On March 23, 2010, the Patient Protection and Affordable Care Act (PPACA) was signed in to law. Although there have been many articles and announcements written about the overall influence of the reform, this client alert will specifically address the impact on clinical research.

PPACA Provisions' Impact on Clinical Research

* COVERAGE FOR CLINICAL TRIAL PARTICIPANTS - Any group health or health insurance plan may not deny the individual participation in a clinical trial, may not deny (or limit or impose additional conditions on) the coverage of routine patient costs for items and services furnished in connection with participation in the trial; and may not discriminate against the individual on the basis of the individual's participation in such trial. This legislation uses the same definition of routine patient costs as appears in the CMS Clinical Trials Policy.
* COMPARATIVE EFFECTIVENESS RESEARCH - Expands scope of clinical research to compare different therapies against one another as a means to improve value-based healthcare. This comparison may include both pharmaceutical and non-pharmaceutical therapies or a combination thereof. A nonprofit Patient-Centered Outcomes Research Institute will also be established to direct research priorities. Clinical research will need to identify comparative effectiveness opportunities while still answering fundamental standard of care questions.
* QUALIFYING THERAPEUTIC DISCOVERY PROJECT CREDIT - Establishes a 50% investment tax credit for "qualifying investment" in any "qualifying therapeutic discovery project" (i.e. projects designed to treat or prevent diseases or conditions by conducting pre-clinical activities, clinical trials, and clinical studies, or carrying out research protocols). This provision differs from traditional investment tax credits by adopting an approach that will allow companies to apply for a non-taxable cash grants in lieu of a tax credit. This may potentially promote more investment in clinical research. Click here to read more on tax credits and cash grants for small and mid-sized life sciences companies .
* HEALTH CARE FRAUD & ABUSE CONTROL FUND - Increases funding for fraud & abuse control by $250 million, over ten years, and expands data collection requirements as defined by the Health and Human Services Secretary under MMIS (Medicaid Management Information System). Over half of this funding will be supplied in years 2011 and 2012. Consistent with recent OIG work plans, these increases will amplify compliance enforcement throughout the entire research community and institutions must prepare for this adherence.
* REQUIREMENT FOR COMPLIANCE PROGRAM -

Any medical provider enrolled in title XIX or title XXI must establish a compliance program with core elements specific to its industry. The core elements will be established by the Secretary in consultation with the Inspector General of the Department of Health and Human Services. Institutions with large research portfolios may need to ensure that research is covered as part of a comprehensive compliance program.
* PHYSICIAN PAYMENT SUNSHINE PROVISIONS - Beginning in 2012, drug and device manufacturers that provide payments or other transfers of value to physicians (anything of value in excess of $100 annually), must submit an electronic report to the government. In September 2013, manufacturers must ensure that this information is publicly available through an internet Web site that is easily searchable and contains descriptive information which can be aggregated and downloaded.

There is an exemption for product samples and educational materials for patient use (not intended to be sold), loaned device (less than 90 days) items under warranty, discounts, in-kind items used for charity care, payments made to physicians who are patients, ownership in publicly traded securities or mutual funds.

Also, publication of payments for services furnished in connection with clinical trials of new drugs or devices; or new uses of drugs or may be delayed until the drug or device is approved or four (4) years after the payment was made.
* MEDICAL DEVICE EXCISE TAX - The recently passed health care reform legislation will impose an excise tax of 2.3 percent on medical device manufacturers, producers or importers for the sales of taxable medical devices. The tax, which takes effect in 2013, will apply to a range of medical devices, but does not include eyeglasses, contact lenses, hearing aides, and any other medical devices determined by the Secretary to be of a type which is generally purchased by the general public at retail for individual use. Although device industry groups have been generally supportive of health care reform, leading medical device associations believe that the excise tax will negatively affect innovative device research and development.

Source: Mondaq.com