[Ip-health] Hank Grabowski on the priority review vouchers

[James Love]

This was Professor Grabowski's note to the Duke faculty about the priority review voucher.  Jamie

----- Forwarded message
    Date: Mon, 18 Feb 2008 15:49:31 -0500
    From: Henry Grabowski
 Subject: New law on priority review vouchers


Dear Community -

               Some of you may have seen reference to a recent speech by Bill
Gates at Davos, and his call for "creative capitalism."
http://www.gatesfoundation.com/MediaCenter/Speeches/Co-ChairSpeeches/BillgSpeeches/BGSpeechWEF-080124.htm.

  One of the examples cited in his speech was the concept of priority
review vouchers This is a prize for companies that develop drugs for
tropical diseases like malaria or dengue fever, diseases with high
burden but low commercial potential.  Priority review vouchers are a
market-oriented incentive that David Ridley, Jeff Moe, and I first
presented in a /Health Affairs/ article in 2006, "Developing Drugs for
Developing Countries."
http://fds.duke.edu/db?attachment-25--1301-view-172

            The prize for developing and getting FDA approval for a new
tropical disease medication is a transferable voucher that entitles the
bearer to a priority review at the FDA for any other drug of its choice
submitted for U.S. market approval.  Priority review leads to an FDA
decision in six months (but not necessarily an approval) in contrast to
the usual one year plus review time for a standard review.

            To our amazement and delight, the concept was embraced by
Senators Brownback and Sherrod Brown (a right-left coalition) and
offered as an amendment to the renewal of the FDA User Fee Act.  After
it passed the Senate nearly unanimously, it ran into some hurdles in the
House, but emerged from Congress on September 20, 2007 (my birthday)
when the House passed it with help from David Price and several others.
It was signed into law a week later by the President.

            We are especially pleased that the transferable nature of
the voucher was preserved since it allows small biotech firms to auction
the rights to priority vouchers to the highest bidder, and thus increase
their value substantially.  The auction thus creates strong incentives
to develop tropical medicines in order to obtain faster review on a
second medicine of the sponsor's choice for the U.S. market.[1]
<imap://grabow@keynes.econ.duke.edu:993/fetch%3EUID%3E/INBOX%3E160371?part=1.3&type=application/x-message-display&filename=New%20law%20on%20priority%20review%20vouchers.eml#_ftn1>
  Bio Ventures for Global Health is a Gates sponsored non-profit group
that is very excited about the new law's potential for developing new
tropical medicines.  The Gates Foundation is collaborating with industry
on a large portfolio of such medicines that are the early stages of the
R&D process.

            In our original /Health Affairs/ article, we estimated the
market value of a voucher could be several hundred million dollars, with
the potential for positive global social value from the development of
new tropical medicines.

            As economists, we are eagerly looking forward to see how
market will develop and hoping the FDA will embrace its objectives
through its regulatory actions.  We are also interacting with the Gates
Foundation and the FDA as the regulations and the market evolve for
PRVs.  Some groups also want to expand the PRV concept to bio-defense
drugs and create similar incentives in other international markets such
as Europe and Japan.



Best,
Henry




------------------------------------------------------------------------

[1]
<imap://grabow@keynes.econ.duke.edu:993/fetch%3EUID%3E/INBOX%3E160371?part=1.3&type=application/x-message-display&filename=New%20law%20on%20priority%20review%20vouchers.eml#_ftnref1>
There is a good description of the law from Bio Ventures for Global
Health at   http://www.bvgh.org/documents/Brownback-BrownanalysisFINAL.pdf

--
_____________________________
James Love, Knowledge Ecology International (KEI)
http://www.keionline.org, mailto:james.love@keionline.org
voice +1.202.332.2670, fax +1.202.332.2673, US mobile +1.202.361.3040, Geneva mobile +41.76.413.6584

When everyone thinks the same, no one thinks.  Bill Walton remix of Walter Lippmann