Regulatory Focus™ > News Articles > Priority Review Voucher Fees Set to Plummet for Second Consecutive Year

Priority Review Voucher Fees Set to Plummet for Second Consecutive Year

Posted 04 September 2013 | By Alexander Gaffney, RAC

The US Food and Drug Administration (FDA) is relatively unique among federal agencies in that it draws much of its operating budget directly from the industries it regulates, including the pharmaceutical industry. But while most user fees are assessed for routine reasons-registration of a facility, submission of a new or generic drug application or the submission of a drug master file-there exists a lesser-known and more obscure fee for an application type rarely used by industry.

Background

The fee in question is for the submission of tropical disease priority review vouchers.

The tropical disease voucher system was established under the FDA Amendments Act of 2007 (FDAAA), which authorized a novel program. Under it, companies that receive approval for a tropical disease treatment are eligible to receive a transferable voucher that allows the bearer to receive six-month priority review status for any future product. Products undergoing priority review are generally given an approval decision-positive or negative-within six months after the applicant's filing date.

The legislation was enacted to spur development of treatment options for tropical diseases, which FDA notes have been remarkably stagnant over the last half century. "Because these diseases are found primarily in poor and developing countries, existing incentives have been insufficient to encourage development of new and innovative drug therapies," explained FDA in a 2008 guidance document on the subject. FDA said it was taking an interest in the topic given the needs of other countries and the ability of those diseases to affect Americans in an increasingly globalized economy.

Under normal circumstances, FDA only grants priority review status to products which fill a treatment void or would otherwise represent a significant advancement compared to existing treatments. Because these reviews cost more than traditional drug reviews, the cost per application is more. However, under the voucher program, any company willing to pay the additional cost of the review may have its product reviewed by FDA.

Fee Nearly Half That of 2012 Rate

In September 2012, when FDA last published its user fee rates for priority review vouchers, the most notable aspect of the Fiscal Year 2013 fee relative to the Fiscal Year 2012 fee was the size of the reduction-a massive drop from $5,280,000 per application in 2012 to just $3,559,000 in 2013.

Now, though, that fee is set to plummet once again, falling to just $2,325,000 in Fiscal Year 2014, FDA explained in a Federal Register notice on 4 September 2013.

Those payments, we should note, are in addition to the usual user fees required under the Prescription Drug User Fee Act (PDUFA) or the Generic Drug User Fee Act (GDUFA), both of which were (re)authorized under the 2012 FDA Safety and Innovation Act (FDASIA).

So why has FDA reduced the cost of a priority review voucher nearly $3 million in just two years? FDA notes in the Federal Register posting that the value of the voucher is based on an assessment of the incremental costs for FDA to conduct a priority review. The 2013 reduction, it continued, was revised "to better approximate the current and ongoing incremental FDA resource costs for a priority review."

This approximation is something of an inexact science, it explained. Because FDA does not track the cost of reviewing applications under priority review separately, it infers the likely cost using proxy data. Explaining this work in the Register posting, FDA said its calculations yielded a cost multiplier of 1.67 when an application is conducted via priority review instead of standard review practices.

"The formula used for FY 2013 and subsequent years provides the Agency with the added resources to conduct a priority review while still ensuring a robust priority review voucher program that is consistent with the Agency's public health goal of encouraging the development of new drug and biological products."

The new fee is set to come into effect for any application submitted after 30 September 2013.


FDA Federal Register Notice


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