the formation of International Orthopedic Insurance Purchasing Group, Inc. The new risk purchasing group (RPG) will serve qualifying members of the orthopedic implant industry.

RPGs, which were first allowed by the Federal Liability Risk Retention Act of 1986, allow companies in the same or related field with similar loss exposures to join together to buy liability insurance. The combined buying power results in many benefits for the companies involved in an RPG.

The International Orthopedic Insurance Purchasing Group insurance was negotiated through a major insurance carrier and is a unique product that will provide participants with coverage enhancements, special pricing and discounts not usually available in the current marketplace.

"We founded the NewScience Insurance Division to meet the specialized needs of medical device companies, orthopedic implant manufacturers, biotechnology firms and contract research organizations," said Britton-Gallagher chief executive officer Bruce Ball. "This new product does exactly that. Even if a company already has a policy with our chosen insurance carrier, we can offer them improved benefits through our RPG."

"We have successfully met the insurance needs of the industry all around the globe since 1948, and we believe products like that offered through our new RPG will help us continue to do so for many years to come," Ball said.

For more information on International Orthopedic Insurance Purchasing Group and to determine if a company meets the criteria to take part, contact Bruce Ball at 1.800.607.4711.

Britton-Gallagher's NewScience Insurance Division serves medical device companies, orthopedic implant manufacturers, biotechnology firms and contract research organizations. The Division strives to offer the broadest coverage for these industries, with no liability gaps, at the lowest possible cost. NewScience Insurance has successfully met the insurance needs of the industry all around the globe since 1948.

The NewScience Division has nearly 20 years of industry experience and sits on more insurance brokerage councils than most any other broker in the country. The professionals in the Division have a vast knowledge base of insurance products and services available to the medical device, orthopedic implant and biotechnology industries from the broadest possible network of suitable insurance carriers.

Insurance provided through the RPG is underwritten by Continental Casualty Company, a division of CNA. Coverage is available in all states where the RPG has been authorized which includes all states except Louisiana where an RPG application for approval is pending.

As you know, on March 23th, President Obama signed into law the Patient Protection and Affordable Care Act. As part of this Act, the Internal Revenue Code Section 48D was created. Section 48D will provide incentives that may offer you a significant benefit.

• Sec. 48D provides a tax credit equal to 50 percent of the "qualified investment" of an "eligible taxpayer."
• Companies that cannot currently use tax credits may apply for a cash grant for the same amount.
• Example - Eligible taxpayer makes $1 million qualified investment = $500,000 credit or grant.

• A taxpayer that employs not more than 250 employees in all its businesses at the time it submits an application.
• Eligible taxpayers include C corporation and pass-through entities like S corporations and partnerships
• Certain non-taxpayers are not eligible for grants, including:
  • Sec. 501 (c) organizations exempt from tax under sec. 501 (a);
  • Federal, state and local government agencies;
  • Any partnership or other pass-through entity which has, as a holder of an equity or profits interest, a person described in the above two categories

• The credit/grant equals 50 percent of a taxpayer's "qualified investment,":
  • The "aggregate amount" of the costs
  • Paid or incurred in a taxable year beginning in 2009 or 2010
  • For expenses "necessary for and directly related to"
  • The conduct of a Qualifying Therapeutic Discovery Project ("QTDP").
• QTDP Objectives:
  • Develop a product, process, or technology to further the delivery or administration of therapeutics;
  • Diagnose diseases or conditions, or determine molecular factors related to diseases or conditions, by developing molecular diagnostics to guide therapeutic decisions; or
  • Treat or prevent diseases or conditions by:
    • Conducting pre-clinical activities, clinical trials, and clinical studies; or
    • Carrying out research protocols, for the purpose of securing approval of a product under sec.:
      • 505(b) of the Federal Food, Drug, and Cosmetic Act (FDA New Drug Application); or
      • 351(a) of the Public Health Service Act (Biologics License Applications).
• Certification by Treasury Department
  • In deciding which projects to certify, Treasury must find that the projects show "reasonable potential" to:
    • Result in new therapies to treat areas of unmet medical need or prevent, detect, or treat chronic or acute diseases and conditions;
    • Reduce long-term health care costs in the United States; or
    • Significantly advance the goal of curing cancer within 30 years.
  • Treasury shall then consider which projects have the greatest potential to:
    • Create and sustain, directly or indirectly, high-quality, high-paying jobs in the U.S.; and
    • Advance United States competitiveness in the fields of life, biological, and medical sciences.
    • Treasury shall take action to approve or deny applications within 30 days of their submission.

• The application is due to be published by May 22, 2010
  • No one knows what the application will look like just yet, but due to the complex rules, the application may be complicated
• Only $1 billion is available for investments in 2009 and 2010, so time is of the essence

Britton-Gallagher has partnered with CPA, business and financial advisory firm Skoda Minotti (www.section48d.com) to assist our clients and contacts with the application process to ensure that you are able to take full advantage of any available credit or grant.

As the available funds (only $1 billion) may go quickly, we encourage you to contact Skoda Minotti as soon as you have identified that you may be eligible for a credit or grant. As they have been researching and studying this opportunity since its announcement, they are most qualified to help you fill out the application as quickly as possible while putting yourself in the best position to receive funding.

If you have any questions about moving forward with a Section 48D application, feel free to contact Jim Sacher at Skoda Minotti at 440-449-6800.

Thank you and we look forward to working with you in the future.