Secure Drug Supply Chain Act of 2026

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 5043 Introduced in Senate (IS)]

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119th CONGRESS
  2d Session
                                S. 5043

 To direct the Food and Drug Administration to prevent the importation
 of counterfeit, unapproved, misbranded, or adulterated drugs from the
  People's Republic of China or other foreign countries, to establish
enhanced safeguards for imported drug products, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             July 21, 2026

   Mr. Budd introduced the following bill; which was read twice and
  referred to the Committee on Health, Education, Labor, and Pensions

_______________________________________________________________________

                                 A BILL

 To direct the Food and Drug Administration to prevent the importation
 of counterfeit, unapproved, misbranded, or adulterated drugs from the
  People's Republic of China or other foreign countries, to establish
enhanced safeguards for imported drug products, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Secure Drug Supply Chain Act of
2026''.

SEC. 2. PURPOSE.

    The purposes of this Act are--
            (1) to prevent the unlawful importation of counterfeit,
        unapproved, misbranded, or adulterated drugs from the People's
        Republic of China and other countries that are known to engage
        in intellectual property theft, forced labor, or the
        distribution of counterfeit and illicit pharmaceutical products
        that undermine the public health and economic interests of the
        United States;
            (2) to increase visibility into the United States
        pharmaceutical supply chain; and
            (3) to reduce the direct and indirect dependence of the
        United States on active pharmaceutical ingredients and key
        starting materials sourced from the People's Republic of China
        or that are of Chinese origin and sourced through third
        countries, in order to strengthen the resilience of the United
        States drug supply and protect public health and national
        security.

SEC. 3. PREVENTION OF IMPORTATION OF UNLAWFUL COUNTERFEIT PRESCRIPTION
              AND OVER-THE-COUNTER DRUGS.

    (a) In General.--The Secretary of Health and Human Services
(referred to in this Act as the ``Secretary'') shall utilize
authorities under the Federal Food, Drug, and Cosmetic Act (21 U.S.C.
301 et seq.) to prevent the importation of drugs, including active
pharmaceutical ingredients and key starting materials, that are
counterfeit, unapproved, misbranded, or adulterated and manufactured,
prepared, propagated, compounded, and processed in a foreign
establishment, with particular emphasis on preventing importation of
such drugs, including active pharmaceutical ingredients and key
starting materials, from the People's Republic of China and other
countries that are designated as adversarial by the Secretary of State.
    (b) Enforcement Actions.--In carrying out subsection (a), the
Secretary shall--
            (1) conduct compliance and enforcement actions directed at
        entities involved in the manufacture, preparation, propagation,
        compounding, processing, or distribution of unapproved,
        adulterated, or misbranded drugs, including active
        pharmaceutical ingredients and key starting materials, that are
        offered for import;
            (2) in cooperation with the Attorney General, initiate
        civil and criminal enforcement actions, including injunctions
        and seizures, under sections 301, 302, 303, 304, and 801 of the
        Federal Food, Drug, and Cosmetic Act (21 U.S.C. 331, 332, 333,
        334, 381);
            (3) refuse entry into the United States of such drugs,
        including active pharmaceutical ingredients or key starting
        materials; and
            (4) conduct inspections of, or use alternative tools with
        respect to, as appropriate, facilities engaged in compounding
        to monitor for unauthorized receipt, use, or handling of drugs
        from the People's Republic of China and other countries
        designated as adversarial by the Secretary of State that were
        imported into the United States in violation of applicable laws
        and regulations.
    (c) Annual Reporting.--Beginning with fiscal year 2027, not later
than 180 days after the end of each fiscal year, the Secretary shall
submit a report to the Committee on Health, Education, Labor, and
Pensions of the Senate and the Committee on Energy and Commerce of the
House of Representatives, detailing enforcement actions described in
subsection (b) that were taken in the previous fiscal year, including
information on the number and type of drugs, active pharmaceutical
ingredients, and key starting materials that were the subjects of such
actions during the previous fiscal year.
    (d) Guidance; Recommendations.--Not later than 180 days after the
submission of each report under subsection (c), based on the
information compiled in the report, the Secretary shall--
            (1) issue or update guidance for importers of drugs to
        comply with the requirements of this Act, including the
        amendments made by this Act; and
            (2) submit to Congress legislative proposals relating to
        resources and policies that would facilitate carrying out this
        Act, including the amendments made by this Act.

