Just in Time for Halloween, FDA Issues its Highly Anticipated “Treat and Trade” Draft Guidance on the New Tropical Disease Priority Review Voucher Program
October 20, 2008On October 20, 2008, FDA announced the availability of a highly anticipated draft guidance document, titled “Tropical Disease Priority Review Vouchers.” The draft guidance discusses FDA’s implementation of FDC Act § 524 – “Priority Review to Encourage Treatments for Tropical Diseases” – which was added to the law by § 1102 of the FDA Amendments Act (“FDAAA”) to encourage the development of new drug and biological products to treat certain tropical diseases for which there are no or few available treatments by offering a new transferable voucher incentive for obtaining FDA approval for products for such diseases. FDA is also reportedly planning to hold a public meeting to discuss the new voucher program.
We first posted on the so-called “treat and trade” program in May 2007 when FDAAA was still being debated. Briefly, FDAAA amended the FDC Act to create a new transferable priority review program in which applicants for new chemical entities for “tropical diseases” that have received priority review receive a “priority review voucher” entitling the holder to a 6-month FDA review of another application that would otherwise be reviewed under FDA’s standard 10-month review clock. The priority review voucher may be used or sold by the company granted the voucher for an application “submitted after the date of the approval of the tropical disease product application.” The tropical diseases that can qualify an applicant are enumerated in new FDC Act § 524(a)(3), and include “infectious disease[s] for which there is no significant market in developed nations and that disproportionately [affect] poor and marginalized populations, designated by regulation by [FDA].” Applicants that use a priority review voucher are required to pay FDA a priority review user fee in addition to other required user fees, and no such fee may be waived, reduced, or refunded. FDA will establish the amount of the priority review user fee before the beginning of each fiscal year, but has not yet done so for Fiscal Year 2009.
The idea to stimulate tropical disease drug development by offering a voucher system was first proposed in a 2006 Health Affairs article authored by Duke University professors David Ridley, Henry Grabowski and Jeffrey Moe. (See additional background information here.) Since then, there has been significant speculation as to the price such a voucher would fetch on the market. Some have speculated that a voucher could bring $300 million or more; however, given FDA’s recent willingness to let PDUFA goal dates slip, it is unclear how much money a company might be willing to invest in such a voucher that might not carry with it the initially intended benefits. But we might find out soon. Novartis’ orphan drug-designated malaria treatment COARTEM (artemether; lumefantrine) (currently under FDA review with a December 2008 action date) and Vioquest Pharma’s orphan drug-designated LENOCTA (sodium stibogluconate) for the treatment of cutaneous leishmaniasis are two drugs that might qualify for a voucher. The success of the tropical disease voucher program could also determine whether interested parties might pursue expanding the law to apply to other types of products, including counterterrorism products.
FDA’s draft voucher guidance is largely styled as a question-and-answer document, and is presumably based on inquiries FDA received on § 524 and related discussions with sponsors. FDA anticipates that the Agency will receive approximately 5 voucher requests annually from 5 sponsors and 5 notifications of intent to use a voucher from 5 sponsors annually. FDA notes in the draft guidance that sponsors should notify the Agency of their intent to use a priority review voucher (including the date on which the sponsor intends to submit the application) at least 1 year before use. Each transfer should be documented with a letter of transfer. Although FDC Act § 524 allows for only a single actual transfer of the voucher from the original recipient to another sponsor, FDA notes in the 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.”