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 highrisk, 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 addition to the Committee on Energy and Commerce, for a period to be subsequently 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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Protecting America’s 

5 Life Saving Medicines Act of 2019’’. 


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1 SEC. 2. STUDY ON HIGH-RISK, HIGH-REWARD DRUGS. 

2 (a) IN GENERAL.—Not later than 180 days after the 

3 date of the enactment of this Act, the Secretary of Health 

4 and Human Services, acting through the Commissioner of 

5 Food and Drugs, shall conduct a study to determine which 

6 of the drugs that are being tested (as of such date of en7 actment) under subsection (i) of section 505 of the Fed8 eral Food, Drug, and Cosmetic Act (21 U.S.C. 355) are 

9 unlikely to be approved under subsection (c) of such sec10 tion, but would, if approved, address an unmet medical 

11 need for the treatment of a serious or life-threatening dis12 ease or condition or a rare disease or condition. 

13 (b) SUBMISSION TO TREASURY.—Not later than 180 

14 days after the completion of the study under subsection 

15 (a), the Secretary of Health and Human Services, acting 

16 through the Commissioner of Food and Drugs, shall trans17 mit to the Secretary of the Treasury (or the Secretary’s 

18 delegate) a list of the drugs that the Secretary of Health 

19 and Human Services determines meets the criteria speci20 fied in subsection (a). 

21 SEC. 3. CREDIT FOR CLINICAL TESTING EXPENSES FOR 

22 CERTAIN HIGH-RISK, HIGH-REWARD DRUGS. 

23 (a) IN GENERAL.—Subpart D of part IV of sub24 chapter A of chapter 1 of the Internal Revenue Code of 

25 1986 is amended by adding at the end the following new 

26 section: 


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1 ‘‘SEC. 45T. CLINICAL TESTING EXPENSES FOR CERTAIN 

2 HIGH-RISK, HIGH-REWARD DRUGS. 

3 ‘‘(a) IN GENERAL.—For purposes of section 38, the 

4 credit determined under this section for the taxable year 

5 is an amount equal to 25 percent of the qualified clinical 

6 testing expenses for the taxable year. 

7 ‘‘(b) QUALIFIED CLINICAL TESTING EXPENSES.— 

8 For purposes of this section— 

9 ‘‘(1) QUALIFIED CLINICAL TESTING EX10 PENSES.— 

11 ‘‘(A) IN GENERAL.—Except as otherwise 

12 provided in this paragraph, the term ‘qualified 

13 clinical testing expenses’ means the amounts 

14 which are paid or incurred by the taxpayer dur15 ing the taxable year which would be described 

16 in subsection (b) of section 41 if such sub17 section were applied with the modifications set 

18 forth in subparagraph (B). 

19 ‘‘(B) MODIFICATIONS.—For purposes of 

20 subparagraph (A), subsection (b) of section 41 

21 shall be applied— 

22 ‘‘(i) by substituting ‘clinical testing’ 

23 for ‘qualified research’ each place it ap24 pears in paragraphs (2) and (3) of such 

25 subsection, and 


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1 ‘‘(ii) by substituting ‘100 percent’ for 

2 ‘65 percent’ in paragraph (3)(A) of such 

3 subsection. 

4 ‘‘(C) EXCLUSION FOR AMOUNTS FUNDED

5 BY GRANTS, ETC.—The term ‘qualified clinical 

6 testing expenses’ shall not include any amount 

7 to the extent such amount is funded by any 

8 grant, contract, or otherwise by another person 

9 (or any governmental entity). 

10 ‘‘(2) CLINICAL TESTING.—The term ‘clinical 

11 testing’ means any human clinical testing— 

12 ‘‘(A) which is carried out with respect to a 

13 drug on a list submitted to the Secretary under 

14 subsection (b) of the Protecting America’s Life 

15 Saving Medicines Act of 2019, 

16 ‘‘(B) which occurs— 

17 ‘‘(i) after the date such list is so sub18 mitted, and 

19 ‘‘(ii) before the date on which an ap20 plication with respect to such drug is ap21 proved under section 505(b) of such Act 

22 or, if the drug is a biological product, be23 fore the date on which a license for such 

24 drug is issued under section 351 of the 

25 Public Health Service Act. 


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1 ‘‘(c) COORDINATION WITH CREDIT FOR INCREASING

2 RESEARCH EXPENDITURES.— 

3 ‘‘(1) IN GENERAL.—Except as provided in para4 graph (2), any qualified clinical testing expenses for 

5 a taxable year to which an election under this sec6 tion applies shall not be taken into account for pur7 poses of determining the credit allowable under sec8 tion 41 for such taxable year. 

9 ‘‘(2) EXPENSES INCLUDED IN DETERMINING

10 BASE PERIOD RESEARCH EXPENSES.—Any qualified 

11 clinical testing expenses for any taxable year which 

12 are qualified research expenses (within the meaning 

13 of section 41(b)) shall be taken into account in de14 termining base period research expenses for pur15 poses of applying section 41 to subsequent taxable 

16 years. 

17 ‘‘(d) SPECIAL RULES.— 

18 ‘‘(1) CERTAIN RULES MADE APPLICABLE.— 

19 Rules similar to the rules of paragraphs (1) and (2) 

20 of section 41(f) shall apply for purposes of this sec21 tion. 

22 ‘‘(2) ELECTION.—This section shall apply to 

23 any taxpayer for any taxable year only if such tax24 payer elects (at such time and in such manner as 


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1 the Secretary may by regulations prescribe) to have 

2 this section apply for such taxable year.’’. 

3 (b) CREDIT MADE PART OF GENERAL BUSINESS

4 CREDIT.—Subsection (b) of section 38 of the Internal 

5 Revenue Code of 1986 is amended by striking ‘‘plus’’ at 

6 the end of paragraph (31), by striking the period at the 

7 end of paragraph (32) and inserting ‘‘, plus’’, and by add8 ing at the end the following new paragraph: 

9 ‘‘(33) the credit determined under section 

10 45T.’’. 

11 (c) CLERICAL AMENDMENT.—The table of sections 

12 for subpart D of part IV of subchapter A of chapter 1 

13 of such Code is amended by adding at the end the fol14 lowing new item: 

‘‘Sec. 45T. Clinical testing expenses for certain high-risk, high-reward drugs.’’. 

15 (d) EFFECTIVE DATE.—The amendments made by 

16 this section shall apply to taxable years beginning after 

17 the date of the enactment of this Act. 

Æ 


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