Rare Disease Report

The Importance of the Orphan Drug Tax Credit [Infographic]

DECEMBER 07, 2017
Mathew Shanley
The Orphan Drug Tax Credit was established as part of the Orphan Drug Act of 1983.

The Act was signed into law in 1983, making the United States the first country in the world to provide financial incentives for developing treatments for rare diseases. A 2015 study conducted by the National Organization for Rare Disorders concluded that, if the tax credit did not exist, exactly one-third fewer orphan products would be developed.

With this infographic from Rare Disease Report, the impact of the ODTC can be easily seen. These 10 statistics make it obvious why the Tax Credit - and the Orphan Drug Act as a whole - are both so important to the rare disease community.

Rare Disease Report
  • 30-million Americans suffer from a rare disease or condition.
  • The Orphan Drug Act was enacted in 1983.
  • A mere 4% of the more than 7,000 rare diseases have an available treatment.
  • Only 34 orphan drugs were approved before the enactment of the Orphan Drug Act.
  • The Orphan Drug Tax Credit allows drug manufacturers to claim a tax credit of 50% of the qualified costs of clinical research and testing of orphan drugs.
  • More than 3,500 orphan products have been designated by the U.S. Food and Drug Administration as orphan drugs since the enactment of the Orphan Drug Act.
  • If the Orphan Drug Act were repealed, it is estimated that 33% fewer new orphan drugs would be approved over the next 10 years.
  • In the absence of the Orphan Drug Tax Credit, 67 orphan drugs would likely not have been developed over the past 30 years.
  • More than 500 orphan therapies have been approved by the FDA in the past 35 years.
  • 95% of Americans with rare diseases are still waiting for their first treatment.
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