I
107TH CONGRESS
1ST SESSION
H. R. 946
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
MARCH 8, 2001
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 2001’’.
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 45D the following new section:
‘‘SEC. 45E. 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.
‘‘(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 (12), by striking the period at the end of
paragraph (13) and inserting ‘‘, plus’’, and by add-
ing at the end thereof the following new paragraph:
‘‘(14) the drug pricing credit determined under
section 45E(a).’’.
(2) LIMITATION
ON
CARRYBACK.—Subsection
(d) of section 39 of such Code is amended by adding
at the end the following new paragraph:
‘‘(10) 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
45E 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 (8), by striking the period at the end
of paragraph (9) and inserting ‘‘, and’’, and by add-
ing after paragraph (9) the following new para-
graph:
‘‘(10) the drug pricing credit determined under
section 45E.’’.
(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 45D the following new item:
‘‘Sec. 45E. 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