Put it on Mr. Underhill’s Bill! FDA Sets Priority Review Voucer Redemption Fee at Almost $4.6 Million

By Kurt R. Karst –   

How much is the potential for four month being lopped off your NDA review period (i.e., the difference between FDA’s standard and priority review goals under PDUFA)?  FDA set the baseline earlier this week when the Agency issued a Federal Register notice setting the Priority Review Voucher (“PRV”) User Fee for Fiscal Year 2011 at (drumroll please) . . . $4,582,000.  And that is in addition to the Fiscal Year 2011 application fee of $1,542,000 that must accompany the submission of an NDA.  We won’t bother you with all of the numbers that went into the calculation, but they are detailed in FDA’s notice if you are interested. 

PRVs were established by § 1102 of the 2007 FDA Amendments Act, which created  FDC Act § 524.  Under the statute, applicants for certain new drugs and biologics for “tropical diseases” that have received priority review may receive a PRV entitling the holder to a 6-month priority FDA review of another application that would otherwise be reviewed under FDA’s standard 10-month review clock.  To our knowledge, FDA has granted only a single PRV – in connection with the April 2009 approval of NDA No. 22-268 for COARTEM (artemether; lumefantrine) for the treatment of acute, uncomplicated malaria infections in adults and children weighing at least five kilograms. 

PRVs are transferable – indeed, FDC Act § 524 allows for a single actual transfer of a PRV from the original recipient to another sponsor, and FDA has clarified in draft guidance that “contractual arrangements such as the use of an option or transfer of the right to designate the voucher’s recipient could comply with the terms of the statute” – so there has been speculation that a market could be created for them.  In fact, one non-profit organization has created a website to track the PRV program and to help build a market for the vouchers.  As we previously commented, ultimately, the value of a PRV must be based on two considerations: (1) the prospect of saved approval time; and (2) the anticipated sales of a new drug.  And it is difficult  to predict either with any certainty.  A redemption fee of $4,582,000, however, could hurt PRV marketability in light of these uncertainties. 

Moreover, a redemption fee of $4,582,000 could hurt the prospects for the passage of the Creating Hope Act of 2010 (S. 3697).  As we previously reported, S. 3697 was introduced earlier this year and would, among other things, amend the PRV program to extend it to applications for a “rare pediatric disease” – that is, a disease “recognized in the medical community as affecting a pediatric population” and that is “a rare disease or condition, within the meaning of section 526” (i.e., the Orphan Drug Act).  With such a high redemption fee, the marketability of a PRV (i.e., sale for profit) is questionable, and support for the bill could wane.  Of course, Congress could amend the PRV statute to require a different redemption fee calculation or set a flat fee, either for a rare pediatric PRV or for a tropical PRV, or both.