“Silent Monks Sing the Hallelujah Chorus”

January 15, 2020, 7:36 am

Perhaps a couple weeks late, but too good not to mention:

Credited to the South Kitsap High School vocal group in Port Orchard, Washington.

Hat tip: Behind the Black.

Cost to develop one new drug

January 13, 2020, 7:00 am

Federal Trade Commission Building in Washington, DC. Image courtesy of Adobe Stock.

How much does it cost for a pharmaceutical company to get one new drug onto the market? As with all variations of “what does it cost” questions the answer is complicated. Any such answer requires explanation of what the calculation means.

Other posts discussing this issue:

According to a 2016 study by Tufts Center for the Study of Drug Development, here is their calculation of what it takes to get one compound to the point of where it is approved for sale:

  • $1.395 billion – out-of-pocket costs – actual cash expended at the point approval is obtained to sell the compound
  • +$1.163 billion – “time costs”, in other words the capitalization of having to invest more than a billion dollars over many years – this represents the opportunity cost of having otherwise been able to invest that money in something else that would have produced a return earlier
  • =$2.558 billion – total capitalized cost at point of receiving approval to sell one compound
  • +0.312 billion – costs incurred for follow-up required by FDA as a condition of obtaining approval – this includes factors such as monitoring long-term side effects, monitoring safety, looking at new formulations or dosage strength
  • =$2.870 billion – total lifecycle costs to develop one new medicine that is approved by the FDA for sale

The study was based on a random selection of 106 drugs from 10 pharmaceutical companies. Since that is a random selection presumably the calculation would apply to all medicines.

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Federal mileage rates for 2020

January 2, 2020, 6:00 am

Image courtesy of Adobe Stock.

On 12/31/19 the IRS published the reference amounts for mileage rates for 2020. Their announcement:

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Two more parents sentenced in college admissions scandal over last two months. Recap of previous sentences.

December 26, 2019, 9:54 am

Image courtesy of Adobe Stock.

Two more parents have been sentenced in the college admissions scandal.  Been watching the news lately and no more sentences have been declared in the last six weeks.

According to my count of the status listed by Wikipedia, there are 6 parents who have a plea deal and are awaiting sentencing. Another 15 parents are awaiting trial.

New sentencing since my last post on 10/28/19:

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Update on exposure draft for increased GIK disclosures

December 19, 2019, 11:17 am

Image courtesy of Adobe Stock.

FASB update presentation today (12/19/19) indicated the GIK disclosures project is moving forward as previously outlined.

An exposure draft is expected to be released in January 2020.  There will be a 60 day comment period.

Previous post described the outline and limited scope of the project as approved by FASB:

In condensed form, the project will require separate disclosure of donated goods on the face of the statement of activities and require some additional disclosures in the notes. There will not be any change in valuation of donated medicine.

Repeal of “Parking Lot Tax” may be imminent.

December 17, 2019, 9:16 pm

Image courtesy of Adobe Stock.

Breaking news today suggests the so-called parking lot tax, which creates a tax liability for charities in certain circumstances for the cost of parking provided to employees, might be repealed shortly.

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More articles on GIK valuation. The issue isn’t going away.

November 20, 2019, 10:09 am

Image courtesy of Adobe Stock.

Nicola White, writing at Bloomberg Tax, has several articles following up on the GIK valuation issue after the veto of California AB 1181 by the governor. If you have been following the issue, you will want to check her recent writing.

End of this post discusses the departure from FASB of a project manager long involved with nonprofit rulemaking.

The articles, with a few highlights:

11/4/19 – Bloomberg Tax – Small Fixes Eyed for Charity Accounting as California Backs Off – Article describes why FASB is strongly resistant to any change in GIK valuation.

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