The R&D Tax Credit Aspects of Heart Disease



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        Cardiovascular disease (CVD) is the leading cause of death worldwide. The World Health Organization estimates that 17 million people die of CVD every year , especially due to heart attacks and strokes, which are considered a global epidemic. In the United States, one in every four deaths is caused by heart disease, adding up to nearly 600,000 people per year.   In 2010 alone, the total cost of CVD in the country was estimated at $444 billion.  

        With the aging of the baby boom generation, the impact of heart disease on the American population is bound to grow. In this scenario, innovative ways to improve prevention and treatment are vital. Federal R&D Tax Credits are available to support credit eligible CVD innovation activities.


The R&D Tax Credit

        Enacted in 1981, the Federal Research and Development (R&D) Tax Credit allows a credit of up to 13 percent of eligible spending for new and improved products and processes. Qualified research must meet the following four criteria:

  • New or improved products, processes, or software
  • Technological in nature
  • Elimination of uncertainty
  • Process of experimentation

        Eligible costs include employee wages, cost of supplies, cost of testing, contract research expenses, and costs associated with developing a patent.  On December 18, 2015 President Obama signed the bill making the R&D Tax Credit permanent.  Beginning in 2016, the R&D credit can be used to offset Alternative Minimum tax and startup businesses can utilize the credit against payroll taxes.


Heart Disease

        Cardiovascular disease is a group of diseases pertaining to the heart and blood vessels. It includes coronary artery disease, cardiomyopathy (heart muscle disease), heart failure, cerebrovascular disease (which can result in strokes), valvular heart disease, cardiac dysrhythmias, and hypertensive heart disease, among others. Epidemiological studies have identified a number of risk factors for heart disease. High blood pressure, diabetes, high LDL cholesterol, overweight, physical inactivity, poor diet, tobacco smoking, excessive alcohol consumption, age, gender, and family history can all contribute to the incidence of CVD. While some factors are unalterable, others can be changed and are intimately linked to lifestyle choices. Studies show that 49% of Americans have at least one of three major risk factors for heart disease (namely, hypertension, high serum cholesterol levels, and smoking).  

        According to the Centers for Disease Control and Prevention (CDC), 83 million Americans currently suffer  
from one or more types of heart disease. In the U.S. alone, one person has a heart attack every 34 seconds. The social and economic impacts of CVD are extensive and concern patients, families, and healthcare providers. The CDC estimates that $1 of every $6 spent on health care in the U.S. is destined to the treatment of CVD. CVD treatments vary and can consist of lifestyle changes, drugs, surgery, transplants, and other medical procedures, such as the implantation of pacemakers or implantable cardioverter-defibrillators (ICDs).


Heart Disease Innovation

        New technology and innovative methods have the potential to change the face of CVD management. The following domains stand out as promising fields for advancements.


Unveiling New Culprits

        Current knowledge of factors that accentuate the risk of CVD remains deficient. Potential for advancements in the understanding of what causes heart disease is vast. Two recent discoveries exemplify the importance of R&D activities in this domain.

        Recent studies have demonstrated how the consumption of certain foods contributes to heart disease. Researchers have found that carnitine, present in red meat, and lecithin, abundant in egg yolks, can increase the risk of CVD. When digested, both compounds are broken into choline, which is then metabolized by intestinal bacteria. The result is an artery-clogging substance denominated TMAO. High levels of TMAO in the blood are associated with higher risks of heart attack, stroke, and deaths. These novel discoveries shed light into a new preventive approach to CVD: controlling the gut bacteria responsible for TMAO production.  

        Similarly, researchers have recently established a link between air pollution and CVD. A study has shown that higher concentrations of particulate matters in the air coincide with increased atherosclerosis, or hardening of the arteries.


Pharmacogenetics

        By analyzing a patient’s genetic profile, oncologists can already assess the likelihood of success of a certain drug, in other words, they can distinguish probable responders from non-responders. Similarly, the study of genetic polymorphisms that affect responses to cardiovascular drugs can play a key role in improving the efficacy of heart disease treatments. However, significant R&D is necessary to allow for pharmacogenetic factors to be consistently incorporated into CVD treatment decisions.


CVD Secondary Prevention

        Cardiovascular risk assessment remains a major challenge. Current technology, biomarkers, and diagnostic tools lack precision in predicting an individual’s probability of developing CVD. R&D activities aimed at improving screening and identification of heart disease can greatly contribute to early diagnosis and targeted treatment, advancements that have the potential to revolutionize CVD management.  


Modification of Risk Factors in Patients

        Important risk factors for CVD are modifiable. However, current strategies and methods only minimally assist in changing patients’ harmful behaviors.  Smokers, for instance, are very likely to resume smoking, even after severe medical procedures.


