HF 2819

as introduced - 91st Legislature (2019 - 2020) Posted on 04/04/2019 02:16pm

A bill for an act
relating to taxation; income; imposing a tax on the excess prices of certain drugs;
proposing coding for new law in Minnesota Statutes, chapter 290.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [290.9810] EXCESS PRICES TAX; PRESCRIPTION DRUGS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms have
the meanings given.
new text end

new text begin (b) "Adjusted average manufacturer price" means the following, as adjusted by the
commissioner under subdivision 5:
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new text begin (1) the average manufacturer price of a prescription drug as defined in United States
Code, title 42, section 1396r-8(k)(1); or
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new text begin (2) for drugs for which United States Code, title 42, section 1396r-8(k)(1), does not
define an average manufacturer price, the wholesale acquisition cost of a prescription drug
as determined in United States Code, title 42, section 1395w-3a(c)(6)(B).
new text end

new text begin (c) "Excess price amount" means the difference, if any, between:
new text end

new text begin (1) the manufacturer's adjusted average manufacturer price of a prescription drug for
the year in which sales are required to be reported under subdivision 4; and
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new text begin (2) the indexed average manufacturer's price of a prescription drug for that year.
new text end

new text begin (d) "Indexed average manufacturer's price" means the average manufacturer's price of
a prescription drug for the later of calendar year 2014 or the calendar year when the drug's
first sale in Minnesota occurs, multiplied each year by an adjustment factor that is equal to
the medical care Consumer Price Index for All Urban Consumers, United States city average,
and including any adjustment made in or for prior years.
new text end

new text begin (e) "Manufacturer" means a manufacturer as defined in United States Code, title 42,
section 1395w-3a(c)(6)(A), that has nexus with Minnesota.
new text end

new text begin (f) "Prescription drug" has the meaning given in section 151.01.
new text end

new text begin (g) "Sold in this state" means any sale of a prescription drug for purposes of resale,
possession, or use in this state, excluding any subsequent resale.
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new text begin Subd. 2. new text end

new text begin Tax imposed. new text end

new text begin In addition to any other tax imposed by this chapter, a tax is
imposed on a manufacturer's excess price amount for a prescription drug. The tax is equal
to ... percent of the excess price amount of each drug produced by a manufacturer that is
sold in this state, multiplied by the number of units of the drug produced by that manufacturer
that are sold in this state as reported by the commissioner in subdivision 4.
new text end

new text begin Subd. 3. new text end

new text begin Administration of tax. new text end

new text begin The commissioner may provide for any requirement
necessary to administer this section, including the time and manner for filing returns. All
provisions relating to collection, audit, assessment, refund, penalty, interest, enforcement,
collection remedies, appeal, and administrative provisions under chapters 270C and 289A
that apply to taxes imposed under this chapter apply to the tax imposed under this section.
new text end

new text begin Subd. 4. new text end

new text begin Reporting of prescription drug sales. new text end

new text begin Each year by February 15, a manufacturer
or wholesale drug distributor licensed under chapter 151 shall submit to the commissioner
of revenue, in the form and manner specified by the commissioner, the number of units of
each prescription drug sold in this state in the immediately preceding calendar year. Each
year by September 1, the commissioner must send to each manufacturer subject to the tax
in subdivision 2 a report detailing the number of units of each prescription drug manufactured
by the taxpayer in the year for which the sales are reported. The commissioner must also
include any adjustments in the average manufacturer price of a prescription drug as provided
in subdivision 5. The commissioner may contract with a vendor for assistance in
administering this section.
new text end

new text begin Subd. 5. new text end

new text begin Average manufacturer price; adjustments. new text end

new text begin The commissioner, in consultation
with the Board of Pharmacy, may reduce the average manufacturer price of a prescription
drug to reflect increases in the costs of inputs necessary to manufacture the prescription
drug. By March 1, the commissioner must notify a manufacturer subject to the tax in
subdivision 2 of any adjustment in the average manufacturer price. The commissioner must
provide a manufacturer an opportunity to appeal an adjustment made under this paragraph,
in the form and manner specified by the board. An appeal of the commissioner's decision
must be taken by June 1. By October 1, the commissioner must certify any increase in the
average manufacturer price of a prescription drug to the commissioner of revenue.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective .......
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