H.R.1414 - Cameron’s Law (119th Congress)
Summary
H.R. 1414, also known as Cameron's Law, aims to amend the Internal Revenue Code of 1986 to restore the orphan drug tax credit to its previous level. Specifically, the bill proposes changing Section 45C(a) of the code by increasing the tax credit from 25 percent to 50 percent. This change would apply to taxable years beginning after the enactment of the Act.
The bill is intended to incentivize pharmaceutical companies to invest in the development of drugs for rare diseases. These diseases, often neglected due to smaller patient populations, would benefit from increased research and development.
The bill was introduced in the House of Representatives by Mr. Gottheimer, along with Mr. Bacon, Mr. Panetta, and Mr. Suozzi, and was referred to the Committee on Ways and Means.
Expected Effects
If enacted, Cameron's Law would increase the tax credit available to pharmaceutical companies for developing orphan drugs. This could lead to increased investment in research and development for treatments of rare diseases. Ultimately, it could result in more available treatments for individuals suffering from these conditions.
The immediate effect would be a reduction in federal tax revenue due to the increased tax credit. However, this could be offset by potential long-term savings in healthcare costs and increased economic activity from the pharmaceutical sector.
Furthermore, the change could encourage more companies to enter the orphan drug market, fostering competition and innovation.
Potential Benefits
- Increased Research and Development: The higher tax credit incentivizes pharmaceutical companies to invest more in developing treatments for rare diseases.
- More Available Treatments: With increased R&D, more drugs for rare diseases are likely to be developed and brought to market.
- Improved Patient Outcomes: Patients with rare diseases will have access to more treatment options, potentially improving their health outcomes and quality of life.
- Economic Growth: The pharmaceutical sector could see growth due to increased investment and innovation.
- Attract Investment: The US becomes a more attractive place to invest in pharmaceutical research.
Potential Disadvantages
- Reduced Tax Revenue: The increased tax credit will reduce federal tax revenue, potentially increasing the budget deficit.
- Potential for Abuse: There is a risk that pharmaceutical companies could exploit the tax credit without genuinely focusing on rare disease treatments.
- Increased Drug Prices: Companies may still set high prices for orphan drugs, even with the tax credit, making them unaffordable for some patients.
- Administrative Burden: The IRS will need to monitor and enforce the tax credit, which could create an administrative burden.
- Unintended Consequences: The change could distort investment decisions, leading to less investment in other areas of healthcare.
Most Disadvantaged Areas:
Constitutional Alignment
The bill appears to align with the general welfare clause of the Constitution, as it aims to promote the health and well-being of individuals with rare diseases. The Constitution grants Congress the power to lay and collect taxes to provide for the general welfare of the United States.
Article I, Section 8, Clause 1 grants Congress the power to lay and collect taxes, duties, imposts, and excises, to pay the debts and provide for the common defense and general welfare of the United States. This bill falls under the power of Congress to lay taxes to promote the general welfare.
There are no apparent constitutional conflicts, as the bill does not infringe on any individual rights or freedoms guaranteed by the Constitution or its amendments.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).