Senate Republicans delivered a significant blow to the biopharmaceutical industry Monday by excluding the Orphan Cures Act from their version of President Donald Trump's tax reform package, known as the "One Big Beautiful Bill Act." The omission removes key provisions that would have protected rare disease drugs with multiple indications from Medicare price negotiations.
Legislative Setback for Rare Disease Drug Development
The Senate's version conspicuously scrapped the Orphan Cures Act, which the House had included in its version published last month. This bipartisan legislation sought to amend provisions in the Inflation Reduction Act (IRA) that currently exempt only drugs treating a single rare disease from Medicare's price negotiation process.
Under the current IRA framework, medicines become eligible for Medicare negotiations after nine or 13 years, depending on their molecular type. The orphan drug exemptions were originally designed to prevent companies from evading negotiations by obtaining rare disease approvals for popular drugs primarily used for non-orphan indications.
The Orphan Cures Act would have broadened these protections by exempting drugs with multiple rare disease indications and delaying the start of price negotiations until these therapies expanded beyond their orphan drug designations.
Industry Data Points to Development Concerns
The biopharma sector has presented compelling evidence supporting their position that current IRA terms discourage rare disease drug development. A National Pharmaceutical Council analysis revealed a dramatic 48% drop in drugs receiving a second orphan designation following the IRA's implementation.
Representatives John Joyce and Don Davis, who introduced the Orphan Cures Act in February, argued that the narrow orphan drug exemptions have "the unintended effect of discouraging and disincentivizing American innovators from engaging in the expensive and time-intensive research necessary to determine if an orphan drug could cure or treat additional rare diseases."
Legal experts have echoed these concerns. During an online panel discussion hosted by BioCentury in April 2023, Meenakshi Datta, partner at Chicago-based law firm Sidley Austin, warned that the drug negotiations could have a "chilling impact" on drug development in the rare disease space.
Patient Groups Oppose Industry Position
Despite industry arguments, patient advocacy organizations strongly opposed the Orphan Cures Act, viewing it as an attempt by pharmaceutical companies to circumvent necessary price negotiations. Organizations like Patients For Affordable Drugs Now celebrated the Senate's decision to exclude the provision.
Critics pointed to examples like AbbVie's Humira as evidence that the IRA's orphan drug limits were necessary to prevent popular drugs from exploiting rare disease designations to avoid price reductions. They argued that maintaining effective drug price negotiations under Medicare promises lower drug costs for millions of Americans.
Legislative Path Forward Uncertain
The Senate's proposed legislation represents a significant departure from the House version, with Republican senators aiming to deliver a final package to Trump by July 4, according to Wall Street Journal reporting. However, the bill must still navigate both chambers of Congress, indicating that further revisions are likely before the Republicans' target deadline.
The exclusion of the Orphan Cures Act from the Senate version sets up a potential conflict that will need resolution as the legislation moves through the final stages of the legislative process. The outcome will have significant implications for both rare disease drug development incentives and Medicare drug pricing negotiations.
