACT OF 2014

                                _______
                                

                 July 29, 2014.--Ordered to be printed

                                _______
                                

         Mr. Upton, from the Committee on Energy and Commerce, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 4709]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Energy and Commerce, to whom was referred 
the bill (H.R. 4709) to improve enforcement efforts related to 
prescription drug diversion and abuse, and for other purposes, 
having considered the same, report favorably thereon without 
amendment and recommend that the bill do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     1
Background and Need for Legislation..............................     2
Hearings.........................................................     2
Committee Consideration..........................................     2
Committee Votes..................................................     3
Committee Oversight Findings.....................................     3
Statement of General Performance Goals and Objectives............     3
New Budget Authority, Entitlement Authority, and Tax Expenditures     3
Earmark, Limited Tax Benefits, and Limited Tariff Benefits.......     3
Committee Cost Estimate..........................................     3
Congressional Budget Office Estimate.............................     3
Federal Mandates Statement.......................................     4
Duplication of Federal Programs..................................     4
Disclosure of Directed Rule Makings..............................     5
Advisory Committee Statement.....................................     5
Applicability to Legislative Branch..............................     5
Section-by-Section Analysis of the Legislation...................     5
Changes in Existing Law Made by the Bill, as Reported............     6

                          Purpose and Summary

    H.R. 4709 would help prevent prescription drug abuse while 
ensuring that patients have access to needed medications by 
fostering better collaboration between drug manufacturers, 
wholesalers, pharmacies, Drug Enforcement Administration (DEA), 
and the Food and Drug Administration (FDA).

                  Background and Need for Legislation

    Millions of Americans rely on prescription drugs to treat 
and cure illnesses, alleviate pain, and prolong and improve the 
quality of their lives. Unfortunately, prescription drug abuse 
kills tens of thousands of Americans each year, requiring 
constant vigilance throughout the prescription drug supply 
chain to halt and prevent drug abuse and diversion.\1\
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    \1\http://www.cdc.gov/homeandrecreationalsafety/rxbrief/.
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    The supply chain involves many stakeholders, including drug 
manufacturers, wholesale distributors, doctors, nurses, 
pharmacists, hospitals, and retail pharmacies. Protecting the 
system from criminal exploitation and ensuring its efficiency 
requires significant investment from both the government's 
enforcement and oversight agencies and the system's private 
operators. Law enforcement must have the tools to act 
decisively and quickly. Private industry must have the 
assurance that lawful conduct will ensure due process, protect 
them from secondary liability, and shield them from disabling 
disruptions--disruptions that endanger the health and safety of 
individual patients. The integrity of the system depends on 
clear rules for enforcement agencies and for providers.
    The Ensuring Patient Access and Effective Drug Enforcement 
Act of 2014 would clarify these rules by providing certainty 
with how federal authorities will apply the law when 
undertaking enforcement actions, and by increasing the 
investment that private industry must make to ensure the 
integrity of the system.

                                Hearings

    The Subcommittee on Health held a hearing on H.R. 4069 on 
April 7, 2014.\2\ The Subcommittee received testimony from: 
Janet Woodcock, M.D., Director, Center for Drug Evaluation and 
Research, U.S. Food and Drug Administration; Joseph T. 
Rannazzisi, Deputy Assistant Administrator, Office of Diversion 
Control, Drug Enforcement Administration; Nathan B. Fountain, 
Chair, Medical Advisory Board, Epilepsy Foundation; John M. 
Gray, President and CEO, Healthcare Distribution Management 
Association; Linden Barber, Partner and Director, DEA 
Compliance Operations, Quarles & Brady; and Wendy K.D. Selig, 
President and CEO, Melanoma Research Alliance.
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    \2\H.R. 4709 is a reintroduced version of H.R. 4069, the ``Ensuring 
Patient Access and Effective Drug Enforcement of 2013.''
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                        Committee Consideration

    On May 28, 2014, the Subcommittee on Health met in open 
markup session and approved H.R. 4709 for full Committee 
consideration by a voice vote. On June 10, 2014, the full 
Committee adopted a technical amendment by a voice vote and 
approved the bill, as amended, by a voice vote.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. 
There were no record votes taken in connection with ordering 
H.R. 4709 reported. A motion by Mr. Upton to order H.R. 4709 
reported to the House, with amendment, was agreed to by a voice 
vote.

                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee held a hearing and made 
findings that are reflected in this report.

         Statement of General Performance Goals and Objectives

    The purpose of this act is to address the nation's 
prescription drug abuse crisis by improving the working 
relationship among private industry, government agencies, 
providers, and patient advocates.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee finds that H.R. 
4709, Ensuring Patient Access and Effective Drug Enforcement 
Act of 2014, would result in no new or increased budget 
authority, entitlement authority, or tax expenditures or 
revenues.

