The Commercial Market For Priority Review Vouchers

Area of Science:

• Health Economics
• Pharmaceutical Policy
• Drug Development

Background:

• The US Congress established the Priority Review Voucher (PRV) program in 2007.
• The program aims to incentivize the development of drugs for neglected diseases.
• PRVs offer expedited Food and Drug Administration (FDA) review and are transferable.

Purpose of the Study:

• To estimate the commercial value of the PRV.
• To analyze the determinants of PRV value.
• To inform policy decisions regarding the expansion of the PRV program.

Main Methods:

• Analysis of US sales data for new treatments approved between 2007 and 2009.
• Economic modeling to estimate voucher value based on market share, expedited review benefits, and generic competition delay.

Main Results:

• The commercial value of a PRV is derived from market share capture (approx. 1/3), value of earlier sales (approx. 1/2), and delayed generic entry (approx. 1/4).
• Estimated value for one PRV exceeds $200 million annually.
• Increasing availability to four PRVs annually could reduce value below $100 million each.

Conclusions:

• The value of PRVs is sensitive to their number in circulation.
• Expanding the PRV program may decrease voucher prices substantially.
• Lower voucher prices could diminish the incentive for developing drugs for neglected diseases, warranting cautious policy expansion.