Tag Archives: R&D tax credit
Today, Research!America urged the 114th Congress to take action on five science priorities in the first 100 days of the legislative session in order to elevate research and innovation on the nation’s agenda:
- Advance the 21st Century Cures Initiative. Spearheaded by Representatives Fred Upton (R-Mich.) and Diana DeGette (D-Colo.),the initiative is a promising step in the right direction, focusing on speeding medical progress from bench-to-bedside by integrating patient perspectives into the regulatory process, modernizing clinical trials, and reducing red tape, among other things.
- Repeal the medical device tax. A provision in the Affordable Care Act, efforts to repeal the medical device tax have garnered bipartisan support as policymakers and industry leaders raise concerns about the tax’s impact on jobs and innovation.
- Enhance and make the R&D tax permanent. The credit, established in 1981, allows companies to deduct certain research expenses, but the short-term extensions have created uncertainty for businesses that rely on long-term planning for research investments.
- Eliminate Sequestration. As part of the 2011 Budget Control Act, sequestration has taken a significant toll on the research ecosystem, forcing institutions to scale back or eliminate important studies and cut jobs. A two-year bipartisan budget deal for FY14 and FY15 reduced the cuts for those years, but the full sequester returns in FY16.
Excerpt of an op-ed by Research!America President and CEO Mary Woolley published in the Huffington Post.
As the new Congress sets priorities, there are strong indications that the political climate is ripe for a surge in science. Bipartisan support for the 21st Century Cures Initiative, a comprehensive study of roadblocks to medical innovation and development of new disease therapies and treatments, is slated to move forward with draft legislation early next year. The measure is expected to address six areas of reform: integrating patients’ perspectives into the regulatory process, modernizing clinical trials, fostering the future of science, investing in advancing research, incentivizing the development of new drugs and devices for unmet medical needs and supporting digital medicine. Research stakeholders ranging from academia to industry to patient groups are working closely with the architects of this initiative, Chairman Fred Upton (R-Mich.) and Rep. Diana DeGette (D-Colo.), to ensure the measure will remove barriers to getting new treatments and cures to patients more quickly.
There is also bipartisan support to reform tax legislation, a light or heavy lift depending on the tax package. All signs point to a repeal of the medical device tax in the new Congress but the jury is still out on whether the R&D tax credit can be made permanent and ultimately whether Congress is ready to tackle tax and entitlement reform overall. A favorable tax climate and strong investments in research are critical to improving our population’s health, boosting the economy and spurring further private sector innovation. With sustained federal funding at risk in a deficit reduction environment, alternative funding models to augment appropriations should be considered including but not limited to a mandatory trust fund dedicated to steady growth in research.
Read the full op-ed here.
Dear Research Advocate:
This week’s CDC announcement of the worst-case Ebola scenario is staggering. Saying, “Let’s be honest with ourselves …” President Obama addressed the UN this morning on the escalating threat posed by Ebola, urging world leaders to work together to address this truly global crisis. The Biomedical Advanced Research and Development Authority (BARDA) program, which received additional funding for Ebola drug development as part of the recently passed continuing resolution (CR), is a terrific example of how the public and private sectors can work together to develop drugs for national and global health threats like Ebola. BARDA provides market incentives so that private sector innovators can work on noncommercial emergencies. It’s a cost-effective strategy since it precludes the need for government to build drug development capacity the private sector already has, and it’s a good reminder that medical and health research is not about government funding, academic research, or private sector R&D. It’s about all of these things and all of us, working together to save lives.
Let’s be honest with ourselves about something else: policies that cripple private sector investment in research are stifling science. One such policy involves the research and development (R&D) tax credit, which – despite historical bipartisan support – expired at the end of 2013 and has not been reinstated. Businesses of all sizes across a wide swath of scientific sectors rely on predictable, annual extensions of this tax credit (not that annual extensions are ideal; Congress would also be wise to finally make this credit permanent). Please consider sending a message to your representatives about the importance of reinstating and enhancing the R&D tax credit. Here are two good resources, one nationwide quantitative analysis from the National Association of Manufacturers and one qualitative account of the effects on businesses in Pennsylvania. Members of Congress must work together and quickly upon their return to Washington after the election to not only reinstate the R&D tax credit, but to enhance its reach and effectiveness. And they must pass an appropriations package that recommits to scientific innovation. Note I use the word “must,” not “should.” When one assumes the role of leader, displaying leadership should not be an option.