       Earmark, Limited Tax Benefits, and Limited Tariff Benefits

    In compliance with clause 9(e), 9(f), and 9(g) of rule XXI 
of the Rules of the House of Representatives, the Committee 
finds that H.R. 4709, Ensuring Patient Access and Effective 
Drug Enforcement Act of 2014, contains no earmarks, limited tax 
benefits, or limited tariff benefits.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974.

                  Congressional Budget Office Estimate

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:
                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, July 7, 2014.
Hon. Fred Upton,
Chairman, Committee on Energy and Commerce,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 4709, the Ensuring 
Patient Access and Effective Drug Enforcement Act of 2014.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Mark 
Grabowicz.
            Sincerely,
                                          Peter H. Fontaine
                                        (For Douglas W. Elmendorf).
    Enclosure.

H.R. 4709--Ensuring Patient Access and Effective Drug Enforcement Act 
        of 2014

    H.R. 4709 would modify certain administrative procedures 
followed by the Department of Justice in regulating controlled 
substances. In addition, within one year of enactment, the bill 
would require the Department of Health and Human Services to 
assess the effect of law enforcement activities on access to 
medications, examine potential benefits to patients from 
collaborations between governments and stakeholders, and report 
to the Congress on these matters.
    Based on the cost of similar activities, CBO estimates that 
implementing the bill would cost less than $500,000 in 2015; 
any spending would be subject to availability of appropriated 
funds. Enacting the legislation would not affect direct 
spending or revenues; therefore, pay-as-you-go procedures do 
not apply.
    H.R. 4709 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.
    The CBO staff contacts for this estimate are Mark Grabowicz 
and Jean Hearne. The estimate was approved by Theresa Gullo, 
Deputy Assistant Director for Budget Analysis.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

                    Duplication of Federal Programs

    No provision of H.R. 4709, Ensuring Patient Access and 
Effective Drug Enforcement Act of 2014 establishes or 
reauthorizes a program of the Federal Government known to be 
duplicative of another Federal program, a program that was 
included in any report from the Government Accountability 
Office to Congress pursuant to section 21 of Public Law 111-
139, or a program related to a program identified in the most 
recent Catalog of Federal Domestic Assistance.

                  Disclosure of Directed Rule Makings

    The Committee estimates that enacting H.R. 4709, Ensuring 
Patient Access and Effective Drug Enforcement Act of 2014 does 
not direct any specific rule making within the meaning of 5 
U.S.C. 551.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

             Section-by-Section Analysis of the Legislation


Section 1, Short title

    Section provides the short title of ``Ensuring Patient 
Access and Effective Drug Enforcement Act of 2013.''

Section 2, Registration process under Controlled Substances Act

    Section 2 of the bill clarifies two definitions within the 
Controlled Substances Act (CSA) essential to providing a clear 
path forward for the enforcement agencies and lawful purveyors 
of controlled substances. These two clarifications establish 
clear standards for the DEA that will facilitate consistent 
enforcement of the CSA, while also protecting the due process 
rights of lawful providers of controlled substances, preventing 
overly broad and unsubstantiated enforcement orders. The 
technical clarifications will promote certainty in the 
regulatory and enforcement regime, focusing law enforcement's 
resources and protecting patients from unintended disruptions 
in the supply chain.
    First, the bill specifies that the phrase ``consistent with 
the public health and safety'' corresponds to a ``substantial 
relationship to . . . preventing diversion and abuse of 
controlled substances.'' The vague phrase ``consistent with the 
public health and safety'' requires explanation because it has 
created inconsistent enforcement actions and has left the 
courts of review with uncertainty about Congress' intent. This 
specification will ensure that law enforcement can effectively 
investigate and target dangerous offenders without wasting 
resources on unconnected parties in the supply chain.
    The U.S. Code lacks a definition for the phrase 
``consistent with public health and safety.'' Its closest 
corollary, ``consistent with the public interest,'' has been 
the subject of numerous court decisions and regulatory 
proceedings within antitrust and administrative law, for 
example. Unlike the ``public interest,'' the Executive Branch 
has never promulgated regulations or issued legal guidance 
concerning the CSA's ``consistent with public health and 
safety.'' Congress enacted the CSA to halt and prevent the 
diversion and abuse of controlled substances, and this bill 
explicitly reaffirms the central purpose of the Act with this 
specification. The term ``consistent with the public health and 
safety'' will now be defined as having a substantial 
relationship to the Act's purpose of preventing diversion and 
abuse of controlled substances.
    Second, the bill further defines ``imminent danger'' to 
indicate those circumstances that pose a ``significant and 
present risk of death or serious bodily harm that is more 
likely than not to occur in the absence of an immediate 
suspension order.'' The vagueness of the term ``imminent 
danger'' has created uneven enforcement applications, and this 
clarification will ensure that action will take place only in 
the presence of direct and urgent danger.
    This clarification harmonizes the CSA with other statutes 
using the ``imminent danger'' standard, namely the Federal Mine 
Safety and Health Act (``Mine Act'') and Occupational Safety 
and Health Act (``OSHA''). Both the Mine Act and OSHA authorize 
federal authorities to take expedited action when serious, 
current, and persistent threats persist. The circumstances must 
be grave and immediate because such federal action denies the 
subjects of the enforcement their ability to function; severe 
deprivations of liberty require severe danger.
    To ensure transparency and due process, section 2 requires 
that when the Attorney General suspends or revokes a party's 
registration--the registration that enables the party to 
operate lawfully within the controlled substance market--that 
the Attorney General must provide notice to the party, cite 
with specificity any laws that may have been contravened, and 
give the party the opportunity to submit a corrective action 
plan in order to remedy any potential violations. The Attorney 
General must weigh the registrant's corrective action plan and 
suggest additional changes as any revocation or suspension 
actions proceed.
    Preventing diversion and drug abuse depends on consistent 
application of the CSA, and this provision ensures that law 
enforcement and private registrants will collaborate to achieve 
these aims.

