‘‘(B) submit to the Secretary the rec-
ommendations of the Panel with respect to such 
prices for drugs on the lists. 
‘‘(3) COMPOSITION.—The Advisory Panel shall 
be composed of five members appointed by the Sec-
retary from among individuals who are not officers 
or employees of the Federal Government. Of such 
members—
‘‘(A) one shall be a representative of the 
pharmaceutical industry; 
‘‘(B) one shall be a representative of retail 
consumers generally; 
‘‘(C) one shall be a representative of retail 
consumers who are members of racial or ethnic 
minority groups; 
‘‘(D) one shall be an academic with exper-
tise in health care economics; and 
‘‘(E) one shall be an academic with exper-
tise in public health. 
The Secretary shall appoint the initial members of 
the Advisory Panel not later than 180 days after the 
date of the enactment of the Sustainable Drug Pric-
ing Act.
‘‘(4) CHAIR.—The Advisory Panel shall select, 
by recorded vote, a member of the Panel to serve as 
the chair of the Panel. 
‘‘(5) TERMS.—
‘‘(A) IN GENERAL.—Each member of the 
Advisory Panel shall be appointed for a term of 
four years, except that the term of each of the 
initial members expires December 31, 2007. 
‘‘(B) SERVICE
AFTER
EXPIRATION
OF 
TERM.—A member of the Advisory Panel may 
continue to serve after the expiration of the 
term of the member until a successor is ap-
pointed. 
‘‘(6) VACANCIES.—
‘‘(A) AUTHORITY OF ADVISORY PANEL.—A 
vacancy in the membership of the Advisory 
Panel does not affect the power of the remain-
ing members to carry out the duties of the 
Panel. 
‘‘(B) APPOINTMENT
OF
SUCCESSORS.—A 
vacancy in the membership of the Advisory 
Panel shall be filled in the manner in which the 
original appointment was made. 
‘‘(C) INCOMPLETE TERM.—If a member of 
the Advisory Panel does not serve the full term
under paragraph (5)(A), the Secretary, not 
later than 30 days after the date on which the 
vacancy occurs, shall appoint an individual to 
serve as a member of the Advisory Panel for 
the remainder of such term. 
‘‘(g) DEFINITIONS.—For purposes of this section: 
‘‘(1) The term ‘brand-name prescription drug’ 
means a drug meeting each of the following criteria: 
‘‘(A) An approved application under sec-
tion 505(b)(1) of the Federal Food, Drug, and 
Cosmetic Act is in effect for the drug, or in the 
case of a drug that is a biological product, a 
biologics license is in effect for the drug under 
section 351 of this Act. 
‘‘(B) The drug is subject to section 
503(b)(1) of the Federal Food, Drug, and Cos-
metic Act. 
‘‘(C) A period of market exclusivity is in 
effect with respect to the drug pursuant to a 
patent or pursuant to section 505(j) or 505A of 
such Act. 
‘‘(2) The term ‘drug’ has the meaning given 
such term in section 201(g)(1) of such Act.’’.
SEC. 3. DENIAL OF CERTAIN TAX BENEFITS UNLESS UN-
LESS PRICING AGREEMENT FOR BRAND-
NAME PRESCRIPTION DRUGS IS IN EFFECT. 
(a) DEDUCTIONS FOR ADVERTISING.—
(1) IN GENERAL.—Part IX of subchapter B of 
chapter 1 of subtitle A of the Internal Revenue Code 
of 1986 (relating to items not deductible) is amend-
ed by adding at the end the following: 
‘‘SEC. 280I. DENIAL OF DEDUCTIONS FOR ADVERTISING 
FOR BRAND-NAME PRESCRIPTION DRUGS UN-
LESS PRICING AGREEMENT IS IN EFFECT. 
‘‘(a) IN GENERAL.—No deduction shall be allowed 
under this chapter for any taxable year for any expendi-
ture relating to the advertising, promoting, or marketing 
(in any medium) of any brand-name prescription drug 
manufactured by the taxpayer. 
‘‘(b) EXCEPTION FOR QUALIFIED PRICING AGREE-
MENT.—
‘‘(1) IN
GENERAL.—Subsection (a) shall not 
apply with respect to any brand-name prescription 
drug for a taxable year if there is in effect for the 
entire taxable year a qualified pricing agreement 
with respect to such drug. 
‘‘(2) SPECIAL RULE REGARDING INITIAL COM-
MERCIAL MARKETING.—In the case of the taxable 
year during which a brand-name prescription drug