1. Short title This Act may be cited as the Rare Disease Fund Act of 2018 or the RaD Fund Act of 2018 . 2. Findings The Congress finds the following: (1) That biomedicine is far more advanced today than even a decade ago is indisputable, but breakthroughs require years of translational research at a cost of hundreds of millions of dollars per trial and have a substantial likelihood of failure. (2) The drug development pipeline is laden with unfavorable probabilities. On average, for every 5,000–10,000 compounds that enter the drug discovery pipeline, just 250 progress to preclinical development—and only one will become an approved drug. (3) Biotech and life sciences traditional financing vehicles of private and public equity are becoming less effective funding sources because the needs and expectations of limited partners and shareholders are not consistent with the increasing complexity, risk, and duration of biomedical innovation. (4) Industry professionals frequently refer to the Valley of Death —a steadily widening funding and resource gap that currently exists between basic research and clinical development, effectively limiting the field of potential novel therapies, technologies, and treatments for patients. (5) The life sciences industry needs novel approaches to early-stage drug development that better manage risk, lower capital cost, improve research effectiveness, create diverse portfolios, leverage risk-tolerant capital, and access new capital sources. (6) One solution is to implement a financial structure in which a large number of biomedical programs are funded by a single entity to substantially diversify the portfolio and thereby reduce risk. The entity can use securitization to finance its activities by issuing debt, which opens up a much larger pool of capital for investment. (7) This approach involves two components: (A) Creating large diversified portfolios, called megafunds , consisting of biomedical products at various stages of development. (B) Structuring the financing for these