Section 3, Report to Congress on effects of law enforcement activities 
        on patient access to medications

    Finally, section 3 requires the Secretary of HHS to work 
with the Commissioner of the FDA, Director of the Center for 
Disease Control and Prevention (CDC), Administrator of the DEA, 
and Director of the Director of National Drug Control Policy 
(ONDCP) to submit a report to Congress within one year of 
enactment. The report will assess how patient access to 
medication could be adversely affected by Federal and State law 
enforcement activities and identify how collaboration between 
agencies and stakeholders can benefit patients and prevent 
diversion and abuse of controlled substances. This report also 
will incorporate feedback and recommendations from the various 
stakeholders.

         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 italic, existing law in which no change is 
proposed is shown in roman):

CONTROLLED SUBSTANCES ACT

           *       *       *       *       *       *       *



TITLE II--CONTROL AND ENFORCEMENT

           *       *       *       *       *       *       *



Part C--Registration of Manufacturers, Distributors, and Dispensers of 
Controlled Substances; Piperidine Reporting

           *       *       *       *       *       *       *



                       registration requirements

  Sec. 303. (a) * * *

           *       *       *       *       *       *       *

  (j) In this section, the phrase ``consistent with the public 
health and safety'' means having a substantial relationship to 
this Act's purpose of preventing diversion and abuse of 
controlled substances.

           denial, revocation, or suspension of registration

  Sec. 304. (a) * * *

           *       *       *       *       *       *       *

  [(c) Before] (c)(1) Before taking action pursuant to this 
section, or pursuant to a denial of registration under section 
303, the Attorney General shall serve upon the applicant or 
registrant an order to show cause why registration should not 
be denied, revoked, or suspended. The order to show cause shall 
contain a statement of the basis thereof and shall call upon 
the applicant or registrant to appear before the Attorney 
General at a time and place stated in the order, but in no 
event less than thirty days after the date of receipt of the 
order. Proceedings to deny, revoke, or suspend shall be 
conducted pursuant to this section in accordance with 
subchapter II of chapter 5 of title 5 of the United States 
Code. Such proceedings shall be independent of, and not in lieu 
of, criminal prosecution or other proceedings under this title 
or any other law of the United States.
  (2) Before revoking or suspending a registration pursuant to 
section 303, the Attorney General shall--
          (A) provide--
                  (i) notice to the registrant of the grounds 
                for revocation or suspension; and
                  (ii) in the case of any such grounds 
                consisting of a violation of law, a specific 
                citation to such law;
          (B) give the registrant an opportunity to submit a 
        corrective action plan within a reasonable period of 
        time to demonstrate how the registrant plans to correct 
        the grounds for revocation or suspension; and
          (C) determine whether--
                  (i) in light of the plan, revocation or 
                suspension proceedings should be discontinued 
                or deferred; or
                  (ii) additional changes need to be made in 
                the corrective action plan.
  [(d) The Attorney General] (d)(1) The Attorney General may, 
in his discretion, suspend any registration simultaneously with 
the institution of proceedings under this section, in cases 
where he finds that there is an imminent danger to the public 
health or safety. A failure to comply with a standard referred 
to in section 303(g)(1) may be treated under this subsection as 
grounds for immediate suspension of a registration granted 
under such section. A suspension under this subsection shall 
continue in effect until the conclusion of such proceedings, 
including judicial review thereof, unless sooner withdrawn by 
the Attorney General or dissolved by a court of competent 
jurisdiction.
  (2) In this subsection, the term ``imminent danger'' means a 
significant and present risk of death or serious bodily harm 
that is more likely than not to occur in the absence of an 
immediate suspension order.

           *       *       *       *       *       *       *