Breaking News
November 17, 2018 - Tracking Preemies’ Head Size May Yield IQ Clues
November 17, 2018 - Scientists call for unified standards in 3-D genome and epigenetic data
November 17, 2018 - Lab Innovations 2018 has beaten all records by attracting 3,113 attendees
November 17, 2018 - Sexuality education before age 18 may reduce risk of sexual assault in college
November 17, 2018 - Lab Innovations 2018 confirmed as a major hit with visitors, exhibitors and speakers
November 17, 2018 - Largest parasitic worm genetic study hatches novel treatment possibilities
November 17, 2018 - Obesity significantly increases risk of Type 2 diabetes and coronary artery disease
November 17, 2018 - People with rare cancers can benefit from genomic profiling, shows research
November 17, 2018 - NIH awards over $1.8 million to husband-and-wife doctors to test new breast cancer approach
November 17, 2018 - Four-in-one antibody used to fight flu shows promise in mice
November 17, 2018 - New approach allows pathogens to be starved by blocking important enzymes
November 17, 2018 - Higher body mass index could cause depression even without health problems
November 17, 2018 - Protein which plays role in sensing cell damage serves as new target to treat pulmonary hypertension
November 17, 2018 - FDA Approves Adcetris (brentuximab vedotin) in Combination with Chemotherapy for Adults with Previously Untreated Systemic Anaplastic Large Cell Lymphoma or Other CD30-Expressing Peripheral T-Cell Lymphomas
November 17, 2018 - ID specialist input improves outcomes for outpatient parenteral antimicrobial therapy
November 17, 2018 - UT Southwestern scientists selected to receive 2019 Edith and Peter O’Donnell Awards
November 17, 2018 - New clinical algorithm to help individuals manage type 2 diabetes when fasting during Ramadan
November 17, 2018 - Researchers identify LZTR1 as evolutionarily conserved component of RAS pathway
November 17, 2018 - Heart Disease Leading Cause of Death in Low-Income Counties
November 17, 2018 - Estrogen Levels Test: MedlinePlus Lab Test Information
November 17, 2018 - Research reveals link between immunity, diabetes
November 17, 2018 - Research shows how to achieve improved smoking cessation outcomes within California’s Medicaid population
November 17, 2018 - New study finds less understanding and implementation of patient engagement
November 17, 2018 - New shoe insole technology could help diabetic ulcers heal better while walking
November 17, 2018 - New method to extend cell division and immortalization of avian-derived cells
November 17, 2018 - Australian Academy of Science urges parents to vaccinate children against meningococcal disease
November 17, 2018 - Hot water treatment may help improve inflammation and metabolism in sedentary people
November 17, 2018 - Researchers produce 3D chemical maps of small biological samples
November 17, 2018 - Must Blood Pressure Rise Wth Age? Remote Tribes Hold Clues
November 17, 2018 - Noonan Syndrome
November 17, 2018 - Interventions to delay and prevent type 2 diabetes are underused, researchers say
November 17, 2018 - Hackathon prize winner seeks to remotely monitor patient skin conditions
November 17, 2018 - Research team identifies Ashkenazi Jewish founder mutation for Leigh syndrome
November 17, 2018 - Gene editing could be used to halt kidney disease in patients with Joubert syndrome
November 17, 2018 - Study uncovers link between gut disruption and aging
November 17, 2018 - Teens more likely to pick up smoking after exposure from friends and family
November 17, 2018 - Nicoya designate the Institute for Stem Cell Biology and Regenerative Medicine as the OpenSPR Centre of Excellence
November 17, 2018 - new horizon in dental, oral and craniofacial research
November 17, 2018 - How does poor air quality affect your health?
November 17, 2018 - New device can regulate children’s blood glucose more like natural pancreas
November 17, 2018 - Game-Changers in Western Blotting and Protein Analysis
November 17, 2018 - FDA announces new actions to limit sale of e-cigarettes to youth
November 17, 2018 - Warmer winter temperatures related to higher crime rates
November 17, 2018 - MCO places increasing emphasis on helping people find and access healthy food
November 17, 2018 - Group of students aim to improve malaria diagnosis using old smartphones
November 17, 2018 - Transplantation of feces may protect preterm children from deadly bowel disease
November 17, 2018 - Researchers explore whether low-gluten diets can be recommended for people without allergies
November 17, 2018 - New and better marker for assessing patients after cardiac arrest
November 17, 2018 - For 7-year-old with failing bone marrow, a life-saving transplant | News Center
November 17, 2018 - New first-line treatment for peripheral T-cell lymphoma approved by FDA
November 17, 2018 - Artificial intelligence could be valuable tool to help young victims disclose traumatic testimony
November 17, 2018 - Breakthrough in the treatment of Restless Legs Syndrome
November 16, 2018 - FDA Approves Keytruda (pembrolizumab) for the Treatment of Patients with Hepatocellular Carcinoma (HCC) Who Have Been Previously Treated with Sorafenib
November 16, 2018 - Eagle Books | Native Diabetes Wellness Program
November 16, 2018 - Patients with common heart failure more likely to have lethal heart rhythms
November 16, 2018 - How AI could help veterinarians code their notes | News Center
November 16, 2018 - Bias-based bullying does more harm to students than generalized bullying
November 16, 2018 - Researchers find first direct evidence that cerebellum plays role in cognitive functions
November 16, 2018 - Non-coding genetic variant plays key role in endothelial function and disease incidence
November 16, 2018 - EMA recommends first all-oral treatment to tackle deadly sleeping sickness
November 16, 2018 - Drug used to treat dizziness may slow down growth of triple-negative breast cancer
November 16, 2018 - AHA: Icosapent Ethyl Cuts CV Risk From Elevated Triglycerides
November 16, 2018 - ‘Orphan’ RNAs make cancer deadlier, but potentially easier to diagnose
November 16, 2018 - Air Cube touches down at hospital | News Center
November 16, 2018 - CRISPR-based tool shown to enhance cell-based immunotherapy
November 16, 2018 - Mechanisms that govern HIV latency differ in the gut and blood, finds study
November 16, 2018 - Researchers unravel mystery of NPM1 protein in acute myeloid leukemia
November 16, 2018 - High school students less likely to select milk, fruit for lunch when fruit juice is available
November 16, 2018 - Football coaches with great emotional competence are more successful
November 16, 2018 - Researchers awarded $10 million grant to address root causes of asthma in Puerto Rico
November 16, 2018 - Personalized scheduling of radiotherapy using genetic data could reduce side effects
November 16, 2018 - American Cancer Society study links social isolation to higher mortality risk
November 16, 2018 - Health Tip: Manage Morning Sickness
November 16, 2018 - Long term exposure to road traffic noise linked with greater obesity risk
November 16, 2018 - Infant gut microbes altered by mother’s obesity may increase risk for future disease
November 16, 2018 - Immunotherapy combination and chemotherapy show encouraging results in Phase II acute myeloid leukemia study
November 16, 2018 - ACC Latin America Conference brings experts to discuss latest cardiovascular science
November 16, 2018 - Pooled analysis of Intersect ENT’s steroid releasing implants in patients after frontal sinus surgery to be published
November 16, 2018 - Expectations about pain intensity can become self-fulfilling prophecies
November 16, 2018 - NIH awards $3.4 million to UC researchers to study gastrointestinal lymphatic system
House Republicans aim to yank tax credits for orphan drugs

