Dec. 18, 2017
NORD Issues Statement in Response to Congressional Consideration of the Tax Cuts and Jobs Act Conference Report
Posted by Lisa Sencen
Washington, D.C., December 18, 2017—The National Organization for Rare Disorders (NORD), the leading independent nonprofit organization representing the 30 million Americans with rare diseases, issued the following statement in response to the upcoming congressional consideration of the Tax Cuts and Jobs Act Conference Report:
“This week, Congress will consider and potentially pass the Tax Cuts and Jobs Act Conference Report. NORD does not support this legislation as it substantially diminishes the Orphan Drug Tax Credit and repeals the Affordable Care Act’s (ACA) individual mandate.
The Conference Report cuts the Orphan Drug Tax Credit in half by reducing the tax credit’s value from 50 percent of qualified clinical testing expenses to 25 percent of qualified clinical testing expenses. This provision represents one of the most substantial rollbacks in incentives to develop orphan therapies.
The Orphan Drug Tax Credit (ODTC) lowers the cost of developing and testing orphan therapies as they move through the clinical trial process. Without the ODTC, we estimate that one-third fewer orphan therapies would be developed going forward. The cost of conducting rare disease clinical trials could rise substantially enough to discourage some biopharmaceutical companies from developing orphan therapies altogether.
We oppose this cut and have called on Congress to maintain the ODTC at every opportunity as tax reform has evolved. However, without the thousands of patients, family members, caregivers, patient advocacy groups, and advocates who voiced their concern, the ODTC may have been repealed entirely, as was proposed by the House of Representatives. We are extremely appreciative of the advocates who made their voices heard.
We are also appreciative of Senators Hatch and Roberts, Congresswoman McMorris Rodgers, and all Senators and Representatives who strongly supported the ODTC and contributed to ensuring its survival.
While we are disappointed by this outcome, we are grateful for the efforts to preserve the ODTC from both inside and outside the rare disease community.
In addition to cutting the ODTC, the Conference Report also repeals the ACA’s individual mandate without replacing it with a comparable alternative. We oppose this provision as the individual mandate incentivizes healthy individuals to purchase health insurance, resulting in lower premiums for individuals with rare diseases. Without the individual mandate or a comparable alternative, we anticipate premiums to rise substantially for our patients and their families with incomes above 400% of the Federal Poverty Line, potentially pricing them out of the market.
We are supportive of the Conference Report’s proposal to maintain the Medical Expense Deduction and lower the threshold of qualifying expenses to expenses above 7.5 percent of income for two years, rather than the current law’s threshold of 10 percent.
While we support the expansion of the Medical Expense Deduction, the damage from cutting the Orphan Drug Tax Credit and repealing the individual mandate far outweighs any benefits.
For these reasons, we do not support the Tax Cuts and Jobs Act Conference Report.”