Rare Disease Research Targeted by Bill’s Tax Credit Limit (1)


Orphan drug tax credit limit in President Joe Biden’s signature social spending program raises concerns that it will stifle research into how existing drugs could be used for rare diseases if Congress passes it .

Tens of millions of patients with Hodgkin’s lymphoma, sickle cell anemia and other rare diseases have benefited from more than 730 drugs and therapies approved by the Food and Drug Administration since Congress first adopted the Orphan Drug Act in 1983.

But a section of the Build Back Better Act (RH 5376) restricts the types of drugs eligible for a rare disease tax credit to those whose first official use is to treat rare conditions or which are first indicated – or labeled for use – as orphan drugs.

The restriction is aimed at preventing high performing pharmaceutical companies from increasing their profits. But the concern is that this will erase a financial incentive for companies to investigate how drugs already approved for certain conditions could also be used to treat rare diseases.

“I’m taking a drug that saved my life,” said David Fajgenbaum, professor of medicine and associate director of the Orphan Disease Center at the University of Pennsylvania, who suffers from Castleman’s disease, a rare disease involving overgrowth cells in the lymph nodes. .

“Unfortunately, there are other patients who are suffering from rare diseases for which the drug that could save their life is already in the neighborhood pharmacy, but no one understood it,” he said.

Fajgenbaum discovered during his own research as a medical student that sirolimus, a drug traditionally used to prevent organ rejection after a kidney transplant, also prevented his immune system from attacking and killing him. because of his Castleman disease.

Affordable research

Proponents of expanding research into rare disease treatments argue that the provision, which was also included in the last version of the Build Back Better text proposed by the Senate Finance Committee, could be particularly damaging for small pharmaceutical companies who may not have sufficient funds to conduct the necessary research and testing.

Such studies can run into the tens of millions of dollars, which rights groups cannot collect on their own, said Fajgenbaum, who is also co-founder and executive director of the Castleman Disease Collaborative Network.

“If this is a product that has been on the market and a company believes there is another potentially life-saving use for this drug in a rare disease, we want the law to push that company to do so. the clinical trials needed to prove safety and efficacy, ”said Rachel Sher, vice president of policy and regulatory affairs for the National Organization for Rare Disorders.

The FDA declined to comment on the potential impact of the tax credit restriction, citing it as an issue subject to pending legislation.

Orphan Medicines Act

For nearly four decades, the FDA has been responsible for granting orphan drug designations for drugs and biologics that can prevent, diagnose, or treat rare cancers, blood disorders, and other rare conditions.

the Orphan Medicines Act defines a “rare disease or condition” as a disease which affects less than 200,000 people in the United States or affects more than 200,000, but “for which there is no reasonable expectation that the cost of development and provision “of the drug” for such disease or the condition will be [be] recovered from sales’ of the drug.

The law allowed orphan product developers designated to be eligible for tax credits for qualified clinical trials and the user fee waiver from manufacturers that help fund FDA operations. The label also qualifies sponsors to potentially receive seven years of market exclusivity for their drug after FDA approval.

Although a single rare disease can impact a relatively small number of people, advocates say the large portion of the global population affected is reason enough to develop life-saving treatments.

About 30 million Americans, or one in 10, suffer from at least one of the more than 7,000 rare diseases identified across the country, according to FDA data.

“If 10% of the population is affected by something, we should really be spending the time, attention, money and research to figure out what we can do to prevent or treat it,” he said. said Linda Goler Blount, President and CEO of Black Women’s Health Imperative and member of the Rare Disease Diversity Coalition, which was launched by Imperative to address the challenges of minority patients with rare diseases.

In recent years, Congress has already reduced the percentage of clinical trial expenses eligible for orphan drug tax credit coverage.

The Tax Cuts and Jobs Act of 2017 reduced the total amount that companies could receive from 50% to 25% of clinical trial spending for drugs with an orphan drug designation. NORD and other groups said the full impact of the change is not yet known, but further limits on financial incentives to develop treatments for rare diseases can only hurt the cause.

“It unfortunately comes down to money,” Goler Blount said. “But of course if you’re that family member, if you’re that person, you know that doesn’t seem like a small problem.”

“System game”

Lawmakers involved in crafting the tax credit changes say the provision is intended to help set federal funds aside for drug developers who need it most.

“This policy simply prevents drug companies from playing with the system,” House Ways and Means president Richard Neal (D-Mass.) Said in a statement. He added that “the proposal aims to ensure that incentives under the Orphan Medicines Act target treatments developed for patients with orphan and rare diseases and are not played by successful drug makers.”

The Office of the Inspector General, in findings released in September, found that some of Medicare’s more expensive drugs have received at least one orphan drug indication, qualifying them for certain financial incentives.

Many of the expensive orphan drugs included in the study were initially approved “to treat relatively common diseases or conditions,” according to The report.

The benefits associated with an orphan drug label can “provide significant financial incentives for manufacturers to seek orphan designation for drugs approved to treat common illnesses or conditions,” the report said.

He also questioned whether the “current eligibility requirements and incentives” of the tax credit are “the most effective way to ensure the continued development of affordable drugs to treat patients with rare diseases and conditions. “.

The 20 drugs approved for rare disease indications that were included in the OIG report, however, “represent only about 4% of all drugs designated as orphan,” the FDA said in a letter submitted in response to findings.

“The FDA is committed to facilitating the development of treatments for patients with rare diseases,” the agency added at the time. “ODA is an important tool to achieve this goal.

Policymakers “cannot turn a blind eye to the success of the Orphan Medicines Act in catalyzing increased treatment options for patients, both through new agents and post-approval indications” , Andrew Powaleny, spokesperson for the Pharmaceutical Research and Manufacturers of America business group. (PhRMA), said in an emailed statement.

PhRMA released a report Thursday showing that nearly 800 potential drugs for rare diseases are currently in clinical trials or awaiting review by the FDA. Powaleny added that despite significant gains in research over the years, the benefits of the tax credit are still needed because less than 10% of rare disease patients in the United States have treatments.

“Congress should not threaten or create uncertainty over the main incentives needed to help these patients,” Powaleny said.

For now, rare disease advocates are bracing for the possibility of the tax credit limit becoming law.

“The advocacy really needs to be stepped up to go into philanthropy, to try to get funds to do research, to create other mechanisms to do research,” Goler Blount said.

The central question, NORD’s Sher said, is not whether companies need the orphan drug tax credit, but whether they will continue to perform the clinical trials necessary to get rare disease indications added to their companies. products without credit.

“NORD’s concern – and that of the 30 million rare disease patients we represent – is that the answer is no,” she said.


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