Draft R&D Tax Incentive Determination on clinical trials (Phase 0-III) for an unapproved therapeutic good.

Sanofi submission re: R&D Tax Incentive Determination on Clinical
Trials
17 February 2022

1. Is the draft determination appropriate for providing more
certainty of access to the R&D Tax Incentive for clinical trials in
Australia? How effective would the draft determination be if it
were finalised in its current state in providing certainty to your
business? Why?
There are still some uncertainties arising from the draft determination,
namely:
• Inclusion of clinical trials for medical devices and diagnostics
• Inclusion or not of non-interventional or observational and
comparator clinical trials
• Whether biosimilars are captured under the generics’ exclusion

2. Should the draft determination be expanded?
Yes. Sanofi believes there is scope to expand the determination as
follows:
• Expand on the distinction between core activity and what should be
separated to be included as a supporting activity. (Please refer to
answer to question 6 for more detail).
• Scope could be expanded so that the determination covers
supporting activities, such as manufacturing for P0-3 clinical trials,
HRECs approvals, and development of analytical methods.
• Phase 4 trials have been excluded from the tax determination
although it is noted that some phase 4 trials can be eligible core
R&D activities. It would therefore be helpful for the determination
to provide clarity or guidance about this.

Specifically, do you agree with the scope of the draft
determination including definitions?
Please refer to answer to question 1. In addition, it is not clear how the
definition of the term “unapproved” will apply. For example, if the
therapeutic is approved for one indication but not another, does that
exclude the clinical trial from the determination (we assume not but this
needs to be clarified).

Do you consider it should include additional clinical trials?
Please refer to answer to question 1. Some pre-clinical trials are also
subject to strict regulatory and animal ethics approvals. These could also
be included.

3. Do you see the potential for the draft determination to be abused,
undermining the integrity of the R&D Tax Incentive? Do you
consider people may try and apply to register activities that are
not core R&D activities? How?
Please refer to answer to question 2.

4. Do you consider the finalised determination should identify and
require compliance with any specific framework, guideline or

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standard, such as the Australian Guideline for Good Clinical
Practice? Why/why not? If yes, what should be specified?
The Australian Guideline for GCP provides guidance on conducting clinical
trials in Australia using ‘unapproved’ therapeutic goods, so compliance
with GCP would help standardise definitions. However, the Tax Incentive
would be outside the scope of GCP.

5. Is there anything that confuses you about the draft
determination? Please offer details.
Yes. There is a need to clarify the uncertainties as identified in previous
answers.

6. Is it clear from the draft determination that it does not apply to all
phases of clinical trials sector, but it is limited to specific phase in
clinical trials? Is it clear how phases 0, I, II and III are core R&D
activities? Why?
There is room for misinterpretation with respect to how much of the
clinical trial is included in the core activity and what should be separated
to be included as a supporting activity. This is because clinical trials are
generally thought of at a “project” level. However, the R&D legislations
breaks activities down into “core” and “supporting” activities. For
example, an experienced R&D consultant would know that HRECs
applications should be registered as a supporting activity but those
preparing in-house claims may not.

As noted above, scope could be expanded so that the determination
covers supporting activities, such as manufacturing for P0-3 clinical trials,
HRECs approvals, and development of analytical methods.

7. Is the explanatory statement helpful in understanding and
applying the draft determination? Is it clear what evidence you
would maintain to apply to the R&D Tax Incentive and that you are
still required to maintain evidence of eligible expenditure? Is there
anything that confuses you about the explanatory statement? How
could it be improved?
The explanatory statement does not provide any detail about what level of
evidence would need to be maintained so it would be helpful for this to be
clarified. In addition, the statement does not provide any detail about how
the determination will streamline the R&D process. For example, will the
registration application be updated to include a section to insert the
CTN/CTX or HREC approval numbers? Would this therefore create a tick
box approval process that would remove the assessors from the process
of confirming eligibility of an activity in the case of a review?

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