Study: Drugs in rare pediatric disease priority review voucher program have similar revenue to brand drugs

Drugs issued rare pediatric disease priority review vouchers that were redeemed had revenues that were similar to other brand drugs, according to recent research published in The Journal of Pediatrics.

The results suggest that “financial incentives for rare pediatric disease drug development may be solid and––in at least some cases––may exceed revenues from drugs treating more common conditions,” Ian Liu, of the division of pharmacoepidemiology and pharmacoeconomics at Brigham and Women’s Hospital, and colleagues wrote in their study.

The priority review voucher program, established by Congress in 2007, was expanded in 2012 for drugs intended to treat pediatric diseases. If a qualifying drug under the program is approved, the sponsor of the rare pediatric disease drug will receive a voucher that can be used to give a different unrelated drug product priority approval, and can also be sold to other companies (RELATED: Rare Pediatric Disease PRVs: FDA Updates Guidance, Regulatory Focus 29 July 2019).

Liu and colleagues analyzed the clinical benefits and revenues of 36 drugs that received rare pediatric disease priority review vouchers between 2017 and 2023. The researchers used financial filings, documents in the Federal Register, and health technology agency assessments to identify which drugs received vouchers, if they had an added therapeutic benefit rating, and their global revenue.

Of the drugs with a rare pediatric priority review voucher, 26 drugs had mean global revenues of $363 million in the first year, 22 drugs had a mean global revenue of $621 million in the second year, and 19 drugs had a mean global revenue of $850 million in the third year after approval. The researchers estimated the median treatment price for a drug that received a voucher was $788,705 per year.

Citing a recent analysis in JAMA of 315 brand drugs that entered the market between 2008 and 2016, the authors said orphan-designated drugs had median 5-year net sales of $719 million compared to $812 million for nonorphan drugs. “Using information from the same database, the domestic median 3-year net sales for the rare pediatric disease drugs with data in our cohort were $746 million,” Liu and colleagues wrote.

“[T]here is a perception that rare pediatric disease drugs do not generate enough revenue to encourage investment in the space by drug manufacturers aside from financial incentives (like priority review vouchers),” Liu told Focus in an interview. “While some rare disease drugs do not generate very much revenue, these relatively high mean revenue amounts suggest that incentive programs may be less necessary than previously thought.”

Out of 36 drugs studied, 17 drugs (47%) had a therapeutic benefit rating, and 9 drugs (53%) were ranked as high value according to at least one report. When compared to drugs that had low therapeutic benefit, drugs with high therapeutic benefit had higher mean global revenues in the first year ($759 million vs. $243 million), second year ($1.219 billion vs. $232 million), and the third year ($1.576 billion vs. $234 million) after approval. “To us, this suggests that payers are willing to pay high revenues for effective drugs and that the financial rewards for developing a successful drug are significant––similar to non-rare disease drugs,” Liu told Focus.

Vouchers were redeemed for 15 drugs during the study period, and 13 drugs received a benefit rating, with 4 drugs (31%) being classified as having high value and 9 drugs (69%) having a low therapeutic benefit. “The FDA has complained that granting these extra drugs priority review status strains its review system; our study suggests that these extra efforts go towards run-of-the-mill drugs and are therefore wasted,” Liu said in an interview.

As the rare pediatric disease and priority review voucher (PRV) program is scheduled to sunset in September 2024, organizations like the National Organization for Rare Disorders (NORD) have called for its reauthorization. NORD also recently released a report arguing that the program supports the development of rare pediatric diseases.

“Generally, I am of the opinion that the rare pediatric disease PRV program is not an effective way of incentivizing development of rare disease drugs, that Congress should allow the program to sunset, and that alternative programs with the same goal should be evaluated by policymakers,” Liu told Focus.

Congress should narrow inclusion criteria if it chooses to reauthorize the program “to target the subset of drugs or conditions that are so rare that reasonable revenue generation is impossible,” Liu explained, or link the voucher to revenue generation of the drug in its first few years on the market. “This would de-risk certain investments without providing additional gain to manufacturers of blockbuster drugs who are also receiving the voucher,” he said.

J Pediatr Liu et al.

Study: Drugs in rare pediatric disease priority review voucher program have similar revenue to brand drugs

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