Rare Disease Organizations Call on Congress to Preserve Orphan Drug Tax Credit

September 17, 2017

Rare Daily Staff

A group of nearly 140 rare disease organizations has sent a letter to leaders of the Senate Finance Committee and the House Ways & Means Committee urging preservation of the Orphan Drug Tax Credit as legislators consider broad changes to U.S. tax policy.

The Orphan Drug Tax Credit, enacted in 1983 as part of the Orphan Drug Act, provides a tax credit of 50 percent of the qualified costs of clinical research and drug testing of orphan drugs, drugs that are in development for patient populations in the United States of 200,000 or fewer.

The letter, dated September 14, was sent to Sen. Orrin Hatch, R-Utah; Sen. Ron Wyden, D-Oregon, Rep. Kevin Brady, R-Texas; Rep. Richard Neal, D-Massachusetts. It argued that the Orphan Drug Act has provided critical incentives to the pharmaceutical company to drive interests in developing drugs for rare diseases. It noted that since the passage of the Orphan Drug Act, more than 500 therapies have won approval and 3,500 therapies in development have won orphan drug designation. That compared to just 10 medicines that were developed for rare disease in the decade prior to passage of the act.

The National Organization for Rare Disorders and the Biotechnology Innovation Organization in 2015 published an analysis that concluded that there would be about one-third fewer orphan therapies developed over the past 32 years and one-third fewer therapies developed going forward if the Orphan Drug Tax Credit is repealed.

September 17, 2017

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