Compounding pharmacies are constantly innovating by customizing drug formulations to accommodate specific patient needs. Common research and development (R&D) activities include assessing the active ingredient(s) and excipients, solubility, and the appropriate dosage and route of administration. Companies that conduct research and development (R&D) for new and complex medications can offset costs with the R&D Tax Credit.
Employee wages, raw materials & supplies, and third-party contractor costs associated with R&D activities are considered qualified research expenses (QREs). Companies can receive refunds of up to 22% of total QREs through federal and state tax credits, depending on the state in which your business operates.
Examples of qualifying activities:
- Formulating and testing unique combinations of medications that are not commercially available
- Testing new formulas for potency and stability
- Reformulating compounds tailored to patients with allergies or other sensitivities
- Developing new testing assays
- Extending product shelf life
- Developing alternative drug delivery formulations (e.g. pellets, transdermal patches, etc.)
Do you have these job titles on your payroll, or do you hire third-party contractors to do these jobs?
- Analytical Chemists
- Compounding Pharmacists
- Compounding Pharmacy Technicians
- Formulation Scientists
- Pharmaceutical Chemists
- Project Managers
- QA/QC Analysts