Rep. Vargas, Rep. Rooney, and Rep. Peters Announce the Introduction of the “Rare Disease (RaD) Fund Act of 2018”
Washington, D.C. (September 14, 2018)— This week, Rep. Juan Vargas (CA-51), Rep. Thomas J. Rooney (FL-17), and Rep. Scott Peters (CA-52) introduced H.R. 6801 Rare Disease (RaD) Fund Act of 2018. The legislation would authorize a pilot program that allows the U.S. Treasury Department to establish a privately owned and operated investment fund for rare disease therapeutics. This fund would address the ever-widening funding gap that currently exists between basic research and clinical development.
“Unfortunately, thousands of potentially lifesaving drugs are being severely hampered because of a lack of early-stage investment,” said Rep. Juan Vargas. “The RaD Fund removes the funding barriers currently in place by implementing a novel financial structure aimed to motivate large institutional investors to finance cures for rare diseases.”
This pilot program creates a $700 million investment fund to allow several biomedical projects to be funded by one entity, ultimately driving down the risk and encouraging the life science industries to leverage the significant capital in the U.S. bond market. The fund is overall designed to better manage risk while improving research effectiveness.
“Too many promising biomedical treatments and genetic therapies have been unable to obtain the funding needed to continue research, so the benefits are left unrealized,” said Rep. Thomas Rooney. “The creation of this Fund is a necessary step to combat rare diseases and help individuals that are fighting them. It is our responsibility as Members of Congress to help accelerate biomedical innovation in the capacity that we can, and this progress shouldn’t be obstructed by a lack of funding.”
“San Diegans know the importance of health care innovation—but without extra funding, rare diseases that need additional resources will be elusive to treat and cure,” said Rep. Scott Peters. “That’s why this fund is so important. As a pilot program, this public-private fund presents the opportunity to jumpstart biomedical research that will provide the next generation of care to millions of people. As a member of the Energy and Commerce Committee, I will continue to promote efforts to better fund critical health research.”
A group of researchers, led by Dr. Andrew W. Lo, Professor of Finance and the Director of the Laboratory for Financial Engineering at the MIT Sloan School of Management, conducted a series of simulations demonstrating that a successful megafund model for rare diseases could be implemented with just $400 million in capital and as few as ten to twenty compounds.
In addition to gaining bi-partisan congressional support, the RaD Fund has also caught the attention of life science leaders, including Biocom. “Biocom applauds the leadership of Congressmen Juan Vargas, Scott Peters and Tom Rooney in introducing the Rare Disease (RaD) Fund Act,” said Joe Panetta, President and CEO of Biocom, the life science association of California. “Today, the increasing complexity, length and risks associated with biomedical innovation have made it very difficult for biotech startups to attract the early-stage investment funding needed to take promising research to the next level of development. This much-needed legislation would help bridge the funding gap between basic research and clinical development by creating an investment fund for a large number of early-stage rare disease therapeutics, therefore diversifying portfolios and reducing risk.”
“It’s time for the United States to model the way and reclaim its position as the world leader in innovation,” said Rep. Vargas. “By passing the RaD Fund Act, we have the potential to save countless lives and dramatically reduce the costs of drugs and therapies for patients with rare diseases.”
Vargas represents California’s 51st Congressional District which includes the southern portion of San Diego County, all of Imperial County and California’s entire U.S.-Mexico border. Vargas was first elected to the U.S. House of Representatives in 2012 and is currently serving his third term in Congress. He serves on the House Financial Services Committee.