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Wellstone Introduces Bill to Strip Price-Gouging Pharmaceuticals of Tax Breaks Urges President Clinton to Support Strong Action to Help Seniors Afford Spiraling Prescription Drug Costs ---------------------------------------------------------------------------- ---- Citing the release of a study by Families USA, "Still Rising: Drug Price Increases for Seniors, 1999-2000," Senator Paul Wellstone (D-MN) today introduced legislation to combat one of the most egregious inequities in the U.S. Tax Code – the subsidies that the federal government offers to pharmaceutical manufacturers to develop drugs which these same companies proceed to sell to the American people at up to twice the price they charge in other countries. "The Prescription Price Equity Act of 2000,"whose companion was introduced by Rep. Pete Stark (D-CA) in the House, would deny research tax credits to pharmaceutical companies that sell their products at significantly higher prices in the U.S. as compared to other industrialized countries. "It is time for the pharmaceutical industry to earn these tax benefits by offering their life saving drugs to America's seniors at the same prices they charge in other countries. We provide lucrative tax credits and other tax benefits to the pharmaceutical industry in order to promote research and development of new lifesaving pharmaceutical products. Yet, in return for these government subsidies, the industry charges senior citizens in the United States higher prices than charged anywhere else in the world. It is unconscionable, and we're going to change that," Wellstone said. The Congressional Research Service recently completed an analysis of the tax treatment of the pharmaceutical industry. That analysis concluded that tax credits were a major contribution to lowering the average effective tax rate for drug companies by nearly 40% relative to other major industries from 1990 to 1996. Yet, at the same time that American seniors are being asked to pay inflated prices relative to consumers in other countries, the drug companies are reaping the benefit of generous governmental subsidies. "The message to pharmaceutical companies is this: So long as your company gives U.S. consumers a fair deal on drug prices as measured against the same products sold in other industrialized countries, you will continue to qualify for all available research tax credits. But if your company is found to be fleecing American taxpayers with prices higher than those charged for the same product sold in other countries, like Japan, Germany, Switzerland, or Canada, then you become ineligible for those tax credits," Wellstone said. The Wellstone measure sends a message to PhRMA that U.S. taxpayers will no longer subsidize low prices in other industrialized countries with our tax code. Research and development is important, and that is why Congress years ago established huge tax breaks for the pharmaceutical industry. But that R & D does little good for U.S. consumers who can't afford to buy the products of that research. In response to President Clinton's remarks on the subject of prescription drug costs today, Wellstone urged the White House to support strong measures such as his bill to meaningfully help seniors pay for needed prescription drugs. "This bill does not solve the biggest underlying problem that America's senior citizens face. Only a comprehensive, prescription drug benefit, available to and affordable by all Medicare beneficiaries will do that," Wellstone said. Tess Owens [log in to unmask] Why Wait? Move to EarthLink. ---------------------------------------------------------------------- To sign-off Parkinsn send a message to: mailto:[log in to unmask] In the body of the message put: signoff parkinsn