Unlocking the FDA’s Golden Ticket: Loopholes and Revocation Risks in Priority Review Vouchers

Executive Summary

The FDA’s Priority Review Voucher (PRV) programs, including the Rare Pediatric Disease (RPD), Material Threat Medical Countermeasure (MCM) and Tropical Disease PRVs, serve as powerful incentives in the biotech sector, encouraging innovation by offering expedited review pathways for companies developing treatments in underserved areas. These vouchers have proven to be highly valuable assets, with the most recent one sold by Acadia Pharmaceuticals Inc for $150 million (a 50% increase over last year’s average value).

However, while the PRV program for rare pediatric diseases includes a unique marketing stipulation, the Tropical Disease and Material Threat Medical Countermeasure (MCM) PRVs, have no such requirement.

This lack of marketing requirements for certain PRVs raises potential loopholes, enabling companies to earn and sell vouchers without ever making the associated drug available in the U.S. market or other markets who may need these drugs the most. This discrepancy invites questions about whether all PRVs should include marketing obligations to prevent exploitation or whether the incentive’s role in encouraging development in neglected fields is sufficient.

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The FDA’s Priority Review Voucher (PRV) programs for Rare Pediatric Disease (RPD), Material Threat Medical Countermeasure (MCM) and Tropical Disease PRVs serve as powerful incentives in the biotech sector, encouraging innovation by offering expedited review pathways for companies developing treatments in underserved areas. These vouchers reward companies for developing treatments in underserved areas. A PRV allows a biotech or pharma company to expedite FDA review for a subsequent drug submission, accelerating market access. PRVs are transferable and they have become coveted assets. Companies actively pursue them to bolster both revenue and investor interest. The transferability of these vouchers has created a market for their sale. The most recent PRV was sold by Acadia Pharmaceuticals Inc for $150 million, and a couple of weeks ago, Ipsen sold one for $158 million.

?How PRVs Work

After receiving a PRV, a company must notify the FDA 90 days before using the voucher for a drug application. This submission qualifies for automatic priority review, bypassing typical eligibility requirements, though it requires an additional user fee. This faster pathway to market can save months in the approval process, which, for some drugs, can be a critical competitive advantage.

Transferability

PRVs are indefinitely transferable assets, allowing companies to sell them without needing immediate drug approvals. This flexibility is a major draw for investors and a lifeline for small biotech companies that can monetize the voucher to fund other development efforts.

Revocation Conditions and Loopholes

The FDA’s PRV program for rare pediatric diseases includes a unique stipulation: the voucher can be revoked if the drug associated with it is not marketed in the U.S. within 365 days from marketing approval date. This condition ensures that the drug reaches U.S. patients, aligning with the program's primary goal of addressing unmet needs in pediatric healthcare. However, neither the Tropical Disease nor the Material Threat Medical Countermeasure (MCM) PRV programs include this requirement, potentially allowing companies to obtain and sell these vouchers for profit without bringing the associated drugs to the U.S. market. This discrepancy raises important questions: Should all PRVs require U.S. marketing to prevent companies from exploiting the system for financial gain only? Or is it enough that PRVs incentivize drug development in neglected fields, regardless of where those drugs are marketed? As PRV sales continue to reach impressive valuations, regulatory scrutiny may tighten to address these concerns, ensuring these vouchers genuinely serve public health goals.

Conclusion

The FDA’s Priority Review Voucher (PRV) programs have become game-changers in the biotech industry, offering not only a faster path to market but also a substantial financial boost. However, the gaps in revocation criteria—particularly the lack of U.S. marketing requirements for some PRVs—highlight a potential misalignment between commercial incentives and public health goals. As PRVs continue to rise in value and impact, it’s crucial for regulators and industry stakeholders to address these inconsistencies, ensuring that these vouchers serve their intended purpose: to encourage innovation that directly benefits patients in need. Tightening oversight and refining requirements could strengthen the program’s integrity, balancing profitability with genuine healthcare advancements.

?References:

1.????? Acadia Pharmaceuticals. (2024, November 5). Acadia Pharmaceuticals enters into an agreement to sell its rare pediatric disease priority review voucher for $150 million. Retrieved from https://acadia.com/media/news-releases/acadia-pharmaceuticals-enters-into-an-agreement-to-sell-its-rare-pediatric-disease-priority-review-voucher-for-150-million/

2.????? Ipsen. (2024, August 27). Ipsen announces sale of Priority Review Voucher for $158m. Retrieved from https://www.ipsen.com/statement/ipsen-announces-sale-of-priority-review-voucher-for-158m-2935903/

3.????? Rare Pediatric Disease Priority Review Vouchers. Retrieved from https://www.fda.gov/media/90014/download

?Authors

Dr. Nana Mainoo, PharmD, MA

Chief Executive Officer at Cleracs Consulting

Email: [email protected] | Cell +1?757?401 3218

With over 16 years of experience in the healthcare industry, Nana has held key roles at Pfizer and Komodo Health and co-founded Medsfinder, a healthtech platform. As CEO of Cleracs Consulting, he specializes in regulatory strategy, focusing on orphan drug regulatory affairs. Nana holds a Doctor of Pharmacy from Nova Southeastern University, a Master of Arts from IE Business School, and certificates in Health Leadership and Finance from INSEAD and Cornell University, respectively, along with a Bachelor of Pharmacy from KNUST.

?Christian Girard, MiM

Co-Founder at The PRV Fund Project

Email: [email protected] | Cell/WhatsApp: +33?667?266?092

Christian is a co-founder of The PRV Fund, an initiative focused on providing non-dilutive funding to early-stage biotech companies developing treatments for rare pediatric-onset disorders. Christian has over 30 years professional background marked by his commitment to advancing rare pediatric disease drug development, from lab bench to approval. His involvement in this sector highlights his dedication to supporting innovative therapies aimed at improving the lives of children with rare diseases. He is a graduate of ESCP Europe, an European business school. His orphan drug industry journey started with Genzyme.

?Dr. Jean Chatellier, PhD

Partner, EVP & Managing Director at KYBORA

Email: [email protected] | Cell/WhatsApp: +33 609 102?105

Jean is a Partner and EVP at KYBORA, a global advisory firm specializing in M&A, licensing, fundraising, and strategic advisory services in biopharma. He contributed to the divestiture of Bayer’s PRV to argenx for $98M [1]. With over 24 years of experience, he has held key leadership roles, including CBO at Besins Healthcare and pivotal positions at Avadel Pharmaceuticals, Micromet (now Amgen), and Crucell (now J&J). He was the founding CEO of Avidis (now Osivax) and has worked with Nobel laureates during his postdoctoral research. Jean holds a PhD in Biochemistry and Molecular Biology and has led significant industry partnerships and transactions throughout his career.

[1] On November 2020, argenx enters into agreement to acquire Priority Review Voucher https://www.globenewswire.com/news-release/2020/11/23/2131371/0/en/argenx-Enters-Into-Agreement-To-Acquire-Priority-Review-Voucher.html.