As President Donald Trump talked tax reform on Capitol HillTuesday, Arkansas patient advocate Andrea Taylor was also meetingwith lawmakers and asking them to save a corporate tax credit forrare disease drug companies.

Taking the credit away, Taylor said, “eliminates the possibilityfor my child to have a bright and happy future.”

Taylor, whose 9-year-old son, Aiden, has a rare connectivetissue disorder, spoke as part of a small rally thrown togetherthis week by the National Organization for Rare Disorders (NORD) —the nation’s largest advocacy group for patients with rarediseases.

Earlier this month, House Republicans proposed eliminating theorphan drug tax credits, which Congress passed as partof a basket of financial incentives for drugmakers in the 1983Orphan Drug Act. The law, intended to spur development of medicinesfor rare diseases, also gives seven years of market exclusivity fordrugs that treat a specific condition that affects fewer than200,000 people.

The Senate Finance Committee, led by Sen. Orrin Hatch (R-Utah),put the tax credit back into the tax legislation. After somenegotiations, the committee settled on reducing the credit to 27.5percent of the costs of preapproved clinical research, comparedwith the current 50 percent. The committee also restored aprovision that would have eliminated any credits for drugmakers whorepurpose a mass-market drug as an orphan.

“As with any major reform, tough choices have to be made,” aHatch spokesperson wrote in an emailed statement, adding that thesenator will continue to work “to make the appropriate policydecisions” to deliver a comprehensive tax overhaul.

Hatch, a member of a rare-disease congressional caucus, received$102,600 in campaign contributions from pharmaceutical and relatedtrade group political action committees in the first half of 2017,making him the top recipient of pharmaceutical cash in the Senate.

If the Senate provision remains untouched, reducing the taxcredit would save the federal government nearly $30 billion over adecade, according to a markup of the bill released late last week.

Orphan drug development has become big business in recent yearsand advocates as well as critics of the industry say tax creditshave been an important motivation for companies. Orphan drugsaccounted for 7.9 percent of total U.S. drug sales last year,according to a report released by QuintilesIMS and NORD.

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Kaiser Health News is a nonprofit news servicecovering health issues. It is an editorially independent program ofthe Kaiser Family Foundation that is not affiliated with KaiserPermanente.

Because patient populations for rare-disease drugs arerelatively small, companies often charge premium prices for themedicines. EvaluatePharma, a company that analyzes the drugindustry, estimates that among the top 100 drugs in the U.S. theaverage annual cost per patient for an orphan drug last year was$140,443. Giant pharmaceutical companies such as Celgene, Roche,Novartis, AbbVie and Johnson & Johnson have led worldwide salesin the orphan market, according to EvaluatePharma’s 2017Orphan Drug Report.

Jonathan Gardner, the U.S. news editor for EvaluatePharma, saidthe orphan drug tax credit is “probably the most importantincentive for developing an orphan drug.” Cutting the credit willforce even the large companies to question development of drugs forrare diseases, Gardner said.

Dr. Aaron Kesselheim, an associate professor of medicine atHarvard Medical School, has been critical of the Orphan Drug Act’sincentives and of companies taking advantage of the law’s financialincentives for profit. But he warned against rushing to eliminatethe tax credit.

“We need to think about ways we can improve the Orphan Drug Actand stop people from gaming the system and exploiting it,”Kesselheim said. But there “are a lot of rare diseases that don’thave treatments. So, we need to be careful in making changes.”

The battle over the tax credit is the latest controversy for theFood and Drug Administration’s orphan drug program. FDACommissioner Scott Gottlieb announced a “modernization”plan for the agency this summer, closing a pediatric testingloophole and eliminating a backlog of corporate applications fororphan drug status. And, this week, the agency confirmed that Dr.Gayatri Rao, director for the Office of Orphan ProductsDevelopment, is leaving.

Meanwhile, the Government Accountability Office confirmed thismonth that it recently launched an investigation of the orphan drugprogram. The GAO’s review was sparked by a letter from top Republican Sens. Hatch, Chuck Grassley(R-Iowa) and Tom Cotton (R-Ark.), asking the agency to investigatewhether drugmakers “might be taking advantage” of the drug approvalprocess.

When the 1983 Orphan Drug Act was passed, thelaw described an orphan drug as one that affects so few peoplethat drugmakers might lose money after covering the cost ofdeveloping a drug. Congress added the 200,000-patientlimit in 1984.

Today, many orphan medicines treat more than one condition andoften come with astronomical prices. Many of the medicines aren’tentirely new, either. A Kaiser Health News investigation, which was also aired and published by NPR, foundthat more than 70 of the roughly 450 individual drugs given orphanstatus were first approved for mass-market use, includingcholesterol blockbuster Crestor, Abilify for psychiatricconditions, cancer drug Herceptin and rheumatoid arthritis drugHumira, which for years was the best-selling medicine in theworld.

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Kaiser Health News is a nonprofit news servicecovering health issues. It is an editorially independent program ofthe Kaiser Family Foundation that is not affiliated with KaiserPermanente.

More than 80 other orphans won FDA approval for more than onerare disease and, in some cases, multiple rare diseases, the KHNinvestigation showed.

The pharmaceutical industry has had a muted response to the taxbill, which includes acorporate tax cut. The powerful industry lobbying group PhRMAsaid it is pleased Congress is looking at overhauling the tax codebut “encourages policymakers to maintain incentives” for rarediseases. BIO, the Biotechnology Innovation Organization thatrepresents biomedical companies, said it was “gratified” the Senatecommittee chose to partially retain the credit but would prefer tokeep the existing incentive.

The group that rallied Tuesday — wearing bright-orange shirtsthat read “Save the Orphan Drug Tax Credit” — planned to meet witha couple of dozen lawmakers, including Grassley, who is a member ofthe Senate Finance Committee.

NORD, like many patient advocacy groups, receives funding frompharmaceutical companies, but the organization’s leaders say theindustry does not have members on the board and does not dictatehow general donations are spent.

On Tuesday, NORD leaders said they are open to discussions aboutthe tax credit and whether the overall law is working asintended.

“We’re here to have that conversation, we’re ready to have thatconversation,” said Paul Melmeyer, director of federal policy forNORD. “Sadly, that’s not the conversation we are having today.”

Abbey Meyers, a founder of NORD and the leading advocate behindpassing the initial 1983 law, said she fears the high cost of thedrugs will make it impossible to sustain the orphan drug program.Now retired, Meyers said she has followed the law’s success overthe years and believes the tax credit should not be changed.

“There are other things that have happened since the law waspassed where there wasn’t any logic to what they did,” Meyers said,adding “because somebody went to a senator and they put into thelaw.”

Kaiser Health News is a nonprofit news servicecovering health issues. It is an editorially independent program ofthe Kaiser Family Foundation that is not affiliated with KaiserPermanente.