And let’s be honest that we are under-investing in our federal research agencies. Determined to alter this state of affairs, Rep. Brian Higgins (D-NY-26), along with Rep. Rosa DeLauro (D-CT-03), recently introduced the Accelerating Biomedical Research Act in the House. The congressman is using some of his district work period/campaigning season to tour institutions that receive NIH funding in his district. If only more incumbents and challengers followed his example! Rather than despairing that there aren’t more like Mr. Higgins, now is the time to work toward the day that there will be! Candidates who hear voters like you speak passionately now about the importance of advancing medical progress are more likely to become champions for research when they enter Congress next January. Personal stories about why research matters in your life and in your community make for some of the most persuasive advocacy tools.
Let’s be honest that along with personal stories, data truly is important (my advice: tell your story first, after that, add data). Consider the new easy-to-use district-level federal research funding fact sheets from the Federation of American Societies for Experimental Biology (FASEB). These local, by-the-numbers summaries provide information about the number of grants received in nearly 400 congressional districts from the NIH, NSF, DOE Office of Science, and Agriculture and Food Research Initiative in the Department of Agriculture and are useful additions when making your case for research. We urge you to share this data as well as your commitment to voter education with five of your friends and family! Join us in the “5 this Fall” campaign on social media.
Final note of honesty about social media … it works! Think “Ice Bucket Challenge” and think about the new ACT for NIH campaign, which is using “selfies” as a way to remind voters and policymakers that research is for everyone, leading to better lives for ourselves, our friends and our loved ones. Reaching an ever-expanding audience via social media is critical. I hope you’ll join Act for NIH by sharing a selfie on social media with the hashtag #ACT4NIH.
Dear Research Advocate:
What will determine the speed and scope of medical progress in the years to come? There is more to it than the essential ingredients of money and brainpower.
Sound tax policy is essential if we are to propel medical progress.
Yesterday, Rep. Dave Camp (R-MI-04), chairman of the House Ways and Means Committee, introduced a comprehensive tax reform bill. While the prospects for passage during this election year are — to put a positive spin on it — uncertain, Congressman Camp laid down the gauntlet for much-needed tax and entitlement reform, and he also proposed making the R&D tax credit permanent. Uncertainty surrounding future access to the R&D tax credit has reduced its power to drive private sector R&D investment. While the Camp bill does not contain the ideal package of changes needed to optimize the usefulness of the credit, and in fact contains some potential setbacks, his decision to support making the R&D tax credit permanent sets the stage for finally achieving this long-standing goal.
Scientists, physicians and patients must all work to increase clinical trial participation.
In a recent Washington Post op-ed, a personal hero of mine, former Surgeon General and CDC Director David Satcher, MD, discusses the importance of African-Americans contributing to medical progress by participating in clinical research. Using Alzheimer’s disease as a lens, he argues that adequate research funding is not the only imperative; individuals must be willing to volunteer for clinical trials. Participation is especially valuable for racial and ethnic groups who have much to gain as health disparities persist, but who understandably remember mistreatment in trials in the past. Polling commissioned by Research!America has affirmed this lack of trust but also, importantly, has revealed that African-Americans in particular say they want to help others by participating in trials. We also learned from our polls that most Americans, across all demographics, look to their physicians to be the touchpoint for learning about clinical trial participation.
Improved scientist engagement with the public and policy makers is essential.
Medical research stands a better chance of becoming a higher national priority if people can connect meaningfully to scientists. As Alan Alda said at the annual AAAS meeting last week, and in an interview with Claudia Dreifus in The New York Times, “How are scientists going to get money from policy makers if our leaders and legislators can’t understand what they do?” He and his colleagues at the Alan Alda Center for Communicating Science at Stony Brook use of the some of the same approaches we do to help the science community connect with non-scientists in ways that can truly move mountains. Alda adds a passion for science with dramatic talent for a skill set we can all learn from.
