Compliance Scorecard: Chemical/Pharmaceutical

Chemical Facility Anti-Terrorism Standards

Through CFATS, DHS screens facilities to identify those that deal with “chemicals of interest,” ran ks them into one of four tiers according to the level of risk they present, and then requires them to complete risk assessments that must be approved by DHS. They must then develop security plans that specifically address the vulnerabilities; these plans must in turn be approved and must then be implemented on an approved schedule. As of this writing, Congress is considering an extension of CFATS to 2017.

 Ryan Haight Online Pharmacy Consumer Protection Act of 2008

This rule amends the Controlled Substances Act to prohibit the delivery, distribution or dispensing of a controlled substance that is a prescription drug over the Internet without a valid prescription. It imposes registration and reporting requirements on online pharmacies that dispense 100 or more prescriptions or 5,000 or more dosage units of all controlled substances combined in one month. It also requires online pharmacies to display certain information on their home pages. The Ryan Haight Act increases criminal penalties involving controlled substances and authorizes states to apply for injunctions or obtain damages and other civil remedies against online pharmacies that are deemed a threat to state residents.

 EU Falsified Medicines Directive

Approved by the European Parliament in February, the Falsified Medicines Directive still requires the governments of all European Union states to assess it and propose changes before it can be made law. If legalized, it will create a pan-European system to verify authenticity of drugs through the use of unique serial numbers on genuine medicine packs. It will also regulate the sale of pharmaceuticals online by requiring special authorization for such operations, and authorized vendors would bear an EU logo.

White House Intellectual Property Legislative Recommendations March 2011

In March, the White House’s Intellectual Property Enforcement Coordinator (IPEC) released a white paper presenting a series of legislative recommendations regarding intellectual property protection, many of which deal specifically with drug counterfeiting. The white paper recommends that Congress:

require importers and manufacturers to notify the FDA and other relevant agencies when they discover counterfeit drugs or medical products, including the known health risks associated with them;

- apply the Ryan Haight Act’s definition of “valid prescription” to the FFDCA to drugs that do not contain controlled substances;

- adopt a track-and-trace system for pharmaceuticals and related products;

- give civil and criminal forfeiture authority for counterfeit trademark offenses under the Federal Food, Drug and Cosmetic Act (FFDCA), particularly for counterfeit drug offenses;

- increase the statutory maxima sentences for counterfeit drug offenses under the FFDCA; and

- direct the U.S. Sentencing Commission to consider increasing the U.S. Sentencing Guideline range for counterfeit drug offenses, including a further enhanced penalty for such offenses involving the conscious or reckless risk of death or serious bodily injury.

As of this writing it is unclear what legislative activity will result from these recommendations.

Foreign Corrupt Practices Act

The FCPA makes it illegal for U.S. companies to pay foreign officials for the purpose of obtaining or keeping business. The pharmaceutical industry has been particularly impacted by this law because the term “foreign officials” has been noted to include employees of state-owned hospitals abroad. Pharmaceutical companies who pay the travel expenses or meal tabs for foreign doctors in socialized medical systems are therefore in potential violation of FCPA anti-bribery provisions. On June 14, the U.S. House Judiciary Committee held a hearing on FCPA at which Rep. Jim Sensenbrenner (R- Wis.) announced he would draft legislation to amend the Act to, among other actions, narrow the definition of “foreign officials.” Draft legislation was not available at the time of this writing.

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