In the reform of the R&D Tax Incentive, AusBiotech advocated for and welcomed the recognition of the critical role that R&D expenditure plays in clinical trials (CTs) for developing life-changing and saving medicines, therapies and medical devices, with the exception from a $4 million cap. However, the definition is yet to be finalised and companies likely to hit the $4 million cap with claims are urged to provide feedback this week.
In theory, the CT exemption will give Australia an opportunity to build on its hard-won momentum in CTs and continue its growth in commercialising medical research. In practice, the proposed definition and the confusion about which expenditure related to CTs would be eligible is completely unresolved and confusing.
There has been much discussion about the definition of a clinical trial for the purposes of the exception and the consultation materials note that for the purposes of the RDTI programme, the proposed definition is based on that of the Therapeutic Goods Administration (TGA): “A clinical trial is a planned study of the safety or efficacy in humans of an intervention (including a medicine, treatment or diagnostic procedure) with the aim of achieving at least one of the following: – the discovery, or verification, of clinical, pharmacological or other pharmacodynamic effects; – the identification of adverse reactions or adverse effects; – the study of absorption, distribution, metabolism or excretion.”
AusBiotech finds that the definition should avoid doubt, and therefore while the definition is well articulated for pharmaceutical-related CTs, it is unclear and unsympathetic to medical device CTs. It is understood that the policy intent was to include medical devices and future therapies and health interventions; and on that basis the definition offered is inadequate and unfit for purpose as it appears above.
AusBiotech said in its submission that the final definition will benefit from the added articulation of areas covered, such as is shown on the Federal Government’s CT website, which notes that CT interventions include:
- experimental drugs;
- cells and other biological products;
- medical devices;
- surgical and other medical treatments and procedures;
- psychotherapeutic and behavioural therapies;
- health service changes;
- preventive care strategies; and,
- educational interventions.
Medical devices in this context, includes diagnostics or screening tests and new ways to detect and treat disease and “software as a medical device”, which has a definition recently published by the TGA.