Application Policy

1. ISSUE

This Application Policy addresses the eligibility of work performed by Canadian claimants in Canada when such work is part of multinational clinical trials. This is not a policy about the eligibility of work done outside Canada. It clarifies the statement made with respect to multinational clinical trials in Section 3 of Application Policy 96-09R.

2. BACKGROUND

Multinational clinical trials represent collaborative research, where the work is distributed among various countries and is pursued concurrently. The contribution of the Canadian claimant to a multinational clinical trial (i.e. the work undertaken in Canada) must meet the definition of SR&ED in order to be eligible.

The CCRA undertook a consultative process to address eligibility issues related to multinational clinical trials. The consultations included input from the pharmaceutical/ biopharmaceutical industry and the medical research community. This Application Policy is based on the result of those consultations.

3. ELIGIBILITY OF THE CANADIAN CONTRIBUTION

The work carried on in Canada with respect to multinational clinical trials, by the claimant and/or on behalf of the claimant, constitutes the Canadian contribution. The contributions are generally subject to the requirements of the Research Ethics Board (REB) at the local institution. The scientific responsibilities of the Canadian researchers pursuing biomedical research are reflected in research ethics guidelines*. The Canadian contribution must meet the definition of SR&ED under subsection 248(1) of the Income Tax Act in order to be eligible.

3.1 Contribution involving study subject accrual

The work carried on in Canada by qualified researchers (clinical investigators and company scientists), as part of a multinational clinical trial involving the accrual of study subjects in Canada would be considered to be eligible SR&ED when:

• Does the research attempt to further the understanding of a phenomenon that can lead to therapeutic benefits?
• Is the hypothesis appropriately formulated and does uncertainty exist about the magnitude and kind of benefits and harm that might arise from the experimental treatment?
• Has the study been designed to optimize subject safety?
• Is the approach, including the clinical trial design and analysis plan, capable of addressing the research questions being asked?
   

Supporting information needs to be available to substantiate that the requirements set out above for the Canadian contributions have been met. The supporting information should demonstrate for instance that the scientific input sought under (b) above has been provided. Examples of relevant records to consider for this purpose could include documents that:

Other types of documents that can be considered in support of the scientific input of the Canadian researchers could include those pertaining to the critical analysis of the study report and/or of manuscripts for publication.

Supporting information should also clearly establish that clinical trial work involving subject accrual was conducted in Canada.

3.2 Contribution not involving study subject accrual

The work carried on in Canada by qualified researchers, as part of a multinational clinical trial does not always involve the accrual of study subjects. The work undertaken in Canada under these circumstances would be eligible if it meets the definition of SR&ED as set out in subsection 248(1) of the Income Tax Act.

The eligibility of a Canadian contribution to a multinational clinical trial when that contribution does not involve study subject accrual, would be considered in terms of the input provided into aspects such as study design, protocol development, interpretation of results and/or participation in scientific monitoring boards.

Supporting information should be available to describe the nature of the input and its role with respect to the attempt to achieve the scientific or technological objectives of the project. The multinational clinical trial must attempt to advance scientific knowledge and be based on a protocol that incorporates the principles of the scientific method.

Examples of Canadian contributions without accrual of study subjects in Canada that could be considered to be SR&ED are provided below for illustrative purposes:

• The claimant has discovered or acquired a new drug entity for a disease that, for all practical purposes, is not found in Canada and undertakes to develop the product. The claimant (directly or through Canadian researchers on his behalf) participates in the development of the protocol, is part of the central project team or scientific monitoring boards and has a coordinating role with respect to the clinical sites abroad.
• A Canadian researcher undertakes, on behalf of the claimant, a sub-study to evaluate a secondary hypothesis (elaborated a priori) using results that are obtained by sites abroad as part of the main study.
• A Canadian researcher, on behalf of the claimant, is involved in determining appropriate safety and/or efficacy end-points and devising methods to assess them for a study that does not involve Canadian sites, and interprets results through out the study. Whether the two components (input to study design and analysis) of the Canadian contribution taken together can correspond to applied research would depend on the merits of the individual claim*.

4. INELIGIBLE WORK

Generally, a Canadian contribution to undertakings such as those listed below would not be considered to be SR&ED. In some cases, Research Ethics Board approval may have been sought. However, these undertakings, whether carried on in a multinational context or not, would not necessarily involve an experimental or analytical study design based on the principles of the scientific method and/or would not attempt to advance scientific knowledge:

The economic or cost analysis component of a pharmacoeconomic trial would also not be eligible since work with respect to research in the social sciences or humanities is excluded under subsection 248(1) (g) of the Income Tax Act. See Application Policy 96-09R for more details on pharmacoeconomic studies.

5. CLAIM SUBSTANTIATION

Submitted clinical trials must be presented to the CCRA as a SR&ED project. The information that must be provided in the description is listed in Part 2 of Schedule 32 (Form T661).

The claimant needs to maintain supporting information to substantiate the work carried on in Canada. As indicated previously, the supporting information could include records related to Research Ethics Boards. Other material may be used as necessary to support the work done in Canada. Private information on study subjects should be excluded from the documentation presented.

In order for the Canadian contribution to a multinational clinical trial to be recognized as SR&ED undertaken in Canada, the claimant must make available relevant supporting information for verification purposes.

Norine Heselton

Director General
SR&ED Directorate