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How Profitable Are the Rare Pediatric Disease Priority Review Vouchers?
(Thursday, July 6, 2023) Priority review vouchers (PRVs) are a less discussed incentive from the US government to developers of new drugs for certain diseases. These are hard to get but provide an immediate financial gain to the company securing it. So, can developers design programs aimed specifically at benefiting from them? In the last 14 years, there have been several case studies to highlight the limitations and benefits of such a return-on-investment (ROI) strategy. Priority Review requires FDA to complete the review of a market approval application for a new drug in 6 months instead of 10 months, in effect giving the manufacturer 4 additional months of market access post approval. So, if a company projects the market size of their product to be say $500 million per year, the 4 extra months could translate to more than $160 million in profits. However, priority review is available only for specific indications. The PRV program allows the voucher holder to get priority review for any indication thereby creating a monetary value for it. The earner of the PRV can use it to prioritize the review of any of their next drug or biologic application. More importantly, PRVs can be sold by the earning company to another one. The PRV program was created in 2009 to incentivize development of treatments for tropical diseases with the justification that Western companies would not develop treatments for diseases common in tropical countries (most of which are poor under-developed or developing countries) due to lack of financial profitability. It was later expanded to rare pediatric diseases and then to medical countermeasures for diseases such as the Ebola virus. So far, since its inception, more than 30 PRVs have been issued, 15 of which were sold for a total of more than $2 billion in immediate profits for the company securing the PRV, not including the companies that benefited financially by using them instead of selling them. Most PRVs have been granted so far for rare pediatric diseases. The highest price for a PRV was $350 million, however, most of the PRVs were sold for an average of $100 million. For some companies, the PRVs have been very profitable. For example, Sarepta Therapeutics, Inc. of Massachusetts cashed-in its 4 PRVs earned for developing treatments for the rare pediatric disease, Duchenne Muscular Dystrophy, for a total of $437 million. The benefit of the PRVs for drug development is highly debatable. According to the Government Accountability Office (GAO), the PRVs have little or no effect on the development of drugs. However, the PRV program offers a remarkable opportunity for pharmaceutical companies to expedite the review of their new drug applications. However, there are obvious concerns about it. While the PRV is guaranteed upon approval of a new drug for an indication listed in the PRV program, its benefit to the purchasers of the PRV comes with its risks. First, getting the PRV does not guarantee that FDA would approve the product in 6 months. Second, there are multiple incentives available to developers of rare diseases, pediatric diseases, medical countermeasures so PRVs act more like an icing on the cake than the cake. This reduces the weight of the PRV program for the overall benefit of the drug. The original goal of developing drugs for tropical diseases has been left far behind by the new one aimed to help rare pediatric diseases in the US with about 30% of PRVs for tropical diseases. As the GAO report found, while there is no tangible measure of the benefit of the PRVs on the development program, the leaders of the companies want it around as the icing it is as it probably plays a role in the overall ROI strategy. 
AUTHOR
Dr. Mukesh Kumar Founder & CEO, FDAMap Email: [email protected] Linkedin: Mukesh Kumar, PhD, RAC Instagram: mukeshkumarrac Twitter: @FDA_MAP Youtube: MukeshKumarFDAMap |
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