[Congressional Record (Bound Edition), Volume 147 (2001), Part 4]
[Extensions of Remarks]
[Page 5120]
[From the U.S. Government Publishing Office, www.gpo.gov]



               ``THE ORPHAN DRUG TAX CREDIT ACT OF 2001''

                                 ______
                                 

                            HON. KEVIN BRADY

                                of texas

                    in the house of representatives

                        Thursday, March 29, 2001

  Mr. BRADY of Texas. Mr. Speaker, I am pleased to introduce the 
``Orphan Drug Tax Credit Act of 2001''. The purpose of this legislation 
is to remedy a problem that has arisen with regard to the Orphan Drug 
Tax Credit.
  This credit, which Congress made permanent in 1996, was enacted in 
order to encourage biotechnology and pharmaceutical companies to 
develop therapies for rare diseases and conditions. The credit applies 
to 50% of qualified clinical trial expenses incurred with respect to 
drugs that are designated as ``orphan'' by the Food and Drug 
Administration (FDA).
  The designation process requires a finding by the FDA that the drug 
under development meets the statutory definition of an ``orphan'', that 
it is intended for treatment of a patient population of less than 
200,000. Unfortunately, this process can take from two months to longer 
than a year. The end result, is that in some cases, companies find 
themselves in the difficult position of either having to: (1) postpone 
the start of their clinical trials until the designation is received, 
thereby delaying important research and patient access; (2) or 
beginning the research before designation, thereby increasing the cost 
of the product's development. Neither choice is in the interest of the 
patient.
  The ``Orphan Drug Tax Credit of 2001'' would solve this dilemma by 
providing that the credit will cover the costs of qualified clinical 
trial expenses of a designated orphan drug, regardless of whether such 
expenses were incurred before or after the designation was granted, 
provided the designation was actually received. This legislation would 
go into effect upon the date of enactment.
  This bill passed both the House and Senate twice in the last 
Congress. It was included in H.R. 2488, the ``Financial Freedom Act of 
1999'' which was vetoed by President Clinton for unrelated reasons. The 
provision was also included in H.R. 2990, which passed the House on 
October 6, 1999, and in H.R. 4577, the ``Department of Labor, Health 
and Human Services, and Education, and Related Agencies Appropriations, 
2001,'' which passed the Senate on July 10, 2000. The time has arrived 
for us to move this legislation in final form and I am hopeful that it 
can be included in a tax package this year.

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