Innovation is one of the things Americans do best and when it comes to creating new therapies, it’s also a key to job growth, strong small businesses, and our industry’s ability to address the needs of patients suffering from debilitating diseases such as cancer, HIV/AIDS and Alzheimer’s.
The recently implemented Therapeutic Discovery Project Program offers a tax credit to small biotechnology companies on the cusp of discovering cutting-edge treatments and technologies that will have a lasting impact on patient care. Through the tax credit, small biotech firms will be able to hire new employees, expand their research and invest in the development of lifesaving therapies and cures for patients suffering from serious diseases. The law mandates that special consideration be given to projects with the promise of curing cancer.
The scientific innovation supported by this credit will impact people across the country, including patients and small businesses in Pennsylvania, where the biotech sector is an increasingly important segment of the local economy. During consideration of health care reform, both Sen. Bob Casey (D-Pa.) and Rep. Allyson Schwartz (D-Pa.) worked diligently with their colleagues in the Senate and House to help make the tax credit a reality.
We knew the credit would be well-received by the biotech community – and I learned first-hand when Rep. Schwartz and I recently met with a group of researchers, business leaders and patient advocates at Temple University’s Fort Washington campus to discuss the potential the credit holds for Southeastern Pennsylvania businesses and sustaining thousands of high-quality, high-wage jobs.
During the discussion, one local CFO noted that his company was running out of cash due to costly studies into a new treatment for skin cancer. With his funding nearly exhausted, he noted a $1 million tax credit would provide the safety net his company needs to complete the studies and, if study results are positive, apply for Food and Drug Administration approval. The outcome could mean the difference between life and death for millions of people diagnosed with skin cancer. Another executive told us that a tax credit of less than $400,000 meant the difference between keeping his firm’s research into a deadly colon infection on track and terminating it.
This tax credit helps ensure that the next miracle drug does not languish in the lab or remain stuck on a shelf due to lack of funding. The importance of this type of program to expedite the development of promising therapies cannot be overstated.
To put this provision in perspective, Herceptin, which cuts the chance of breast cancer recurrence in half, would not be available to patients today without investment and capital from similar programs.
This tax credit comes at a critical time. Developing biotech treatments and therapies is an uphill climb, and the investment needed is staggering. It can take more than a decade and more than $1 billion dollars to bring a new drug to market. Many small biotech companies in Pennsylvania and across the country face tremendous challenges in raising this type of capital, particularly in today’s economy.
We’re looking forward to late October when the grants will be announced – and to working with other Members of Congress and companies who are invested in creating fertile economic ground for a thriving biotech sector across the United States. Several thousand companies applied for the $1 billion in grants. We believe that extension of this program could help the majority of these companies bring innovative new therapies to waiting patients.