Is Your Pharma Team Doing SR&ED Work Without Knowing It?
Pharmaceutical & Life Sciences, Canadian SR&ED Case Study
Introduction
Has your team ever spent weeks on a formulation that just wouldn’t come together? You fixed one problem, and another one showed up?
If so, you may have been doing SR&ED work, and part of what it cost could come back to you as a tax credit.
Many pharmaceutical companies tell us, “We’re not a research lab. We were just trying to get the product right.” But when the answer isn’t known and your team must test its way to it, that is exactly the kind of work the Scientific Research and Experimental Development (SR&ED) program supports.
What SR&ED Looks For
In plain terms, a project is likely to qualify when:
- Your team faced a technical problem that couldn’t be solved with existing knowledge or standard practice.
- They worked through it systematically: forming an idea, testing it, studying the results and adjusting.
- The goal was to learn something new about the science or technology, not just to make or sell a product.
Four Pharma Scenarios That May Qualify
1. An extended-release tablet that wouldn’t hold its profile. A manufacturer wanted a 12-hour version of an existing product. Changing the polymer ratio fixed the early burst but made the tablets too soft to coat. Reworking the granulation fixed hardness, but the release drifted after three months on accelerated stability. Nobody knew how to balance all three, and it took 18 trial batches to find out.
2. A drug that wouldn’t dissolve. A poorly soluble active ingredient gave low and variable absorption. The team tried particle size reduction, then solid dispersions with different polymers. Some dispersions worked at first but recrystallized during storage. There was no way to predict which combination would stay stable, so they had to test it.
3. An impurity that only appeared at scale. A synthesis step ran cleanly in the lab. At pilot scale, a new impurity showed up above the acceptable limit. The team had to work out whether mixing, heat transfer or hold time was causing it, then change the process to control it.
4. A test method that didn’t exist yet. A degradation product had to be measured at very low levels, and the standard method couldn’t separate it from a neighbouring peak. The lab developed and tested new chromatographic conditions until the separation was reliable.
What Usually Doesn’t Qualify
- A generic product where the standard formulation approach works as expected, with only routine adjustments
- Transferring or validating an established test method on new equipment
- Routine QC testing and ongoing stability programs for commercial batches
- Regulatory submissions, packaging and label changes
- Scale-up once the process is known and working
- Market research, sales and commercial production
Conclusion
The difference comes down to one question: did your team know the answer at the start of a project or a problem? In the scenarios above, they didn’t, and they had to experiment to find it. In the second list, the answer was already known or could be worked out using standard practice.
One more thing people often miss: failed batches count. They show the problem was real and the answer wasn’t obvious, but the tracking wasn’t so good. Keep your batch records, lab notebooks, stability data and even the email your chemist sent asking “what went wrong with batch 7?”
If any of this sounds like your last 12 months or the last fiscal year. Now think about your last 12 months or last fiscal year. Did a product resist every solution? Did a process take much longer than expected, or did you have to develop a test method from scratch? These are the kinds of technical challenges where SR&ED begins.
Not sure where to start? We can help you identify and track eligible activities, optimize your SR&ED claim, and explore additional funding for costs not covered by SR&ED tax credits.
If this sounds like your experience, it’s worth a conversation before your filing deadline rather than after.
Our team brings decades of combined experience in successfully preparing and filing SR&ED claims for clients year after year.
For assistance in preparing your submission and to position your application for approval contact EVAMAX Group to help you with the process. You may also email us at info@evamax.com or call 1-877-711-7733.