SEC. 4. SUPPLY CHAIN TRANSPARENCY AND RESILIENCE.

    (a) Reporting Requirements for Active Pharmaceutical Ingredients
and Key Starting Materials.--
            (1) In general.--Section 510(j)(3) of the Federal Food,
        Drug, and Cosmetic Act (21 U.S.C. 360(j)(3)) is amended--
                    (A) in the first sentence of subparagraph (A)--
                            (i) by striking ``annually'' and inserting
                        ``quarterly''; and
                            (ii) by inserting ``and the information
                        described in subparagraph (C)'' before the
                        period at the end; and
                    (B) by adding at the end the following:
            ``(C)(i) The annual report required under subparagraph (A)
        shall include the information described in clause (ii) with
        respect to drugs, in accordance with the following:
                    ``(I) In the 1-year period beginning on the
                effective date of the final regulations described in
                section 4(c) of the Secure Drug Supply Chain Act of
                2026, the information described in clause (ii) shall be
                included in the report under subparagraph (A) with
                respect to any drug that--
                            ``(aa) is included on the Essential
                        Medicines List maintained by the Food and Drug
                        Administration pursuant to Executive Order
                        13944 (85 Fed. Reg. 49929); and
                            ``(bb) is a drug for which any active
                        pharmaceutical ingredient, key starting
                        material, or acquired intermediate is sourced
                        from the People's Republic of China or another
                        foreign country of concern.
                    ``(II) Beginning on the day after the last day of
                the 1-year period described in subclause (I), the
                information described in clause (ii) shall be included
                in the report under subparagraph (A) if it is a drug
                for which any active pharmaceutical ingredient, key
                starting material, or acquired intermediate is sourced
                from the People's Republic of China or another foreign
                country of concern.
            ``(ii) The information described in this clause is the
        following, as applicable:
                    ``(I) The identity of each active pharmaceutical
                ingredient, key starting material, and acquired
                intermediate used by the registrant to manufacture the
                listed drug.
                    ``(II) The total amount of each such active
                pharmaceutical ingredient, key starting material, and
                acquired intermediate used by the registrant to
                manufacture the listed drug during the reporting
                period, expressed in such units as the Secretary shall
                specify.
                    ``(III) The country of origin of each such active
                pharmaceutical ingredient, key starting material, and
                acquired intermediate, including the name, address, and
                unique facility identifier (as applicable) of each
                establishment at which such active pharmaceutical
                ingredient, key starting material, or acquired
                intermediate was manufactured.
            ``(iii) Information reported under this subparagraph shall
        include the country of origin without regard to any
        distribution or shipment through a country other than the
        country of origin.
            ``(iv) A person required to report information under this
        subparagraph shall maintain such records and supporting
        documentation as the Secretary shall require to verify the
        accuracy and completeness of information submitted under this
        paragraph, for a period of not less than 5 years, and shall
        make such records available to the Secretary upon request.
            ``(D) Not later than 18 months after the 1-year period
        described in subparagraph (C)(i)(I) ends, and annually
        thereafter, the Secretary shall, based on the reports submitted
        under subparagraph (A), issue a confidential report to Congress
        that--
                    ``(i) analyzes United States vulnerabilities
                arising from dependence on active pharmaceutical
                ingredients and key starting materials sourced from the
