[Ip-health] Priority Review Voucher
james.love at keionline.org
Wed Aug 6 09:26:27 PDT 2014
Good points. It is also interesting to reflect on a couple of key
difference between federal funding that leads to a patented invention,
grants or CRADAs that subsidize trial costs or other research expenses, the
50 percent orphan tax credit (which this company also received) or a
priority review voucher. Federally funding of an invention gives the US
government a royalty free right in the patent, and march-in rights. CRADAs
at one time gave the government a contractual right over reasonable
pricing. (Until 1996, when Clinton decided to end this policy). Now none
of the other subsidies (CRADAs, funding of trials, tax credits, PRV) give
the US government leverage over prices or uses of the products (unless I'm
missing something with the PRV, which I know less about).
On Tue, Aug 5, 2014 at 2:02 PM, Aidan Hollis <ahollis at ucalgary.ca> wrote:
> One of the mechanisms that was promoted to get drugs developed for
> tropical diseases was the priority review voucher, which was predicted to
> have a value of up to $300m. The first product to generate a PRV was the
> approval in the US of Coartem. Novartis kept the voucher so there was no
> market value established. A survey of willingness to pay was undertaken in
> 2012, with a mean value of $94m.
> Now a PRV has been sold, for $67.5m. This is a more credible estimate of
> the true value.
> How important was the voucher?
> Since BioMarin expects revenues of approximately $1bn over the next few
> years for Vimizim, the addition of $67.5m in pure profit is not
> One of the contentious issues in PRVs is the possibility that they might
> either slow down the approval of other products; or result in a mistaken
> approval for the product which gets through the FDA review on an expedited
> basis. There is some evidence to suggest that trying to accelerate approval
> may have real costs.
> See http://content.healthaffairs.org/content/33/8/1453.abstract?=right
> A good question is whether the value of the PRV in terms of encouraging
> neglected disease R&D (or in this case paediatric product R&D) is enough to
> overcome these costs. Note that if the “value” of the PRV had been $300m,
> there would have been evidence of a stronger incentive effect. Now it turns
> out that the incentive effect is at the low end of the estimated range, but
> there is no reason to think that the costs will be at the low end.
> Overall, one has to conclude that the incentive value of the PRV is not
> insignificant, and the system should help to increase R&D in targeted
> areas. What is not clear is whether these benefits are large enough to make
> the system worthwhile. There must be some threshold market value of a PRV
> below which the system is simply not an attractive proposition for society.
> Aidan Hollis
> Professor of Economics
> University of Calgary
> ahollis at ucalgary.ca
> +1 403 220 5861
> Incentives for Global Health
> Ip-health mailing list
> Ip-health at lists.keionline.org
James Love. Knowledge Ecology International
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