101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB2880

 

Introduced , by Rep. Will Guzzardi

 

SYNOPSIS AS INTRODUCED:
 
New Act
30 ILCS 105/5.891 new

    Creates the Prescription Drug Price Increase Tax Act. Imposes a tax on each establishment that makes the first sale of a covered outpatient drug within the State. Provides that the term "first sale" means an initial sale of a covered outpatient drug from a manufacturer to a wholesaler or from a wholesaler to a pharmacy. Provides that the tax shall be charged against and paid by the establishment making the first sale and shall not be added as a separate charge or line item or otherwise passed down on any invoice to the customer. Provides that the proceeds shall be deposited into the Prescription Drug Fairness Fund and used by the Department of Healthcare and Family Services. Amends the State Finance Act to create the Prescription Drug Fairness Fund.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 1. Short title. This Act may be cited as the
5Prescription Drug Price Increase Tax Act.
 
6    Section 5. Definitions. As used in this Act:
7    "Average manufacturer price" has the meaning given to that
8term in 42 U.S.C. 1396r-8.
9    "Baseline average manufacturer price" means the average
10manufacturer price for the dosage, form, and strength of the
11covered outpatient drug for the first full calendar quarter
12after the day on which the drug was first marketed.
13    "Covered outpatient drug" has the meaning given to that
14term in 42 U.S.C. 1396r-8.
15    "First sale" means an initial sale of a covered outpatient
16drug from a manufacturer to a wholesaler or, if the sale from
17the manufacturer to the wholesaler is not subject to the tax
18under this Act, from the wholesaler to a pharmacy. Any such
19sale of a covered outpatient drug within the State shall be
20presumed to be the first sale of the covered outpatient drug
21unless the seller can prove that the tax is due from another
22establishment within the chain of title.
23    "Inflation-adjusted baseline average manufacturer price"

 

 

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1means the baseline average manufacturer price increased by the
2percentage by which the Consumer Price Index for All Urban
3Consumers (United States city average) for the month before the
4month in which the sale occurs exceeds that index for the month
5before the first month of the first full calendar quarter after
6the day on which the drug was first marketed, regardless of
7whether the covered outpatient drug has been sold or
8transferred to an entity, including a division or subsidiary of
9the manufacturer, after the first day of that quarter.
 
10    Section 10. Tax imposed.
11    (a) On and after January 1, 2020, any establishment that
12makes the first sale of a covered outpatient drug within the
13State is liable for a tax equal to 100% of the difference
14between the gross amount received for the first sale of the
15covered outpatient drug and the inflation-adjusted baseline
16average manufacturer price of the covered outpatient drug.
17    (b) This tax shall be charged against and paid by the
18establishment making the first sale and shall not be added as a
19separate charge or line item or otherwise passed down on any
20invoice to the customer.
21    (c) Any invoice associated with the first sale of a covered
22outpatient drug shall state the establishment making the sale's
23liability for the tax and include the establishment's name,
24address, and taxpayer identification number. This invoice
25shall also include identifying information, as defined by the

 

 

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1Department of Healthcare and Family Services, for the covered
2outpatient drug or drugs associated with the first sale, the
3date of the sale, the purchaser, the number of units sold, and
4any other information required by the Department of Healthcare
5and Family Services. A copy of this invoice shall be made
6available to any subsequent seller or purchaser of the covered
7outpatient drugs detailed on the invoice as evidence that the
8subsequent seller or purchaser is not liable for the tax. The
9Department of Healthcare and Family Services may adopt rules
10concerning the information required and may allow for such
11invoices to be transmitted and stored electronically,
12including allowing sellers to maintain records of the invoice
13on behalf of purchasers.
 
14    Section 15. Returns. On or before the twentieth day of each
15calendar month, every establishment that makes a first sale of
16a covered outpatient drug within the State during the preceding
17calendar month shall file a return with the Department of
18Revenue, stating:
19        (1) the name of the establishment;
20        (2) the address of the establishment's principal place
21    of business;
22        (3) the amount of tax due; and
23        (4) such other information as the Department of Revenue
24    may require.
25    If a taxpayer fails to sign a return within 30 days after

 

 

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1the proper notice and demand for signature by the Department of
2Revenue, the return shall be considered valid and any amount
3shown to be due on the return shall be deemed assessed.
 
4    Section 20. Recordkeeping. Any establishment liable for
5any tax under this Act shall maintain auditable records of
6sales made and taxes paid for a period of at least 3 years
7unless the Department of Revenue establishes a different
8retention period by rule. Those records shall be available to
9the Department of Revenue for inspection or audit upon request.
 
10    Section 25. Retailers' Occupation Tax Act. All of the
11provisions of Sections 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5i and 5j of
12the Retailers' Occupation Tax Act, which are not inconsistent
13with this Act, and Section 3-7 of the Uniform Penalty and
14Interest Act, shall apply, as far as practicable, to the
15subject matter of this Act to the same extent as if such
16provisions were included herein.
 
17    Section 30. Payment into the Prescription Drug Fairness
18Fund. The proceeds collected from the tax imposed under this
19Act shall be deposited into the Prescription Drug Fairness
20Fund, a special fund created in the State treasury. Moneys in
21the Fund shall be used, subject to appropriation, by the
22Department of Healthcare and Family Services.
 

 

 

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1    Section 90. The State Finance Act is amended by adding
2Section 5.891 as follows:
 
3    (30 ILCS 105/5.891 new)
4    Sec. 5.891. The Prescription Drug Fairness Fund.