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Regulatory Explainer: Everything You Need to Know About

FDA’s Priority Review Vouchers

Posted 27 September 2017 By Alexander Gaffney, RAC, Michael Mezher, Zachary Brennan

Regulatory Explainer: Everything You Need to Know About FDA’s Priority Review Vouchers http://www.raps.org/Regulatory-Focus/News/2015/07/02/21722/Regulatory-Explainer-Everyth...

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Since 2007, the US Food and Drug Administration (FDA) has issued a handful of special "priority review" vouchers

which allow its recipient to expedite the review of any one of its new drug products. What are these vouchers, why is

FDA issuing them and what benefit might they have for society? Find out in our latest Regulatory Explainer on the

Priority Review Voucher system.

Last updated on 27 September 2017 to include:

Updated to include Priority Review Voucher FY2018 Fee Rates

Previous updates:

Biomarin awarded priority review voucher for Brineura (cerliponase alfa) to treat Batten disease.

Marathon Pharmaceuticals awarded Priority Review Voucher for Emflaza (deflazacort).

Sarepta Sells Priority Review Voucher from Exondys 51 Approval to Gilead for $125 Million.

New rare pediatric PRV awarded to Ionis Pharmaceuticals for the approval of Spinraza (nusinersen), the first drug

approved to treat children and adults with spinal muscular atrophy.

New medical countermeasure priority review voucher program created under the 21st Century Cures Act.

New priority review vouchers awarded to Novartis and Chemo Research S.L.

Janssen's and Gilead's use of priority review vouchers.

Read all of our Regulatory Explainers here.

I Don't Know Much About Drug Development - What are we Talking About Here?

FDA's priority review voucher (PRV) programs are about drug development, and specifically the time and cost of drug

development and the conditions a new drug is intended to treat.

Developing a new drug is a costly and time-intensive affair. The cost of developing a new drug can range from the tens


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of millions to billions of dollars—and that assumes the development program is successful. Only about one in 10 drug

products which enter phase I testing are ever approved in the US. For some hard-to-treat indications, like conditions

affecting the central nervous system, success rates can be even lower.

The time it takes to obtain that approval can also be a major factor. Companies often take years, sometimes decades, to

develop a drug before sending it to regulatory officials for review. Once FDA begins its review, it takes more than a year

on average for regulators to approve a drug.

Why Does the Time and Cost of Drug Development Matter?

Assume, for a minute, that you're a pharmaceutical or biopharmaceutical company hoping to develop a drug. The time

and cost it takes to develop a drug means you're going to need funding, either from private investors or public

shareholders. In return for their initial investment, investors usually want a return on their investment. Most


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companies generate this return by selling their approved products, either directly to consumers or to payers like health

insurers and government healthcare systems.

But what happens if no market exists for a product to be sold?

That's the problem faced by companies developing drugs for two types of populations: Drugs intended to treat so-called

"neglected" tropical diseases, and drugs intended for so-called "orphan" diseases affecting relatively few individuals. For

the former, a market exists for the drugs, but can be too poor to allow the company to recoup its development costs. For

the latter, a market exists, but it can sometimes number in the hundreds of patients, again making it too small to recoup

development costs without charging exorbitant sums of money.


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In other words, if a company is looking to make the most money it can, it's unlikely to be able to do so by developing

products for rare or neglected diseases.

In addition, developing drugs for rare and neglected diseases can sometimes be disproportionately difficult. Most

prominent diseases in western countries benefit from research conducted by government entities like the US National

Institutes of Health (NIH) or public health foundations. Their research helps expedite drug development by better

helping companies to understand the pathology of the diseases they hope to develop treatments or cures for. Companies

hoping to develop treatments for rare or neglected diseases often have to conduct more, if not all, of this early-stage

research.

Are There Ways to Incentivize Drug Development to Benefit Specific Diseases?

Actually, yes.

Since the 1984 passage of the Orphan Drug Act, the US has begun to recognize that incentives can help spur

development of new drugs for historically underserved conditions. Under the Orphan Drug Act, companies are eligible

for several extra years of marketing exclusivity, during which time FDA is not permitted to approve a generic, for getting

a drug for a "rare" disease approved. This is meant to give companies an added incentive to produce drugs intended for

rare diseases, as it allows the company extra time to recoup its development costs and likely turn a profit as well.

