WASHINGTON, April 7 (UPI) -- A biotechnology industry group said Friday it backs a new bill providing tax credits that the group said are critical to biotech R&D.
The Biotechnology Industry Organization said the new legislation -- dubbed the Healthcare Technologies Competitiveness Act -- updates current corporate and investor tax laws and offers a range of incentives for new research.
For example, the bill amends the Orphan Drug Credit law to allow expenditures incurred after a new product application is submitted, but before an FDA orphan designation, to qualify for the tax credit.
The bill would also provide a 40-percent credit on qualified medical research expenses expected to lead to the development of a medical product performed at medical schools, teaching hospitals and National Institutes of Health-designated centers.
According to BIO, the biotechnology industry generated a total net loss of $6.4 billion in 2004, an 18 percent increase over 2003.
But "despite this fact, research and development expenditures increased by 15.7 percent. For every $1 of sales in 2004, there was roughly 60 cents of R&D spent by biotechnology companies," the group said.
"Attracting sufficient equity capital to fund critical research is often a challenging task for the industry," said BIO Chief Jim Greenwood. "This problem is exacerbated by an outdated tax regime that was largely set in place well before the advent of the modern biotechnology industry."
