As part of a sweeping tax reform plan, House Republicans proposed on November 2, 2017, eliminating billions of dollars in corporate tax credits that have played a key role in the industry in boom in “orphan drugs”. Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”? Get the original essay The credits were approved under the Orphan Drug Act (ODA) of 1983. Under current policy, pharmaceutical and biotechnology companies receive a tax credit of up to 50 % of certain research costs on drugs for rare diseases. The new tax bill, if passed, would eliminate the credit "for certain medications, for rare diseases or conditions" starting this year. The bill's attempt to repeal the orphan drug research credit follows the recent release of an analysis by the United States Department of the Treasury, which found that total tax expenditures related to the orphan drug research credit research into orphan drugs is increasing considerably. Spending is expected to increase from about $2.3 billion in 2017 to nearly $6 billion in 2022 and more than $15 billion in 2027. According to the bill, eliminating tax credits for Orphan drugs would save the United States $54 billion in revenue over the next decade. The National Organization for Rare Diseases (NORD) stated that “there would be 33 percent fewer orphan drugs coming to market if the credit disappeared” (findings from a 2015 report). There are approximately 7,000 rare diseases that affect 25 to 30 million people in the United States. Children represent more than half of those affected.3 An orphan drug is a pharmaceutical product intended to treat rare diseases or disorders. A product must be intended to treat a disease that affects fewer than 200,000 people in the United States to obtain orphan drug designation. The development of orphan drugs was financially encouraged by U.S. law through the Orphan Drug Act of 1983. Through this act, Congress sought to encourage the development of drugs to treat rare diseases by providing drug manufacturers with funding credits. tax, fee exemptions and a period of seven years. of commercial exclusivity for an approved orphan indication. In terms of tax credit, a sponsor can claim half of the eligible clinical research costs (50%) for a product designated orphan. The orphan drug credit is available for eligible costs incurred between the date the Food and Drug Administration (FDA) designates a drug as an orphan drug and the date the FDA approves the drug, although the research credit may be claimed for development costs that are eligible research expenses, regardless of the drug's designation or approval by the FDA. Before the Orphan Drug Act was enacted in 1983, drug developers were often reluctant to invest in developing new treatments for rare diseases because small patient numbers made it difficult to recover development costs. For rare diseases, clinical trial costs alone can total thousands of dollars per person diagnosed with the disease. Since 1983, the FDA has granted more than 3,500 orphan designations and approved more than 500 orphan drugs.3 A combination of commercial barriers and..