Congress Continues Spree of Proposing Alternative Incentives for Product Development: the “CBRN Countermeasure PRV” (Part 1)

October 22, 2015

By Kurt R. Karst

Last month we posted on a bill introduced in the U.S. Senate – S. 2041, the Promoting Life-Saving New Therapies for Neonates Act of 2015 – that would amend the FDC Act to add Section 530 to create a transferable “Neonatal Drug Exclusivity Voucher.”  The bill, we noted, continues a recent trend to push for (or reward) new product development by offering an incentive different from the standard grants of patent and non-patent marketing exclusivities (including incentives that merely stack new exclusivity periods upon one another).  A few days after the introduction of S. 2041, two other bills were introduced in Congress that offer alternative rewards for targeted product development.  In today’s post we’ll cover the fist proposal: S. 2055, the Medical Countermeasure Innovation Act of 2015, introduced by Senator Richard Burr (R-NC).  The second bill will be covered in a post in the coming days. 

In addition to making certain changes to the Strategic National Stockpile, clarifying the contracting authority of the Biomedical Advanced Research and Development Authority, and prompting FDA to prioritize finalization of draft guidance on the so-called “Animal Drug Rule,” the Medical Countermeasure Innovation Act of 2015 would, in Section 7, amend the FDC Act to add Section 565A, titled “Priority review to encourage treatments for agents that present national security threats.”

That’s right, another Priority Review Voucher (“PRV”) program is under consideration by Congress!  If enacted, the new PRV program would be added to the Rare Pediatric Disease PRV (“Pediatric PRV”) program (FDC Act § 529) created in 2012 by the FDA Safety and Innovation Act, and to the Tropical Disease PRV (“TD PRV”) program (FDC Act § 524), cretaed in 2007 by the FDA Amendments Act. 

We’ll call the new PRV proposed in S. 2055 the “CBRN Countermeasure PRV,” where the “CBRN” is shorthand for “Chemical, Biological, Radiological and Nuclear.”  The CBRN Countermeasure PRV program is modeled after the current TD PRV and Rare Pediatric Disease PRV programs, but is targeted at the development and approval of products that are the subject of a “material threat medical countermeasure application.”   Such an application is an application for a drug or biological product, no active ingredient of which has been previously approved, that qualifies for 6-month priority review, and that is intended to “prevent, or treat harm from a biological, chemical, radiological, or nuclear agent identified as a material threat under [PHS Act §  319F-2(c)(2)(A)(ii)], or “to mitigate, prevent, or treat harm from a condition that may result in adverse health consequences or death and may be caused by administering a drug, or biological product against such agent.”

Like other PRVs, the CBRN Countermeasure PRV would be transferable, requires notice to FDA before use (in this case only 90 days), and is subject to a special application user fee.  Of course, the ability to transfer (by sale) a PRV is what has made PRVs quite sought after.  So far, FDA has issued 7 PRVs under the TD PRV and Rare Pediatric Disease PRV programs (see here).  One PRV recently sold for an astounding $350 million.

Despite the growing popularity of PRVs, there are PRV detractors (or at least those who have expressed some concern with PRVs).  In a recent interview with folks from The RPM Report, FDA Office of New Drugs Director John Jenkins shared his thoughts about the PRV programs administered by FDA.  When asked whether he thinks PRVs are a good way to incentivize drug development, Dr. Jenkins commented:

The PRV programs require FDA to provide a service (i.e., priority review) that would not otherwise be warranted on the merits for the application for which the voucher is redeemed.  This approach is not consistent with FDA’s usual approach to determine priorities for its public health work based on the merits of the application under review.  In effect, these programs allow sponsors to “purchase” a priority review at the expense of other important public health work in FDA’s portfolio.

Dr. Jenkins also noted during the interview that “[t]he PRV vouchers issued to date have been awarded to drugs that were already being studied in the U.S. or approved in other countries prior to the passage of the PRV legislation.”  This is an observation echoed by Aaron Kesselheim, a Professor of Medicine at Harvard, in a recent article published in The Journal of the American Medical Association.  According to Dr. Kesselheim, there is “little reliable evidence” that the TD PRV program has spurred novel drug development.  “Several more promising approaches exist to promote discovery of new treatments for neglected tropical diseases or other overlooked disease classes,” says Dr. Kesselheim.  “In particular, greater funding of basic science research would help identify novel targets for therapy.”

We imagine that there is also some concern among drug and biological product manufacturers that new PRV programs will dilute the value of a PRV.  It’s a simple issue of supply and demand.  The more PRVs issued and on the market, the less they are likely to sell for. 

Given the criticism of and concerns about PRVs on the one hand, and Congress’s apparent need to create incentives on the other hand, we’ve given some thought to other non-exclusivity incentives Congress might consider as it looks for alternative ways to incentivize drug and biological product development.  Borrowing from this blogger’s vast board game experience (e.g., Risk, Monopoly, and Life), Congress might consider a transferable “Anti-PRV.”  An “Anti-PRV” would allow the holder of such a PRV, awarded for some particular product development achievement, the ability to cancel out another company’s redeemed Pediatric or TD PRV (or a CBRN Countermeasure PRV if it exists).  Or how about the “Standstill Voucher”?  That voucher would provide the holder with the ability to freeze FDA’s review of a competitor’s NDA or BLA review for 6 months.  Or maybe the “Switch-Out PRV,” which would allow the holder of such PRV the ability to take another sponsor’s PRV and leave a competitor with a standard 10-month review.  We could go on and on, but we’ll stop with these three proposals (all said with tongue-in-cheek of course).