To date, these incentives have proven wildly popular. Prior to the passage of the Orphan Drug Act, few medicines were

approved to treat rare conditions—defined as affecting fewer than 200,000 persons in the US. Just three "orphan"

drugs were approved in 1984, for example. In 2014, 49 orphan drug products were approved.


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Not all drugs are reviewed by FDA in the same way. Most drugs are reviewed by FDA under "standard" review times,

meaning FDA has 10 months to review each product before it is supposed to render a decision. However, the review

clock stops each time FDA requests additional information from a sponsor, adding several months to the review

process.

However, for certain drugs, FDA accelerates its regulatory review in the hopes of getting products to market more

quickly.

Drugs intended for use in "serious conditions," or which "demonstrate the potential to be a significant improvement in

safety or effectiveness," are permitted to be reviewed under FDA's Priority Review Designation pathway. As explained in


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an FDA guidance document, the pathway allows FDA to review a drug in just six months instead of the standard 10.

For companies and patients alike, FDA's priority review process can be extremely beneficial. For patients with serious

conditions, the expedited review means they have access to a potentially life-saving or -changing treatment. For

companies, it means they can market their product more quickly and begin recouping their often considerable

development costs.

What Does all This Have to do with a Priority Review Voucher?

FDA's priority review vouchers (there are two types) are incentives meant to spur the development of new treatments

for diseases that would otherwise not attract development interest from companies due to the cost of development and

the lack of market opportunities.

To do this, companies are given a special voucher which allows them to have any one of their drugs reviewed under

FDA's priority review system.


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That Sounds Interesting. What is the History of the PRV Programs?

The priority review voucher system was first proposed in a March 2006 paper published in the journal Health Affairs,

and written by Duke University's David Ridley, Henry Grabowski and Jeffery Moe.

In their paper, "Developing Drugs for Developing Countries," they proposed the creation of a priority voucher system

specifically targeted at neglected tropical diseases, which the authors argued lacked sufficient development incentives to

produce.

This "prize," as they called it, could be used in one of two ways: Either it could be redeemed by its recipient, or it could

be sold to another company, which might want to have its own drug reviewed in a six-month timeframe.

The initiative later caught the attention of Sen. Sam Brownback (R-KS), who worked to introduce the first voucher

system into a bill known as the Food and Drug Administration Revitalization Act, which was eventually renamed and

passed as the Food and Drug Administration Amendments Act (FDAAA) of 2007.

What did the FDAAA do for the Priority Voucher System?

Section 1102 of FDAAA, "Priority Review to Encourage Treatments for Tropical Diseases," created the Neglected

Tropical Disease Priority Review Voucher system.

As explained in the law and subsequent guidance documents, any new drug intended to treat the following list of

tropical diseases is eligible to receive a transferrable voucher for priority review:

Eligible Diseases Under the Tropical Disease Priority Review Voucher System

Malaria Blinding trachoma

Buruli Ulcer Cholera

Dengue/Dengue haemorrhagic fever Dracunculiasis (guinea-worm disease)

Fascioliasis Human African trypanosomiasis

Leishmaniasis Leprosy


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Lymphatic filariasis Onchocerciasis

Schistosomiasis Soil transmitted helminthiasis

Yaws Tuberculosis

Added by Congress

Cueva virus Ebola virus

Marburg virus Zika virus

Added by FDA Order

Chagas Neurocysticercosis

FDAAA also gave FDA the regulatory authority to add "any other infectious disease for which there is no significant

market in developed nations and that disproportionately affects poor and marginalized populations."

In December 2014, legislators added several new viruses to the list of diseases eligible for a voucher including

Cuevavirus, five strains of Ebolavirus and two strains of Marburgvirus (more on that below). In August 2015, FDA

exercised its authority to add to the list of eligible neglected tropical diseases for the first time, adding, Chagas disease

and neurocysticercosis to the list.

