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Clarify the Orphan Drug Tax Credit
More than 20 million Americans suffer from one of over 5,000 rare diseases and medical disorders. Often, patients suffering from one of these debilitating diseases have no available treatments or options.
Recognizing this dilemma, the Congress enacted the Orphan Drug Tax Credit in 1983 in order to encourage biotechnology and pharmaceutical companies to develop therapies for rare diseases and conditions that affect 200,000 or fewer patients. By reducing the costs of developing drugs for small patient populations, the credit allows companies to develop products that would otherwise be commercially unfeasible.
However, the Orphan Drug Tax Credit only applies to qualified clinical trial expenses that are incurred after the U.S. Food and Drug Administration (FDA) officially designates the drug as an "orphan," which can delay or prevent the start of clinical trials for many debilitating, rare diseases. BIO supports clarifying that the Orphan Drug Tax Credit applies to qualified clinical trial expenses for a designated orphan drug, regardless of whether such expenses were incurred before or after the product received such designation, provided that such designation has been received.
Fact Sheet on the Orphan Drug Tax Credit
Clarification Needed in the Orphan Drug Tax Credit to Accelerate Research in Rare Diseases (Apr. 11 2003)
Read the Fact Sheet
BIO Letter
Expressing strong support for the Orphan Drug Tax Credit, to Representative Kevin Brady (R-Tex) (Mar. 5, 2003)
Read the Letter
Legislation in the 108th Congress
H.R.1308: Tax Relief, Simplification, and Equity Act of 2003
Read the Bill
Orphan Drug Tax Credit Archive
Older materials on this subject are available in our archive.
Browse the Archive
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