Rare disease research in the crosshairs of Bill’s tax credit limit (1)

An orphan drug tax credit limit in President Joe Biden’s social spending agenda raises fears it could chill 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 disease and other rare diseases have benefited from more than 730 Food and Drug Administration-approved drugs and therapies since Congress passed the Orphan Drug Act in 1983.

But a section of the Build Back Better Act passed by the House (HR 5376) limits the types of drugs that would qualify for a rare disease tax credit to those whose first official use is to treat uncommon conditions or are first indicated or labeled for use as orphan drugs.

The restriction aims to prevent successful pharmaceutical companies from increasing their profits. But the concern is that it will destroy a financial incentive for companies to investigate how drugs already approved for certain conditions could also be used to treat rare diseases.

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

“Unfortunately, there are other rare disease patients where the drug that could save their life is already in the neighborhood pharmacy, but no one has figured it out,” 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 damaging him. kill as a result of his Castleman disease.

Affordable search

Proponents of expanding research into rare disease treatments say the provision, which was also included in the latest version of text proposed by the Senate Finance Committee to Build Back Better, could be particularly harmful for smaller companies. pharmaceutical companies that may not have enough funds. conduct the necessary research and testing.

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

“If it’s a product that’s been brought to market and a company feels there’s another potentially life-saving use for that drug in a rare disease, we want there to be incentives for this company to perform the necessary clinical trial testing to prove safety and effectiveness,” 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 a matter subject to pending legislation.

Orphan Drugs 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 uncommon conditions.

The Orphan Drug Act defines a “rare disease or condition” as a disease that affects fewer 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 development and availability of “drug” for such disease or condition will be [be] recovered from sales” of the drug.

The law made developers of products designated as orphan drugs eligible for qualified clinical trial tax credits and exemption from manufacturer user fees 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 affect a relatively small number of people, advocates say the large proportion of the general population affected is reason enough to develop life-saving treatments.

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

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

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

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

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

“Play with the system”

Lawmakers involved in crafting the tax credit changes say the provision is intended to help reserve federal funds for drug developers who need them 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 seeks to ensure that incentives under the Orphan Drugs Act are targeted at treatments developed for patients with orphan and rare diseases and are not manipulated by blockbuster drug manufacturers.” .

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

According to the report, many of the expensive orphan drugs included in the study were originally approved “to treat relatively common diseases or conditions.”

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

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

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

“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 overlook the success of the Orphan Drug Act in catalyzing increased treatment options for patients, both through new agents and post-approval indications,” Andrew Powaleny, spokesman for the Pharmaceutical Research and Manufacturers of America (PhRMA) trade group, said in an emailed statement.

The PhRMA released a report on Thursday showing 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, tax credit benefits are still needed because less than 10% of rare disease patients in the United States have treatments available to them. .

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

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

“The advocacy will really have to be stepped up to go to philanthropy, to try to get funding to do research, to create other mechanisms to do research,” Goler Blount said.

The central question, said NORD’s Sher, is not whether companies need the orphan drug tax credit, but whether they will continue to perform the clinical trial testing needed to obtain indications of rare diseases. added to their products without the credit.

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

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