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Biotech industry waits for shot in the arm
WASHINGTON, D.C.—A bill that could give the biotech industry a financial boost is getting Congressional support from two legislators. The Qualifying Therapeutic Discovery Project, a one-time grant program announced in 2010, funded $1 billion into biotech research and development, and now Reps. Susan Davis, D-Calif., and Allyson Schwartz, D-Pa., are proposing a bill that will extend the program's annual allocation of $1 billion through fiscal year 2017.
"It's important to encourage innovation in the areas in which it has a competitive advantage, such as biotechnology and medical device development," said Davis in a statement. "These fields also provide high-paying and stable employment, and investment will lead to additional hiring."
The program, authorized by the Patient Protection and Affordable Care Act, parcels out the funding to projects that show potential to produce new therapies in areas of unmet medical need, reduce long-term costs for healthcare or significantly advance the goal of finding a cure for cancer within the next 30 years. The potential of projects to create and sustain high-quality, high-paying U.S. jobs and advance competitiveness in life, biological and medical sciences is also considered, according to the National Institutes of Health (NIH) website. Only taxpayers with no more than 250 employees can receive funding from the act. The grant covers up to 50 percent of qualifying biomedical research, up to a maximum of $5 million each, according to the Internal Revenue Service (IRS) website. The IRS and the U.S. Department of Health and Human Services consider all applications.
"Smart, targeted tax credits and grants like this effort are exactly the types of investments we must make to ensure America leads in a global economy driven by innovation and forward-thinking ideas," said Schwartz in a statement on her website.
Despite the support the bill received in 2010 and the responsive interest from biotech companies, the Qualifying Therapeutic Discovery Project was not without its issues. The funds were dispersed to nearly 3,000 firms from 47 states, resulting in the money being parceled out in small amounts, and not as carefully as some would like.
"That wasn't what we considered ideal," Biotechnology Industry Organization (BIO) CEO Jim Greenwood noted in a press release. "Our preference would have been if the government, particularly the folks at [the National Institutes of Health], had done more of a qualitative analysis of the projects and rewarded those that they thought most promising in perhaps fewer, larger grants."
No new provisions are present within the bill to further shape the allocation of the funds, however, so companies may face the same frustrations unless some adjustments are made. Alan Eisenberg, executive vice president of emerging companies and business development at BIO, says the program "was oversubscribed," and notes that in addition to extra funding, the program also needs to adjust the review process to be "transparent and clearly communicated to companies submitting applications."
Still, the program's effectiveness is undeniable. In a survey conducted for BIO by market researcher Penn Schoen Berland, titled "Therapeutic Discovery Project (TDP) Post-Award Survey," 226 executives whose companies were awarded Therapeutic Discovery Project credits or grants were surveyed. The survey revealed that on average, the TDP funds created six jobs and sustained seven others, and 80 percent of CEOs agreed that the TDP funds are important to the viability and survivability of their companies. Sixty-two percent of the CEOs said the funds were very likely to advance the progress of their projects, which fell into areas such as oncology, neurology, autoimmunity and cardiovascular disease. Additionally, approximately three in 10 companies that received TDP funds were approached to move their operations abroad, and three in five of those companies said the TDP funds make them more likely to stay in the United States.
"Recognizing the still uncertain economic conditions, CHI thanks Representatives Davis and Schwartz for their bill to extend the program in order to advance promising research and development, while protecting and creating new jobs," said Dr. David L. Gollaher, president and CEO of the California Healthcare Institute (CHI) , in a press release. CHI, along with BIOCOM, supports the new bill.
Biotechnology Industry Organization (BIO)
Penn Schoen Berland
California Healthcare Institute (CHI)