“CROs will be indirect beneficiaries of these efforts as more start-up and virtual companies receive funding and turn to CROs to conduct their research and development activities,” John Lewis, vice president of public affairs at ACRO told Outsourcing-Pharma.com.
ACRO’s decision to join the Coalition for Small Business Innovators comes as two “important customer groups for CROs,” BIO (Biotechnology Industry Organization) and AdvaMed (Advanced Medical Technology Association) are also participating, Lewis said.
“One of the advantages of participating in coalitions, including CSBI, is to leverage ACRO’s political influence across a variety of issues that are important to the CRO industry,” he noted.
CSBI is focused on “pre-revenue” companies, which are basically start-ups that do not have any income and are not paying taxes or eligible for tax credits. The coalition’s three objectives related to the tax code are to:
- Stimulate private capital for research by relaxing loss rules for small research-intensive companies to allow, for example, investors to enjoy more attractive tax treatments for operating losses generated during an R&D process;
- Remove financing restrictions to allow some small companies in certain instances to retain their net operating losses generated by R&D expenditures; and
- Improve capital gains treatment for small companies by changing the gross assets test.
In a letter to the House Ways and Means Committee Manufacturing Working Group in March, the coalition called on lawmakers to address companies that will not be helped by broadening the tax base or lowering tax rates because they do not generate revenue.
“Unpredictable funding is a hindrance to the development of innovative therapies and, additionally, makes planning for CROs more difficult,” Lewis said.
In addition, he said ACRO is supporting “some modifications to the R&D tax credit to ensure the US remains competitive globally and that we continue to generate domestic job growth in the research sector.”
Other industry groups that signed up for the coalition include the Neurotechnology Industry Organization and the Medical Device Manufacturers Association.