June 3, 2011 (Washington D.C.) – Congresswoman Susan Davis (D-San Diego) last week introduced legislation to spark innovation within San Diego’s biotech and medical device industry. The Therapeutic Tax Credit Act would provide federal assistance through tax credits and grants to develop promising new lifesaving medications or medical devices.
“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. “Medical technology industries create products that improve human health and help Americans to manage illnesses. Americans will ultimately live healthier and more productive lives with the investment made by the program. These fields also provide high-paying and stable employment, and investment will lead to additional hiring.”
Rep. Allyson Schwartz (D-PA) joined Davis in introducing the bill.
“From scientists and business leaders to doctors and researchers, every single day critical work is done in America in field of biotechnology, one of the leading growth industries in the 21st century global economy. Biotechnology companies are transforming the field of medicine by developing life-saving cures and groundbreaking new and improved medicine. 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 Rep. Schwartz.
The Patient Protection and Affordable Care Act authorized the Qualifying Therapeutic Discovery Project Program to encourage innovation in biotechnology and medical device technology. The program expired at the end of 2010 after successfully providing $2 billion in funding to keep the United States on the cutting edge of medical technology innovation.
The Davis-Schwartz legislation reauthorizes the program through 2015. A total of $1 billion would be available for innovation and development each year for products that show promise in curing or managing serious illnesses. The cost of the legislation is fully offset by reducing funding for federal programs deemed duplicative by the Government Accountability Office (GAO).
BIOCOM and the California Healthcare Institute (CHI) both support the bill.
“Extending the Therapeutic Discovery Tax Credit is key to bolstering our nation’s innovative biotechnology sector, which, due to the capital markets crisis, is facing reduced funding, the threat of lost jobs and, most important, slowdowns in the development of new medicines for patients," said David L. Gollaher, Ph.D., President and CEO, California Healthcare Institute (CHI) in La Jolla.
California-based firms alone were awarded over $280 million under the original $1 billion credit, for projects targeting dread diseases and conditions such as cancer, spinal cord injury, tuberculosis, Parkinson’s, hepatitis, diabetes and heart disease, he noted. "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," Gollaher concluded.
Davis has previously secured millions of dollars in funding from the National Institutes of Health for the San Diego region to foster medical and scientific breakthroughs as well as job creation.