[Congressional Record Volume 144, Number 56 (Thursday, May 7, 1998)]
[Extensions of Remarks]
[Page E803]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


         INTRODUCTION OF THE MEDICAL INNOVATION TAX CREDIT BILL

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                            HON. SAM JOHNSON

                                of texas

                    in the house of representatives

                         Thursday, May 7, 1998

  Mr. SAM JOHNSON of Texas. Mr. Speaker, I rise today to introduce 
legislation to establish the Medical Innovation Tax Credit with my 
colleague, Sander M. Levin. This new credit will provide an important 
incentive for companies to expand their pioneering clinical research 
activities at our nation's leading medical institutions such as M.D. 
Anderson, the University of Texas, and the University of Michigan. By 
promoting more medical research, the credit will help enhance the 
development of new products and therapies to prevent, treat and cure 
serious medical conditions and diseases.
  The Medical Innovation Tax Credit establishes a narrowly targeted, 
incremental 20% credit in the Internal Revenue Code. The credit is 
available to companies for qualified expenditures on human clinical 
trials conducted at medical schools, teaching hospitals that are under 
common ownership or affiliated with an institution of higher learning, 
or by non-profit research hospitals that are designated as cancer 
centers by the National Cancer Institute (NCI).
  The additional private sector investment generated by the Medical 
Innovation Tax Credit is also essential so that medical schools and 
teaching hospitals can continue to fulfill their unique and vital roles 
that benefit both the health of the American public and the economy. 
These institutions are the backbone of innovation in American medicine. 
By linking together research, medical training and patient care, they 
develop and employ the knowledge that can result in major medical 
breakthroughs.
  Today, however, they are under increased financial pressures as 
markets for health care services undergo rapid, fundamental change. 
These financial pressures may have an adverse impact on funds 
traditionally dedicated for research. Recent reports indicate that 
there has been a decline in clinical trials at medical schools and 
teaching hospitals. This decline is troubling, since it signals that 
research dollars are shrinking at our nation's leading medical research 
institutions. A new infusion of funds for expanded clinical research 
activities, stimulated by the Medical Innovation Tax Credit, can help 
stem and reverse this trend. Moreover, continued and expanded 
investment in our leading medical research institutions will ensure 
that the United States maintains its position as the leader in 
innovative, biomedical research.
  The credit also provides an important incentive for research 
activities to remain in the United States since only domestic clinical 
research activities are eligible for the credit. This requirement will 
encourage biotechnology and pharmaceutical companies to keep their 
clinical trial research projects at home by decreasing the economic 
incentive to move such activities to ``lower-cost'' facilities off-
shore.
  I urge all of my colleagues to support this important legislation. 
The Medical Innovation Tax Credit will strengthen the partnership 
between the private sector and our nation's leading medical 
institutions to ensure America's continued world leadership in research 
and medical innovation.

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