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[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 3103 Introduced in Senate (IS)]

106th CONGRESS
  2d Session
                                S. 3103

 To amend the Internal Revenue Code of 1986 to impose a discriminatory 
    profits tax on pharmaceutical companies which charge prices for 
 prescription drugs to domestic wholesale distributors that exceed the 
most favored customer prices charged to foreign wholesale distributors.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

           September 25 (legislative day, September 22), 2000

 Mr. Levin (for himself and Mr. Bryan) introduced the following bill; 
     which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL

 
 To amend the Internal Revenue Code of 1986 to impose a discriminatory 
    profits tax on pharmaceutical companies which charge prices for 
 prescription drugs to domestic wholesale distributors that exceed the 
most favored customer prices charged to foreign wholesale distributors.

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

SECTION 1. IMPOSITION OF DISCRIMINATORY PROFITS TAX ON CERTAIN 
              PRESCRIPTION DRUG MANUFACTURERS.

    (a) In General.--Subtitle D of the Internal Revenue Code of 1986 
(relating to miscellaneous excise taxes) is amended by inserting after 
chapter 44 the following:

 ``CHAPTER 45--DISCRIMINATORY PROFITS TAX ON CERTAIN PRESCRIPTION DRUG 
                             MANUFACTURERS

                              ``Sec. 4986. Imposition of tax.

``SEC. 4986. IMPOSITION OF TAX.

    ``(a) In General.--There is imposed on any taxpayer who--
            ``(1) has any gross income attributable to the manufacture 
        or production of prescription drugs for any taxable year, and
            ``(2) fails to include with its return of tax for such 
        taxable year a statement (in such form and manner as the 
        Secretary may prescribe) which--
                    ``(A) declares the taxpayer's policy that it does 
                not directly or indirectly charge any wholesale 
                distributor located in the United States a higher unit 
                price for any bulk purchase of a prescription drug than 
                the most favored customer price it directly or 
                indirectly charges any wholesale distributor located in 
                any covered foreign country for any bulk purchase of 
                such drug, and
                    ``(B) is signed, under penalty of perjury, by the 
                chief financial officer or other senior corporate 
                officer with knowledge of the facts,
a tax equal to 10 percent of the taxable income of the taxpayer.
    ``(b) Definitions.--For purposes of this section--
            ``(1) Covered foreign country.--The term `covered foreign 
        country' means Canada and any country which is a member of the 
        European Union.
            ``(2) Most favored customer price.--The term `most favored 
        customer price' means, with respect to any prescription drug, a 
        unit price equal to--
                    ``(A) the best unit price given or available to any 
                wholesale distributor with respect to bulk purchases of 
                such drug if the terms and conditions applicable to 
                such purchases are comparable, or
                    ``(B) the best unit price given or available to any 
                wholesale distributor with respect to bulk purchases of 
                such drug with a differential based entirely on costs 
                attributable to differences in the terms and conditions 
                applicable to such purchases if such terms and 
                conditions are not comparable.''.
    (b) Dedication of Tax to Federal Hospital Insurance Trust Fund.--
Section 1817(a) of the Social Security Act (42 U.S.C. 1395i(a)) is 
amended--
            (1) by striking ``and'' at the end of paragraph (1),
            (2) by striking the period at the end of paragraph (2) and 
        inserting ``; and'', and
            (3) by adding at the end the following new paragraph:
            ``(3) the taxes imposed by section 4986 of the Internal 
        Revenue Code of 1986.''.
    (c) Clerical Amendment.--The table of chapters of subtitle D of the 
Internal Revenue Code of 1986 is amended by inserting after the item 
relating to chapter 44 the following:

                              ``Chapter 45. Discriminatory profits tax 
                                        on certain prescription drug 
                                        manufacturers.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.
                                 <all>
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