FDA Priority Vouchers: Less Than Impressive

Some facts to chew on: The prescription drug industry is projected to reach $842 billion in global sales in 2010. Over the last ten years, 80 percent of the drugs that have entered the U.S. market are “me too” drugs that are no more effective than those we already use. Meanwhile, across the ocean, Sub-Saharan Africa accounts for 60 percent of the world’s 250-500 million malaria cases every year and 75 percent of the global population that goes blind from the infectious eye disease trachoma.  Both diseases can be treated through various drugs and antibiotics which pharmaceutical companies have the capacity to manufacture.

The billion-dollar question: how can we get drug companies to focus more of their formidable resources on producing drugs to combat these tropical diseases? The Food and Drug Administration (FDA) thinks it has the answer: a “priority voucher” program which grants drug companies accelerated approval for products targeted at wealthy countries as a reward for developing drugs that address tropical diseases. The program, established through a 2007 Congressional amendment to FDA legislation, essentially offers drug makers a deal: prove that you have, say, a new anti-malarial drug, and get your next blockbuster antidepressant fast-tracked for FDA approval. At first glance, this may seem like a sly bargaining chip to help the Third World; but in reality, the priority voucher program leaves much to be desired.

Granted, the incentive for drug companies to take advantage of the priority voucher program is strong. In a recent New England Journal of Medicine commentary, Dr. Aaron Kesselheim of Harvard Medical School lays out the appeal: “A voucher obtained after the approval of a drug for a tropical disease can be used to require accelerated regulatory review (in 6 months or less) of a cholesterol-lowering drug or an antidepressant, for example, that the sponsor might sell in the United States for thousands of dollars per year of treatment…[V]ouchers could speed up FDA evaluation time by an average of 12 months, providing domestic patients with more rapid access to the [more expensive] drugs. A voucher could be worth more than $300 million, thanks to the earlier period of market exclusivity afforded by decreasing the time a drug spends in FDA review.”

At first glance, this seems like a win-win: drug makers get a head-start on making billions and the world gets a stronger commitment to combating tropical diseases. So what’s the problem?

The first major issue is that, as Kesselheim notes, the “voucher’s value will bear no relation to the usefulness of the drug whose development it is intended to reward.” Specifically, the law “stipulates that no voucher will be earned for a product whose ‘active ingredient’ was previously approved” by the FDA. This is silly. If a company comes forward with an impractical drug that’s an all-new substance, it gets a voucher; but if it offers a useful improvement on a previously-approved drug, it doesn’t. Kesselheim offers an example: a drug company could come to the FDA with a malarial drug that “degrades in the heat and must be taken six times a day”— which would make it all but useless in a tropical environment—and get a voucher. But if the company tinkers with an existing drug to make it more useful in resource-poor settings”—by coming up with a heat-resistant, single-dose formulation—the company wouldn’t get a voucher, even though this development would really useful. 

The FDA’s emphasis on novelty can also backfire in the sense that the agency is only concerned with drugs that it has or hasn’t reviewed, regardless of whether or not they’re already on the market in the developing world. In a post last week, Merrill Goozner notes that next month Novartis will submit a malaria drug called Coartem for FDA approval in order to receive a voucher. Coartem is one form of a drug cocktail called artemisinin combination therapy (ACT), which has been shown to be more than 90 percent effective in clinical trials; patients recover from malaria in just three days.  Since 2002, ACT has been on the World Health Organization’s preferred therapy list for drug-resistant malaria; most African countries have officially adopted the therapy as a first-line treatment for malaria.

So Coartem a good thing—but it’s not a new thing. It was approved in Switzerland and proven in clinical trials in the developing world. The FDA has never reviewed Coartem; thus it will treat the pill as a “new” drug and give Novartis a priority voucher worth millions—even though the drug is already in use in Africa. Novartis gets a chance to fast-track a new product, while, as Goozner puts it, “the developing world gets nothing”—particularly because the priority voucher program doesn’t include any stipulations regarding the availability or affordability of a drug.

