WASHINGTON (Reuters Health) - Lawmakers in the US House on Thursday passed a bill that includes a plan to extend the tax credits offered to makers of orphan drugs.

The agency gives orphan drug designation to drugs that provide a significant therapeutic advantage over existing treatments and target conditions affecting 200,000 or fewer US patients per year.

The highest-profile aspect of the bill is a proposal to allow taxpayers to deduct part of the cost of buying long-term healthcare insurance.

But the bill also expands tax credits for firms developing orphan drugs. Under the new plan, manufacturers would be able to claim the credits from the time that they apply for orphan drug status, rather than beginning when the drug is awarded the status.

Under the orphan drug program, which is designed to encourage development of treatments for rare diseases, tax credits can be claimed for up to half of certain clinical testing expenses. Orphan drug designation carries other benefits as well, most notably 7 years of marketing exclusivity.

The newly passed bill also expands the 75-cent-per-dose federal vaccine excise tax to hepatitis A vaccines.

The tax is paid on most common childhood vaccines as a way to finance the National Vaccine Compensation Fund, which makes payments to patients who have experienced adverse health effects from vaccines if they drop their lawsuits against vaccine companies.

The long-term care portion of the legislation would allow taxpayers to write off 25% of the cost of long-term care insurance premiums next year on insurance for themselves, a spouse or dependents. The deduction expands to 50% of premium costs by 2012.

The bill's supporters said that the tax write-offs are a good way to entice consumers to buy the coverage. "If we don't put incentives in for individuals, our public resources will be depleted," said Rep. J.D. Hayworth (R-AZ), the bill's chief sponsor.

But opponents said the bill would only serve to subsidize the insurance industry for products that consumers don't really want. Rep. Fortney (Pete) Stark (D-CA) said the plan would force the government to spend $561 million in 2012 subsidizing insurance that only about 100,000 people would buy.

"Why are we wasting the taxpayers' money? This is some insurance salesman run amok," Stark said.

The House passed the bill 362 to 61.