Life Sciences Newsbrief – February 2012, Issue #40

Welcome to PwC’s monthly issue of the Life Sciences Newsbrief. This publication provides you with a snapshot of developments in the Canadian and global life sciences industry along with upcoming Canadian events and thought leadership. If you need further information, please contact any of the life sciences professionals listed on the right.

Thought Leadership

15th Annual Global CEO Survey: Industry Reports for Pharma/LS and Healthcare
PwC’s 15th Annual Global CEO survey, Delivering results: Growth and value in a volatile world explores CEO’s perspectives to understand how businesses are preparing for growth in their industries. The industry reports supplements the survey and provide a more tailored perspective on the results and draw on additional insights from high profile industry-specific CEOs.

Key Findings in the Pharmaceuticals & Life Sciences Industry
Based on interviews with 82 Pharmaceuticals & Life Sciences CEOs in 29 countries, CEOs are pinning their hopes for growth on innovation. They’re looking to new technologies and alliances with other organizations to help them innovate, and they’re targeting the emerging markets of China and Brazil in particular.

43% of CEOs are focusing on the development of new products and services (compared with the overall average of just 28%)
20% aim to increase their share of existing markets — evidence, perhaps, of how demanding healthcare payers in the mature economies have become.
51% say it's become more difficult to hire suitably qualified workers.

Tax Updates

New U.S. Excise Tax for Medical Devices
The Medical Device Excise Tax (MDET) will come into effect on January 1, 2013, subjecting manufacturers, producers and importers of most medical devices to a 2.3% federal excise tax on sales made in the US. The IRS recently issued proposed regulations which help clarify many aspects of the tax. Comments on the proposed rules must be submitted on or about May 7, 2012 and a public hearing is scheduled for May 16, 2012.

A taxable medical device is any device defined in section 201(h) of the Federal Food, Drug, and Cosmetic Act, intended for humans. Section 201(h) defines the term "device" as an instrument, apparatus, implement, machine, contrivance, implant, in vitro reagent, or other similar or related article, including any component, part, or accessory, which meets certain requirements.

Calculating the MDET cannot necessarily be calculated by simply multiplying U.S. sales by 2.3%. Complexities can exist in a variety of situations including retail exemptions, rebates, trade-ins, leases, instalment sales, convenience kits, dual use devices, contract manufacturing, and combination products. To comply with the tax provisions, a fully functional automated compliance system needs to be designed, built, tested and deployed ahead of the effective date. Before an organization can embark on this effort, it is important to understand the operational impacts of the tax, and analyze what operational constraints and improvements should be factored into the future state model.

For a discussion geared towards your company, please contact us.

Events

10th Annual BioPartnering North America
February 26-28, 2012, Vancouver, BC
This year’s conference is focusing its BioPartnering North America (BPN) on the Pacific Rim. The conference aims to build on close ties with industry leaders in the Pacific Rim to create a unique opportunity for the U.S., Canada, and Europe to meet leading life science companies from Asia. Attracting over 819 delegates each year, the conference combines podium presentations, leadership sessions, workshops, and exhibitions to maximize networking and new partnerships.

PwC partners Gord Jans and Ian Heine will be attending. For more information visit www.techvision.com/bpn/

Innovator's Workbench
March 14, 2012, Palo Alto, CA
The Innovator's Workbench features interviews with top innovators in the biomedical technology field, discussing their process of identifying major critical needs, creating new technologies, and implementing innovations in patient care. PwC sponsors these case study presentations on successful medtech and biotech ventures. For more information visit http://biodesign.stanford.edu/bdn/networking/workbench.jsp

8th Annual Pharmaceutical/Biotech Accounting and Reporting Congress
March 19-21, 2012, Philadelphia, PA
This event provides updates on changing regulations, technical accounting guidelines, auditing strategies and financial reporting best practices. Most importantly, it is uniquely tailored for the specific challenges and requirements of pharmaceutical and biotech companies. PwC sponsors this conference. Jim Connolly, US Pharmaceuticals and Life Sciences Assurance Leader, will be speaking. For more information visit http://www.cbinet.com/conference/pc12139

The National Disclosure Summit
March 26-28, 2012, Washington, DC
This summit is the leading forum on disclosure, transparency and aggregate spend for drug, device and biotech companies. PwC is a sponsor of this event to examine changing rules around physician interactions. PwC’s Jonathon Kellerman, Partner, Global Pharmaceutical Advisory Services Group, will be speaking. For more information visit www.disclosuresummit.com