A complete substitute amendment. v2 fundamentally restructures the approach to requiring drug labeling to include original manufacturer and supply chain information, shifting the statutory basis from FFDCA Section 502(b) to a new Section 503(i). It introduces specific civil monetary penalties for non-compliance, modifies the definition of 'original manufacturer', and replaces a direct customs exemption with a requirement for inter-agency coordination, while also extending the effective date significantly.
CLEAR LABELS Act
- Sponsor
- Sen. Scott, Rick [R-FL]
- Committees
- Health, Education, Labor, and Pensions Committee (primary)
- Last action
- Jul 27, 2026
Bottom line
The CLEAR LABELS Act aims to increase transparency in the pharmaceutical supply chain by requiring detailed origin information on drug labels, backed by civil penalties, with a five-year implementation period.
What it actually does
This bill amends the Federal Food, Drug, and Cosmetic Act to mandate that drug labels for active pharmaceutical ingredients (APIs) and finished drug products include the name and place of business of the 'original manufacturer' of the API and the finished product, as well as any packer or distributor. It defines 'original manufacturer' and establishes civil monetary penalties for non-compliance, explicitly stating that violations are not criminal offenses. The requirements take effect five years after enactment.
Proponents argue
Proponents argue this bill will significantly enhance transparency, allowing consumers and healthcare providers to know the true origin of their medications. This increased visibility is expected to improve drug safety, foster greater accountability among manufacturers, and strengthen the resilience of the pharmaceutical supply chain by reducing reliance on unknown foreign sources, thereby addressing critical public health and national security concerns.
Opponents contend
Opponents might argue that these extensive labeling requirements could impose substantial administrative and logistical burdens on pharmaceutical manufacturers, particularly those with complex global supply chains. These increased costs could potentially lead to higher drug prices for consumers, create supply disruptions, or disproportionately affect smaller manufacturers, without a clear commensurate benefit to public health that justifies the burden.
The bill is relatively short and its core provisions are straightforward, making it accessible for a quick but informed read within the typical time constraints for legislative review.
Section 2, amending Section 503(i)(1)(A) of the FD&C Act
Mandate for Active Pharmaceutical Ingredient (API) Original Manufacturer Information
This provision requires that active pharmaceutical ingredients (APIs) introduced into interstate commerce must have their label and certificate of analysis include the name and place of business of the 'original manufacturer' of that API. This ensures traceability of the raw drug material's origin, providing clarity on who produced the core component of a drug.
Supporters argue
Supporters argue this improves transparency for the fundamental components of drugs, enhancing safety and accountability by making the source of active ingredients clear, which is crucial for identifying potential quality issues.
Critics contend
Critics may argue this adds a significant burden to API manufacturers, especially those with complex global supply chains, potentially increasing costs or limiting supply due to the need for new tracking and labeling systems.
Tradeoffs
Balances increased transparency and potential safety benefits against the administrative and cost burdens on API manufacturers in a globalized supply chain.
Section 2, amending Section 503(i)(1)(B) of the FD&C Act
Mandate for Finished Drug Product Original Manufacturer and Supply Chain Information
This provision requires that finished drug products in package form must include on their label (either printed directly or made available through electronic means) the name and place of business of the original manufacturer of each active pharmaceutical ingredient, the original manufacturer of the finished drug product, and any packer or distributor. This ensures comprehensive origin information for the final product.
Section 2, amending Section 503(i)(4) of the FD&C Act
Definition of 'Original Manufacturer'
This section defines 'original manufacturer' as the establishment that conducts the majority of the significant phases of manufacturing (chemical, physical, or biological manipulation) to produce the active pharmaceutical ingredient or the finished dosage form. This clarifies which specific entity in a potentially complex supply chain is responsible for being identified on the label.
Section 2, amending Section 503(i)(3) and Section 3, amending Section 303(f) of the FD&C Act
Establishment of Civil Monetary Penalties and Non-Criminal Violation Status
The bill grants the Secretary discretion to determine noncompliance with the new labeling requirements as misbranding and to assess a civil monetary penalty, up to 25 percent of the total value of the drug product lot(s) involved. Crucially, it explicitly states that a violation of this subsection cannot be treated as a criminal violation. The Secretary must consider business size, gravity of violation, prior notice, and good faith efforts when assessing penalties.
Section 4
Coordination Between FDA and Customs and Border Protection
This section mandates that the Commissioner of Food and Drugs coordinate with the Commissioner of U.S. Customs and Border Protection (CBP) to address potential administrative burdens, overlap, duplication, or conflict between the new labeling requirements and existing customs country of origin marking requirements (Section 304 of the Tariff Act of 1930). Coordination may include information sharing and joint rulemaking.
Section 6
Delayed Effective Date
The amendments made by this Act will apply to active pharmaceutical ingredients and finished drug products manufactured and packaged on or after the date that is 5 years after the date of enactment of this Act. This provides a substantial grace period for the pharmaceutical industry to adapt to the new requirements.
This section clarifies that nothing in the Act authorizes the Secretary of Health and Human Services to disclose any information that constitutes a trade secret or confidential information, as protected by existing federal law (5 U.S.C. 552(b)(4) and 18 U.S.C. 1905).
Section 5
Why it matters:This is standard legislative practice to include such protective clauses to address potential industry concerns about intellectual property and proprietary information when new disclosure requirements are introduced.
Case for: This clause is crucial for protecting intellectual property and proprietary manufacturing processes, which is essential for pharmaceutical companies to maintain competitive advantage and invest in research and development, ensuring that increased transparency does not inadvertently compromise business secrets.
Case against: Some transparency advocates might argue that broad confidentiality clauses could be used to shield information that, while proprietary, might also be relevant to public health or safety, potentially undermining the bill's transparency goals in certain edge cases.
Estimated impact: Ensures continued protection of intellectual property rights for pharmaceutical manufacturers, potentially reducing industry opposition related to data disclosure and fostering greater cooperation with the new labeling requirements.