As the United States Senate gears up to vote on whether to pass their version of the Republican-crafted tax reform legislation (the House of Representatives has already passed their version), it’s important to know that a very important tax credit is on the chopping block – which affects all of us in the rare disease community.
The House bill – which already passed – proposes repealing the Orphan Drug Tax Credit all together while the Senate bill would cut it in half!
The Orphan Drug Tax Credit was created in 1983 as a part of the Orphan Drug Act, and is a major incentive for the development of drugs for patients with rare diseases. This incentive allows drug manufacturers to claim a tax credit of 50 percent of most of the costs of clinical research and testing.
According to an analysis by the National Organization for Rare Disorders, without this tax credit, approximately one-third fewer orphan therapies will be developed going forward.
This would be a major blow to the rare disease community.
To be fair, criticisms of the Orphan Drug Act exist. Some argue that it has allowed pharma companies to overcharge for drugs and take advantage of the incentives by seeking additional approvals in further disease subtypes or indications that do not qualify for orphan disease status.
But is repealing the tax credit or slashing it’s efficacy the answer? Wouldn’t the better solution be to address the critics’ issues and legislation solutions?
Wherever you land on the tax debate, I think we can all agree that this proposed tax credit repeal will hurt among the most vulnerable people in the nation, and we must make our voices heard.
The reach out to your senator, click here. The Senate has yet to vote for their version, so make your opinions heard!
And to reach out to your House representative, click here.
And don’t just take it from us! Read more about this proposal to slash the Orphan Drug Tax Credit on The Hill, Rare Disease Report, and NPR.
