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Trump’s Tax Plan Throws Rare Disease Patients Under The Corporate Bus

How the Tax Cuts and Jobs Act approved by the House on Thursday undermines President Trump’s promised nation of medical “miracles.”

Trump’s Tax Plan Throws Rare Disease Patients Under The Corporate Bus
Members participate in House Ways and Means Committee markup of the Republicans tax reform plan titled the Tax Cuts and Jobs Act, on Capitol Hill November 9, 2017, in Washington, D.C. [Photo: Mark Wilson/Getty Images]

In his address to Congress last February, President Trump singled out Megan Crowley, calling her a “miracle.” A 20-year-old patient-survivor of Pompe disease, Crowley was in attendance in a wheelchair with her father, John, a former special ops commander who found the treatment for Pompe and saved the lives of Megan, her brother, and thousands of others. The rare, often fatal neuromuscular disorder weakens and debilitates children’s muscles, inflaming their hearts and livers, until heart or lung failure take them at five or six years of age. Today, however, Megan is a junior at Notre Dame.

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After praising Megan, the president went on to say that cutting regulations at the FDA and beyond would accelerate the development of more life-saving treatments, and that, as a result, “our children will grow up in a nation of miracles.”

Megan’s backstory is instructive here: In 2000, John Crowley wagered everything his family had to launch a startup called Novazyme focused on developing a therapy for his two dying children. Novazyme was bought by Genzyme, which brought an enzyme therapy for Pompe to trial in 2003. While his kids’ disease had progressed irreversibly in some ways, the enzyme therapy reduced organ inflammation and stabilized them moving forward. This incredible (and now widely told) story was chronicled in The Wall Street Journal and in a book by Geeta Anand, and is the basis for the 2013 feature film, Extraordinary Measures, produced by and starring Harrison Ford.

However, the Tax Cuts and Jobs Act passed by the House on Thursday abandons the possibilities described by the Crowleys’ story, and undermines Trump’s promised nation of medical miracles. A little-known proposal in the White House tax plan would cut the Orphan Drug Tax Credit (ODTC), the single largest incentive for pharmaceutical and biotech companies to invest in drug development for rare–often called “orphan”–diseases. These are the same tax incentives John Crowley and Genzyme relied on to save Megan, her brother, and the 40,000 children around the world with Pompe. It’s this tax credit that drug makers budget with to develop therapies for the rest of the 30 million Americans with rare diseases, half of whom are children, and only 5% of whom have treatments, let alone cures.

The Orphan Drug Tax Credit currently gives drug companies a 50% tax deduction on the costs of clinical research and drug testing necessary to bringing a new rare disease therapy to market. (The average total cost is approximately $2.5 billion.) A central component of the 1983 Orphan Drug Act, the ODTC was designed specifically to accelerate the development of therapies for rare diseases that had been “orphaned” by the pharmaceutical sector due to the small profit margins that came with small patient populations. Before the act passed, 10 rare therapies in total had been approved by the FDA; today, we have upwards of 500 approved therapies for rare diseases and a burgeoning U.S. biotech industry, which the ODTC and the Orphan Drug Act are largely credited with spawning.

According to the National Organization for Rare Disorders (NORD), the original and primary proponent of the Orphan Drug Act, slashing the ODTC would result in 33% fewer treatments for the 1 in 10 Americans who hang all hope on new therapies. In effect, Trump and the GOP are throwing America’s sickest–most of them children–under the bus in order to get the U.S. tax rate on corporations down from 35% to 20%.

“Such a cut would particularly harm kids suffering from very rare, often fatal disorders,” Philip Reilly, a clinical geneticist and author of Orphan, among other books, told me. “Why? It would discourage investment in very small markets. I think it fair to say that over time the cut would directly contribute to the death of some children.”

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Fortunately, Senator Orrin Hatch (R-UT), a sponsor of the Orphan Drug Act and chairman of the Senate Finance Committee, is fighting the House’s proposed ODTC. The Senate plan, revealed last week, modifies the ODTC by limiting the research and development costs that can be deducted, and excludes credits to new orphan drugs that offer treatments for other disorders whose patients exceed the 200,000 population definition of rare diseases.

To be sure, rare patients aren’t the only community who’ve benefited from the Orphan Drug Act. The seven-year market exclusivity on “orphan designated” drugs has lead to astronomical drug pricing in some cases, which pharmaceutical companies claim is justified to cover the cost of drug development. Orphan designations are also abused: The world’s best-selling mega drug, Humira by AbbVie, has an orphan drug designation despite having applications for more common conditions like arthritis, psoriasis, and Crohn’s. However, neither cutting nor modifying the ODTC will fix the drug pricing crisis–a burden on patients and insurers alike–or stop some bad actors from gaming the system. It will, however, dramatically reduce the development of life-saving treatments for 1 in 10 Americans like myself.

Even if Trump and the House aren’t concerned about the many Americans suffering from rare diseases, they should care that cutting the ODTC undermines the job creating intent of the the Tax Cuts and Jobs Act. The globally renowned and innovative U.S. biotech sector, and in particular its small companies, relies on the ODTC to fund the kind of research that brings new therapies to market for the 30 million plus Americans suffering from rare diseases. And the follow-on effects of that research mean more treatments for other types of patients.

Last week, Robert K. Coughlin, President & CEO of MassBio, a Cambridge, Massachusetts-based consortium of biotech executives, said the ODTC “has been instrumental in helping to finance the development of lifesaving treatments for patients with rare diseases, and any effort to dismantle it would be a major blow to patients around the world for which there is still no hope of treatment.”


Related: The Republican Tax Bill Is Great If You’re A Rich, Jobless Heir


The House cut would raise $54 billion in tax revenue for the government over a 10-year period starting in 2018; the Senate Finance Committee estimates $29.7 billion in revenue for its plan over the same span. The real question, however, is, what is the cost of throwing the baby out with the bathwater? (The baby here is the 50% of rare patients who are children, and the bathwater, presumably, a few bad actors abusing the Orphan Drug Act.) From a life-saving perspective, the proposed House and Senate policies will, at best, do more harm than good.

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If “the biggest tax cut in history,” as the president fondly calls it, trashes the Orphan Drug Tax Credit in part to pay for the reduced corporate tax rate, Trump’s cut would be of truly historic–and inhumane and lethal–proportions.


Sarah Hogate Bacon is a rare disease patient and writer, currently researching a book, Move Fast & Break Things, on rare patients and parents who have advanced science against all odds.