Protecting America’s Life Saving Medicines Act of 2019

I 116TH CONGRESS 1ST SESSION H. R. 5402 To direct the Secretary of Health and Human Services, acting through the Commissioner of Food and Drugs, to conduct a study on high- risk, high-reward drugs, and for other purposes. IN THE HOUSE OF REPRESENTATIVES DECEMBER 11, 2019 Mr. GOTTHEIMER (for himself and Mr. UPTON) introduced the following bill; which was referred to the Committee on Ways and Means, and in addi- tion to the Committee on Energy and Commerce, for a period to be sub- sequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To direct the Secretary of Health and Human Services, acting through the Commissioner of Food and Drugs, to conduct a study on high-risk, high-reward drugs, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Protecting America’s 4 Life Saving Medicines Act of 2019’’. 5 VerDate Sep 11 2014 22:48 Dec 16, 2019 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H5402.IH H5402 kjohnson on DSK79L0C42 with BILLS 2 •HR 5402 IH SEC. 2. STUDY ON HIGH-RISK, HIGH-REWARD DRUGS. 1 (a) IN GENERAL.—Not later than 180 days after the 2 date of the enactment of this Act, the Secretary of Health 3 and Human Services, acting through the Commissioner of 4 Food and Drugs, shall conduct a study to determine which 5 of the drugs that are being tested (as of such date of en- 6 actment) under subsection (i) of section 505 of the Fed- 7 eral Food, Drug, and Cosmetic Act (21 U.S.C. 355) are 8 unlikely to be approved under subsection (c) of such sec- 9 tion, but would, if approved, address an unmet medical 10 need for the treatment of a serious or life-threatening dis- 11 ease or condition or a rare disease or condition. 12 (b) SUBMISSION TO TREASURY.—Not later than 180 13 days after the completion of the study under subsection 14 (a), the Secretary of Health and Human Services, acting 15 through the Commissioner of Food and Drugs, shall trans- 16 mit to the Secretary of the Treasury (or the Secretary’s 17 delegate) a list of the drugs that the Secretary of Health 18 and Human Services determines meets the criteria speci- 19 fied in subsection (a). 20 SEC. 3. CREDIT FOR CLINICAL TESTING EXPENSES FOR 21 CERTAIN HIGH-RISK, HIGH-REWARD DRUGS. 22 (a) IN GENERAL.—Subpart D of part IV of sub- 23 chapter A of chapter 1 of the Internal Revenue Code of 24 1986 is amended by adding at the end the following new 25 section: 26 VerDate Sep 11 2014 22:48 Dec 16, 2019 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H5402.IH H5402 kjohnson on DSK79L0C42 with BILLS 3 •HR 5402 IH ‘‘SEC. 45T. CLINICAL TESTING EXPENSES FOR CERTAIN 1 HIGH-RISK, HIGH-REWARD DRUGS. 2 ‘‘(a) IN GENERAL.—For purposes of section 38, the 3 credit determined under this section for the taxable year 4 is an amount equal to 25 percent of the qualified clinical 5 testing expenses for the taxable year. 6 ‘‘(b) QUALIFIED CLINICAL TESTING EXPENSES.— 7 For purposes of this section— 8 ‘‘(1) QUALIFIED CLINICAL TESTING EX- 9 PENSES.— 10 ‘‘(A) IN GENERAL.—Except as otherwise 11 provided in this paragraph, the term ‘qualified 12 clinical testing expenses’ means the amounts 13 which are paid or incurred by the taxpayer dur- 14 ing the taxable year which would be described 15 in subsection (b) of section 41 if such sub- 16 section were applied with the modifications set 17 forth in subparagraph (B). 18 ‘‘(B) MODIFICATIONS.