The R&D Tax Credit Aspects of Asthma
According to the World Health Organization,
235 million people currently suffer from asthma
worldwide. This chronic condition is often
underdiagnosed and undertreated, thus representing a
significant public health burden. Innovative approaches,
however, promise to change the way we prevent, monitor, and
treat asthma. The present article will discuss recent trends
in asthma research, including how the Internet of Things is
paving the way for more effective treatments. It will also
present the R&D tax credit opportunity available for those
engaged in asthma-related innovation.
The Research &
Development 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
Eligible costs include employee wages, cost of supplies, cost
of testing, contract research expenses, and costs associated
with developing a patent.
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
- New or improved products,
processes, or software
- Technological in nature
- Elimination of uncertainty
- Process of experimentation
Asthma is a chronic condition that affects
the airways in the lungs. Asthma attacks, which can vary from
mild to life threatening, are characterized by the
inflammation of the airways and consequent difficulties to
breathe. In addition to shortness of breath, these attacks
often involve coughing, wheezing, and tightness or pain in the
There is no consensus around what causes asthma; it may be due
to genetic or environmental factors, or a combination of both.
Well-known triggers of asthma attacks include allergens (such
as pollen, mold, animal dander, and dust mites), physical
exertion, drugs and food additives, occupational hazards,
pollution, and airway infections. There is also no cure for
asthma; those who suffer from this condition must seek
continuous medical care and avoid triggers. Asthma medications
can be classified into long-term control and quick-relief
drugs. While the first group aims to control symptoms through
continuous intake, the second is designed to treat asthma
better understanding of the patterns of asthma prevalence is
key to the development of more effective treatments. A
particularly important area of research is racial disparities.
According to a 2015 study by researchers from Harvard
University, black people have higher asthma rates relative to
whites, and Hispanics had lower rates than whites. Even though
the authors were unable to identify the drivers of such
disparities, they pointed out that differences in access to
quality healthcare and in exposure to pollutants and
environmental stressors may play a role. Still, disparities
persisted even after accounting for income and education,
which calls for further investigation into their underling
Prevalence and Impacts
in the U.S.
According to the Asthma and Allergy
Foundation of America, about 25.9 million Americans have
asthma, a condition that affects 8 percent of adults and 10
percent of children in the country. Asthma results in almost 2
million emergency room visits, more than 14 million doctor
visits, 439,000 hospitalizations, and 3,600 deaths annually.
As the most common chronic illness among children, asthma
accounts for 10.5 million missed school days each year.
The annual cost of asthma is estimated at $56 billion, $50.1
billion of which in direct medical costs, such as hospital
care, physicians’ services and medications, and $5.9 billion
in indirect costs, including lost workdays and decreased
Asthma and the
Internet of Medical Things
The Internet of Things is revolutionizing
healthcare. Unprecedented connectivity has enabled the
emergence of more effective, personalized treatments and has
empowered patients to monitor and improve their conditions.
the new era of health and wellness wearables, smart inhalators
promise to have an increasingly prominent position. In
addition to monitoring patients’ conditions and identifying
risk factors for attacks, these devices show particular
promise in helping improve therapy adherence, which is
considered a major challenge due to non-adherence rates that
vary from 30 to 70 percent for asthmatic patients, according
to the World Health Organization.
The market for next-generation inhalers is rapidly growing and
has become a key focus area for pharmaceutical companies.
Recently acquired by Teva Pharmaceuticals, Cambridge,
Massachusetts-based Gecko Health Innovations is the creator of
CareTRx, a platform for managing chronic respiratory diseases.
The innovative product brings together a sensor device that
can be connected to most inhalers, a data analytics platform,
and a user-friendly mobile application.
When a dose is delivered, the attached sensors and onboard
memory attached to the inhaler register the information, which
is automatically transferred to the users’ mobile device. In
addition to alerting when it’s time for a dose, the solution
also features a diary for tracking potential triggers, peak
flow, and symptoms, a prescription adherence tracker, a reward
system for “good” behaviors, and the possibility of sharing
data with healthcare professionals. Gecko plans to expand its
analytics to include a wider variety of data, including local
weather and air quality.
GlaxoSmithKline (GSK) recently announced a partnership with
Madison, Wisconsin-based Propeller Health, which will create a
custom sensor for the Ellipta inhalers. Similar to other
devices previously designed by Propeller, the sensor will
record data on the frequency and location of inhaler use and
wirelessly transfer this information to GSK researchers. The
idea is to uncover patient adherence patterns during clinical
trials and use this knowledge as basis for the development of
new products and treatment protocols.
July 2015, Propeller received FDA clearance to market its
sensor devices and digital health platform as improving – not
only tracking – medication adherence. The company, which has
worked in partnership with German Boehringer Ingelheim, uses
various approaches to promote adherence, including in-app
notifications, SMS, and audiovisual reminders on users’
Academic and research institutions are also exploring the
potential connections between mobile technology and asthma
treatment. Researchers from the University of California, Los
Angeles and the University of Southern California have
recently been awarded $6 million by the National Institute of
Biomedical Imaging and Bioengineering to develop a mobile
application for predicting asthma attacks in children. The
grant is part of an initiative called Pediatric Research using
Integrated Sensor Monitoring Systems, which aims to use big
data and mobile technology to help understand how
environmental conditions can affect children’s health.