Are There any Limitations on How Tropical Disease Priority Review Vouchers Can be Used?

Yes, though subsequent legislation eliminated some of those limitations.

For example, FDAAA originally required a drug sponsor to alert FDA at least 365 days before it planned to apply a

voucher to the submission of a new product. That limited the usefulness of the voucher for many companies, as it

slowed down the drug development process. Some companies do not know if they plan to file a new drug application

until they receive the results of late-stage (Phase III) clinical testing.

Another limitation contained in FDAAA was the number of times a voucher could be sold: only once. While a 2008

guidance by FDA allowed companies to buy and sell options on vouchers, once a company purchased a voucher, it could

not be resold—a major risk for the purchaser. For example, if a company's sole drug product failed before it could use

the voucher, it would have been effectively useless.

A third limitation (if you can call it that) is the cost to redeem the voucher. Under FDAAA, FDA is permitted to charge a


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company redeeming a voucher the added cost of conducting a priority review in addition to the normal new drug user

fee.

Since the priority voucher user fee was first established in FY 2011, the cost to use it has ranged as high as $5.28 million

(2012) and as low as $2.32 million (2014).

Tropical Disease Priority Review Voucher User Fee

Fiscal Year Voucher Fee

FY 2011 $4,582,000

FY 2012 $5,280,000

FY 2013 $3,559,000

FY 2014 $2,325,000

FY 2015 $2,562,000

FY 2016 $2,727,000

FY 2017 $2,706,000

FY 2018 $2,830,579

What Other Types of Vouchers Exist?

So far, two other types of voucher exists: rare pediatric disease priority review voucher and medical countermeasure

priority review vouchers.

The rare pediatric voucher was created in 2012 under the Food and Drug Administration Safety and Innovation Act

(FDASIA), and specifically targets the need for additional therapies for rare pediatric subsets of other diseases.

Section 908 of FDASIA defines a "rare pediatric disease" as one which "primarily affects individuals aged from birth to

18 years, including age groups often called neonates, infants, children and adolescents," and is a rare disease according

to federal statute (200,000 persons in the US or fewer).

The rare pediatric voucher system is closely modeled off the tropical disease voucher system, with several exceptions.

Perhaps the most notable difference at the time of the pediatric voucher's initial passing was its relative ease of use.

Unlike the tropical voucher, which required FDA to be notified 365 days prior to its use, the rare pediatric voucher could


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be used just 90 days prior to its use.

Another key difference: The rare pediatric voucher could be transferred (i.e. sold) an unlimited number of times, unlike

the tropical disease voucher which could only be sold once.

However, as of December 2014, both of these differences have been erased under the Adding Ebola to the FDA Priority

Review Voucher Program Act, which eliminated the disparity between the two vouchers. Tropical vouchers may now be

redeemed in just 90 days, and may be resold an unlimited number of times.

In 2016, the 21st Century Cures Act was signed into law creating a priority review voucher program for medical

countermeasures, though to date no product has been awarded a priority review voucher under the program.

FDA has also indicated that the vouchers will require the same user fee.

Rare Pediatric Disease Priority Review Voucher User Fee

Fiscal Year Voucher Fee

FY 2014 $2,325,000

FY 2015 $2,562,000

FY 2016 $2,727,000

FY 2017 $2,706,000

FY 2018 $2,830,579

How Many Vouchers Have Been Awarded so Far?

FDA has awarded a total of 14 priority review vouchers, six for rare pediatric indications and three for tropical disease

treatments:

Have any Vouchers Been Used or Sold so Far?

Just as interesting as who obtained the vouchers is what has happened to those vouchers.

Perhaps the most notable aspect of the vouchers so far is the price they have been able to command. BioMarin's

voucher, the first ever to be sold, was purchased for $67 million. Several months later, Gilead Sciences purchased

Knight Therapeutics' voucher for $125 million. In May 2015, Sanofi purchased yet another voucher for a record-setting


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$245 million, and in August 2015, AbbVie shattered that record by paying $350 million for a voucher originally

awarded to United Therapeutics.

However, then the selling price for PRVs has continued to slide, with Gilead paying $200 million for a voucher in 2016,

and $125 million for one in February 2017.

