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37 Biotechnology L. Rep. 1 (2018)

handle is hein.journals/bothnl37 and id is 1 raw text is: Selected Developments in Biotechnology Law and the Biotechnology Industry By STEVEN J. ZWEIG EUROPEAN COMMISSION CLOSES FIRST INFRINGEMENT PROCEEDING UNDER THE PENALTY REGULATION In 2012, the British Medical and Health Products Regulatory Agency (MHRA) inspected Roche's UK headquarters. During that inspection, the agency found data on approximately 80,000 not-properly reported adverse events involving approved Roche medicines; 15,161 of those events included deaths. Further information about adverse events led the MHRA to conduct reinspections. Roche appealed the reinspections, but had its appeal rejected by the High Court of Justice Queen's Bench Division, which found that the company had failed to pass on these reports [of adverse incidents]. Roche could have been fined up to US$685 mil- lion for these deficiencies. However, despite the pos- sibility of significant penalties, Roche escaped without any fines. The reason they avoided fines was that they had taken appropriate remedial action. The European Commission stated that [a]fter con- sidering all the available evidence and being satisfied with the company's remedial actions, the Commis- sion decided not to notify a statement of objections to Roche Registration Ltd and Roche Holding AG and to close the case without imposing fines. The European Medical Agency (EMA) expanded on the reasoning, stating that a review of all Periodic Safety Update Reports submitted by Roche from May 20, 2013 through January 31, 2016 found that the previously unreported information did not impact or change the benefit-risk profiles for the rel- evant products. This meant that the nondisclosure did not pose any actual risk to patient health or pub- lic safety. This, in turn, minimized the impact of the Steven J. Zweig is the Managing Editor of Biotechnology Law Report. nondisclosures-supporting the lack of fines-and also meant that there would be no changes to the marketing authorizations for the affected products. GOOD AND BAD FOR PHARMACEUTICAL BUSINESSES IN THE NEW UNITED STATES TAX LAW It's fair to say that other than the Affordable Care Act, no United States law in recent memory has generated as much commentary, both pro and con, as the Trump administration-led revision to the tax code. Much of the controversy comes from figuring out who actually gains-and who loses-under the law: for example, an increase in the standard deduc- tion will help many people, but many others will lose due to the new limitations on state and local tax (SALT) deductions, and it's not always immedi- ately obvious whether any given person will come out ahead or behind. The pharmaceutical industry is in a similar posi- tion, with some provisions helping it and others harming it. Of course, there were some changes that are undoubted wins for any corporation, such as the drastic lowering of the corporate tax rate from 35% to 21%. But, as stated, that is a change af- fecting all corporations. Looking at provisions more specifically relevant to the pharmaceutical industry, we find items on both sides of the ledger. Take the provisions on overseas income and repa- triation of profits. The now-former tax regime ap- plied the full corporate tax rate (35%) to all earnings, no matter where in the world they were earned. That led companies to defer the tax bite by leaving their overseas profits overseas, since they were only taxed when returned (repatriated) to the United States. The new system, however, goes to a territorial tax system that taxes offshore earn- ings at a much lower rate, 15.5%-even lower 1 37 Biotechnology Law Report 1 Number 1, 2018 © Mary Ann Liebert, Inc. DOI: 10.1089/bir.2018.29050.sjz News Briefs

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