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-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Protecting America’s 
Life Saving Medicines Act of 2019’’. 
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SEC. 2. STUDY ON HIGH-RISK, HIGH-REWARD DRUGS. 
(a) IN GENERAL.—Not later than 180 days after the 
date of the enactment of this Act, the Secretary of Health 
and Human Services, acting through the Commissioner of 
Food and Drugs, shall conduct a study to determine which 
of the drugs that are being tested (as of such date of en-
actment) under subsection (i) of section 505 of the Fed-
eral Food, Drug, and Cosmetic Act (21 U.S.C. 355) are 
unlikely to be approved under subsection (c) of such sec-
tion, but would, if approved, address an unmet medical 
need for the treatment of a serious or life-threatening dis-
ease or condition or a rare disease or condition. 
(b) SUBMISSION TO TREASURY.—Not later than 180 
days after the completion of the study under subsection 
(a), the Secretary of Health and Human Services, acting 
through the Commissioner of Food and Drugs, shall trans-
mit to the Secretary of the Treasury (or the Secretary’s 
delegate) a list of the drugs that the Secretary of Health 
and Human Services determines meets the criteria speci-
fied in subsection (a). 
SEC. 3. CREDIT FOR CLINICAL TESTING EXPENSES FOR 
CERTAIN HIGH-RISK, HIGH-REWARD DRUGS. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following new 
section: 
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‘‘SEC. 45T. CLINICAL TESTING EXPENSES FOR CERTAIN 
HIGH-RISK, HIGH-REWARD DRUGS. 
‘‘(a) IN GENERAL.—For purposes of section 38, the 
credit determined under this section for the taxable year 
is an amount equal to 25 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— 
‘‘(i) by substituting ‘clinical testing’ 
for ‘qualified research’ each place it ap-
pears in paragraphs (2) and (3) of such 
subsection, and 
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‘‘(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). 
‘‘(2) CLINICAL
TESTING.—The term ‘clinical 
testing’ means any human clinical testing— 
‘‘(A) which is carried out with respect to a 
drug on a list submitted to the Secretary under 
subsection (b) of the Protecting America’s Life 
Saving Medicines Act of 2019, 
‘‘(B) which occurs— 
‘‘(i) after the date such list is so sub-
mitted, and 
‘‘(ii) before the date on which an ap-
plication with respect to such drug is ap-
proved under section 505(b) of such Act 
or, if the drug is a biological product, be-
fore the date on which a license for such 
drug is issued under section 351 of the 
Public Health Service Act. 
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‘‘(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-
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) SPECIAL RULES.— 
‘‘(1) 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. 
‘‘(2) 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 
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the Secretary may by regulations prescribe) to have 
this section apply for such taxable year.’’. 
(b) CREDIT MADE PART OF GENERAL BUSINESS 
CREDIT.—Subsection (b) of section 38 of the Internal 
Revenue Code of 1986 is amended by striking ‘‘plus’’ at 
the end of paragraph (31), by striking the period at the 
end of paragraph (32) and inserting ‘‘, plus’’, and by add-
ing at the end the following new paragraph: 
‘‘(33) the credit determined under section 
45T.’’. 
(c) CLERICAL AMENDMENT.—The table of sections 
for subpart D of part IV of subchapter A of chapter 1 
of such Code is amended by adding at the end the fol-
lowing new item: 
‘‘Sec. 45T. Clinical testing expenses for certain high-risk, high-reward drugs.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
Æ 
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