—For purposes of 19 subparagraph (A), subsection (b) of section 41 20 shall be applied— 21 ‘‘(i) by substituting ‘clinical testing’ 22 for ‘qualified research’ each place it ap- 23 pears in paragraphs (2) and (3) of such 24 subsection, and 25 VerDate Sep 11 2014 22:48 Dec 16, 2019 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H5402.IH H5402 kjohnson on DSK79L0C42 with BILLS 4 •HR 5402 IH ‘‘(ii) by substituting ‘100 percent’ for 1 ‘65 percent’ in paragraph (3)(A) of such 2 subsection. 3 ‘‘(C) EXCLUSION FOR AMOUNTS FUNDED 4 BY GRANTS, ETC.—The term ‘qualified clinical 5 testing expenses’ shall not include any amount 6 to the extent such amount is funded by any 7 grant, contract, or otherwise by another person 8 (or any governmental entity). 9 ‘‘(2) CLINICAL TESTING.—The term ‘clinical 10 testing’ means any human clinical testing— 11 ‘‘(A) which is carried out with respect to a 12 drug on a list submitted to the Secretary under 13 subsection (b) of the Protecting America’s Life 14 Saving Medicines Act of 2019, 15 ‘‘(B) which occurs— 16 ‘‘(i) after the date such list is so sub- 17 mitted, and 18 ‘‘(ii) before the date on which an ap- 19 plication with respect to such drug is ap- 20 proved under section 505(b) of such Act 21 or, if the drug is a biological product, be- 22 fore the date on which a license for such 23 drug is issued under section 351 of the 24 Public Health Service Act. 25 VerDate Sep 11 2014 21:04 Dec 19, 2019 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H5402.IH H5402 kjohnson on DSK79L0C42 with BILLS 5 •HR 5402 IH ‘‘(c) COORDINATION WITH CREDIT FOR INCREASING 1 RESEARCH EXPENDITURES.— 2 ‘‘(1) IN GENERAL.—Except as provided in para- 3 graph (2), any qualified clinical testing expenses for 4 a taxable year to which an election under this sec- 5 tion applies shall not be taken into account for pur- 6 poses of determining the credit allowable under sec- 7 tion 41 for such taxable year. 8 ‘‘(2) EXPENSES INCLUDED IN DETERMINING 9 BASE PERIOD RESEARCH EXPENSES.—Any qualified 10 clinical testing expenses for any taxable year which 11 are qualified research expenses (within the meaning 12 of section 41(b)) shall be taken into account in de- 13 termining base period research expenses for pur- 14 poses of applying section 41 to subsequent taxable 15 years. 16 ‘‘(d) SPECIAL RULES.— 17 ‘‘(1) CERTAIN RULES MADE APPLICABLE.— 18 Rules similar to the rules of paragraphs (1) and (2) 19 of section 41(f) shall apply for purposes of this sec- 20 tion. 21 ‘‘(2) ELECTION.—This section shall apply to 22 any taxpayer for any taxable year only if such tax- 23 payer elects (at such time and in such manner as 24 VerDate Sep 11 2014 22:48 Dec 16, 2019 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H5402.IH H5402 kjohnson on DSK79L0C42 with BILLS 6 •HR 5402 IH the Secretary may by regulations prescribe) to have 1 this section apply for such taxable year.’’. 2 (b) CREDIT MADE PART OF GENERAL BUSINESS 3 CREDIT.—Subsection (b) of section 38 of the Internal 4 Revenue Code of 1986 is amended by striking ‘‘plus’’ at 5 the end of paragraph (31), by striking the period at the 6 end of paragraph (32) and inserting ‘‘, plus’’, and by add- 7 ing at the end the following new paragraph: 8 ‘‘(33) the credit determined under section 9 45T.’’. 10 (c) CLERICAL AMENDMENT.—The table of sections 11 for subpart D of part IV of subchapter A of chapter 1 12 of such Code is amended by adding at the end the fol- 13 lowing new item: 14 ‘‘Sec. 45T. Clinical testing expenses for certain high-risk, high-reward drugs.’’. (d) EFFECTIVE DATE.—The amendments made by 15 this section shall apply to taxable years beginning after 16 the date of the enactment of this Act. 17 Æ VerDate Sep 11 2014 22:48 Dec 16, 2019 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6301 E:\BILLS\H5402.IH H5402 kjohnson on DSK79L0C42 with BILLS