The innovative UCLA-USC application will use sensors that will
be worn by the children and placed in various locations, such
as their homes and schools. Through cloud-based technology,
the information collected will be integrated with the
patient’s electronic medical record, real-time weather and air
quality data as well as a calendar of previous exacerbations.
By analyzing this wealth of information, the app will be able
to warn users when conditions are likely to cause another
attack. In addition to the big data-related challenges,
researchers are also working on creating a user-friendly
interface for young children.
AIR Louisville: Big
Data and Public Health
Smart technology promises to become a
strategic tool in public health programs. An interesting
example comes from Louisville, Kentucky, which has one of the
highest asthma rates in the country. A partnership between the
city’s public health department, Propeller Health, and the
Institute for Healthy Air, Water and Soil has lead to the
creation of AIR Louisville, an ambitious and innovative
program that aims to equip citizens with sensors for their
asthma inhalers. The idea is to track when, where, and how
often the inhalers are used and subsequently use this
information to help patients manage their symptoms and allow
policy makers to make well-informed decisions. The
program started in 2012 with 300 participants and is now
expanding to involve two thousand asthmatic residents.
Genetic and Microbiome
Microbiome research, or the study of the
immense community of microbes residing in and on the human
body, can be a promising alternative for the treatment and
prevention of asthma.
Research has unveiled links between babies born via C-section
and the prevalence of the condition. This has been explained
by the non-exposure to certain microbes that live in the
mother’s birth canal. Aiming to change this scenario,
researchers at New York University and the Icahn School of
Medicine are currently assessing the potential benefits of
performing a microbial transfer as a means to prevent asthma,
allergies, and autoimmune diseases. The ongoing study already
proved that the C-section babies that were exposed to their
mothers’ bacteria developed microbial neighborhoods that were
more similar to vaginally born infants than to other ones born
surgically. The outstanding question is whether this change in
microbiome will translate into better health in the years to
The role of genetics in the asthmatic population is also a
promising area of research. An ongoing study at the University
of Arizona has focused on the protein surfactant, which is
abundant in the lungs and helps clearing out infections.
Researchers have unveiled a connection between a mutation in
this protein and a greater susceptibility to asthma
Asthma treatments have traditionally taken
the form of inhaled medications. Aiming to offer an
alternative form of drug delivery – and tackle a potential $7
billion in sales per year, major pharmaceutical companies have
invested in injectable asthma treatments.
November 2015, GlaxoSmithKline received FDA approval for
Nucala, an innovative biological drug to be delivered
subcutaneously as an add-on maintenance treatment for severe
asthma patients. The first-of-its-kind medication targets the
cell signaling protein interleukin-5 (IL-5), which regulates
inflammatory cells known as eosinophils.
Other injectable therapeutics for sever asthma include
Norvartis and Genentech’s antibody treatment Xolair, which is
already on the market, and AstraZeneca's Phase III
benralizumab, which has the same anti-IL-5 mechanism of action
as Nucala. Teva Pharmaceuticals has also expressed its intent
to join the emerging injectable asthma medication market.
A Preventive Approach
A recent study by Belgium researchers may
have shed light on the possibility of developing a vaccine
against asthma. For a while now, there seemed to be a
connection between growing up on farms and being protected
against asthma and allergies. This innovative research
unveiled a casual relationship between the exposure to farm
dust and the prevention of such conditions.
Upon contact with farm dust the body synthesizes a protein
called A20, which acts as a protection against asthmatic or
allergic reactions, making “the mucous membrane inside the
respiratory tracts react less severely to allergens, such as
house dust mite.” The study examined 2,000 people who grew up
on farms, most of which did not suffer from allergies or
asthma. The ones who did suffer were found to have a genetic
variance of the A20 that caused it to malfunction.
Though undoubtedly an important step towards the development
of an asthma vaccine, there are major outstanding challenges,
including the identification and isolation of the substance
found in farm dust that is responsible for the protection.
Researchers from University of Alabama at Birmingham are also
working on a preventive approach to asthma. Using house dust
mite (HDM) allergen, they have recently discovered new
information on how allergic responses develop. According to
their findings, the initial, or sensitization, exposure to HDM
does not cause the classical allergic response of asthma but
leads to the formation of memory immune cells that are
assisted by B cells, known as T follicular helpers (Tfh). When
subject to a second dose of HDM, these cells differentiate
into a new type of cell that then attacks the allergens and
unleashes the destructive asthma responses that makes
the words of Frances Lund, Ph.D., professor and chair of the
microbiology department "This finding really changes the way
we might think about treating allergic diseases and also has
important implications when thinking about how young children
are first exposed and sensitized to allergens." Researchers
believe that targeting Tfh cells could be a promising new way
to prevent asthma.
There are many unanswered questions as to
what causes asthma and the best ways to treat and prevent it.
Innovative efforts, however, promise to improve the lives of
millions of people who suffer from this chronic condition.
From smart inhalers to injectable medication and microbiome
transplants, this exciting field of research is rapidly
evolving. R&D Tax Credits are available to help support
and stimulate companies engaged in asthma-related innovation.