Page:United States Statutes at Large Volume 96 Part 2.djvu/692

 96 STAT. 2054

PUBLIC LAW 97-414—JAN. 4, 1983 SI' *

"(C) EXCLUSION FOR AMOUNTS FUNDED BY GRANTS, ETC.—

The term 'qualified clinical testing expenses' shall not inelude any amount to the extent such amount is funded by any grant, contract, or otherwise by another person (or any governmental entity). "(D) SPECIAL RULE.—For purposes of this paragraph, section 44F shall be deemed to remain in effect for periods after December 31, 1985.

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"(2) CLINICAL TESTING.—

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"(A) IN GENERAL.—The term 'clinical testing' means any human clinical testing— "(i) which is carried out under an exemption for a drug being tested for a rare disease or condition under section 505(i) of the Federal Food, Drug, and Cosmetic Act (or regulations issued under such section), "(ii) which occurs— "(I) after the date of such drug is designated under section 526 of such Act, and "(II) before the date on which an application with respect to such drug is approved under section 505(b) of such Act, and "(iii) which is conducted by or on behalf of the taxpayer to whom the designation under such section 526 applies.

21 USC 355.

"(B) TESTING MUST BE RELATED TO USE FOR RARE DISEASE OR

Ante, p. 2050.

CONDITION.—Human clinical testing shall be taken into account under subparagraph (A) only to the extent such testing is related to the use of a drug for the rare disease or condition for which it was designated under section 526 of the Federal Food, Drug, and Cosmetic Act.

"(c) COORDINATION WITH CREDIT FOR INCREASING RESEARCH EXPENDITURES.—

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"(1) IN GENERAL.—Except as provided in paragraph (2), any qualified clinical testing expenses for a taxable year to which an election under this section applies shall not be taken into account for purposes of determining the credit allowable under section 44F for such taxable year.

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"(2) EXPENSES INCLUDED IN DETERMINING BASE PERIOD RE-

SEARCH EXPENSES.—Any qualified clinical testing expenses for any taxable year which are qualified research expenses (within i the meaning of section 44F(b)) shall be taken into account in determining base period research expenses for purposes of applying section 44F to subsequent taxable years. "(d) DEFINITION AND SPECIAL RULES.-:"(1) RARE DISEASE OR CONDITION.—For



purposes of this section, the term 'rare disease or condition' means any disease or condition which occurs so infrequently in the United States that there is no reasonable expectation that the cost of developing and making available in the United States a drug for such disease or condition will be recovered from sales in the United States of such drug. Determinations under the preceding sentence with respect to any drug shall be made on the basis of the facts and circumstances as of the date such drug is designated under section 526 of the Federal Food, Drug, and Cosmetic Act. "(2) LIMITATION BASED ON AMOUNT OF TAX.—The credit al-

V lowed by this section for any taxable year shall not exceed the amount of the tax imposed by this chapter for the taxable year

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