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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

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