CandleFocus

Orphan Drug Credit

Candlefocus Editor
The Orphan Drug Credit, put into effect as part of the Orphan Drug Act, is an integral source of financial and other incentives that encourage research and development into treatments for rare diseases. The development of rare disease treatments is often considered too cost-intensive for companies to pursue given the small population of those affected and the uncertain market potential. The Orphan Drug Credit, however, provides a strategic means of circumventing these obstacles.

Under the Orphan Drug Act, the US government provides a number of tax incentives and other benefits to raise the financial value of rare disease drug developments. These include a 25% tax credit applicable to all “qualified clinical trial expenses”, a reduced fee for the Drug Applications and a seven-year period of exclusive drug marketability.

Thanks to the Orphan Drug Credit, more than 780 treatments have been approved for more than 250 rare diseases, with almost half in the field of oncology, or cancer. Of the treatments developed so far, many have enabled the prolongation, improvement, or even remission from certain disorders, such as muscular dystrophy and HIV/AIDS.

The successful implementations of therapies for rare diseases are important not only for the affected individuals, their families, and research, but also for drug developers who can now cut costs and benefit from government provided incentives. With the combination of multiple players and mutual financial gain, the Orphan Drug Act creates a fractional, yet optimistic, solution that more and more effective treatments come hand in hand.

Today, the Orphan Drug Credit remains an essential means of bridging financial hurdles and enabling the development of treatments for otherwise rare conditions. By encouraging the investigative exploration of treatments that have a high potential to yield clinical success, the Orphan Drug Act continues to remain a powerful force in the medical research community and an invaluable source of hope for many.

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