HR1414-119

What This Bill Does

Cameron's Law changes Internal Revenue Code section 45C. The orphan drug tax credit for qualified clinical testing expenses would rise from 25 percent to 50 percent for taxable years beginning after enactment. That restores a larger federal subsidy for clinical trials of drugs treating rare diseases or conditions. The bill's tradeoff is direct: rare-disease drug developers get stronger tax support for testing, while federal revenue falls because a larger share of qualifying expenses offsets tax liability.

Who Benefits and How

Rare disease drug developers benefit because half of qualified clinical testing expenses can be claimed as a tax credit. Rare disease patients benefit if stronger trial incentives lead to more orphan drug development. Biotechnology startups benefit because the credit improves after-tax financing for small patient-population trials. Clinical research organizations benefit if sponsors fund more orphan drug testing.

Who Bears the Burden and How

Federal taxpayers bear the revenue cost of increasing the orphan drug credit rate. The Internal Revenue Service must administer the restored 50 percent credit. Budget writers must account for lower tax receipts from qualifying orphan drug clinical testing. Drug sponsors must document qualified clinical testing expenses to claim the larger credit.

Key Provisions

• Amends section 45C to increase the orphan drug credit from 25 percent to 50 percent.
• Provides the restored credit rate for taxable years beginning after enactment.
• Authorizes stronger tax support for clinical testing of orphan drugs treating rare diseases or conditions.
• Expands the federal tax subsidy for qualifying drug-development expenses.