Media attention — old school and new school — is key.
Both traditional and social media play a role in the fate of U.S. medical progress because of their ability to call public and policy maker attention to possibilities and stumbling blocks. Research!America and the Pancreatic Cancer Action Network hosted a media luncheon today to discuss the challenges involved in turning cancer, in all its insidious forms, into a manageable chronic condition. It was reinforced to us that journalists’ questions are good markers of questions the public in general are raising; it’s important for scientists and advocates to listen and respond. Sometimes we fall into the pattern of just repeating our own messages louder and louder, but we should instead step back and listen to the sometimes-challenging questions being raised by media as they seek to inform the public. All of us who care about the future of research for health should seek out opportunities to engage with journalists. Contact us for suggestions on how to get started!
Dear Research Advocate:
Budget Uncertainty Deepens
The House Appropriations Committee has postponed this week’s scheduled consideration of the Labor-Health and Human Services (Labor-H) funding measure. A New York Times article indicated that the bill protects NIH funding; but, given how low the overall spending number is for Labor-H, “protected” is most likely interpreted as the NIH being cut less than other agencies, themselves highly valued. The distance between the Senate (passed) and House (estimated) Labor-H appropriations — in excess of 20% — sets the stage for another continuing resolution (CR). What actually does happen next is uncertain, which is why advocacy is essential.
The Devil’s in the Details
There are so many health priorities on the line in the not-yet-official House Labor-H bill. Perennial threats are back on the table, including wholly unjustifiable underfunding of CDC, the elimination of AHRQ and PCORI, a prohibition on funding for health economics research at NIH, and more micromanagement of the NIH as well. If any or all of these issues strikes a chord with you, let us help you write a letter to your representative asking them to represent your views in Congress. Email email@example.com — one of us will get right back to you. Continue reading →
Tell Congress to Make it Permanent.
The R&D tax credit, a proven engine of economic development, was created more than 30 years ago and spurs innovation by companies of every size across every sector. For medical research and development, the tax credit not only creates jobs, but it enables critical R&D focused on a host of disabling and deadly illnesses. However, as it stands, the tax credit needs to be reauthorized by Congress and the president every year. This creates uncertainty for businesses and hinders the full economic benefit of this incentive. Strengthening the tax credit by making it permanent is vital to continuing our nation’s commitment to research.
The Senate Finance Committee Chairman, Max Baucus (D-MT), and Ranking Member, Orrin Hatch (R-UT), are soliciting comments from their Senate colleagues as the committee embarks on tax reform. Starting with a “blank slate,” they hope to rebuild our nation’s tax code in a fair and simplified manner, including only those special provisions which grow the economy or promote policy goals. The R&D tax credit meets both of these tests by fueling economic activity and spurring medical progress. Ask your senator to push for inclusion of a permanent R&D tax credit in the revised tax system.
Take action now.
Dear Research Advocate:
Our elected representatives know they must make hard tax and entitlement reform decisions, and, for the sake of the nation, ensure those decisions foster economic growth and societal progress. Part of that equation is federal funding for medical research sufficient to capitalize on unprecedented scientific opportunity and tackle urgent threats like Alzheimer’s Disease. As I’ve highlighted before, a majority of Americans say they are willing to pay additional taxes — $1 more per week (which amounts to approximately $4.4 billion annually) — if they knew those dollars were funding medical research. The public is on our side with their wallets as well as their hearts and minds!
