Sponsors (6)
The bill creates a targeted 10% R&D tax credit to spur research on fentanyl, methamphetamine, and other emerging drug threats—encouraging nonclinical innovation and adding congressional oversight—while limiting benefits for clinical trials and non-taxable startups, introducing compliance uncertainty, and modestly reducing federal revenue.
Researchers focused on fentanyl, methamphetamine, and other emerging drugs receive stronger financial incentives to pursue mitigation, prevention, or treatment research through a targeted R&D tax credit.
Small businesses conducting qualifying drug-threat mitigation R&D get a nonrefundable 10% tax credit on eligible expenses, lowering their net R&D costs and encouraging private-sector investment.
Congress (and taxpayers) will have improved oversight and data after a GAO report required five years after enactment detailing amounts and types of credits awarded, enabling evaluation of the program's effectiveness.
Clinical research is largely excluded unless it complies with NIH policies, which could limit support for clinical trials aimed at treating overdose or addiction and slow translation of discoveries to patient care.
Because the credit is nonrefundable, small companies without taxable income (e.g., early-stage startups) may be unable to realize the benefit, reducing the incentive for cash-constrained innovators.
Narrow, chemistry-based eligibility definitions (e.g., fentanyl-related structural variants) could create uncertainty and compliance costs for researchers and tax preparers trying to determine which activities qualify.
Based on analysis of 2 sections of legislative text.
Creates a 10% nonrefundable R&E tax credit for small businesses for qualified drug threat mitigation research expenses, with statutory definitions and GAO oversight.
Official title: To amend the Internal Revenue Code of 1986 to provide a credit to small businesses for research activities related to the mitigation of certain drug threats.
Introduced July 21, 2025 by Joseph Neguse · Last progress July 21, 2025
Creates a new nonrefundable research & experimentation (R&E) tax credit targeted at small businesses equal to 10% of qualified "drug threat mitigation" research expenses to incentivize development of tools, diagnostics, or countermeasures against specified dangerous drugs (including fentanyl, fentanyl-related substances, methamphetamine, and statutorily defined "emerging drugs"). The credit adds definitions to the Internal Revenue Code, applies to taxable years beginning after enactment, and requires a GAO report five years after enactment on credit usage with anonymized data and protections so the study won’t impede research.