Adherence to Medication

        Patient self-care is also a challenge in CVD management. Studies show that despite medical recommendations, more than one in five patients discontinue the use of aspirin, beta-blockers, or statins within one month after suffering a heart attack. Novel and effective methods to improve adherence to medication are crucial to reduce CVD mortality rates.


CVD Management for Specific Populations

        CVD rates vary according to race, ethnicity, and gender. Further research is necessary to understand the disparities in heart disease risk factors throughout different populations. R&D activities can help create novel approaches to treatment and prevention, especially designed for certain groups of people.  


Heart Disease R&D Activities

        Significant heart disease R&D activities are currently underway. The diversity of projects and objectives to be attained exemplify the immense potential for innovation.

        On March 19th, the University of California, San Francisco (UCSF) launched the Health eHeart Study.  The project consists of the use mobile devices, such as smartphones, to monitor patients. Information is instantly sent to physicians who analyze the data and provide immediate feedback. The initiative will engage about 1 million people from around the world. Researchers expect that the huge gathering of data will help “better understand how the heart functions and to develop new ways to predict and prevent cardiovascular disease” , in other words, it will use available technology and big data to make heart care delivery more precise. Moreover, UCSF’s initiative will allow patients to stay constantly connected with doctors, a situation that can make a difference in daily lifestyle choices.

        Heart bypass surgery has also been the subject of innovative efforts. Saphenous veins have traditionally been attached to blocked arteries to allow blood flow to “bypass” the blockage. Thinner than arteries, the saphenous vein grafts tend to enlarge, commonly resulting in the accumulation of plaque, which can ultimately obstruct blood flow. The eSVS® Mesh, created by Kips Bay Medical, was designed to increase the saphenous vein’s strength and avert its enlargement. It consists of a very thin and flexible tube of knitted mesh metal (nitinol) to be placed around the graft. Dr. J. Alan Wolfe from the Northeast Georgia Medical Center stated the product “could be the biggest game-changer heart surgery has seen in decades”. The first experimental procedure was performed last February as part of a preliminary feasibility clinical trial approved by the U.S. Food and Drug Administration (FDA).

        R&D activities to facilitate early diagnosis are also underway. The Texas Heart Institute at St. Luke’s Episcopal Hospital has been working on the development of a “noninvasive, cost-effective, simple, and widely accessible imaging tool for earlier detection of atherosclerotic plaques by altering existing technologies”. In collaboration with the University of Texas, researchers have developed a nanoparticle for detecting atherosclerotic plaques, which is expected to heighten the capabilities of existing technology.  

        Another example of innovative diagnosis comes from Fayetteville, Arkansas. The startup CardioWise has developed a non-invasive Cardiac Magnetic Resonance Imaging (cMRI) analysis software able to produce quantified 3D image models of the heart. The Multiparametric Strain (MPS™) heart analysis delivers highly detailed quantitative assessments of cardiovascular health. The in-depth analyses of the myocardium, arteries, and valves are expected to greatly contribute to treatment decision-making and monitoring of heart patients.  

        LoneStar Heart Inc., a Laguna Hills medical device firm, has also invested in heart disease innovation. The company has recently mobilized $20 million for the clinical trial and regulatory approval for Algisyl-LVR, a biopolymer for treating advanced heart failure. When injected to the heart’s left ventricle, the Algisyl-LVR thickens into gel-like bodies that protect the muscle from excessive stress. The novel regenerative treatment is expected to avert the evolution of heart failure and restore the muscles’ normal functions.  


Industry Implications

        The Affordable Care Act (Obamacare) will be penalizing hospitals who readmit patients originally admitted for chronic conditions, mainly heart and lung issues (which comprise over 80% of all Medicare enrollees).  These penalties will be levied against hospitals regardless of the reason for readmission.  In 2015, penalties will reach 3% of Medicare payments to the facility, which for many facilities will be in the multiples of millions in lost dollars.  The list of conditions assessed currently includes heart attack, heart failure, and pneumonia. Given the key role of heart disease for hospital readmissions, it is reasonable to presume that more effective treatments and technologies to manage CVD will become a priority.  


Conclusion

        New diagnostic tools as well as innovative treatments for heart failure and bypass surgeries are examples of promising heart disease R&D initiatives. Progress, however, is still urgently needed in various fields, from the unveiling of new causal relations to the study of CVD in specific populations. Federal tax credits are available to support eligible heart disease R&D activities.

Article Citation List

   


Authors

Charles R Goulding Attorney/CPA, is the President of R&D Tax Savers.

Andressa Bonafé is a Tax Analyst with R&D Tax Savers.

Charles G Goulding is the Manager of R&D Tax Savers.


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