Speaking of taxes, the Senate Finance Committee is working on a tax reform package, and Chairman Max Baucus (D-MT) and Ranking Member Orrin Hatch (R-UT) are soliciting comments from their Senate colleagues to rebuild the tax code starting from a blank state. One component that definitely should be included is the R&D tax credit. This credit is a proven engine of economic development that spurs innovation. It creates jobs and supports critical medical research that otherwise would not be conducted. However, as it stands, the credit must be reauthorized each year. This is not only absurdly inefficient, it is counterproductive since the uncertainty it creates reduces the credit’s stimulative effect on R&D. First and foremost, of course, it is critical that the R&D tax credit be included in the tax package, but it is also extremely important to make the credit permanent to amplify it as a catalyst to economic and medical progress. Click here to view the letter Research!America sent in support of the tax credit, and click here to urge your senators to work with the committee to include the R&D tax credit in the tax package and finally make it permanent. Continue reading →
Dear Research Advocate,
The first presidential debate gave us little to go on regarding research for health. Americans are dying to know more – many, quite literally dying – about what either presidential candidate would do to speed up medical progress in the face of Alzheimer’s disease, Parkinson’s disease, ALS and the host of other disabling and deadly health threats that breed suffering, compromise independence and drive spiraling health care costs. Add to that the pivotal role medical innovation plays in our economy, and Americans absolutely deserve to know whether candidates will champion or shortchange it. All of us must say to candidates: Tell us what you will do, share your views – candidates for president and Congress alike. Take 30 seconds to ask your candidates to speak out and then help more by sharing this alert.
Another issue that the candidates failed to adequately address in last night’s debate was sequestration, and that’s why we must continue to speak up. If more of us get involved we can shift the halt-the-sequester momentum into high gear – check out the following articles and then write your own op-ed: Athens (GA) Banner-Herald, Montgomery Advertiser. The Los Angeles Times highlighted a new AAAS report on the impact of sequestration (read here). The report provides estimates of just how much states stand to lose under sequestration, with California alone being deprived of over $11 billion in R&D funding over a 5-year period! How much does your state stand to lose? Find out via FASEB’s outstanding series of new fact sheets that illustrate the importance and impact of NIH funding close to home. Take a moment to find the fact sheet for your state or district and use this information in your advocacy efforts.
For years, our public polling has shown that Americans strongly support incentives for companies that are investing in R&D – investments that create jobs and foster innovation. An article recently published in The Atlantic drives this point home, calling on policy makers to not only expand the R&D tax credit but to make it permanent. This is a common-sense policy solution that would enhance our competitiveness at a time when other nations are boosting investment in research and creating new incentives to encourage the private sector to invest. We need to step up, or we will be left behind.
And, speaking of the global nature of science as well as economic interdependence, we are eager to hear the announcements of the Nobel Prizes, starting this coming Monday. Here’s a suggestion: Take the opportunity of the announcements to make a phone call, send an email or write a letter to the editor to call attention to the importance of maintaining strong support of science in this country. Doing so could prove critical in reversing the perception among Capitol Hill staffers that few members of the science community are engaged in the public policy conversation – volume matters and that means every one of us needs to step up.
Dear Research Advocate,
In last week’s letter, I highlighted research-related themes in the Republican National Platform. The good news included explicit support for basic and applied research and a pledge to make the R&D tax credit permanent. The bad news included strident criticism of FDA — such that support for adequate funding was unclear — and opposition to embryonic stem cell research. The Democratic platform asserts that Democrats will “double funding for key basic research agencies.” It also goes further than the Republican platform in improving the research and development tax credit and places a very strong emphasis on science education as critical to our innovation economy. And, it reiterates Democratic support for embryonic stem cell research.
Do platforms matter? Yes and no. Yes, in that the language comes from a broad base of each party’s membership. It lays out principles that we can ask policy makers to adhere to, and we can see how well those principles track with the polls we regularly commission. But also no — as a respected Nobel laureate reminded me in an insightful response to my last letter, it is a mistake to breathe easy based on the rhetoric in these platforms. Actions speak louder than words, and the fact is Republicans and Democrats alike supported the Budget Control Act (BCA), which not only applies across-the-board cuts to research spending but also tightly restrains annual growth in discretionary spending. That makes it difficult to envision any kind of “moonshot” for research or even a basic policy frame that truly promotes research and innovation. Despite what these platforms assert, policy makers have taken their eye off the ball. The public is not happy about that fact. Our new polling data shows that only 19% of likely voters believe elected officials are paying enough attention to combating disease. For more on this point, see my piece this week in The Hill’s Congress Blog. It ends with a call to action to engage the candidates — you can lead the way in doing just that among your network of colleagues, family and friends.
In case you missed it, a U.S. appeals court has upheld the legality of federal funding for embryonic stem cell research — a major victory for advocates and patients alike. See this recent ScienceInsider article to learn more about the ruling.
