RARE Daily

NORD Warns Provision in Biden Administration’s Ambitious Legislation Would Cut Benefits of Orphan Drug Tax Credit

September 13, 2021

The National Organization for Rare Disorders is sounding an alarm on a provision in the Biden Administrations Build Back Better legislation before a U.S. House of Representatives committee saying it would “severely undercut” the goal of the Orphan Drug Act.

Photo: Peter Saltonstall, CEO and president of NORD

The Build Back Better Act is an ambitious plan to create jobs, cut taxes, and reduce expenses for working families offset by taxing large corporations and the wealthiest individuals. But as the legislation moves to consideration in the House Committee on Ways and Means, NORD is criticizing a provision that would end tax credits under the Orphan Drug Act for qualified clinical testing expenses for all but the first approved orphan use of a new drug.

“NORD is deeply concerned about this misguided provision, and we urge the Committee to oppose its inclusion in this legislative package,” said Peter Saltonstall, CEO and president of NORD.

More than 90 percent of rare diseases lack an FDA-approved treatment indicated for the specific rare disease. Each time a new orphan use of a drug is added to the label of a drug, more rare disease patients receive assurance that the drug is safe and effective for them.

The Orphan Drug Tax Credit can help to offset the cost of developing and testing orphan therapies as they move through the clinical trial process, NORD said. It noted the longstanding incentive is particularly important for smaller companies focused exclusively on rare diseases.

As lawmakers consider this provision targeted directly at rare disease drugs, NORD noted that orphan drugs account for only 11 percent of the overall drug spend in the United States.

The Orphan Drug Tax Credit was already reduced in 2017 in the Tax Cut and Jobs Act when Congress reduced the total amount of the tax credit for qualifying clinical testing expenses from 50 percent to 25 percent. NORD opposed this change then and again calls on Congress to maintain the ODTC as it stands today, so that rare disease patients can maintain their hope that new orphan uses of drugs will continue to be pursued.

“In its efforts to alleviate the burden on U.S. patients at the pharmacy counter, Congress should focus on the true drivers of high drug costs,” said NORD, and not attack the critical incentives necessary for developing products for those who need them the most and who were at one time entirely left out of the drug development process: rare disease patients.”

Author: Rare Daily Staff

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