In a previous post, we discussed the medical innovation funding gap that exists between high-income countries and low and middle-income countries. This gap exists largely because companies lack a profit incentive to develop products that treat the poor. A recent report from the UN High-level Panel on Access to Medicines addressed the challenge of finding solutions to close this gap. Specifically, the report recommended finding new “models for financing…public health research and development (R&D), such as…innovative financing mechanisms (IFMs).”

An IFM is any alternative mechanism used to finance development aid. While some IFMs are still theory, one IFM – the Priority Review Voucher (PRV) – has been in use in the U.S. since 2007. PRVs are designed to spur long-term investment in R&D for neglected tropical diseases (NTDs; see page 7) or rare diseases. It works like this: the FDA rewards a PRV to a company who develops a product for an NTD or rare disease. Then, this company can use that PRV as a one-time-use ticket to ask the FDA to accelerate the review of a different product – usually a highly-profitable drug or vaccine. This decreases the time it takes to bring that product to market, which can increase company profits.

Of course, this is a stick-figure-explanation. In this post, we’ll flesh out the nuances of PRVs as we answer some common questions.

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How does the PRV system work? As we noted in our last post, a PRV is a “pulling” mechanism. This means PRVs strengthen the incentives for a company to invest in R&D for neglected or rare diseases. In other words, PRVs “pull” companies into R&D investment.

To qualify for a PRV, a company must conduct R&D on a product for a neglected or rare disease. That product must pass clinical trials, and once approved by the FDA, the company can apply for a PRV. If a PRV is rewarded, the company can either use it to get a “priority review” of another product or it can sell the PRV to a different company.

“Priority review” means that the review is shortened from an average of 10 months to 6 months. A company preparing to use a PRV must give a 90 days’ notice to the FDA. They must also pay a user-fee to cover the increased staff time and other costs needed to ensure the FDA has the capacity to accelerate the review process. It is important to note that use of a PRV speeds up the review process but does not necessarily guarantee final approval of the product.

Is a faster review really worth the extra R&D costs? A company can use a PRV to speed up the review process from a standard 10 months – although in practice it often takes more than a year – to 6 months. While a few months may not sound like a lot, the market value for PRVs is in the hundreds of millions of dollars. Recently, Abbvie, the biopharmaceutical company, purchased a PRV for $350 million. A sped up approval can save a company hundreds of millions of dollars in staffing, opportunity costs and other regulatory compliance costs incurred while waiting for approval of a drug. Given this, the sooner a company can get their product to market the sooner they can recoup their R&D costs and gain an edge on competitors.

So how does this relate to neglected tropical diseases (NTDs) again? PRVs can only be rewarded to companies that have successfully created a new product for NTDs. Thus, to get a PRV, companies are incentivized to create needed products for NTDs that would otherwise not exist in a regular market. As Bill Gates put it, “If you develop a new drug for malaria, your profitable cholesterol-lowering drug could go on the market a year earlier.”

Where did the PRV concept originate? In 2006, an article by David B. Ridley entitled, Developing Drugs for Developing Countries” gave birth to the PRV concept. That March, Ridley presented his concept to the National Press Club, which connected him with Senator Sam Brownback (R-KS). Sen. Brownback drafted an amendment modeled on Ridley’s ideas, drawing bipartisan support. In 2007, the Food and Drug Administration Amendment Act (FDAA) was passed in the House and Senate with near unanimous and unanimous vote. In 2012, a follow-up amendment was passed that made PRVs available for rare pediatric diseases. Subsequent amendments to the law have loosened some of the rules for using the voucher. While it used to be a year, companies now only have to give a 90 day notice to the FDA for when they plan to use their PRV. The new amendments also allow a PRV to be sold multiple times (as opposed to only being sold once), and clarify what a “new” and eligible product can be.

What has been the progress of PRVs to date? So far, 11 PRVs have been awarded, four of which have been for NTDs. The first NTD PRV went to Novartis in 2009 for developing Coartem, an antimalarial drug. In 2012, Janssen was awarded a PRV for Sirturo, a multi-drug tuberculosis treatment, and in 2014, Knight Therapeutics was awarded a PRV for Impavido, a treatment for leishmaniasis. Finally, just this year, a PRV was awarded to PaxVax Bermuda for a new cholera vaccine, Vaxchora. Two of these PRVs have been used so far. Since PRVs are transferrable, Knight Pharmaceuticals sold their PRV for $125 million to Gilead Sciences, which used it to expedite approval of Odefsey, an HIV medication. But a PRV doesn’t guarantee a successful review. In fact, the FDA rejected Novartis’ PRV, the first PRV ever used. Of the two remaining vouchers, Janssen has held onto its PRV and PaxVax has sold its PRV to Gilead for an approximated $200m.

What challenges remain for the NTD PRV system?  There have been criticisms of the PRV system’s effectiveness. One criticism is that PRVs don’t necessarily lead to useful products. For example, a company could develop an onchocerciasis treatment, but the treatment may be useless without refrigeration. Other critics say PRVs don’t require companies to do their own R&D, because under the current system companies can take a product already in use outside of the U.S. and get it approved by the FDA to receive a PRV. Knight Therapeutics took advantage of this loophole in 2014 when they received a PRV for a leishmaniasis treatment that had been used outside of the United States since the 1990s. While Knight paid $10 million to cover the FDA costs for the expedited approval, their PRV took advantage of a system that was designed to foster development of novel products. Last year an amendment was introduced into the house that would address these flaws. If passed, companies would have to create a plan for making their products available to at-risk populations. Second, PRVs would not be able to be awarded for drugs that have already been approved in other countries. Finally, it’s hard to know whether the PRV system has actually increased R&D for NTD products, or if it has just given an advantage to companies who might have done the R&D anyway. To answer this, the amendment would commission a study by the Government Accountability Office to assess the effectiveness of the program. But since R&D for new medicines and vaccines can take up to a decade, it may be several more years before the PRV program’s effectiveness can be fully assessed.

What does a PRV have to do with Sabin’s work? The Sabin PDP is a model of product development which combines the public and private sector to produce vaccines for neglected diseases. While Sabin does not produce “blockbuster” products like a traditional pharmaceutical company, Sabin will likely be eligible to receive PRVs for NTD vaccines in its product development pipeline. This would be a major benefit to Sabin’s mission. Sabin could sell its PRV to another company and invest the proceeds of that sale back into the PDP for creation of additional vaccines for neglected diseases.

The PRV system is an important tool that Sabin follows closely. Compared to drugs, vaccines are often more difficult and costly to develop. As a result, financing mechanisms such as the PRV can create an incentive for pharmaceutical and biotech companies to partner with Sabin to create new vaccines for neglected diseases.

Where does Sabin’s PRV work go from here? The Sabin policy team is active within a community of organizations advocating for the PRV system while also working to address the current drawbacks and loopholes. In addition, Sabin is actively educating policymakers and stakeholders about the importance of the PRV and leading discussions to explore additional IFMs that can ultimately help Sabin achieve its mission. Sabin will continue to engage in policy discussions on PRVs and other IFMs relevant to neglected tropical diseases in order to ensure that medical innovations reach those who need them most.

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In coming blog posts we will explore additional IFMs, such as the Advanced Market Commitment (AMC). Sabin’s President, Dr. Peter Hotez, will introduce a “partial-PRV,” a new concept based on a modification of the existing PRV idea.

This piece was coauthored by Sabin Intern Julien Rashid.