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Advocacy - Tax and Fiscal

140+ Rare Disease Organizations Letter in Support of Orphan Drug Tax Credit – September 2017

September 14, 2017

The Honorable Orrin Hatch, Chairman
U.S. Senate Committee on Finance
219 Dirksen Senate Office Building
Washington, D.C. 20510

The Honorable Kevin Brady, Chairman
U.S. House Committee on Ways & Means
1102 Longworth House Office Building
Washington, D.C. 20515

The Honorable Ron Wyden, Ranking Member
U.S. Senate Committee on Finance
219 Dirksen Senate Office Building
Washington, D.C. 20510

The Honorable Richard Neal, Ranking Member
U.S. House Committee on Ways & Means
1106 Longworth House Office Building
Washington, D.C. 20515

Dear Chairmen Hatch and Brady and Ranking Members Wyden and Neal:

As organizations representing millions of American men, women and children with rare diseases, we are writing to express our strong support for the Orphan Drug Tax Credit (ODTC). We understand that Congress is developing tax reform proposals and we urge you to keep this critical tax credit in place.

The ODTC allows drug manufacturers to claim a tax credit of 50 percent of the qualified costs of clinical research and drug testing of orphan drugs (drugs for diseases affecting 200,000 Americans or fewer). The ODTC is part of a package of provisions enacted in 1983 in the Orphan Drug Act (ODA) that provide incentives for drug companies to develop products for rare diseases. This legislation has been extremely successful.

In the decade before the Orphan Drug Act, only 10 medicines were developed by industry for rare diseases. Since 1983, however, more than 3,500 potential treatments have been designated as an orphan drug, and more than 500 orphan therapies have been approved by the FDA. This is a direct result of the incentives provided by the ODA including the tax credit.

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