Morrison & Foerster Research Analyst Christine Lentz contributed to the writing of this article.
The House of Representatives recently passed a proposed bill that encourages treatments for rare pediatric diseases by prolonging the authority of Health and Human Services to issue priority review vouchers. H.R.4439, or the “Creating Hope Reauthorization Act,” aims to amend Section 529(b)(5) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360ff(b)(5)) to extend the program cutoff deadlines by four years.
Historical Incentive for Pharmaceutical Companies
To help stimulate new development of rare pediatric disease (RPD) drugs, Congress created the RPD Priority Review Voucher Program in 2012, which offered additional incentives for obtaining FDA approval of these products. Under this program, a pharmaceutical company that receives an approval for a drug or biologic for a RPD may qualify for a voucher that can be redeemed to receive a priority review of a subsequent marketing application for a different product.
Since these vouchers can be redeemed to receive priority review from the FDA with a targeted evaluation time of six months, rather than the 10-month standard review, the program potentially accelerates pharmaceutical companies’ time-to-market, allowing them to begin recouping their considerable drug development costs sooner. For patients with serious conditions, the expedited review means they have earlier access to a potentially life-saving or -changing treatment.
While some companies have successfully (and unsuccessfully) redeemed priority review vouchers for their own future drug applications, others have transferred/sold them to other companies for prices ranging from about $67 million to $350 million. According to a Government Accountability Office (GAO) study, the FDA awarded 31 vouchers, mostly for drugs to treat RPDs in fiscal years 2009 through 2019. Of those 31 vouchers, 17 were sold to another drug sponsor.
This structure has both motivated companies to develop RPD drugs and sped up review of blockbuster therapies that otherwise would not qualify for priority review.
Recent Program Developments
Proposed/Effective | December 2016 | September 2020 | Future TBD |
21st Century Cures Act | Congress Short-term Extension | Creating Hope Reauthorization Act | |
RPD Drug Designation Grant Cutoff | September 30, 2020 | December 11, 2020 | September 30, 2024 |
RPD Priority Review Voucher Grant Cutoff | September 30, 2022 | December 11, 2022 | September 30, 2026 |
In December 2016, the 21st Century Cures Act previously extended the RPD Priority Review Voucher Program, authorizing the FDA to award vouchers through September 30, 2022, limited to drugs with RPD designation granted by September 30, 2020.
On September 30, 2020, Congress provided a short-term extension of the RPD Priority Review Voucher Program. According to the current statutory sunset provisions:
- After December 11, 2020, the FDA may only award a voucher for an approved RPD product application if the sponsor has RPD designation for the drug and that designation was granted by December 11, 2020.
- After December 11, 2022, the FDA may not award any RPD priority review vouchers.
The Creating Hope Reauthorization Act, which was received in the Senate on September 30, 2020, proposes to replace those cutoffs with “September 30, 2024” and “September 30, 2026,” respectively, thus extending the authorized period for RPD designation and granting of RPD priority review vouchers from the 21st Century Cures Act by four years.
We will continue to monitor the trajectory of the Act and update this post as requested. Keep up with the latest legal and industry insights, news, and events by signing up at Morrison & Foerster’s Resource Center.