In past letters, I’ve written extensively about the grave threat that sequester poses to American research and innovation, and the news seems to be getting worse. According to the Alliance for a Stronger FDA, the user fees that FDA collects for review of drugs and devices may be subject to sequestration in addition to the funding provided through taxes. In effect, the FDA budget would be double-slashed with cuts totaling $294 million! Just imagine the havoc that these cuts would wreak on our nation’s ability to bring new, critical treatments to patients. With Congress reconvening next week, please remind lawmakers that they are playing with fire. Research is important. Innovation is important. Blind, across-the board funding cuts aren’t just an abdication of congressional responsibility, they are a divestment in medical and economic progress.
Dear Research Advocate,
As you know, the Republican Party Platform was unveiled Tuesday during the convention in Tampa. There are direct references to medical and health research and other statements that — if not explicit — definitely imply the need for such research. We can draw from both to enhance our advocacy efforts.
The following exemplifies the direct and indirect nature of the platform’s embrace of medical and health research:
“We support federal investment in health care delivery systems and solutions creating innovative means to provide greater, more cost-effective access to high quality health care. We also support federal investment in basic and applied biomedical research, especially the neuroscience research that may hold great potential for dealing with diseases and disorders such as autism, Alzheimer’s and Parkinson’s. If we are to make significant headway against breast and prostate cancer, diabetes and other killers, research must consider the special needs of formerly neglected groups.”
The platform explicitly supports federal funding for basic and applied medical research, and, if I am interpreting the text correctly, acknowledges the need to address health disparities as part of the nation’s research agenda. This statement also implies the need for health services research (HSR) to devise “solutions” that improve health care access, cost-effectiveness and quality. Unfortunately the House Labor-H appropriations bill precludes NIH funding for health economics research — a key subset of HSR — and virtually zeroes out the budget of the Agency for Healthcare Research and Quality, the main funder of HSR. The platform provides advocates fresh talking points as final appropriations decisions are made later this year.
The Republican platform also states: “Even expensive prevention is preferable to more costly treatment later on.” While the rest of the statement focuses on personal responsibility, research plays an undeniable role in effective prevention. Vaccines, the nicotine patch, successful drug and alcohol addiction treatment programs … all are grounded in research. Advocates can segue directly from the platform to the importance of prevention research at CDC and other agencies … and we should. Three other sections of the platform are noteworthy. It goes hard on the FDA, asserting that it needs significant reform. The platform does not mention funding, but there is a logical connection here. Patient groups, scientists, industry and FDA leaders themselves are all committed to strengthening the agency and are working hard to accomplish just that. Support for FDA reform cannot logically be decoupled from support for FDA funding, a point that must not get lost in the reform debate.
Second, the platform advocates making the R&D tax credit permanent. Bravo! We should increase and make other improvements to the credit as well.
Finally, the platform opposes embryonic stem cell research. Not a surprise, but a disappointment. Proponents must keep fighting this battle, drawing strength from the recent court victory in which President Obama’s executive order was once again upheld.
There is much to applaud in the Republican platform when it comes to federal support for both medical and health research. Let’s take that and run with it. In an article that appeared this week in Forbes, John Zogby discusses the results of our recent national poll. He focuses on the exceptional level of agreement between different demographic and ideological subsets of the American population on issues related to health and medical research. We see that reality reflected in many of the planks in the Republican platform. Indeed most of the results from our poll will not surprise you (except, perhaps, the fact that a majority of Americans of all stripes would pay a dollar more per week in taxes if they knew it was going toward medical research), but it’s a fact that most policy makers have not embraced medical progress as a goal worthy of mentioning in campaign speeches or on their campaign websites. Platforms aside, this gives Americans no basis by which to evaluate whether individual candidates will champion or chop research funding and no assurance that they will take medical innovation into account when evaluating policy decisions that could stimulate or stifle it. Your Candidates-Your Health is an important way that candidates can make their opinions known about medical and health research. Advocates can do their part by attending town halls, visiting campaign offices, writing op-eds and letters to the editor, and using these polling results to convince candidates that promoting medical progress should be one of their core missions.
We have our work cut out for us, but we will succeed if we do more than parse the rhetoric — we have to take action!