House Republicans aim to yank tax credits for orphan drugs

image_pdfDownload PDFimage_print

As part of a sweeping tax reform bill, House Republicans on Thursday proposed eliminating billions of dollars in corporate tax credits that have played a key role in the booming “orphan drug” industry.

For more than three decades, pharmaceutical and biomedical companies have claimed a 50 percent tax credit for the cost of clinical trials on orphan drugs, or those that treat rare diseases affecting fewer than 200,000 people.

The credits were approved as part of the 1983 Orphan Drug Act, which has been under scrutiny in the past year as the country grapples with skyrocketing drug prices. Drugs that win special orphan status get a package of financial incentives, including the credits and seven years of market exclusivity. The drugs routinely have five-digit price tags and have become a sought-after market for drugmakers.

The National Organization for Rare Disorders (NORD) predicted, drawing from a 2015 report, there would be 33 percent fewer orphan drugs coming to market if the credit vanishes — “an unprecedented decrease in the development of these life-improving therapies,” NORD’s statement read. The group said advocates had sent over 500 letters to Congress in support of the credit.

The powerful Biotechnology Innovation Organization, along with 20 drug companies such as Novo Nordisk, Horizon and Sanofi, wrote to Congress late last month urging them to keep the credit in the tax overhaul bill. BIO vowed Thursday to work with lawmakers to save the credit. If they fail, the repeal would be effective in January.

Yet, James Love of the think tank Knowledge Ecology International welcomed the potential repeal as a way to begin a conversation about “deeper reform” in the financial incentives for rare diseases.

Love noted that cancer drugs and “huge blockbuster drugs [have] qualified for orphan tax credit[s] … and certainly provided no relief from high prices.”

Earlier this year, the high prices caused one of the bill’s creators and champions, former U.S. congressman Henry Waxman (D-Calif.), to co-author a report that suggested restricting or replacing the tax credit in some manner.

A KHN investigation in January this year, which was published and aired by NPR, found that many drugs that now have orphan status aren’t entirely new. Of about 450 drugs that have won orphan approval since 1983, more than 70 were drugs first approved by the Food and Drug Administration for mass-market use. Those include cholesterol blockbuster Crestor, Abilify for psychiatric disorders and rheumatoid arthritis drug Humira, one of the world’s best-selling drugs.

In March, the Government Accountability Office confirmed it would investigate potential abuses to the law after Sens. Orrin Hatch (R-Utah), Chuck Grassley (R-Iowa) and Tom Cotton (R-Ark.) sent a letter to the agency, asking if the law needed to be changed.

This summer, the FDA announced an orphan drug modernization plan and promised to eliminate a backlog in drugs applying for the rare disease status. In a September update, FDA Commissioner Scott Gottlieb wrote he wants to ensure financial incentives are granted “in a way that’s consistent with the manner Congress intended” when it passed the law decades ago.

Orphan drugs hit $36.1 billion in sales last year, according to a report released last month by QuintilesIMS and NORD. And, according to EvaluatePharma’s 2017 Orphan Drug Report, orphan drugs will account for nearly 22 percent of global prescription sales, excluding generics, by 2022.

With that growth, the cost of the orphan drug tax credits to the U.S. government also grows.

“A billion here and a billion there and eventually it’s real money,” said Nicholas Bagley, a law professor at the University of Michigan who has studied the credits.

In 2018, the U.S. is expected to grant nearly $2.8 billion in orphan drug tax credits to companies, according to estimates from the Treasury Department. And, the reduced tax revenue for the U.S. government increases every year, to total $75 billion from 2018 to 2027.

“Repealing this credit will effectively increase the cost of doing research on orphan drugs,” said Kathy Michael, an analyst with PricewaterhouseCoopers’ US Pharmaceutical & Life Sciences Tax Sector.

“It’s significant,” she said, adding that a number of companies have used the credit and that many have drugs in the pipeline that could qualify for the credit down the road.

KHN’s coverage of prescription drug development, costs and pricing is supported in part by the Laura and John Arnold Foundation.


Kaiser Health NewsThis article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.

Tagged with:

About author

Related Articles