US Biotechnology and regulatory framework

May 23, 2008

Biotechnology in the United States is regulated by at least five Federal agencies in a Coordinated Framework:

1. The Environmental Protection Agency (EPA)

2. Department of Agriculture (USDA)

3. National Institutes of Health (NIH)

4. The Occupational Safety and Hazard Administration (OSHA) and

5. To a small extent the Food and Drug Administration (FDA)

Major Laws that Empower Federal Agencies to Regulate Biotechnology
Law Agency
The Plant Protection Act USDA
The Meat Inspection Act USDA
The Poultry Products Inspection Act USDA
The Eggs Products Inspection Act USDA
The Virus Serum Toxin Act USDA
The Federal Insecticide, Fungicide, and Rodenticide Act EPA
The Toxic Substances Control Act EPA
The Food, Drug, and Cosmetics Act FDA, EPA
The Public Health Service Act FDA
The Dietary Supplement Health and Education Act FDA
The National Environmental Protection Act USDA, EPA, FDA
Source: Pew Initiative on Food and Biotechnology

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$80bn Indian mega-hub proposed

May 23, 2008

The Indian government is close to rubber-stamping an $80bn industrial hub near Vishakhapatnam (Vizag) which is expected to attract pharmaceutical companies to the region. A consortium of Mittal Energy Investments, Total SA and Petroleum Corp will be the anchor tenant at the mega oil, chemical and petrochemical hub following its $7.5bn investment.

Surrounding this will be numerous pharmaceutical and chemical manufacturing facilities, spread over the 603 sq km site.

The sheer scale of the site and the investment should ensure that it becomes a focal point for pharmaceutical activity within India. At this time it is unclear which pharmaceutical companies will be setting up in the region.

The operating in India the hub at Vizag should prove alluring to pharmaceutical companies owing to its scale plus the surrounding geography, culture and infrastructure.

Companies operating in the hub will be looking to utilise the large number of highly educated, English speaking graduates from the region’s educational establishments.

It is this workforce which has driven the rapid growth of Vizag from a small fishing village during colonial times to the industrial monolith it is today.

This industrial expansion has been supported by improvements in the region’s infrastructure.

Consequently, the hub will have excellent links by air, which have undergone rapid improvement in recent years. This has resulted in increased capacity for international airlines and permission for night flights. The city is also well connected to the rest of India by air and rail.

This should facilitate the movement of people to the hub, as well as the transport of goods to market. Vizag’s natural harbour will also play a vital role in dealing with exports, which are anticipated to be $13.6bn per annum.

Infrastructure at the hub itself is to be developed through significant governmental funding, with central government pumping in $1.2bn and the state, Andhra Pradesh, supplying $500m.

The sums of money involved signify the commitment of the Indian government to see the nation build on the impressive growth it has achieved in recent years.


What Foreign Companies Need to Know about Litigation in America before Entering the U.S. Market

May 23, 2008

Despite the beginning of the “credit crunch” and the collapse of the housing market, 2007 was a banner year for foreign direct investment in the United States, which ranked second, behind China, in the number of new and expanded foreign projects. Behind the bad news is a silver lining – the decline in the value of the dollar against other currencies currently makes investment in the U.S. extremely attractive. With its dynamic economy, deep capital markets and resilient consumer spending, the United States is likely to remain an irresistible target for foreign companies seeking new business opportunities, yet hurdles remain.

Selecting a Business Location

Good corporate legal strategy in America begins by planning ahead to ensure that, if and when litigation arises, it occurs on favorable terms.  In that regard, the most critical decision a business must make initially is where to locate its headquarters.  There are, of course, a host of issues that must be weighed when choosing where to locate any new business, such as taxes, regulations, access to an educated workforce and whether unions have a strong presence.  However, carefully choosing the location of the principal place of business can go a long way toward minimizing the consequences of litigation by guaranteeing that a forum, friendly to business, hears any future disputes.  Such jurisdictions typically have a negligible union presence and a strong governmental commitment to attracting foreign investment.  The judges are conservative and the juries are well-educated, sensible and stingy.

The Best Defense is a Good Offense

Locating a company in a “pro-business” jurisdiction also allows it to take advantage of the Declaratory Judgment Act (DJA), which authorizes courts to rule on any legal issue presenting an actual controversy between two parties.  Often, a party that wishes to initiate suit will first send the other party a “demand letter” explaining the nature of its legal claim and threatening to sue the other party unless it is paid an outrageous sum of money.

The Benefits of Arbitration over Litigation
To avoid litigation altogether, foreign businesses should also seriously consider including provisions mandating arbitration of any disputes by the American Arbitration Association (AAA) in their contracts.  Arbitration requires the parties to submit disputes to a neutral decision maker and expert in the substantive law, with the authority to issue a binding decision.  The principal advantage of arbitration is that it allows a company to avoid having a jury decide its case.  This can be a real benefit to any corporate defendant, especially when a foreign company faces off against a hometown entity or individual.

The Litigation Process
If all else fails and a company finds itself in court, this need not be cause for despair.  The American judicial system is designed to repeatedly test the merits of the plaintiff’s claims and to dispose of the case at the earliest opportunity.  Indeed, despite its reputation as a no-holds-barred litigious society, only 4.1% of all cases filed in federal court ever reach trial, with the rest being settled by the parties or dismissed by the court. Cases typically begin with the filing of a complaint in court followed by service of the complaint on the defendant.  If the complaint is defective on its face, the defendant may immediately move for dismissal.

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