In the Republican-led campaign to reform the U.S. tax code, the tax incentive for making orphan drugs is on the chopping block. The House bill eliminates this credit, while the Senate bill decreases it by about half. Both versions worry me and likely the millions of other Americans living with orphan diseases who are waiting, often in vain, for effective therapies.
The Orphan Drug Act, which became law in 1983, provides incentives, including tax credits, to ease the burden of developing drugs for rare diseases. To date, it has aided in the approval of more than 500 orphan drugs in the U.S., a large improvement compared to just 10 new drugs for rare diseases approved in the decade before 1983. Ernst and Young, an independent accounting firm, has estimated that eliminating these incentives could decrease the number of drugs developed for rare diseases by 33 percent.
In the U.S., a disease is considered “rare” if it affects fewer than 200,000 people, and “ultra-rare” if it affects fewer than 50,000. Together they make up the universe of orphan diseases. While these terms give the impression that these diseases affect relatively few people, collectively they affect about 30 million Americans. Add in their family members and friends, and a sizable portion of the population feels the burden. Yet only about 4 percent of the nearly 7,000 or so rare diseases have an FDA-approved therapy.
My ultra-rare disease isn’t one of them.
Starting when I was about 3 years old, prolonged exposure to sunlight would leave me in pain for days. Immersing my hands in bowls of cold water gave me brief but minimal relief. Sunscreen didn’t help, nor did pain medications or topical creams. In many of my childhood pictures, I am carrying an umbrella to shade myself from the sun or holding my hands awkwardly under a wet rag, with a pained expression on my face. As I got older, on the second day of the reaction, my hands would swell to about twice their normal size.
The tipping point came when I was 12 years old, during a family vacation to Washington, D.C. The first day of the trip was a blazingly hot summer day; early on I could already feel the itching and tingling sensation of a reaction in its early stages. After dashing from shade to shade, I finally broke down in front of the Lincoln Memorial, crying and screaming in pain. The next day the swelling started, this time accompanied by bleeding under the skin from burst blood vessels. That reaction prompted my parents to see if someone back home in Oklahoma could find out what was plaguing me.
After several months of being poked and prodded by an array of doctors, and even having my case discussed at a local dermatology conference, my doctors decided to test me for a condition known as erythropoietic protoporphyria (EPP). The diagnosis is made by a test that evaluates the amount of a compound called protoporphyrin in red blood cells. Normal is less than 100; mine was 2,800.
Having EPP makes me a member of an exclusive club — fewer than 1,000 Americans are known to have this condition. It arises from a genetic defect in the final enzyme needed to make heme, the complex molecule that carries oxygen in red blood cells. This leads to a buildup of protoporphyrins inside red blood cells. With a molecular structure similar to light-catching chlorophyll, protoporphyrins have the ability to absorb energy from light. Unlike a plant, I am unable to convert this energy into anything useful. My protoporphyrins just emit the energy back to the surrounding tissue, damaging it.
Essentially, sunlight can cause damage similar to second-degree burns, but from the inside out. Pain medications don’t ease these phototoxic reactions.
The severity of the condition differs from person to person. Some individuals, like me, can tolerate a few hours of sunlight. Some, like seventh-grader Brady Wheeden, start getting a reaction after less than a minute of sun exposure. Others, like Jennifer Beck, are even sensitive to artificial light. Finally diagnosed with EPP at age 40, her light sensitivity is so pronounced that even covering up completely and living in the dark as much as possible isn’t enough to avoid the pain. Her church even agreed to hold services in the dark so she could join in.
As is the case for so many people with rare diseases, my diagnosis gave me knowledge. But it didn’t give me a treatment or a cure. Convinced that no treatment would ever become available, my recourse has been to manage my EPP by developing creative sunlight-avoidance strategies and by covering up. Sunscreen is useless, as the problematic rays from the sun are in the visual spectrum, not the ultraviolet rays that sunscreen blocks.
