R&D Tax Credit Reinstated in California & Spurring Innovation
IRVINE – At the Orange County headquarters of Masimo, state officials celebrated the company’s rapid response to the COVID-19 pandemic and their new innovations designed to combat the opioid crisis. New technology includes Bridge™ - a small electrical nerve stimulator device – that provides opioid withdrawal symptom relief in as little as 20 mins (85% reduction in 1 hour). With over 600 patents and many firsts in medical innovation, Masimo is getting ready to celebrate their 33rd anniversary in May. The speakers also noted the importance of California’s recent reinstatement of the R&D tax credit and NOL deductions. (VIDEO)
Assemblywoman Cottie Petrie-Norris (D-Irvine) said, “The R&D tax credit is one of the most important levers that we can pull to incentivize investment in California’s innovation economy. We must act with real urgency to stop tragic deaths. But as we are seeing here today – these policies have a real, tangible impact. Real investments. Real jobs. Real treatments and real cures.”
Joe Kiani, Founder, Chairman and CEO, Masimo Corporation said, “The COVID-19 pandemic underscored the vital role that the life sciences have in developing solutions to global challenges. As we work on breakthrough technologies to address other critical health issues like the opioid crisis, we appreciate California’s support of this vital business sector.”
Dee Dee Myers, Senior Advisor to the Governor and Director of the Governor’s Office of Business and Economic Development, “Innovation drives California’s economy. The restoration of the R&D tax credit, signed by the Governor in February, allows for investments in research and development, including basic research, that are the foundation of California’s unmatched innovation economy. This investment has helped create many of the incredible, life-changing technologies we now take for granted – including several of Masimo’s innovations. Thank you Assemblymember Cottie Petrie-Norris, for your leadership and bringing us all together on this important issue.”
Natalie Rubalcava, Orange County Business Council, Chief Operating Officer said, “With several million Californians out of work or underemployed, implementing economic development solutions such as the Research and Development Tax Credit and Net Operating Loss Deduction are imperative to retain innovative research based businesses in our communities. Tax credits help prevent business from moving to other states that may offer greater incentives. Businesses like Masimo which is headquartered in Orange County, generate opportunity for high paying jobs which our workforce needs to ensure their families have the chance to thrive and grow in the Orange County region.”
Mike Guerra, CEO, California Life Sciences said, “Robust R&D investments by California life sciences companies positioned our state to lead the global pandemic response and we continue to make incredible new treatments and devices to address the opioid crisis and significant health needs around the world. California’s decision to restore incentives for research and other financial credits that allow smaller companies to survive the incredibly risky process of bringing these innovations to market reaffirms the commitment to be a premier global hub for innovation. ”
Joe Panetta, president and CEO of Biocom California said, “When we create a business environment that encourages innovation, we unleash scientific creativity, leading to medical breakthroughs that will forever improve human health," said. "The life sciences are a robust economic engine in California, with companies of all sizes dedicated to addressing significant unmet medical needs. This Administration and our legislative leadership deserve our thanks for making patients a priority."
Jennifer Barrera CEO, Cal Chamber added, “CalChamber is grateful for the leadership of Assemblymember Petrie-Norris in restoring the R&D tax credit because it encourages California born-and-raised businesses to stay and grow in California. Research and development is the backbone of our state’s innovation-based economy and high wage job growth in all parts of the state is driven by this tax credit.”
Dr. William Wilson, MD, MA, Chief Medical Office for Masimo & former Chief Medical Officer for UCI Health talked from the clinician’s perspective about how these innovations saved thousands of lives and helped hospitals, doctors, and nurses manage the surge of patients that they cared for during the pandemic.
The COVID-19 crisis has worsened the opioid epidemic. Provisional data from CDC’s National Center for Health Statistics indicate that there were an estimated 100,306 drug overdose deaths in the United States during 12-month period ending in April 2021, an increase of 28.5% from the 78,056 deaths during the same period the year before. The new data documents that estimated overdose deaths from opioids increased to 75,673 in the 12-month period ending in April 2021, up from 56,064 the year before.
- Opioid-induced respiratory depression can lead to decreases in the level of oxygen in the blood which can cause brain damage in 2 to 3 min and death in just 5 min.
- A patient can take their pain medication at prescribed doses after surgery, go to sleep and never wake up because every person reacts differently to these drugs.
- In California, opioids were involved in nearly 70% of all overdose deaths. (NIH)
- Opioids kill more than 136 Americans every day.
- An estimated 100,000 Americans and 10,000 Californians died of drug overdoses for the year long period ending April 2021. 64% were caused by the synthetic opioid fentanyl. (US Centers for Disease Control and Prevention)
As a result of the COVID-19 pandemic, the 2019-2020 state budget limited the use of business incentive tax credits for research and development (R&D). In addition, it suspended the use of the net operating loss (NOL) deduction for some businesses. In February, California restored the Research & Development Tax Credit & Net Operating Loss (NOL) Deduction via early action budget bill SB 113 (Economic Relief – COVID 19 Pandemic) VIDEO.
California’s Research & Development support has enabled California innovators to drive breakthroughs in:
- Advanced manufacturing
- Life Sciences