From the Office of Senator Kerry

Tuesday, May 15, 2001

Washington, DC – Senator John F. Kerry (D-MA) and Senator Bill Frist (R-TN) today introduced legislation to provide tax incentives for biotech and research companies who accelerate research, development, and distribution of vaccines for HIV and other infectious diseases that kill more than one million people annually.

Senator Kerry said, "The AIDS crisis has never been so devastating or so urgent. In less than two decades AIDS has become a global epidemic endangering the lives of millions, the majority of them in developing countries. Vaccines are the most effective weapons in the arsenal of modern medicine to stop the threat of AIDS and other infectious diseases. These drugs are critically important -- the war against AIDS cannot be won unless we develop vaccines against the HIV virus and related infectious diseases. This legislation encourages the pharmaceutical and biotech companies that hold the key to this crisis to redouble their efforts to find a vaccine for these critical diseases."

The Kerry Frist vaccine bill would:

• Provide a 30% tax credit each year on qualified research expenses to develop a vaccine for HIV and vaccines for HIV, TB, malaria and other infectious diseases that kill more than 1 million people annually. This is an expansion of the existing 20 % Research and Development tax credit.

• Provide a refundable tax credit to small biotechnology companies based on the amount of qualified research that they do in a given year. Because Biotech firms are among the most innovative, increased research efforts by these firms could be instrumental to the effort to develop effective vaccines, particularly for HIV/AIDS.

• Provide a 100% tax credit on contracts and other arrangements for research and development of these vaccines. This credit, which is an increase over the 65% credit now in the tax code, is designed to serve as an incentive to larger pharmaceutical companies to work hand in hand with the smaller biotech companies to increase the pace of vaccine development."