In July 2016, Gilead disclosed it had purchased a priority review voucher in a US Securities and Exchange Commission

(SEC) filing. However, the party the voucher was purchased from and amount it was purchased for remain unknown.

Are There any Risks to Using a Priority Review Voucher?

There are several risks inherent to using a PRV.

The first and most obvious is that FDA is under no obligation to approve a product using a voucher. Both FDASIA and

FDAAA stipulate that FDA only needs to come to a decision within six months. As Novartis proved in the first-ever use

of a priority review voucher, FDA will not necessarily approve a product just because its sponsor used a voucher.

Priority review will likely accelerate the approval of a good drug to market, but it will not save a bad drug from being

rejected. And for companies that are unsuccessful in their use of a priority review voucher, the cost of failure can be

especially high due to the cost to procure and use the voucher.


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Another little-known limitation is that FDA claims it isn't actually required to review all drugs submitted using a

voucher in six months. As explained in FDA's tropical disease voucher guidance, sponsors are not "guaranteed a six-

month review" of their new drug product.

"We believe the intent of this section is that drugs for which priority review vouchers are used should be treated as if

they were any other priority review drug. Therefore, these applications would be placed in the priority review group.

The Agency has committed to a goal of completing 90 percent of priority reviews within 6 months."

The agency's rare pediatric disease voucher guidance contains similar language:

"Although FDA's goal is to take action on the application within 6 months after the 60 day filing period for an

application involving a new molecular entity or within 6 months after the date of receipt of an application not

involving a new molecular entity, this timeframe is not guaranteed. Note that "take action" in this context means that

FDA aims to complete its review of the filed application and issue an approval or complete response letter within this

timeframe; it does not mean that the application will be approved within this timeframe."

Have There Been any Changes to the Priority Review Voucher Program?

In 2014, US legislators made a major change to the tropical disease priority review voucher program with the intent of

providing additional incentives to fight the Ebola virus and several other related viruses.

The changes were spurred in part by an op-ed by David Ridley, one of the fathers of the original voucher plan, in which

he proposed adding "other infectious diseases" to the list of diseases eligible to receive a voucher. While FDA was

already permitted to add additional diseases to its list through the regulatory process, legislators said they feared that

process would take too long and would not be completed until the Ebola outbreak had potentially ended.

On 16 December 2014, President Barack Obama signed into law the Adding Ebola to the FDA Priority Review Voucher

Program Act. The law made several subtle but important changes to the neglected tropical disease voucher program.


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First, the law permitted the tropical vouchers to be used just 90 days after a company notified FDA of its intent to file a

new drug. Previously, companies were required to notify FDA 365 days in advance.

Second, the law allows tropical vouchers to be resold an unlimited number of times. FDA had previously interpreted the

statute to allow only one sale of the voucher.

Third, the law adds " filovirus"—a category of diseases which include five strains of Ebolavirus, two strains of

Marburgvirus and the lone strain of Cuevavirus, known as Lloviu virus.

Genus name Virus name

Cuevavirus Lloviu virus

Ebolavirus

Bundibugyo virus

Reston virus

Sudan virus

Taï Forest virus

Ebola virus

MarburgvirusMarburg virus

Ravn virus

Fourth, the law permits FDA to add any new viruses to the list of tropical diseases eligible for a voucher "by order"

instead of "by regulation." This change will permit FDA to make changes much more quickly, and to avoid the lengthy

notice-and-comment provisions of federal regulation.

Are There any Criticisms of the Priority Review Voucher Program?

There have been several major criticisms levied against the priority review voucher program.

First, there have been some questions about whether the voucher system is actually incentivizing development, or is

rather just acting as a giveaway to companies which would have developed the new products anyways. In a January

2015 Public Library of Science article, authors Bernard Pécoul and Manica Balasegaram looked at the tropical disease

voucher obtained by Knight Therapeutics, and found that other companies and entities had done much of the

development work to get the company's tropical disease drug approved.


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The group Medicines san Frontiers has levied similar claims against the voucher program, and argued that companies

should be required to show they conducted the research necessary to obtain approval for the drug.

