The government’s Qualifying Therapeutic Discovery Project Program is doing what it was intended to do, according to a recent survey of senior executives at small biotechnology companies.
The 226 surveyed biotech execs say the tax incentives program already has begun to benefit the biotech industry by creating and sustaining high-wage jobs in the life sciences sector; advancing development of new lifesaving therapies and cures; and keeping U.S. biotech companies from moving operations to other countries.
Those are the findings of the recently released “Therapeutic Discovery Project (TDP) Post-Award Survey” conducted for BIO by market researcher Penn Schoen Berland.
In the fall, the Internal Revenue Service announced that nearly 3,000 projects would be eligible to receive grants and tax credits through the federal program. The incentives are a vital component in keeping the United States competitive in the biomedical industry, most survey respondents agreed.
The Qualifying Therapeutic Discovery Project Program was enacted as part of the Patient Protection and Affordable Care Act of 2010 and is available only to companies with 250 or fewer employees. The program targets projects that show potential to create new therapies to:
treat areas of unmet medical need;
prevent, detect or treat chronic and acute diseases and conditions;
reduce long-term growth of healthcare costs in the United States;
significantly advance the goal of curing cancer within 30 years.
“This survey demonstrates that the Therapeutic Discovery Project — and programs like it — can accelerate our industry’s ability to develop new treatments for individuals living with cancer, Alzheimer’s, multiple sclerosis and many other debilitating diseases, while preserving and creating new high-wage, high-value U.S. jobs,” said Jim Greenwood, BIO president and CEO. “But more is needed to secure our global leadership in developing these breakthroughs – we will be working this year to get the program renewed and expanded.”
The incentives program also encourages domestic biotech companies to stay in the United States rather than moving their production facilities to foreign countries.
Although not explicitly written into the IRS qualifications for the tax credit, the program’s ability to keep jobs in the United States is critical, Greenwood noted.
The hope is that these survey results will encourage lawmakers to extend the program, particularly because the biotech industry is so dependent on investment in the current uncertain financial environment, said Russell Herndon, president and CEO of Hydra Biosciences, which is a TDP recipient.
Late last year, before the program’s recipients were announced, many executives noted that they had been approached by foreign countries recruiting them to move some or all of their operations abroad. A majority of the company officials pointed out that the opportunity to apply for, and potentially receive, a tax credit greatly increased the likelihood that they would keep their companies’ operations in the United States.
“This program can provide a critical lifeline for innovative biotechnology companies,” Greenwood said. “American biotech offers the hope of new cures and treatments for patients around the world. We hope Congress will consider extending and expanding this program to support American innovation and speed the development of lifesaving cures.”