NORD Orphan Drug Tax Credit letter to Chairmen Camp and Baucus and Ranking Members Levin and Hatch

July 25, 2013

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

 

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

 

The Honorable Dave Camp, Chairman U.S. House Committee on Ways & Means 1102 Longworth House Office Building Washington, D.C. 20515 The Honorable Sander Levin, Ranking Member U.S. House Committee on Ways & Means 1106 Longworth House Office Building Washington, D.C. 20515

 

Dear Chairmen Camp and Baucus and Ranking Members Levin and Hatch:

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

According to 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.”

The ODTC allows drug manufacturers to claim a tax credit of 50% 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 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 2,700 potential treatments have entered the research pipeline as orphan products and more than 300 have been approved by the FDA, largely as a result of the incentives provided by the ODA including the tax credit.

Much remains to be done. Of the approximately 7,000 diseases considered rare in the U.S., only a few hundred have FDA-approved treatments. This leaves millions of Americans with diseases that currently have no treatment or cure. The Orphan Drug Tax Credit gives hope to those people while also aiding the U.S. economy by enhancing the growth of firms developing products to treat rare diseases.

We appreciate your attention to this important matter...

 

Download the full letter (PDF)