As is the case for so many people with rare diseases, my diagnosis gave me knowledge. But it didn’t give me a treatment or a cure.
Hope emerged for EPP patients several years ago. Numerous studies investigated a drug called afamelanotide, culminating in two randomized trials in Europe and the U.S. demonstrating it was effective for treating the disease. Afamelanotide stimulates the body to make extra melanin, the pigment responsible for darkening the skin in response to sunlight. This extra pigment prevents protoporphyrin molecules from being activated by sunlight and, if they do become activated, neutralizes their damaging effects.
Participants in the trial told remarkable stories of no longer being held hostage indoors by the disease. Jared Ulmer, creator of a YouTube video series about his experiences with EPP, went from needing to cover up anytime he was outside to spending eight hours at a fair with his family in just shorts and a T-shirt. Afamelanotide “improved my life dramatically” he told me.
The European Medicines Agency, the European version of the FDA, approved afamelanotide (Scenesse) for marketing authorization in 2014. It is currently available to patients in four European countries.
In the U.S., the FDA granted afamelanotide orphan drug status in 2008. Nine years later, those of us with EPP are still waiting for the drug to be approved here. And we’re likely to wait longer — Clinuvel, the company that makes Scenesse, hasn’t yet submitted a new drug application for it to the FDA.
Some people aren’t waiting. Jennifer Beck decided to cover up from head to toe and board a plane to Switzerland for an afamelanotide implant. The next week she was pain free, able to return to work, and even able to spend time outside at her children’s sporting events. “I am like a normal person,” she told me. Although she has been flying to Switzerland every two months to receive the treatment, she can afford only one more round.
The Orphan Drug Act has been criticized for creating monopolies by ensuring that companies have seven years of market exclusivity for each orphan drug’s rare disease. Because of this, drug companies have been able to charge astronomical prices. In some cases, companies have even obtained orphan drug designations for medications already on the market, enabling them to charge considerably more for the same drug if used for rare diseases.
Abuses of the act’s market exclusivity, however, would not be addressed by eliminating the tax credits of the Orphan Drug Act, which provides drug companies with a tax credit of 50 percent of the cost of research and development. To many in Congress, the main problem with the orphan drug tax credit is that it costs money. The U.S. Treasury Department has estimated that the U.S. could grant nearly $50 billion in orphan drug tax credits from 2016 to 2025.
Interestingly enough, the pharmaceutical companies are not fighting back against losing the orphan drug tax credit, as the House’s tax bill provides even greater benefits for the pharmaceutical companies through cuts in corporate tax rates. Of course, those with rare diseases still lose in the deal.
Cutting this tax incentive would almost certainly further slow the creation of new orphan drugs, making the outlook even more bleak for people living with orphan diseases. New legislation to fix the Orphan Drug Tax Act, which the Senate bill calls for, could seek to control abuses of the act’s market exclusivity, rather than eliminating the tax credits.
It isn’t right to put up more barriers to developing effective drugs for orphan diseases and bringing them to market. People with these diseases have waited years, even lifetimes, for treatments. Reducing or eliminating tax incentives for orphan drugs would extend their waits, which is neither fair nor moral.
Amy Dickey, M.D., is a fellow in pulmonary and critical care medicine at Massachusetts General Hospital in Boston and a volunteer for the American Porphyria Foundation. The views expressed in this article are solely those of the author and do not necessarily reflect those of her employer or volunteer group.
Cunning pharmaceutical companies have unfortunately taken advantage of this law and got previously inexpensive generic drugs on orphan status with the subsequent exorbitant price increases. Best example would be H.P. Acthar Gel, a drug used for infantile spasm and MS which went from $40 a dose to $20,000 for a course of treatment.
Why not reduce the number of possible patients to declare a drug deserves orphan drug status from 200,000 to, say, 50,000 and leave the tax rule the same? Would that work?
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