                People's Republic of China or other foreign countries
                of concern, including any such ingredients or materials
                with origins in the People's Republic of China or
                another foreign country of concern that are sourced
                through third countries;
                    ``(ii) identifies the proportion of drugs
                manufactured, prepared, propagated, compounded, or
                processed for commercial distribution in the United
                States that depend on active pharmaceutical ingredients
                and key starting materials sourced from the People's
                Republic of China or other foreign countries of
                concern, disaggregated by country of origin to the
                extent practicable;
                    ``(iii) determines specific supply chain
                vulnerabilities, including drug classes or therapeutic
                categories for which dependence on active
                pharmaceutical ingredients and key starting materials
                sourced from the People's Republic of China or another
                foreign country of concern, poses a risk to public
                health or national security; and
                    ``(iv) tracks trends over time in dependence on
                active pharmaceutical ingredients and key starting
                materials sourced from the People's Republic of China
                or another foreign country of concern, including
                anonymized aggregate data reflecting increases or
                decreases in such dependence.
            ``(E) In this paragraph:
                    ``(i) The term `acquired intermediate' means a
                material produced during steps in the manufacture of an
                active pharmaceutical ingredient that undergoes further
                molecular change or purification before it becomes an
                active pharmaceutical ingredient and is manufactured at
                an establishment other than the establishment at which
                the active pharmaceutical ingredient is manufactured.
                    ``(ii) The term `country of origin' means, with
                respect to an active pharmaceutical ingredient, key
                starting material, or acquired intermediate, each
                country in which such ingredient, intermediate, or
                material was manufactured into its chemical identity
                through chemical synthesis, fermentation, extraction,
                purification, or other manufacturing process including
                each country at which such active pharmaceutical
                ingredient, key starting material, or acquired
                intermediate was repackaged, relabeled, finished,
                blended, or tested.
                    ``(iii) The term `foreign country of concern' has
                the meaning given such term in section 10612(a) of the
                Research and Development, Competition, and Innovation
                Act.''.
            (2) Confidentiality.--Nothing in the amendment made by
        paragraph (1) shall be construed as authorizing the Secretary
        to disclose any information that is a trade secret or
        confidential information subject to section 552(b)(4) of title
        5, United States Code, or section 1905 of title 18, United
        States Code.
    (b) Regulatory Gap Analysis.--Not later than 180 days after the
date of enactment of this Act, the Secretary shall identify and submit
to Congress a report describing--
            (1) existing regulatory authorities available to the
        Secretary to support or incentivize the sourcing of active
        pharmaceutical ingredients and key starting materials from
        countries other than the People's Republic of China, or from
        sources with no People's Republic of China origin content; and
            (2) any deficiencies in existing regulatory authorities
        that limit the ability of the Secretary to support or
        incentivize such sourcing, together with recommendations for
        legislative or administrative action to address such
        deficiencies.
    (c) Regulations.--The Secretary of Health and Human Services
shall--
            (1) not later than 90 days after the date of enactment of
        this Act, issue proposed regulations implementing the
        amendments made by subsection (a); and
            (2) not later than 180 days after issuance of the proposed
        regulations described in paragraph (1), finalize such
        regulations.

