Overview of the Orphan Drug Tax Credit

Scope of Rare Diseases in the US 7% of the United States is effected 25 million people Only a small portion (225) of rare diseases are currently treatable by one or more orphan drugs 2

Orphan Drugs since 1983 In the decade before 1983 only 10 treatments were approved Since the passage of the Orphan Drug Act(1983) 441 orphan drugs have been approved by the FDA An average of 14 drugs per year receive approval Number of Orphan Drugs (1983-2013): Approved since ODTC: 441 (FDA stats) (FDA statement) Orphan Designations: 2835 (FDA stats)   “The ODA has been very successful--more than 200 drugs and biological products for rare diseases have been brought to market since 1983. In contrast, the decade prior to 1983 saw fewer than ten such products come to market.” NIH Office of Rare Diseases Research (2013) 3

Cost of the Credit The ODTC currently costs an estimated $800 million to maintain In 2017, it is projected to cost $1 billion Estimated yearly amount spent on ODTC and projections (in billions) (Joint Committee on Taxation 2012, 2013): 2011 – 600million 2012 – 700million 2013 – 800million 2014 – 800million 2015 – 900million 2016 – 900million 2017 – 1 billion 4

Orphan Drug Tax Credit The ODTC saves lives The ODTC provides incentives for companies to develop needed therapies for rare diseases without treatments If the ODTC is abolished, fewer treatments will be available in the future The Orphan Drug Act has worked well, and the ODTC is a critical component of that success.

Where the Debate Currently Stands Congress is debating tax reform and the ODTC "on the table" Staff has said we need to make the case for the ODTC The patient voice is critical Julia can provide a copy of a letter to Reps. Camp and Levin urging them to protect the ODTC in the context of tax reform We urge you to sign it