Senate tax bill will not make orphan drug tax credits transparent as to company, drug and disease

In a reversal from the version that passed out of the Senate Finance Committee, the version of the tax bill that passed the Senate eliminated the requirement that the Orphan Drug tax credit be transparent as to taxpayer, drug and indication, a victory for pharma, making R&D outlays and public subsidies less transparent.

Lobbyists for drug companies were more focused on eliminating the transparency provisions that preserving the higher rate of 50 percent. The revised credit is 27.5 percent, which makes trials for orphan products 45 percent more expensive for a company financing a trial.

James Love

James Love is the Director of Knowledge Ecology International. Previously, he was an economist for the Center for Study of Responsive Law where he also directed the Consumer Project on Technology and the Taxpayer Assets Project, Senior Economist for the Frank Russell Corporation, and held lecturer positions at Rutgers and Princeton Universities. His KEI webpage is