Rare Diseases and Tax Credits

Brady Bryan, CEO
According to the National Organization for Rare Disorders, there are more than 1,200 rare diseases on the books. Unfortunately, for a number of reasons, these diseases are also usually last on the list for funding and research by both public and private entities. Fortunately, there are tax incentives available to businesses performing qualified research in the hopes of finding a potential cure for these rare diseases.

For example, Internal Revenue Code § 45C, “Clinical testing expenses for certain drugs for rare diseases or conditions,” provides for a tax credit of 50 percent of qualified clinical testing expenses for orphan drugs. Another example is the Internal Revenue Code § 41 R&D tax credit, where certain expenses and activities related to certain activities may qualify for this credit. Now with respect to these credits, what is considered “qualified” or not, is highly nuanced, and one should always contact a qualified tax professional for clarification and further understanding.


As I delved into the study of the positive impact tax incentives can have on the research of rare diseases (also called “orphan diseases”), and the rare disease community, I felt it appropriate to ask someone their thoughts with much more experience with rare diseases than myself. With that being said, I am fortunate to call Ben Munoz my friend since high school. Ben, a graduate of Stanford University, with an MBA from Northwestern University’s Kellogg School of Business, Ben was ready to write his own ticket anywhere. However, Ben experienced an Arteriovenous Malformation (AVM) stroke, which, in layman’s terms, can be explained as a disease which causes a logistical nightmare for blood and oxygen attempting to get to the brain. From this experience, Ben learned that not only are some conditions rare, but help and community can be rare, as well. Ben founded Ben’s Friends (BensFriends.org), a 501(c)(3) non-profit, online rare disease patient community.

In addition to being the president and co-founder of BensFriends.org, Ben is also CEO of Nadine West. Nadine West has been described as, “…a Trunk Club for the Forever 21 Crowd — a fashion subscription box without the commitment.” Below, we ask Ben answers some questions about rare and orphan diseases.


Why is it important to pursue treatments for orphan diseases?
“Everyone with a rare disease is someone’s son or daughter. Every disease that impacts someone’s life is a tragedy but those with orphan diseases are especially unfortunate since the biggest profits go towards developing blockbuster drugs, not drugs to treat orphan diseases.

Luckily, technology is changing the game. Genomics is making it easier for scientists to uncover causes and create therapies.  And the internet is making it cheaper and easier to recruit for clinical trials.”


Based upon your experiences at BensFriends.org, can you provide some insight to the orphan and rare diseases, impacts on persons, the community, vulnerable communities, and treatments for such?
“Patients with orphan diseases feel lonely and underserved. Ben’s Friends does what we can to connect them with others like them, but we need scientists and drug companies to provide treatments. There are multi-billion dollar companies, like Shire, that have discovered a sustainable business model built around orphan drug treatments.”

Do you think that most researchers involved in clinical research of orphan drugs are aware of the tax incentives?
“This is tough for me to answer. I think they are aware of tax incentives and genomic technology but unaware of our orphan disease patients have self-organized and are willing to collaborate with scientists to find a cure.”

Do you think more scientists and their investors would support this kind of testing if they knew about incentives like this?
“Yes, definitely.”

If you or your organization are interested in learning about these powerful tax incentives, please contact us at info@braynconsulting.com or 888-773-8356. Also feel free to visit us at www.braynconsulting.com and www.calcompetes.com.


Follow BRAYN on LinkedIn and on Twitter @BRAYNware to stay on top of updates.

Leave a Reply

Your email address will not be published. Required fields are marked *