Preserving an Incentive for Global Health R&D: The Priority Review Voucher Secondary Market

In December 2014, the United States government expanded the Priority Review Voucher ("PRV" or "voucher") program to include Ebola and other related Filoviruses. By doing so, lawmakers provided a potentially powerful incentive for drug companies to invest time and money in the development of novel medicines for terrifying diseases. This expansion is one of several additions made to the PRV programs since 2012. Many companies rely on voucher resale to recoup research and development ("R&D") costs; however, it is unclear whether the PRV program could be overextended, thereby diluting the value of the incentives. In this paper, I use historical approval data from the Food and Drug Administration ("FDA") and United States drug revenue data to better understand the secondary market value of a PRV. The data suggests that that purchase prices of a PRV could continue to climb; despite this, the market size for these vouchers is limited. The implications of these findings are discussed further.