The biopharma industry has hit a setback in its ambition to leverage President Donald Trump’s “big, beautiful bill” to amend an Inflation Reduction Act (IRA) provision currently affecting treatments for rare diseases.
The Senate version of the One Big Beautiful Bill Act, unveiled Monday, has dropped what’s known as the Orphan Cures Act.
The bipartisan Orphan Cures Act would allow drugs with multiple rare disease indications to be exempt from Medicare’s drug price negotiations under the IRA. As it stands, the IRA applies such exclusions only to drugs treating a single rare disease.
In addition, while a drug is typically up for price negotiations either nine years or 13 years after its initial FDA approval, the Orphan Cures Act would start the countdown to eligibility for rare disease therapies only when the drug branches out beyond orphan indications, according to the House version of the Big Beautiful Bill Act passed in May.
The biopharma industry has argued that the original IRA terms disincentivize companies from pursuing follow-on rare disease approvals because, if successful, the drug would no longer be exempt from IRA price cuts.
“The ORPHAN Cures Act ensures that proven, critical R&D incentives are in place so the millions of Americans with rare diseases can continue to have hope for the future,” Congressmen John Joyce, M.D., R-Pa., said in a statement when introducing the Orphan Cures Act with Congressman Don Davis, D-N.C., in February.
However, critics have argued that the Orphan Cures Act is another attempt by drugmakers to try to evade IRA drug price negotiations.
The IRA installed the orphan drug limits with the intention to prevent loopholes in which popular drugs—such as AbbVie’s Humira—carry orphan drug designations for rare conditions such as hidradenitis suppurativa alongside other large indications as a way to dodge negotiations.
But advocates for the industry argue that the law causes unintended consequences by disincentivizing investment in post-approval clinical trials of rare disease therapies. An analysis performed by the National Pharmaceutical Council found that post-IRA, the percentage of drugs with an initial orphan designation that went on to receive a second designation decreased by 48%—from 12.1% to 6.3%—despite a steady increase pre-IRA.
“We urge Congress to protect the development of new medicines for rare diseases by adopting this pro-patient, pro-innovation proposal as soon as possible,” a spokesperson for the trade association Biotechnology Innovation Organization (BIO) said in a statement to Fierce Pharma in response to the Senate version of the reconciliation bill. “BIO will continue to work to educate on this important bipartisan legislation.”
For its part, the Patients For Affordable Drugs Now (P4ADNOW), an organization focused on lowering drug prices, touted the exclusion of the Orphan Cures Act from the Senate’s reconciliation text as a “direct rejection of the pharmaceutical industry’s greed-driven agenda.”
“This decision helps protect the popular and effective Medicare negotiation program and its promise of lower prescription drug prices for millions of Americans on Medicare,” P4ADNOW Executive Director Merith Basey said in a statement Monday.
Monday’s release of the proposed legislation represented the Senate’s first crack at Trump’s sweeping tax-cut and spending bill. Given that there are several high-profile changes to the House version, there will likely be additional revisions before the Republicans' self-imposed July 4 deadline.