The Food and Drug Administration wants to end a voucher program designed to spur development of new drugs for rare pediatric diseases, although a new government report released on Wednesday said it’s too early to say whether it’s working. Drug makers and advocacy groups, however, told the Government Accountability Office they see value in the program, which expires on Oct. 1.

At issue are pediatric review vouchers. Created in 2012, the program awards a priority review voucher to a drug maker that wins approval of a treatment for a rare pediatric disease. Companies can later redeem vouchers when seeking approval for another medicine to treat any illness. And the FDA is obligated to review this other drug in six months instead of the standard 10 months.

The deal is akin to a grand bargain in that public health is promoted by development of a medicine that may not otherwise become available. And a drug maker can profit, because a faster review means an approved medicine may be sold sooner and generate sales. Moreover, vouchers can be sold or transferred. So far, a few transactions have occurred, ranging in price from $67.5 million to $350 million.

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But whether the program will succeed is unclear. (A similar program exists for tropical disease drugs).

So far, drug makers have made 11 requests for a pediatric voucher and six were awarded. To the GAO, this suggests interest in the program. But the GAO also noted each of the drugs awarded vouchers were in development prior to the program. And so, most companies that might want to develop a treatment for a rare pediatric disease would “likely be years away” from seeking FDA approval.

A key issue, though, are concerns expressed by FDA officials.

For one, they told the GAO they have not seen any evidence the program has encouraged increased development of drugs for rare pediatric diseases. The FDA officials also maintained the program hinders their ability to set public health priorities. How so? They complained that agency staff must provide priority reviews of new drugs that would not otherwise qualify.

For instance, FDA officials anticipate that drug makers will redeem vouchers for medicines that would otherwise receive a standard 10-month review for illnesses that already have available treatments, such as diabetes or cholesterol. In effect, the program allows a company to “purchase” a priority review at the expense of other important public health goals.

And they argued that the added workload strains agency resources. The FDA told the GAO that it lacks a sufficient pool of medical reviewers that can be moved from one review division to another on an “ad hoc basis” to complete priority reviews based on pediatric vouchers.

As an FDA source told us recently, the special user fee paid by a drug maker that redeems a voucher is a one-time payment. This “means the funding is not there to continue to pay additional staff once the review is completed. It is not feasible for us to hire and train new professional staff to handle the ‘surge’ work and then let them go,” the source said about both voucher programs.

“Simply calling a standard application a priority application because of a redeemed voucher does not magically transform the application into a public health priority and also does not change the underlying work needed to review the application,” the agency source explained.

“The program was not negotiated with FDA, and we have opposed the program strongly … from the time it was first proposed,” the source continued. “But in the legislative process, FDA does not get a true seat at the table. So, well-meaning academics, advocates, and legislators ‘sold’ FDA to the highest bidder in setting up this program.  We are often accused by many of the same groups of being ‘too cozy’ or ‘in bed with’ the pharmaceutical industry, but no one seems to notice that the program is the worst possible example of industry controlling FDA, and not to the public good.”

Instead of a voucher program, the FDA suggested that other incentives, such as offering an additional period of market exclusivity, may be more effective in spurring drug development.

Nonetheless, drug makers believe each voucher sale provides welcome cash infusions. Four of five companies that were awarded or transferred and later sold vouchers told the GAO they plan to reinvest some of the proceeds into R&D to treat other rare pediatric diseases. However, both drug makers and patient groups said the FDA too narrowly interprets the definition of a rare pediatric disease.

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