Biotech industry waits for shot in the arm
California, Pennsylvania reps co- sponsor renewal bill for Qualifying Therapeutic Discovery Project
WASHINGTON, D.C.—A bill that could give the biotech industrya financial boost is getting Congressional support from two legislators. TheQualifying Therapeutic Discovery Project, a one-time grant program announced in2010, funded $1 billion into biotech research and development, and now Reps.Susan Davis, D-Calif., and Allyson Schwartz, D-Pa., are proposing a bill thatwill extend the program's annual allocation of $1 billion through fiscal year2017.
"It's important to encourage innovation in the areas inwhich it has a competitive advantage, such as biotechnology and medical devicedevelopment," said Davis in a statement. "These fields also provide high-payingand stable employment, and investment will lead to additional hiring."
The program, authorized by the Patient Protection andAffordable Care Act, parcels out the funding to projects that show potential toproduce new therapies in areas of unmet medical need, reduce long-term costsfor healthcare or significantly advance the goal of finding a cure for cancerwithin the next 30 years. The potential of projects to create and sustainhigh-quality, high-paying U.S. jobs and advance competitiveness in life,biological and medical sciences is also considered, according to the NationalInstitutes of Health (NIH) website. Only taxpayers with no more than 250employees can receive funding from the act. The grant covers up to 50 percentof 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 areexactly the types of investments we must make to ensure America leads in aglobal economy driven by innovation and forward-thinking ideas," said Schwartzin a statement on her website.
Despite the support the bill received in 2010 and theresponsive interest from biotech companies, the Qualifying TherapeuticDiscovery Project was not without its issues. The funds were dispersed tonearly 3,000 firms from 47 states, resulting in the money being parceled out insmall amounts, and not as carefully as some would like.
"That wasn't what we considered ideal," BiotechnologyIndustry Organization (BIO) CEO Jim Greenwood noted in a press release. "Ourpreference would have been if the government, particularly the folks at [theNational Institutes of Health], had done more of a qualitative analysis of theprojects and rewarded those that they thought most promising in perhaps fewer,larger grants."
No new provisions are present within the bill to furthershape the allocation of the funds, however, so companies may face the samefrustrations unless some adjustments are made. Alan Eisenberg, executive vicepresident of emerging companies and business development at BIO, says theprogram "was oversubscribed," and notes that in addition to extra funding, theprogram also needs to adjust the review process to be "transparent and clearlycommunicated to companies submitting applications."
Still, the program's effectiveness is undeniable. In asurvey conducted for BIO by market researcher Penn Schoen Berland, titled "TherapeuticDiscovery Project (TDP) Post-Award Survey," 226 executives whose companies wereawarded Therapeutic Discovery Project credits or grants were surveyed. Thesurvey revealed that on average, the TDP funds created six jobs and sustainedseven others, and 80 percent of CEOs agreed that the TDP funds are important tothe viability and survivability of their companies. Sixty-two percent of theCEOs said the funds were very likely to advance the progress of their projects,which fell into areas such as oncology, neurology, autoimmunity andcardiovascular disease. Additionally, approximately three in 10 companies thatreceived TDP funds were approached to move their operations abroad, and threein five of those companies said the TDP funds make them more likely to stay inthe United States.
"Recognizing the still uncertain economic conditions, CHIthanks Representatives Davis and Schwartz for their bill to extend the programin order to advance promising research and development, while protecting andcreating new jobs," said Dr. David L. Gollaher, president and CEO of theCalifornia 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)