Page:United States Statutes at Large Volume 117.djvu/2268

 PUBLIC LAW 108–173—DEC. 8, 2003

117 STAT. 2249

‘‘(C) APPLICATION OF MEDICARE PROVIDER OMBUDSMAN.—For provision providing for a program-wide Medicare Provider Ombudsman to review complaints, see section 1868(b), as added by section 923 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. ‘‘(3) AWARDING MULTIPLE CONTRACTS FOR A CATEGORY AND AREA.—The Secretary may limit (but not below 2) the number of qualified entities that are awarded such contracts for any category and area. The Secretary shall select among qualified entities based on the following: ‘‘(A) The bid prices for competitively biddable drugs and biologicals within the category and area. ‘‘(B) Bid price for distribution of such drugs and biologicals. ‘‘(C) Ability to ensure product integrity. ‘‘(D) Customer service. ‘‘(E) Past experience in the distribution of drugs and biologicals, including controlled substances. ‘‘(F) Such other factors as the Secretary may specify. ‘‘(4) TERMS OF CONTRACTS.— ‘‘(A) IN GENERAL.—A contract entered into with an entity under the competition conducted pursuant to paragraph (1) is subject to terms and conditions that the Secretary may specify consistent with this section. ‘‘(B) PERIOD OF CONTRACTS.—A contract under this section shall be for a term of 3 years, but may be terminated by the Secretary or the entity with appropriate, advance notice. ‘‘(C) INTEGRITY OF DRUG AND BIOLOGICAL DISTRIBUTION SYSTEM.—A contractor (as defined in subsection (a)(2)(D)) shall— ‘‘(i) acquire all drug and biological products it distributes directly from the manufacturer or from a distributor that has acquired the products directly from the manufacturer; and ‘‘(ii) comply with any product integrity safeguards as may be determined to be appropriate by the Secretary. Nothing in this subparagraph shall be construed to relieve or exempt any contractor from the provisions of the Federal Food, Drug, and Cosmetic Act that relate to the wholesale distribution of prescription drugs or biologicals. ‘‘(D) COMPLIANCE WITH CODE OF CONDUCT AND FRAUD AND ABUSE RULES.—Under the contract— ‘‘(i) the contractor shall comply with a code of conduct, specified or recognized by the Secretary, that includes standards relating to conflicts of interest; and ‘‘(ii) the contractor shall comply with all applicable provisions relating to prevention of fraud and abuse, including compliance with applicable guidelines of the Department of Justice and the Inspector General of the Department of Health and Human Services. ‘‘(E) DIRECT DELIVERY OF DRUGS AND BIOLOGICALS TO PHYSICIANS.—Under the contract the contractor shall only supply competitively biddable drugs and biologicals directly to the selecting physicians and not directly to individuals,

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