Developing treatments for rare diseases, often referred to as “orphan” conditions, presents unique challenges. The Orphan Drug Tax Credit (ODTC) is a critical incentive designed to alleviate some of these challenges by providing substantial tax relief to companies involved in the research and development (R&D) of orphan drugs. This tax credit reduces the financial burden of developing treatments that might otherwise be economically unviable, ensuring that innovation in this vital area continues to thrive.

At Pagestreet, we specialize in helping pharmaceutical companies and biotech firms navigate the complexities of the Orphan Drug Tax Credit. Our team of experts is committed to maximizing your tax savings while supporting the advancement of groundbreaking therapies for rare diseases.

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Understanding the
Orphan Drug Tax Credit

The Orphan Drug Tax Credit is a U.S. federal tax incentive that allows companies to claim a credit for a portion of the qualified clinical testing expenses associated with the development
of orphan drugs—medications intended to treat rare diseases and conditions. This credit aims to make the development of these essential drugs more financially feasible, encouraging innovation in areas of significant unmet medical need.

Eligibility for the Orphan Drug Tax Credit

To qualify for the Orphan Drug Tax Credit, a drug must meet specific criteria, including:

  • Designation as an Orphan Drug by the FDA: The drug must be intended to treat a rare disease or condition affecting fewer than 200,000 people in the United States.
  • Qualified Clinical Testing Expenses: The expenses must be directly related to the drug’s development and must occur after the drug receives orphan designation but before FDA approval.

The Benefits of the Orphan Drug Tax Credit

Significant Tax Savings

The ODTC allows eligible companies to claim a tax credit for 25% of qualified clinical testing expenses, reducing the overall cost of developing orphan drugs. This financial relief is crucial for companies investing in high-risk, high-cost drug development processes.

Enhanced Financial Stability

For small and mid-sized biotech firms, the ODTC can provide critical financial support, allowing them to invest more heavily in R&D without compromising their financial stability. This support can be the difference between a promising treatment reaching the market or being shelved due to cost concerns.

Improved Access
to Life-Saving Treatments

The ODTC helps bring life-saving therapies to market that might otherwise be too costly to develop. By making it financially viable to pursue orphan drug projects, the credit contributes to improving access to treatments for patients with rare diseases.

Encouraging Innovation
in Rare Disease Treatment

By offsetting the costs associated with orphan drug development, the ODTC plays a pivotal role in promoting research and innovation in the treatment of rare diseases. This not only benefits patients with rare conditions but also advances the broader field of medicine.

Our Services

Strategic Tax Planning

We work with your financial team to incorporate the ODTC into your broader tax strategy. By aligning the credit with your overall tax planning efforts, we help you optimize your financial outcomes and support the sustainability of your orphan drug projects.

Eligibility Assessment

Our team starts by assessing your projects to determine eligibility for the ODTC. We evaluate your clinical testing expenses and guide you through the process of ensuring that your projects meet all necessary criteria to maximize your tax savings.

Compliance

Our experts handle the complexities of filing for the Orphan Drug Tax Credit, ensuring that your claim is accurate and timely. We also provide ongoing support to help you navigate any compliance issues that may arise, protecting your company from potential penalties.

Expense Documentation

Accurate documentation of clinical testing expenses is vital to claiming the ODTC. We assist in meticulously tracking and documenting all eligible expenses, ensuring that your claim is fully substantiated and compliant with IRS requirements.

Your Benefits

Greater chances of success

With the help of our experience, you have a better chance of successful acceptances.

Performance-based remuneration

You pay largely based on success.
You can find out more about this in a personal meeting.

Significant time savings

With us, you save between 80 and 90% of your time and gain a clear roadmap for all decisions and future processes.

Accurate selection of the right programs

The area of subsidies is a broad field. We navigate you unerringly through the various funding programs.

Legal certainty

We advise you on financial planning before and after funding approval. This gives you legal certainty in the sometimes complex issues of finances and allocations.

Our Team of Consultants

Marius Ehrlinger

CEO/Founder

julien andre

Julien André

Head of finance/CFO

chris wavle

Chris Wavle

Senior Accountant Executive

Luca Prieß

Consultant Subsidies

Who Can Benefit from the Orphan Drug Tax Credit?

Large pharmaceutical companies can leverage the ODTC to reduce the financial risks associated with orphan drug development. This credit supports the continued investment in research that addresses unmet needs in the treatment of rare diseases.

For biotech startups focused on developing innovative therapies, the ODTC can be a critical source of financial support. This credit allows smaller companies to compete in the challenging field of rare disease treatment, fostering innovation and growth.

Academic institutions involved in drug development for rare diseases can also benefit from the ODTC. By partnering with commercial entities or pursuing their own projects, these institutions can access essential funding to advance their research.

Non-profits dedicated to finding treatments for rare diseases can utilize the ODTC when engaged in clinical testing. This credit can help stretch limited resources further, enabling more research and development efforts aimed at curing or managing rare conditions.

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