SEC. 5. AMENDMENTS TO THE FEDERAL FOOD, DRUG, AND COSMETIC ACT.

    (a) Ban on Imports of Drugs From Establishments Using Forced Labor
or Violating Sanctions.--Section 801(a) of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 381(a)) is amended, in the third sentence--
            (1) by inserting ``or (6) such article is a drug and the
        safety of such drug is based solely on information or
        certifications provided by a foreign government, including any
        inspection described in section 704(i), without routine
        inspections conducted by United States inspectors to verify
        compliance with this Act, or (7) such article is a drug and was
        manufactured, prepared, propagated, compounded, processed in an
        establishment known to have used forced labor (as defined in
        section 307 of the Tariff Act of 1930) or to have been in
        violation of sanctions imposed by the Federal Government under
        the International Emergency Economic Powers Act or other
        applicable law, as determined by the Secretary in consultation
        with the Secretary of Homeland Security,'' after ``301(cc),'';
        and
            (2) by striking ``clauses (1) through (5)'' and inserting
        ``clauses (1) through (7)''.
    (b) Destruction of Refused Articles Presenting Significant Public
Health Concerns.--Section 801 of the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. 381) is amended by adding at the end the following:
    ``(v) Destruction of Refused Articles Presenting Significant Public
Health Concerns.--
            ``(1) In general.--If the Secretary determines that an
        article that has been refused admission under subsection (a)
        presents a significant public health concern, the Secretary may
        issue to the owner or consignee of the article an order to
        destroy the article, without the opportunity for export.
            ``(2) Deadline; costs.--Not later than 90 days after the
        issuance of an order under paragraph (1), the owner or
        consignee shall destroy the article. The owner or consignee
        shall be responsible for the costs of such destruction.
            ``(3) Due process.--The Secretary shall provide to the
        owner or consignee of an article subject to an order under
        paragraph (1) appropriate due process prior to the destruction
        of the article. Such due process shall include notice and an
        opportunity to appear before the Secretary and introduce
        testimony on the destruction, in combination with the notice
        and opportunity to appear and introduce testimony on the
        refusal of admission of the article under subsection (a) or
        separately.''.
    (c) Prohibition on Registration of Certain Foreign
Establishments.--Section 510(i) of the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. 360(i)) is amended by adding at the end the following:
    ``(6) Notwithstanding any other provision of this section, any
establishment that knowingly used, or partnered with, contracted with,
or purchased from an entity that has used, forced labor (as defined in
section 307 of the Tariff Act of 1930) or that knowingly violated
sanctions imposed by the Federal Government under the International
Emergency Economic Powers Act or other applicable law, as determined by
the Secretary in consultation with the Secretary of Homeland Security,
shall not be eligible for registration under this section, and the
Secretary shall revoke any registration of such an establishment that
was accepted prior to the date of enactment of the Secure Drug Supply
Chain Act of 2026.''.
    (d) Prohibited Acts.--Section 301 of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 331) is amended by adding at the end the
following:
    ``(jjj) The unauthorized movement, or introduction or delivery for
introduction into interstate commerce, including export, of an article
that is subject to an order for destruction under section 801(v).
    ``(kkk) The knowing provision of a materially false, fictitious, or
fraudulent statement or representation to the Secretary that
accompanies or relates to a drug imported or offered for import into
the United States.
    ``(lll) The import or offering for import into the United States of
a drug that previously has been refused admission under section 801(a)
or exported during the pendency of a detention, unless the person
reimporting or reoffering the drug affirmatively makes reference to the
original refusal or detention and establishes that the drug complies
with the applicable requirements of this Act, as determined by the
Secretary.''.
    (e) Misbranded Drugs.--Section 502 of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 352) is amended by adding at the end the
following:
    ``(hh) If it is a drug, including an active pharmaceutical
ingredient and key starting material, imported or offered for import
and the drug is accompanied by a materially false, fictitious, or
fraudulent statement or representation knowingly made by the person
importing the drug or offering the drug for import.''.
    (f) Adulterated Drugs.--Section 501 of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 351) is amended by adding at the end the
following:
    ``(k) If it is an active pharmaceutical ingredient that has not
been approved as part of an application under section 505 of this Act
or 351 of the Public Health Service Act, or otherwise approved or
authorized for use in a drug or device, and it was manufactured,
prepared, propagated, compounded, or processed in--
            ``(1) an establishment that was not inspected within the
        immediately preceding 3-year period; or
            ``(2) in the case of an establishment located in a foreign
        country with which the Secretary has an arrangement or
        agreement under section 809 to recognize the inspection of
        establishments by the government or an agency of the government
        of such country, within the immediately preceding 5-year
        period.
    ``(l) If it is a drug that was manufactured, prepared, propagated,
compounded, or processed in an establishment that the Secretary, in
consultation with the Secretary of Homeland Security, determines--
            ``(1) knowingly utilizes forced labor (as defined in
        section 307 of the Tariff Act of 1930); or
            ``(2) is in violation of sanctions imposed by the Federal
        Government under the International Emergency Economic Powers
        Act or other applicable law, including an establishment that is
        designated to the list of specially designated nationals and
        blocked persons maintained by the Office of Foreign Assets
        Control of the Department of the Treasury or owned 50 percent
        more or more, directly or indirectly, by one or more such
        designated persons.''.
    (g) Regulations.--The Secretary of Health and Human Services
shall--
            (1) not later than 90 days after the date of enactment of
        this Act, issue proposed regulations implementing the
        amendments made by this section; and
            (2) not later than 180 days after issuance of the draft
        guidance described in paragraph (1), finalize such guidance.
    (h) Applicability.--The amendments made by this section shall apply
beginning on the date that is 180 days after the final guidance under
section 6(2) is issued.

SEC. 6. DEFINING KEY STARTING MATERIAL.

    The Secretary of Health and Human Services shall--
            (1) not later than 90 days after the date of enactment of
        this Act, issue draft guidance defining the term ``key starting
        material'' for purposes of this Act and the amendments made by
        this Act; and
            (2) not later than 180 days after the date of enactment of
        this Act, issue final guidance defining such term for such
        purposes.
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