A proposal by Rep. Dave Camp (R-Mich.) to repeal a tax credit for orphan drug development has sparked the ire of the National Organization for Rare Diseases, the incentive’s biggest champion.
Camp, who chairs the House Ways and Means Committee, included the proposal as part of draft tax reform legislation that would overhaul corporate and individual income tax rates, among other things. According to the lawmaker, repealing the tax credit enjoyed by makers of rare disease drugs would increase revenues by $9.1 billion over the next decade. The repeal provision would be effective for amounts paid or incurred in tax years beginning after 2014, the bill says.
As currently applied, orphan drug manufacturers can claim a tax credit of 50 percent of qualified clinical testing expenses for drugs that treat diseases affecting 200,000 U.S. patients or less. NORD says a third of FDA-approved drugs are rare disease drugs that benefit from the tax perk.
Nine of the 27 new molecular entities approved last year were for rare diseases, PhRMA says.
The group Thursday called the incentive one of the most successful tax credits ever passed by Congress and that its repeal would squelch research and innovation.
“Repealing this tax credit is a signal from the Congress that new treatments for people with rare diseases are unimportant. NORD appeals to Congress to block this proposed repeal and to keep the light of hope on for so many who desperately need life-saving interventions,” the group said.
View the draft tax reform bill at www.fdanews.com/ext/resources/files/02/02-28-2014-draft-tax-reform-bill.pdf. Read a summary of it at www.fdanews.com/ext/resources/files/02/02-28-2014-tax-reform-summary.pdf. — Johnathan Rickman
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