I 

108TH CONGRESS 

2D SESSION H. R. 3865 

To amend the Internal Revenue Code of 1986 to deny any deduction for 

certain gifts and benefits provided to physicians by prescription drug 

manufacturers. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 26, 2004 

Mr. STARK introduced the following bill; which was referred to the Committee 

on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to deny any 

deduction for certain gifts and benefits provided to physicians by prescription drug manufacturers. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Prescription Drug 

5 Safety and Affordability Act of 2004’’. 

6 SEC. 2. FINDINGS. 

7 The Congress finds that— 

8 (1) gifts to physicians from pharmaceutical 

9 companies lead to the unnecessary prescribing of 
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1 prescription drugs, inflating the costs of prescrip2 tions and jeopardizing patient safety, 

3 (2) the pharmaceutical industry annually 

4 spends $13,000,000,000 promoting and marketing 

5 their products, by way of meals, travel subsidies, 

6 and other gifts to medical professionals, 

7 (3) drug companies annually spend more than 

8 $15,000 per physician on such promotions, 

9 (4) the present extent of physician-industry 

10 interactions appears to adversely affect prescribing 

11 and professional behavior and should be further ad12 dressed at the level of policy and education, and 

13 (5) either redirecting these funds to research or 

14 lowering the costs of prescription drugs is a much 

15 more needed expenditure by the pharmaceutical in16 dustry. 

17 SEC. 3. DISALLOWANCE OF DEDUCTION FOR PHYSICIAN 

18 GIFT EXPENSES OF PRESCRIPTION DRUG 

19 MANUFACTURERS. 

20 (a) GENERAL RULE.—Part IX of subchapter B of 

21 chapter 1 of the Internal Revenue Code of 1986 (relating 

22 to items not deductible) is amended by adding at the end 

23 the following new section: 
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1 ‘‘SEC. 280I. PHYSICIAN GIFT EXPENSES OF PRESCRIPTION 

2 DRUG MANUFACTURERS. 

3 ‘‘(a) GENERAL RULE.—No deduction shall be allowed 

4 under this chapter for any physician gift expense paid or 

5 incurred by any prescription drug manufacturer. 

6 ‘‘(b) PHYSICIAN GIFT EXPENSE.—For purposes of 

7 this section, the term ‘physician gift expense’ means any 

8 gift provided directly or indirectly to or for the benefit of 

9 a physician, including gifts of meals, sponsored teachings, 

10 symposia, and travel, but not including product samples. 

11 ‘‘(c) PRESCRIPTION DRUG MANUFACTURER.—For 

12 purposes of this section, the term ‘prescription drug man13 ufacturer’ means— 

14 ‘‘(1) any person engaged in the trade or busi15 ness of manufacturing or producing any prescription 

16 drug, and 

17 ‘‘(2) any person who is a member of an affili18 ated group which includes a person described in 

19 paragraph (1). 

20 For purposes of the preceding sentence, the term ‘affili21 ated group’ means any affiliated group as defined in sec22 tion 1504 (determined without regard to paragraphs (3) 

23 and (4) of 1504(b)).’’. 

24 (b) CLERICAL AMENDMENT.—The table of sections 

25 for part IX of subchapter B of chapter 1 of such Code 
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1 is amended by adding at the end thereof the following new 

2 item: 

‘‘Sec. 280I. Physician gift expenses of prescription drug manufacturers.’’. 

3 (c) EFFECTIVE DATE.—The amendments made by 

4 this section shall apply to amounts paid or incurred after 

5 December 31, 2004. 

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