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Life sciences, tech companies say regulatory burdens are chief concern

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Both life science and technology companies industries say regulatory burdens represent their top challenge, according to a new report from consulting firm BDO USA LLP.

BDO, which analyzes annual company reports filed with the Securities and Exchange Commission, said 100 percent of life science companies list government regulation as the top risk facing their business. Competition and consolidation also was cited by 100 percent of life science companies.

In a separate report, BDO said 96 percent of technology firms say government regulation is their top concern. Competition and pricing pressure, which ranked as the first concern among technology companies in last year's report, was second, followed by general economic conditions in the United States.

Regulatory burdens are a constant concern among business, said Ryan Starkes, partner and life sciences practice leader at BDO, but are more pressing now, given the uncertain impacts of major reform legislation.

Technology companies are on edge because of uncertainty over new rules that have yet to be implemented by the Dodd-Frank legislation aimed at reforming financial markets and providing consumer protections. Life science companies, meanwhile, are concerned about the impact of the Affordable Care Act.

"When businesses are looking ahead, that uncertainty creates problems," said Starkes, who works out of the Chicago firm's Woodbridge N.J. office. "When firms cannot clearly project what the impact is going to be, it creates uncertainty for the customer. What is the pricing impact going to be? What is the impact on insurance reimbursements?"

The biotech report also lists compliance with the U.S. Food and Drug Administration as the sixth-highest concern, representing 94 percent of companies surveyed. According to the report, intense global competition among biotechs to bring new drugs to market is compounded by the significant expenses needed to advance products through the FDA approval process.

Intellectual property infringement and the ability to commercialize and market products both ranked third on the list of concerns among biotechs. This was the first year BDO surveyed biotech firms in its annual report.

When compiling its data, BDO analyzed the 100 largest publicly listed technology companies, as well as the top 100 companies on the Nasdaq Biotechnology Index ranked by revenue.

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