Other experts, including the Drugs for Neglected Disease Initiative's (DNDi) Rachel Cohen, have noted that the voucher

systems actually do not require a company to sell a drug. In other cases, companies might seek regulatory approval for a

tropical disease drug which is marketed outside the US in the hopes of obtaining a voucher. This should be banned, one

of the founders of the voucher program, David Ridley, has said.

The voucher program also doesn't require the drugs provided through the program to be affordable. David Ridley has

proposed requiring companies to report on the affordability of drugs that receive a voucher from FDA, and called on

companies to voluntarily ensure that the drugs are affordable to those who need them.

Then there's a more fundamental question: Would these drugs have been developed were it not for the possibility of

obtaining a voucher? While defenders of the voucher program have said the existence of the vouchers provides a

powerful incentive for companies to consider developing new drugs, there's little evidence to show the drugs wouldn't

have been developed anyway.

Unfortunately, it's not yet possible to determine whether FDA's priority review voucher programs are having an effect.

As we stated at the outset of this article, it often takes a decade to develop a new drug, and any new development

catalyzed by the creation of the voucher system may not be evident for several more years. One study recently published

in the Public Library of Science estimated that FDA will issue between five and six new vouchers between 2016 and

2018.

Another criticism, levied by Aaron Kesselheim in the New England Journal of Medicine in 2008, is that while the

voucher program is intended to be used only for new drug ingredients, it ignores the potential utility of new

innovations.

"As a result, an effective novel antimalarial drug that degrades in the heat and must be taken six times a day would earn

its sponsor a voucher, but no voucher would be granted for a follow-on formulation that might be more useful in

resource-poor settings," he wrote.

Kesselheim also noted a broader concern, raised by other experts as well, that the priority review process is improper to


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use for drugs lacking an urgent need. "The voucher program will allow drugs for which there is little or no clinical

urgency to be subject to accelerated deadlines and may lead to approval of products without adequate consideration by

the FDA," he wrote.

Do Any Other Countries Have a Voucher System in Place?

No, although a September 2010 article in The Lancet—again authored by David Ridley—proposed the creation of a

European voucher system which would accelerate the review of medicines as well as pricing and reimbursement

decisions. The proposal has not yet been adopted.

Are There Other Diseases FDA Might Add to its List of Eligible Neglected Tropical Diseases?

The World Health Organization (WHO) recently called on governments to "increase investment to tackle neglected

tropical diseases."

In August 2015, FDA exercised its ability to add to the list for the first time, adding Chagas disease and

neurocysticercosis to the list of eligible neglected tropical diseases.

Many of the diseases on its list are already contained on FDA's list of neglected tropical diseases, but several are not:

Which Diseases Aren't on FDA's List of Neglected Tropical Diseases?

Rabies Echinococcosis

Taeniasis Foodborne trematodiases

And with the inclusion of the Ebolavirus, Chagas and other diseases to the list, it is possible Congress and FDA may

soon eye other diseases for inclusion on the list as well, including the Middle East respiratory syndrome coronavirus

(MERS-CoV), Chikungunya, the avian flu virus and other diseases thought to present a security risk to the US.

Are There any Potential Changes Coming to the Priority Review Voucher System?

The Rare Pediatric Disease PRV program was re-authorized by Congress in the 21st Century Cures legislation,

extending the program through 2020, and also creating a new PRV program for medical countermeasures.


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Where Can I Learn More About Priority Review Vouchers?

You should read FDA's two related guidance documents:

Guidance for Industry: Tropical Disease Priority Review Vouchers

Guidance for Industry: Rare Pediatric Disease Priority Review Vouchers, Guidance for Industry

Categories: Biologics and biotechnology, Drugs, Research and development, Regulatory strategy, Submission and

registration, News, US, CDER

Tags: Priority Review Voucher, PRV, Neglected Tropical Disease, Neglected Tropical Disease Priority Review Voucher,

Rare Pediatric Disease Voucher, Rare Pediatric Disease, FDASIA, FDAAA, Voucher, FDA Voucher, Guidance, AbbVie,

United Therapeutics, Praluent


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