Research and development (R&D) scientists may have been feeling down in the dumps lately. Many of them have lost their jobs in the last few months as a result of mergers and cost-cutting projects. But these sometimes underappreciated workers may soon get more respect, thanks to a US government initiative.
On Friday, the US Treasury released details about its Therapeutic Discovery Project Program, which was created by the Affordable Care Act to support small pharmaceutical and biopharmaceutical companies’ research efforts. The program’s goals are to promote the development of new therapies, create US jobs, and increase US firms’ competitiveness.
Companies with 250 employees or fewer can apply for tax credits worth as much as 50% of the cost of qualifying research investments. Each company could earn a maximum credit of $5 million. To provide an immediate boost to the industry, the credit will cover research investments made in 2009 and 2010. To startup firms that have not yet become profitable and thus cannot take advantage of a tax credit, the Treasury will offer grants.
On Friday, the Internal Revenue Service published guidance that explains how firms can apply to have their research projects certified as eligible for the credit. Projects must show “significant potential to produce new therapies, address unmet medical needs, reduce the long-term growth of healthcare costs, and advance the goal of curing cancer within the next 30 years,” according to a statement from the US Treasury. The application period begins on June 21, 2010 and lasts through July 21, 2010.
It’s heartening to see the US government try to encourage the development of new treatments, especially in a difficult economy. With luck, the industry’s pipelines and the country’s patients will both benefit. The Therapeutic Discovery Project Program should remind industry of just how valuable R&D scientists are, and I hope it encourages small firms to hire more of them. The program might just put a spring back in the step of these researchers.