[Congressional Record Volume 144, Number 68 (Monday, June 1, 1998)]
[Senate]
[Pages S5521-S5522]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         ADDITIONAL STATEMENTS

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               MEDICAL INNOVATION TAX CREDIT ACT OF 1998

 Mr. ROCKEFELLER. Mr. President, I wish to draw attention to 
legislation I have cosponsored that will create the Medical Innovation 
Tax Credit. This bill will facilitate the development of lifesaving 
medical treatments at medical schools and teaching hospitals. I am 
pleased to join my colleagues, Senators D'Amato, Feinstein, Boxer, and 
Hutchison, in this initiative.
  In my own State of West Virginia, and throughout this country, 
academic medical centers are feeling the changes in the health care 
marketplace. With limited reimbursement under managed care and cuts in 
Medicare payments, these medical institutions are under increasing 
financial pressures.
  To compound these stressors, academic medical centers also support 
certain services, such as burn units or trauma centers, which are vital 
to the community but financially draining to a hospital's budget. West 
Virginia University's Ruby Memorial Hospital, for example, operates a 
trauma unit which serves as a lifeline to victims of serious injuries. 
Our legislation would help these academic medical centers to avoid 
choosing between research and the day-to-day activities associated with 
the running of a hospital.
  Under the Medical Innovation Tax Credit, pharmaceutical or 
biotechnology companies would receive a tax credit equal to 20 percent 
of the funds spent for medical research expenses conducted at eligible 
sites. This incentive will make them a more attractive site for 
clinical trials. Given the important role played by academic medical 
centers, I believe this support is warranted.
  Mr. President, our bill will add a freestanding section to the 
Internal Revenue Code to create this research incentive. It is intended 
to complement the existing research-targeted tax credits--the Research 
and Experimental Tax Credit and the Orphan Drug Tax Credit, both of 
which have been credited with stimulating billions of dollars in 
research. Initial clinical studies are just the beginning, however. 
Additional studies are frequently needed to determine combinations for 
administering drugs and for providing the most appropriate therapies to 
patients. The Medical Innovation Tax Credit is

[[Page S5522]]

geared toward promoting this type of research.
  Aside from medical schools and teaching hospitals, National Cancer 
Institute-designated centers will also be eligible sites. Peer-reviewed 
clinical trials are credited with providing cancer patients the best 
available care. Our legislation will indirectly promote these 
opportunities for care.
  Department of Veterans Affairs hospitals affiliated with teaching 
hospitals will also be eligible under the legislation. VA research is 
not only supported by an appropriation, but by private donations 
largely from pharmaceutical companies in support of clinical drugs 
trials. Clinical research conducted in VA medical centers has a 
significant and lasting impact on the care provided to veterans.
  Mr. President, if America is to continue leading in the field of 
biomedical research, we must do all we can to assure that valuable 
research programs at medical schools and teaching hospitals do not 
suffer because of financial pressures and changing market conditions. 
Research is just too important.
  I look forward to discussing this issue and pursuing the goal of this 
legislation in the coming months with my colleagues on the Finance 
Committee as we look at a variety of ways to improve and strengthen our 
valuable research program.

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