Posted 28 May 2015
By Alexander Gaffney, RAC
An unusual regulatory incentive used to accelerate the review of a small number of drug products has just sold to the French pharmaceutical giant Sanofi for the record-setting sum of $245 million.
The incentive, known as a Rare Pediatric Disease Priority Review Voucher (Pediatric PRV), is an integral part of a program meant to spur the development of new therapies of rare pediatric diseases.
The Pediatric PRV program was established under the Food and Drug Administration Safety and Innovation Act (FDASIA) of 2012, and modeled off a similar voucher program known as the Neglected Tropical Disease Priority Review Voucher.
The essence of the program is that pediatric drug development is difficult. Clinical trials are inherently risky, data obtained from adult populations do not transfer directly to pediatric populations, trial enrollment is harder, and many companies are wary of the ethical challenges of development. For pediatric diseases which are rare—affecting fewer than 200,000 patients in the US—these challenges are even more pronounced.
As a result, many companies have traditionally shied away from developing drugs for rare pediatric diseases.
The voucher is intended to change that dynamic. Under the Pediatric PRV program, any companies which receive FDA approval for a drug intended to treat a rare pediatric disease are granted a voucher which allows its redeemer to have any of its drugs reviewed under FDA's "priority review" system. Drugs reviewed under priority review are typically offered an approval decision within 6-8 months, while drugs reviewed under standard procedures typically receive a decision within 10-12 months.
Read Regulatory Focus' extensive Regulatory Explainer on the Priority Review Voucher system here.
Crucially, the owner of the voucher may also sell it to another company. To date, two other vouchers have been sold:
A Record-Setting Sale
Now a third priority review voucher has sold for a record-setting sum: $245 million.
The voucher in question was owned by Retrophin, which had obtained the voucher after the 17 March 2015 approval of Asklepion Pharmaceuticals' drug Cholbam (cholic acid). The drug is the first FDA-approved treatment for pediatric and adult patients with bile acid synthesis disorders due to single enzyme defects, and for patients with peroxisomal disorders.
While Asklepion technically obtained the voucher, it was immediately transferred to Retrophin, which had licensed the rights to the voucher under an earlier agreement.
Retrophin has apparently wasted little time looking for a buyer for the voucher. On 27 May 2015, it announced that Sanofi had agreed to purchase the voucher for $245 million (an initial payment of $150 million, followed by two payments of $47.5 million in 2016 and 2017, respectively).
The eye-popping sum is nearly four times as much as Sanofi paid for its first voucher ($67 million), which is now being used in the priority review of Praluent (alirocumab). A decision for Praluent is expected on 24 July 2015 and, if approved, would represent the first successful use of a priority review voucher.
The high purchase price is also eye-catching for another reason: In order for the purchase to make financial sense, Sanofi will have to use it on a drug capable of generating more than $245 million in extra profit based on its early entrance into the market.
That could raise the stakes of failure for Sanofi. FDA is under no obligation to approve a drug submitted under the priority review program, and may either delay its decision (to allow for more time to review an application for approval) or issue a complete response letter (i.e. a rejection) asking for more data.
Once redeemed, a voucher may not be used again.