FDARA: Priority Review For Sale

May 14, 2007

In the near future, one might see the following ad on Ebay or Craig’s List: "For Sale:  One FDA Priority Review voucher.  Mint condition.  Entitles 505(b)(1) applicant to 6-month FDA review.  Sponsor must pay additional user fee."

In an effort to incentivize companies to invest in the development of treatments for neglected and tropical diseases, the Senate-passed version of the FDA Revitalization Act ("FDARA") creates a transferable priority review voucher for companies that obtain approval for such products.  When FDA grants "priority review," the Agency agrees (under PDUFA III) to review and act on an application within 6 months of receipt. 

The bill, if enacted, would add § 524 to the FDC Act –"Priority Review To Encourage Treatments For Tropical Diseases."  Under this provision, FDA "shall award a priority review voucher to the sponsor of a tropical disease product upon approval by [FDA] of such tropical disease product" after the enactment of FDARA.  "Tropical disease products" are defined to include products for HIV, malaria, tuberculosis and related diseases, and "any other infectious disease that disproportionately affects poor and marginalized populations, including those diseases targeted by the Special Programme for Research and Training in Tropical Diseases cosponsored by the United Nations Development Program, UNICEF, the World Bank, and the World Health Organization."  A priority review voucher may be used when FDA would otherwise assign a "standard review" (10-month review) to an application. 

A priority review voucher awarded to a sponsor is transferable.  The bill states that "[t]he sponsor of a tropical disease product that receives a priority review voucher . . . may transfer (including by sale) the entitlement to such voucher to a sponsor of a new drug for which an application under section 505(b)(1) will be submitted after the date of the approval of the tropical disease product."  In addition to limiting priority review vouchers to 505(b)(1) applications (it is unclear why 505(b)(2) applications are excluded), there is a string attached to such vouchers.  Specifically, FDA must assess a new priority review voucher user fee.  Under the bill, FDA "shall establish a user fee program under which a sponsor of a drug that is the subject of a priority review voucher shall pay to [FDA] a user fee . . . in addition to any fee required to be submitted under" PDUFA.  Presumably FDA will establish this new fee under the goals document that will be issued as part of PDUFA IV once FDARA is signed into law later this year.   

The tropical disease incentive provision was added by an amendment sponsored by Sen. Sam Brownback (R-KS).  In introducing the amendment Sen. Brownback commented that:

According to the World Health Organization, more than 1 billion people -nearly one in every 6 people worldwide- are affected by at least one neglected tropical disease.  In addition, neglected tropical diseases claim roughly 500,000 lives each year.  However, less than 1 percent of the 1,400 drugs registered between 1975 and 1999 -over a 25-year-period- fewer than 1 percent of the 1,400 drugs registered treated such diseases.  This disparity is clearly due to the lack of financial incentive for pharmaceutical companies to bring neglected tropical disease treatments to market because these diseases disproportionately affect low-income countries, with the poorest of the poor in those countries needing those medicines, most of them in Africa.  Creating incentives for companies to invest in treatments for these diseases is not only in our country’s national interest, but it is consistent with our longstanding tradition of caring for those who are less fortunate around the world.  In other words, it is consistent with American values.

Although the FDC Act does not currently offer incentives specifically for the development and approval of products for tropical diseases, if a tropical disease meets the requirements of the Orphan Drug Act, e.g., United States prevalence of 200,000 or less persons (presumably many do), FDA may designate a drug for a tropical disease as an "orphan drug."  Orphan drug designation qualifies an applicant for a 7-year period of orphan drug exclusivity, tax credits, and other benefits.  Therefore, while Sen. Brownback’s amendment offers a new type of incentive for the development of drugs for tropical diseases (some of which may not qualify for Orphan Drug Act benefits), sponsors should also consider whether their drug qualifies as an "orphan drug."

Categories: Drug Development