Eshoo: More federal incentives needed for ‘orphan’ drug makers

Rep. Anna Eshoo (D-Calif.) said the federal government needs to provide further incentives for manufacturers of orphan drugs, or drugs that treat rare diseases.

Speaking at The Hill’s “Rare Diseases: A Conversation of Value Assessment” event Friday, Eshoo said that tax credits established by the Orphan Drug Act of 1983 need to be brought back to their original level. 

The Orphan Drug Act of 1983 established a 50 percent tax credit for clinical testing of drugs designed to treat a rare disease, which by definition affect fewer than 200,000 people nationwide. 

The credit was cut in half by the Trump-backed Tax Cuts and Jobs Act of 2017, which Eshoo said disincentivized pharmaceutical companies from researching treatments for conditions affecting relatively small groups of people. 

“In the 2017 Republican tax cut package, they reduced the tax credit to 25 percent. I think that it should move back up,” Eshoo told The Hill’s Bob Cusack.

According to the EveryLife Foundation for Rare Diseases, 30 million Americans suffer from rare diseases. But because groups suffering from particular conditions are often very small, researching and manufacturing therapeutics can be a tough business model.

“It’s a challenge for drug makers because it’s a smaller universe of patients that will be partaking in the drugs,” she said. 

Even with adequate funding, Eshoo said, finding enough patients to fill clinical trials can be challenging.

“It’s not only a smaller patient population for these rare diseases, it makes it difficult for drug makers to identify and recruit participants in the trials,” she said. 

Earlier this year, Eshoo, chair of the House Energy and Commerce subcommittee on health, introduced legislation to create the Advanced Research Projects Agency for Health (ARPA-H). If passed, the bill would establish and fund an agency that specializes in researching rare and deadly diseases.

“[ARPA-H] is different from other undertakings because it will pursue high risk projects around not only rare diseases but around those diseases where we have not made the kind of progress we need to make,” Eshoo said.

Eshoo called creating the agency “a top priority” at Friday’s event sponsored by Alexion Pharmaceuticals.

“If we get ARPA-H over the finish line, that would be a boom to the rare disease sector in our country,” she said.