Some of the Bay State’s biggest biotech companies are teaming up with drug makers and patient advocacy groups across the country to wage battle to protect the crucial federal tax credit that provides a key incentive for pharmaceutical companies to develop drugs for “orphan diseases.”
The measure, slated for debate as part of upcoming tax reform discussions in Congress, allows pharmaceutical companies to claim a tax credit of 50 percent of research and testing costs for drugs meant for diseases affecting fewer than 200,000 people in the U.S. — such a small market that they would not otherwise be worthwhile for large pharmaceutical companies to target.
Development of the so-called orphan drugs has skyrocketed since the tax credit was approved in 1983, with some of Massachusetts’ powerhouse biotechs specializing in the market.
“We believe it provides an important incentive for companies to pursue research into serious diseases that despite affecting a small number of people are often life-threatening and have few available treatments,” said Nikki Levy, a spokeswoman for Cambridge-based Vertex Pharmaceuticals, maker of Kalydeco, a drug for people with cystic fibrosis who have a specific genetic mutation.
The cost and limited potential for profit would make such drugs difficult to develop without the tax credit, pharmaceutical companies say.
“The Orphan Drug Tax Credit has been a crucial incentive to those companies as they have made significant breakthroughs in areas such as cystic fibrosis, Parkinson’s disease and sickle cell anemia,” said Massachusetts Biotechnology Council President and CEO Robert K. Coughlin.
There are roughly 7,000 rare diseases, and around 50 percent of those affected are children.
“We strongly urge you to keep this critical tax credit in place,” the National Organization for Rare Disorders, which represents a number of health organizations, said in a letter to congressmen who have questioned the credit.
“Repeal of the tax credit would cause irreparable harm to the goal of promoting development of therapies for patients with rare diseases,” said Lori Gorski, a spokeswoman for Genzyme, a Cambridge-based company that spent 12 years developing Kynamro, which targets an inherited high-cholesterol condition that affects one in a million people.