I 
114TH CONGRESS 
1ST SESSION H. R. 3539 
To amend the Internal Revenue Code of 1986 to allow a credit against 
tax for clinical testing expenses for qualified infectious disease drugs 
and rapid diagnostic tests. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 17, 2015 
Mr. BOUSTANY (for himself, Mr. THOMPSON of California, Mr. PAULSEN, Mr. 
SHIMKUS, and Mr. GENE GREEN of Texas) introduced the following bill; 
which was referred to the Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to allow a 
credit against tax for clinical testing expenses for quali-
fied infectious disease drugs and rapid diagnostic tests. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Reinvigorating Anti-
biotic and Diagnostic Innovation Act of 2015’’. 
SEC. 2. CLINICAL TESTING EXPENSES FOR QUALIFIED IN-
FECTIOUS DISEASE PRODUCTS. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
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1986 is amended by adding at the end the following new 
section: 
‘‘SEC. 45S. CLINICAL TESTING EXPENSES FOR QUALIFIED 
INFECTIOUS DISEASE PRODUCTS. 
‘‘(a) GENERAL RULE.—For purposes of section 38, 
the qualified infectious disease product credit determined 
under this section for the taxable year is an amount equal 
to 50 percent of the qualified clinical testing expenses for 
the taxable year. 
‘‘(b) QUALIFIED CLINICAL TESTING EXPENSES.— 
For purposes of this section— 
‘‘(1) 
QUALIFIED
CLINICAL
TESTING
EX-
PENSES.— 
‘‘(A) IN GENERAL.—Except as otherwise 
provided in this paragraph, the term ‘qualified 
clinical testing expenses’ means the amounts 
which are paid or incurred by the taxpayer dur-
ing the taxable year which would be described 
in subsection (b) of section 41 if such sub-
section were applied with the modifications set 
forth in subparagraph (B). 
‘‘(B) MODIFICATIONS.—For purposes of 
subparagraph (A), subsection (b) of section 41 
shall be applied— 
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‘‘(i) by substituting ‘clinical testing’ 
for ‘qualified research’ each place it ap-
pears in paragraphs (2) and (3) of such 
subsection, and 
‘‘(ii) by substituting ‘100 percent’ for 
‘65 percent’ in paragraph (3)(A) of such 
subsection. 
‘‘(C) EXCLUSION FOR AMOUNTS FUNDED 
BY GRANTS, ETC.—The term ‘qualified clinical 
testing expenses’ shall not include any amount 
to the extent such amount is funded by any 
grant, contract, or otherwise by another person 
(or any governmental entity). 
‘‘(D) SPECIAL
RULE.—For purposes of 
this paragraph, section 41 shall be deemed to 
remain in effect for periods after enactment of 
this section. 
‘‘(2) CLINICAL TESTING.— 
‘‘(A) IN
GENERAL.—The term ‘clinical 
testing’ means any human clinical testing— 
‘‘(i) which is carried out under an ex-
emption for a drug being tested as an anti-
biotic or antifungal drug under section 
505(i) of the Federal Food, Drug, and 
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Cosmetic Act (or regulations issued under 
such section), 
‘‘(ii) which occurs before the date on 
which an application with respect to such 
drug is approved under section 505(b) of 
such Act or, if the drug is a biological 
product, before the date on which a license 
for such drug is issued under section 351 
of the Public Health Service Act, and 
‘‘(iii) which is conducted by or on be-
half of the taxpayer to whom exemption 
under section 505(i) of such Act is grant-
ed. 
‘‘(B) TESTING MUST BE RELATED TO USE 
AS
QUALIFIED
INFECTIOUS
DISEASE
PROD-
UCT.—Human clinical testing shall be taken 
into account under subparagraph (A) only to 
the extent such testing is related to the use of 
the drug as a qualified infectious disease prod-
uct. 
‘‘(c) COORDINATION WITH CREDIT FOR INCREASING 
RESEARCH EXPENDITURES.— 
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), any qualified clinical testing expenses for 
a taxable year to which an election under this sec-
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tion applies shall not be taken into account for pur-
poses of determining the credit allowable under sec-
tion 41 for such taxable year. 
‘‘(2) EXPENSES
INCLUDED
IN
DETERMINING 
BASE PERIOD RESEARCH EXPENSES.—Any qualified 
clinical testing expenses for any taxable year which 
are qualified research expenses (within the meaning 
of section 41(b)) shall be taken into account in de-
termining base period research expenses for pur-
poses of applying section 41 to subsequent taxable 
years. 
‘‘(d) DEFINITIONS AND SPECIAL RULES.— 
‘‘(1) QUALIFIED
INFECTIOUS
DISEASE
PROD-
UCT.—For purposes of this section, the term ‘quali-
fied infectious disease product’ means any drug or 
biological product for human use that— 
‘‘(A) is intended to treat a serious or life- 
threatening infection, including those caused 
by— 
‘‘(i) an antibacterial or antifungal re-
sistant pathogen (including novel or emerg-
ing infectious pathogens), or 
‘‘(ii) qualifying pathogens listed by 
the Secretary of Health and Human Serv-
ices under section 505E(f) of the Federal 
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Food, Drug, and Cosmetic Act (21 U.S.C. 
351 et seq.), and 
‘‘(B) is intended to treat an infection for 
which there is an unmet medical need as de-
fined by the Secretary of Health and Human 
Services. 
‘‘(2) SPECIAL LIMITATION ON FOREIGN TEST-
ING.— 
‘‘(A) IN GENERAL.—No credit shall be al-
lowed under this section with respect to any 
clinical testing conducted outside the United 
States unless— 
‘‘(i) such testing is conducted outside 
the United States because there is an in-
sufficient testing population in the United 
States, and 
‘‘(ii) such testing is conducted by a 
United States person or by any other per-
son who is not related to the taxpayer to 
whom exemption under section 505(i) of 
the Federal Food, Drug, and Cosmetic Act 
is granted. 
‘‘(B) 
INSUFFICIENT
TESTING
POPU-
LATION.—For purposes of this section, the test-
ing population in the United States is insuffi-
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cient if there are not within the United States 
the number of available and appropriate human 
subjects needed to produce reliable and timely 
data from the clinical investigation. 
‘‘(3) CERTAIN
RULES
MADE
APPLICABLE.— 
Rules similar to the rules of paragraphs (1) and (2) 
of section 41(f) shall apply for purposes of this sec-
tion. 
‘‘(4) ELECTION.—This section shall apply to 
any taxpayer for any taxable year only if such tax-
payer elects (at such time and in such manner as 
the Secretary may by regulations prescribe) to have 
this section apply for such taxable year. 
‘‘(e) TRANSFERABILITY.— 
‘‘(1) IN
GENERAL.—Any taxpayer holding a 
credit under this section may transfer for valuable 
consideration unused but otherwise allowable credit 
for use by a qualified pharmaceutical research tax-
payer. A taxpayer that transfers any amount of 
credit under this section shall file a notification of 
such transfer to the Secretary in accordance with 
procedures and forms prescribed by the Secretary. 
‘‘(2) USE
OF
TRANSFERRED
CREDIT.—Any 
qualified pharmaceutical research taxpayer that re-
ceives credit that has been transferred shall use such 
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