In Philly, biotech industry weighs new tax, conflict-of-interest standards

    Area biotech companies are still hoping for the repeal of a new tax on medical devices set to go into effect in 2013.

    The 2.3 percent tax is meant to help fund new programs initiated under the federal health law. Industry representatives say it will move manufacturing jobs overseas and cost jobs.

    At an industry conference in Philadelphia Monday, Ronald Spair, CFO of Bethlehem-based OraSure Technologies, said such a tax would hit the Delaware Valley hard. According to estimates from 2007, the sector employs more than 45,000 people in Pennsylvania, New Jersey and Delaware.

    “You don’t have to think very long about quantifying the impact this is going to have for all of us, throughout the industry,” Spair said during a panel discussion. “Hopefully by the time we get to that point, we’ll have some action to impact that excise tax.”

    Lobbyists are hanging their hopes on a bill to repeal the tax that was introduced in Washington last winter. But with the congressional super-committee looking to slash the national budget wherever possible, analyst Jeff Jonas, with New York-based Gabelli & Company, said he would not expect the repeal to pass.

    The industry is also backing another piece of legislation, introduced by a bipartisan trio of senators this month, which would loosen conflict-of-interest standards for medical device advisory boards during the FDA approval process.

    The bill would reverse a 2008 policy that bars experts with financial ties from sitting on FDA advisory boards without first getting a waiver.

    It is an effort to speed up the review process for applications for new devices, which many at the Philadelphia conference said is too slow and stifles investment and innovation.

    Mark Leahey, president and head of the Medical Device Manufacturers Association, said a removal of the present rule would also improve the opinions given by the boards.

    “At the end of the day, I think FDA should be basing their science on the best science and the best minds,” Leahey said, “versus on having a conflict-free environment.”

    The FDA has said it is increasingly difficult to find qualified experts who do not have financial ties to drug or device makers.

    A watchdog group called the Project on Government Oversight said a reversal of the existing rule would be a step in the wrong direction, and urged the agency to look harder for neutral experts. In a letter to the FDA, it pointed to falling vacancy rates on the advisory panels as proof that loosening standards is unnecessary.

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