“(II) the reasons why such amounts are not sufficient to acquire or maintain a 6-month supply. “(ii) shall submit a report to the Secretary identifying. “(i) may acquire and maintain less than a 6-month supply, but in no case less than a 3-month supply and “(C) INSUFFICIENT FUNDS.-If amounts available to an eligible entity through contracts under this section are not sufficient to acquire or maintain a 6-month supply of any drug in the stockpile of the eligible entity funded under this section, the eligible entity.
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“(ii) may store stockpiled inventory separately in a different location and replace drugs in the stockpile inventory with the same drug with newer dating. “(i) may stockpile inventory at the eligible entity’s distribution center with specified inventory amounts virtually reserved for the Federal Government with constant cycling to reduce product expiration or “(B) INVENTORY MANAGEMENT.-Each eligible entity with a contract under this section for a stockpile of generic drugs at risk of shortage shall manage inventory to ensure that drugs in the stockpile are efficiently cycled to the commercial market and. “(ii) if it is not possible to comply with clause (i), notify the Secretary, citing the reason why it is not possible and the expected time of acquisition of the drug. “(i) acquire not later than 6 months following the date the contract is awarded, and maintain thereafter, a 6-month supply of each type of drug the eligible entity has contracted to stockpile, which 6-month supply shall be in addition to the average levels of inventory held by such eligible entity over the previous year for such drug and “(A) IN GENERAL.-Each eligible entity with a contract under this section for a stockpile of generic drugs at risk of shortage shall. “(ii) if there is no commercial market for a drug in the stockpile, dispose of the drug, report such disposal to the Secretary, and replace the drug. “(i) sell drugs in the stockpile through normal commercial channels and replace those drugs or “(A) ensure that each drug maintained in the stockpile has an expiration date at least 1 year beyond the current date and “(1) ENSURING AVAILABILITY OF UNEXPIRED PRODUCTS.-Each eligible entity with a contract under this section for a stockpile of generic drugs at risk of shortage shall. “(2) LIQUIDATION OF INVENTORY.-A drug held in a stockpile pursuant to a contract under this section may be liquidated by the eligible entity at the end of the period of the contract.
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“(1) DURATION.-A contract awarded under this section shall be for a term of no more than 3 years. “(c) Sufficient quantity.-For each generic drug in a stockpile maintained pursuant to subsection (a), the Secretary shall specify the quantity of such drug that is sufficient for purposes of such subsection to ensure that consumers in the United States of the respective eligible entity have access to such drug for at least 6 months. “(2) CHOICE OF ELIGIBLE ENTITIES.-A contract awarded to an eligible entity under this section need not require the stockpile of the eligible entity to include all 50 types of drugs listed pursuant to paragraph (1). “(B) maintain an up-to-date list of such drugs and “(A) select not more than 50 types of drugs that may be included by eligible entities in a stockpile pursuant to a contract under this section and “(2) is of sufficient quantity to ensure that customers in the United States of the respective eligible entity have access to such drugs for at least 6 months (as specified by the Secretary based on the historic demand for those drugs). “(1) consists of generic drugs at risk of shortage and “(a) Award of contracts.-Beginning not later than January 1, 2021, the Secretary shall award contracts to eligible entities to each implement and test the effectiveness of acquiring, maintaining, managing, and distributing a stockpile that.