That’s right: the FDA doesn’t provide any incentives to actually administer or distribute a drug; a manufacturer just has to present a new formula. In the words of Kesselheim, there’s no guarantee of “follow through”—of getting drugs to the people who need them. Novartis just has to show the FDA something that the agency hasn’t seen before; it doesn't have to take any steps to make the drug accessible to patients.

Unfortunately, access is a major concern when it comes to ACT. Last year, a Chinese pharmaceutical company recalled thousands of ACT doses after it discovered that its inventory had gotten mixed up with counterfeit version of the drugs which had little curative effect. This wasn’t an isolated case. Fake drugs are common in Africa: according to the UK Department for International Development, counterfeits account for 70 percent of medicines in Angola and Nigeria.  In one American Enterprise Institute study, one-third of anti-malarial drugs sold in six cities in Ghana, Kenya, Nigeria, Rwanda, Tanzania and Uganda were knock-offs that did not contain enough active ingredients to be effective. 

The voucher program does nothing to help this situation because it has no stipulations as to how available or affordable a new drug must be in order to qualify. Nor does the program try to address the fact that drug companies often make it more difficult for people in developing countries to get access to necessary drugs. In March, Maggie called attention to the fact that drug companies pressure the U.S. government to prevent poor nations from importing less expensive, generic versions of drugs in order to protect their patents. For example, the U.S. put Thailand on a “priority watch list” that could lead to trade sanctions when it licensed two anti-AIDS drugs and one used to treat cardio-vascular diseases in such a way that allowed “for the production or import of a generic version of a patented drug, without the permission of the patent holder”—a perfectly legal practice.

Just as worrisome is the fact that prescription drug companies bribe doctors in developing countries to prescribe non-essential drugs—including products that did not pass regulatory threshold in the U.S. and Europe. The result is a glut of superfluous drugs: a 2005 study from the Indian National Commission on Macroeconomics and Health reported that ten of the top-25 selling drugs in India are “irrational or non-essential [given the country’s primary health concerns] or [even] hazardous.”

The priority voucher program doesn’t give drug companies any incentive to ease up on their opposition to generics, nor does it set incentives for them to reduce marketing efforts of non-essential drugs to developing countries. Again: it doesn’t encourage them to do anything about access. They get a free pass  just for showing a new drug formula. That’s all.

It doesn’t have to be this way. You can imagine a different financial incentive program aimed at structuring a more comprehensive deployment of drugs for tropical diseases. In his commentary, Kesselheim offers such an alternative system, in which “wealthier countries could, in concert with international public health groups, set up independent funds that award reasonable compensation for the development of a safe and useful drug or vaccine and then continue to compensate companies for the appropriate implementation of treatment programs. The level of payment could be adjusted according to the degree of success in controlling the disease in question.” This way, financial incentives are tied to implementation and results, not just the initial development of a drug.

Kesselheim also suggests that governments might “work with nonprofit foundations to develop treatments for neglected diseases. The drugs could then be licensed to for-profit pharmaceutical manufacturers for dissemination.” Here, the allure for private companies would be “grants of extended periods of market exclusivity for such drugs, with accompanying price restrictions to ensure affordability and modest but predictable profits.” In other words, drug companies would be allowed to be the only ones distributing a certain drug, but they would have to keep it under a certain price. They receive exclusivity in exchange for affordability.

But instead, we’re stuck with a strange half-measure that squanders the opportunity of guiding pharmaceutical industry resources to those who need it most. The voucher program also raises a slew of questions about the drugs that it will produce here in the U.S. Given that the FDA already has an accelerated approval program for drug reviews, how much faster can the agency work before the quality of its oversight suffers any more than it already has? What is to stop drug companies from using their priority vouchers to rush the approval process, bringing drugs to market that wouldn’t stand up to closer scrutiny?