I 
108TH CONGRESS 
1ST SESSION 
H. R. 354
To amend the Internal Revenue Code of 1986 to allow drug manufacturers 
a credit against income tax if they certify that the price of a drug 
in the United States market is not greater than its price in the Canadian 
or Mexican market. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 27, 2003
Mr. DUNCAN 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 allow drug 
manufacturers a credit against income tax if they certify 
that the price of a drug in the United States market 
is not greater than its price in the Canadian or Mexican 
market.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘North American Pre-
scription Price Equity Act of 2003’’.
SEC. 2. CREDIT TO DRUG MANUFACTURERS SELLING IN 
THE U.S. MARKET AT PRICES NOT GREATER 
THAN PRICES IN CANADIAN OR MEXICAN 
MARKET. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 (relating to business related credits) is amended by 
inserting after section 45F the following new section: 
‘‘SEC. 45G. CREDIT TO DRUG MANUFACTURERS SELLING IN 
THE U.S. MARKET AT PRICES NOT GREATER 
THAN PRICES IN CANADIAN OR MEXICAN 
MARKET. 
‘‘(a) IN GENERAL.—For purposes of section 38, in 
the case of a taxpayer who manufactures any qualified 
prescription drug, the drug pricing credit determined 
under this section for the taxable year is an amount equal 
to 5 percent of the wholesale price of the drug with respect 
to sales during the taxable year. 
‘‘(b) QUALIFIED PRESCRIPTION DRUG.—For pur-
poses of this section, the term ‘qualified prescription drug’ 
means any prescription drug if—
‘‘(1) there are substantial sales of such drug in 
the Canadian or Mexican markets, and 
‘‘(2) there is a certification by the manufac-
turer that the wholesale price of the drug in the 
United States market is not greater than the whole-
sale price of the drug in the Canadian and Mexican 
markets.’’
(b) CREDIT MADE PART OF GENERAL BUSINESS 
CREDIT.—
(1) IN GENERAL.—Subsection (b) of section 38 
of such Code (relating to current year business cred-
it) is amended by striking ‘‘plus’’ at the end of para-
graph (14), by striking the period at the end of 
paragraph (15) and inserting ‘‘, plus’’, and by add-
ing at the end thereof the following new paragraph: 
‘‘(16) the drug pricing credit determined under 
section 45G(a).’’. 
(2) LIMITATION
ON
CARRYBACK.—Subsection 
(d) of section 39 of such Code is amended by adding 
at the end the following new paragraph: 
‘‘(11) NO CARRYBACK OF DRUG PRICING CRED-
IT BEFORE EFFECTIVE DATE.—No portion of the 
unused business credit for any taxable year which is 
attributable to the credit determined under section 
45G may be carried back to any taxable year ending 
before the date of the enactment of this para-
graph.’’. 
(3) DEDUCTION FOR CERTAIN UNUSED BUSI-
NESS CREDITS.—Subsection (c) of section 196 of 
such Code is amended by striking ‘‘and’’ at the end
of paragraph (9), by striking the period at the end 
of paragraph (10) and inserting ‘‘, and’’, and by 
adding after paragraph (10) the following new para-
graph: 
‘‘(11) the drug pricing credit determined under 
section 45G.’’. 
(d) CLERICAL AMENDMENT.—The table of sections 
for subpart D of part IV of subchapter A of chapter 1 
of such Code is amended by inserting after the item relat-
ing to section 45F the following new item:
‘‘Sec. 45G. Credit to drug manufacturers selling in the U.S. mar-
ket at prices not greater than prices in Canadian 
or Mexican market.’’.
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act.
Æ