NORD and orphan drug firms campaign to maintain Orphan Drug Tax Credit

In Regulation & Government by Tim Peplow

congress orphan drugs tax credits (ron cogswell

We know that the Orphan Drug Tax Credit (ODTC) is a great incentive for orphan drug developers – but could you soon see it disappear? Shire, Vertex Pharmaceuticals, ViroPharma and BioMarin are reportedly among orphan drug firms urging Congress to maintain the ODTC amidst US tax reform proposals. The companies join the National Organization of Rare Disorders (NORD) and more than 70 patient organisations in voicing their concerns about the impact of dropping the ODTC.

The status quo is that the ODTC allows drug firms to claim a tax credit of 50% on the cost of clinical drug testing, and acts as an incentive for firms to develop products for rare diseases. According to a Financial Times article, it’s been proposed that tax credit reform should begin with a “blank-slate” – i.e. nothing – and orphan drug firms tasked with justifying why they should receive any tax credit at all.

The website Rare Disease Legislative Advocates asked organizations to add their name to a letter sent to Congress urging that the ODTC is kept in place. “The ODTC provides necessary incentives for companies to embark on research and development projects to develop treatments” for rare diseases, warns the letter. “In so doing, the Orphan Tax Credit literally saves lives.”

You can also read the letter NORD has sent here.The letter includes a quote from Marlene E. Haffner, MD, MPH, former Director of the FDA Office of Orphan Products Development: “Tax credits are an integral part of the Orphan Drug Program and are a lifeline to small and medium-sized firms as they are developing and growing their business and their products to treat rare diseases. The tax credits are a very small portion of tax revenue, but a very large incentive for the development of products for the treatment of rare diseases, many of which are life-threatening; 50% of those affected by these diseases are children.”

What do you think about this issue? How likely do you think the elimination of the ODTC is? What effect would dropping the ODTC have on the orphan drug industry?

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The World Orphan Drug Congress Europe brings together pioneers from the orphan drug community, including key opinion leaders from the payer, HTA, public health and patient advocacy bodies. Read more about the World Orphan Drug Congress Europe 2013, 14-15 November 2013, Geneva.

Read more at Financial Times >