[Ip-health] KEI Comments to the Priority Review Voucher Mechanism

[Malini Aisola]

http://www.keionline.org/index.php?option=3Dcom_content&task=3Dview&id=3D21=
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         KEI Comments to the Priority Review Voucher Mechanism

                       Docket No. FDA-2008-D-0530

December 19, 2008

Knowledge Ecology International (KEI) is a non-profit organization with
offices in Washington, DC and Geneva, Switzerland, that searches for
better outcomes, including new solutions, to the management of knowledge
resources. The following are our comments on the FDA Priority Review
Voucher Mechanism.

Background
The new section 524 of the Federal Food, Drug, and Cosmetic Act requires
the Secretary to award transferable priority review vouchers to
developers of certain tropical disease products. The priority review
voucher (PRV) has been created to induce innovation and investment on
new medicines. The PRV holder can use or sell the right to accelerated
evaluation and market approval for unrelated products.

The PRV is valuable for products that do not otherwise meet the FDA's
requirements for priority reviews. The value of a PRV is unknown, but
has been estimated to have a market value of $50 to $600 million.

The PRV program exists in combination with other incentive programs. For
example, an innovator could qualify both for the PRV and for benefits
under the Orphan Drug Act that allow a company to receive extended U.S.
market exclusivity, and tax credits equal to as much as 50 percent of
the cost of clinical trials.

Comments on the PRV
KEI welcomes the initiative of Senators Brownback and Brown to stimulate
investment in new drugs and biologics for diseases =E2=80=9Cfor which there=
 is
no significant market in developed nations and that disproportionately
affects poor and marginalized populations.=E2=80=9DOur comments are designe=
d to
address areas where the PRV could be strengthened.

Scope of diseases.
Section 524 lists 16 diseases that qualify for the PRV, plus a general
criteria for other infectious diseases that could be added by
regulation. Chagas Disease should be added as a qualifying disease.

Transferability of voucher
The transferability of the voucher is essential, as it extends the
benefits of the initiative to the broadest range of actors, including
smaller firms or non-profit product development partnerships that are
not likely to have an internal use for the voucher.

Affordability of end products
The PRV as currently designed has the capacity to reduce the innovation
gap for neglected diseases, but without assurances that products will be
affordable. As currently implemented, the PRV is a =E2=80=9Ccomplementary=
=E2=80=9D
incentive scheme that allows the innovator to maintain its intellectual
property rights and has no mechanisms attached to address the pricing of
resulting products.

To the extent permitted by the statute, or allowed by a future amendment
to the statute, the benefits of the PRV should be linked to measures to
address access by poor persons. These should include an obligation to
price products at affordable prices, and to license patents and other
intellectual property rights to generic suppliers. The licenses to
generic suppliers could be limited to a specific field of use (the
neglected disease for which the PRV was based), and to countries not
designated as high income by the World Bank. Alternatively, a
beneficiary of a PRV could agree to license the product through the
UNITAID patent pool for medicines.

Transparency
Policy in this area was based upon a theory of how the PRV would work.
Over time it will be important to have evidence of how the PRV actually
works in practice. Given the enormous value of the PRV, and the public
interest in evidence based policy making, there should be obligations
for disclosing certain data. The transparency that would be most useful
would include the following items:

     1. How much money was spend on the clinical trails used to register
        the PRV product?

     2. To what extend did the product benefit public sector grants, tax
        credits and other subsidies and incentive mechanisms?

     3. How much money was the PRV worth when traded in the market?

     4. How was the product priced?

     5. Where has the product been registered for use?

     6. How many people have access to the product?

Extensions to cases where active ingredient was previously approved
The current design of the mechanism excludes its applications to
products whose active ingredient (including any ester or salt of the
active ingredient) has been approved in any other application. The
discovery of new uses of existing products, including the development of
new combination therapies, will not be rewarded.

This limitation is not necessarily a defect in the current formulation
of the PRV, where only a registration of the product is necessary to
trigger the benefit. However, in some proposals to modify the PRV, it
would be appropriate to revisit this limitation.

Unintended Consequences of the PRV
By design, the PRV provides for an accelerated review for unrelated
products that have otherwise failed to achieve priority review status.
There is some concern that an accelerated review may increase the risks
to patients.

Another concern regarding the PRV is that it may decrease the
willingness of persons to share knowledge, data, materials and
technology, without prior payment or agreements to share in the benefits
of the PRV.

Abuses of the PRV involving old products not yet registered in US
According to news reports, Novartis is attempting to claim the PRV for a
U.S. Registration of Coartem for malaria. While Coartem had not been
registered in the U.S., the product had been used for years in
developing countries, often subsidized by the PEPFAR or Global Fund
programs. This is an abuse of the PRV. No PRV should be granted for
products that have already been developed, marketed and used in
developing countries prior to the enactment of the PRV program.

Future Reform of the PRV
The FDA and the Congress should consider further reforms of the PRV. In
particular, if the PRV is to be the instrument for funding R&D
incentives, consideration should be given to auctioning off a fixed
number of PRVs per year, and using the proceeds for a prize fund for
neglected diseases. The prize fund should be used to reward developers
of new medicines, diagnostics and biologics for neglected diseases. The
fund should be a proportional reward system, with larger proportional
rewards being given to products that have greater incremental health
benefits, and that are used by more patients. The payments could be made
over a ten year period of time, based upon evidence of utilization and
efficiency in each year, for all qualifying products.

If a prize fund with proportional rewards is used, the qualifying
products could be extended to new uses of older medicines, to the extent
that the new use was rewarded for its impact on health outcomes in
developing countries, in the specific field of use that qualifies for
the PRV. This could be further limited to the impacts in countries not
defined as high income by the World Bank.

As noted above, the benefits of the prize fund could be linked to
requirements for reasonable pricing and open licensing of inventions.

The prize fund could also include an =E2=80=9Copen source or access to know=
ledge
dividend.=E2=80=9D This would be the sharing of a a fixed proportion of the
reward generated for a product to persons or organizations that provided
non-remunerated and non-discriminatory access to knowledge, data,
know-how, and technology. For a qualifying product, the open source
dividend could be decided by a time limited jury, evaluating competing
claims.

For more Information
Knowledge Ecology International
1621 Connecticut Avenue, NW, Suite 500
Washington, DC 20009
Telephone: +1.202.332.2670
www.keionline.org


--
Malini Aisola
Knowledge Ecology International
1621 Connecticut Avenue NW, Suite 500, Washington DC 20009
Tel: +1.202.332.2670 Fax: +1.202.332.2673