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Congress weighs repeal of tax credit for rare disease drugs

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House Republicans are considering repealing a decades-old tax credit designed to spur cures for rare diseases as part of their tax reform efforts. The proposal under consideration would end the tax breaks for development of what are called orphan drugs.

House Republicans are considering repealing a decades-old tax credit designed to spur cures for rare diseases as part of their tax reform efforts. The proposal under consideration would end the tax breaks for development of what are called orphan drugs. Ending the credit used by big and small drug companies could save the government an estimated $54 billion over the next decade, an effort to help offset some of the anticipated losses in revenue if other Republican tax cut provisions become law. The credit has come under scrutiny because critics say that some major drugmakers have exploited it by obtaining the orphan designation for billion-dollar blockbuster drugs. However, the repeal proposal will likely face opposition in the Senate, particularly from Sen. Orrin Hatch (R-UT), who is overseeing tax reform in the Senate and was a leading sponsor of the 1983 Orphan Drug Act. Under current law, companies that develop drugs for rare diseases can receive a tax credit for half of the cost of their clinical trials and they are also granted 7 years of exclusivity, when the drug is protected from competition. Companies are not required to disclose the amounts of the tax credits they receive. In public, the pharmaceutical industry's largest lobbying groups have not said much about the credit.

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https://www.nytimes.com/2017/11/08/health/republican-tax-plan-orphan-drugs-rare-diseases.html

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