The encyclopedia · R&D & Science · Legal decision · 2007
FDA awarded transferable vouchers that put a market price on neglected-disease drugs
The US FDA gave a tradable 'priority review' voucher to firms that win approval for a neglected-disease drug, paying for R&D with speed.
US Food and Drug Administration
the move
Drugs for neglected tropical diseases have almost no buyers who can pay, so companies spend R&D money where the market rewards them and avoid diseases that chiefly hit the poor.
In 2007 the US created a priority-review voucher (PRV): a sponsor that wins approval for a neglected-disease product gets a voucher redeemable for a faster review of a completely different future product.
The speed is worth real money. Since the voucher can be sold or transferred, even an organization that never launches a blockbuster can cash it out, which treats the neglected-disease effort as an investment with a pay-off rather than a donation.
The FDA later added a parallel rare-pediatric-disease voucher with the same design: one approval earns a redeemable, transferable voucher for priority review of another product.
why it works
- A tradeable voucher creates a price where there was no market, so investors can value and de-risk the effort.
- Small, mission-driven sponsors can sell the voucher instead of needing a blockbuster to profit.
- Priority review is a free resource the FDA controls, so it costs no budget to issue.
- The design pulls money into a neglected area without a direct subsidy.
what transfers
If you cannot pay enough, create a reward with a resale market.
what came after
From 2007 to 2024 about 43 products were awarded a priority review voucher and several vouchers have been resold for large sums. Critics note that relatively few of them addressed the most neglected diseases, so the pull was real but imperfect.
references
- Rare Pediatric Disease Designation and Priority Review Voucher Programs
- The priority review voucher: a misconceived quid pro quo
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