Remember those ‘get out of jail free’ cards in the board game Monopoly, with somewhat dubious value (i.e. you’d sell them right before you landed in jail) that could get you back on track quicker? It turns out that this express ticket exists in the drug discovery world, and we’ll take you on this multi-million dollar ride.
If you’re totally clueless about the process of drug discovery and would like to go into more detail, you can read about the entire process here – as part of our series on drug discovery and regulation.
Drug Discovery and Costs
Once a hit compound has been identified and ascertained to be safe enough and effective enough (through clinical trials), a company submits a New Drug Application (NDA) to the Food and Drug Administration (FDA). This dossier will contain all the information about the drug, from its development and manufacture to its recorded side effects and all clinical trial data. Then they wait. This process usually takes ten months if everything goes according to plan.
The costs of waiting for a drug to be approved by the FDA can be enormous. Revenue from sales of the drug is delayed, entering the market later means losing more market share to competitors, and all this goes on while the company’s patent on the drug ticks closer to expiry.
A ‘priority review’ designation can potentially be assigned by the FDA, which essentially means that the panel will commit to give a decision on the drug within six months rather than the usual ten. However the FDA is rather picky when it comes to deciding if a drug deserves a priority review, choosing only those that show a ‘significant improvement’ in safety and/or efficacy compared with the current treatment options available.
‘Buying’ a Priority Review
Say your company has developed a drug that is close to completing clinical trials and its prospects look good, but a competitors’ drug for treating the same condition is also close to making it to market. A little push for your drug to make it to market first could be the multi-million dollar difference. But you aren’t sure your drug will receive a priority review designation, can you actually buy one?
It turns out that the answer is yes, but the FDA doesn’t sell them directly for obvious reasons. Instead, the FDA hands out priority review ‘vouchers’ for free to companies that have previously released a drug used to treat diseases listed under a special program (classified into pediatric rare diseases or tropical diseases). What this means is that after a company develops a drug to treat a rare genetic condition in kids, they can then use the voucher to request a priority review for their far more lucrative anti-obesity drug.
The company that receives the voucher can choose to either use it to accelerate the approval of one of their own drugs, or resell it to other pharmaceutical companies (the FDA allows the voucher to be resold only once). In 2015 United Therapeutics received a voucher for dinutuximab, and promptly sold it to pharmaceutical giant Abbvie for a whopping $350 million2.
Why Rare and Tropical Diseases?
With the undoubted value of such a voucher, it is clear that the FDA places great importance to the development of drugs for rare and tropical diseases. But why?
We previously highlighted the rising costs of getting a drug product on the market, which has prompted pharmaceutical companies to take a play-it-safe approach to drug discovery by focusing their R&D on therapies for ‘Western world’ diseases such as heart diseases, obesity, certain forms of cancer, etc. While this in no way guarantees financial success, it ensures that there is a potential market for their drug and that patients and governments who require the drug also have the means to afford it.
This is the reason why pharmaceutical companies get cold feet when it comes to investing in the development of the aforementioned drugs. For rare diseases – less than 200 000 patients with the condition in the U.S – the market might be too small to be financially feasible, and even then the drug would cost the patients huge sums of money. For tropical diseases – diseases endemic in developing countries such as tuberculosis and malaria – there exists a sizable market but the patients who require the drugs might not be able to afford them.
The priority review voucher program is just one of the ways that the FDA has worked to pass laws that incentivize the development of such drugs, but it shouldn’t stop there. Bottlenecks exist all along the process; clinical trial requirements and other regulatory barriers still deter pharmaceutical companies from deviating from the traditional approach of developing ‘marketable’ and ‘financially rewarding’ drugs.
- Clarification of Orphan Designation of Drugs and Biologics for Pediatric Subpopulations of Common Diseases [PDF]. (2017, December). Food and Drug Administration.
- Khachatryan, K. (2016). Incentivizing Drug Development: Novel Reforms of Pharmaceutical Innovation. Colum. Sci. & Tech. L. Rev., 18, 139.
- US Food and Drug Administration. (2012). Guidance for industry: Tropical disease priority review vouchers.