Tax Bill Could Pose Problems for Cancer Patients; Cancer Research

Bill Ends Medical Expense Deduction and Tax Credits for Drug Development

November 8, 2017

Washington, D.C.—Today the American Cancer Society Cancer Action Network (ACS CAN) sent a letter to House leadership and committee chairs asking that they reconsider provisions of their tax proposal that could harm cancer patients. Specifically, ACS CAN opposes eliminating the medical expense deduction and ending tax credits for developing so-called “orphan drugs”.

The medical expense deduction allows people who itemize their taxes to subtract out-of-pocket health care expenses, like co-pays, transportation, lodging and other costs not covered by insurance from their taxes. Last year nearly 9 million taxpayers claimed the deduction, the majority of whom had incomes below $75,000. A 2016 study in Health Affairs reported a survey of cancer survivors that showed one-third go into debt and of those more than half incurred more than $10,000 in expenses.

“Eliminating the medical expense deduction could hit cancer patients hard,” said Chris Hansen, president of ACS CAN. “Patients often have to travel long distances, go out-of-network for care or endure costly co-pays or co-insurance that add up over the course of the year. We should be looking for ways to lessen the financial stress on patients rather than potentially increasing costs,” said Hansen.

Additionally, eliminating the orphan drug tax credit could also hurt cancer patients by slowing the development of new, innovative treatments. While cancer is generally a common disease, it has hundreds of variations and the corresponding therapies can be quite different. As a result, cancer drug development has become highly specialized.  The majority of cancer drugs now qualify for orphan status at some point in their lifecycle.  A 2015 report estimated that eliminating this tax credit would cut drug development by a third. Many cancer patients are relying on or are hopeful for new treatments that are directly related to the availability of the orphan drug tax credit.

“We strongly encourage lawmakers to reconsider these provisions and their potential unintended consequences for cancer patients,” said Hansen. “Tax policy should help those most in need. These changes could instead hurt those already suffering the high cost of this terrible disease.”

Read the letter.