THE CREATING HOPE ACT: THE RARE PEDIATRIC DISEASE PRIORITY REVIEW VOUCHER INCENTIVE PROGRAM
Section 504 of the FDA Reauthorization Act of 2017, 21 U.S.C. 360ff
What is the Creating Hope Act?
How does the voucher process work?
What is the Creating Hope Act?
The Creating Hope Act, championed by Kids v Cancer and first passed into federal law in 2012, establishes the pediatric rare disease pediatric voucher program. The Creating Hope Act has been reauthorized multiple times, most recently on December 27, 2020. The current reauthorization sunsets on September 30, 2024. After that date, FDA may only award vouchers for approved rare pediatric disease product applications for companies that have rare pediatric disease designations for the drugs approved by the FDA by September 30, 2024.
What is a pediatric priority review voucher?
A pediatric voucher is an incentive to encourage development of treatments for children with rare and life threatening diseases. Drug development is a long, costly, and financially risky process. Achieving an acceptable risk-adjusted rate of return for developing therapies for rare pediatric diseases is exceedingly difficult for companies. The purpose of the pediatric voucher program is to provide non-dilutive revenue at FDA approval, revenue that is unrelated to the size of the disease market.
The pediatric voucher comes with rights to faster FDA review of a future drug for any disease, for example heart disease. Vouchers may also be transfered. The benefit of this faster review is around four months. FDA standard review of a new drug application is about 10 months; FDA priority review of a new drug application is about 6 months. Getting a drug to market earlier is valuable to a drug company not only because it pushes ahead the revenue curve, but also because it may result in beating a competitor’s drug to the market and thereby achieving a permanent market advantage for the drug over the competitor’s drug.
To qualify for a voucher, a drug’s disease must be (1) a rare disease, (2) a pediatric disease, (3) a disease that qualifies for priority review and (4) the drug must receive FDA approval. A disease is rare, if, pursuant to the Orphan Drug Act, it affects fewer than 200,000 Americans. All childhood cancers are rare. The disease is pediatric if, pursuant to the FDA Guidance for Industry, if meets the definition of a pediatric disease: that over 50% of the patients present with the disease before age 18. The disease itself must also qualify for priority review – it must be life threatening and address an unmet medical need.
The pediatric voucher program does not cost taxpayers or patients anything. It is a transfer from companies seeking to get their big-market drugs approved more quickly (usually major pharmaceutical companies) to companies developing therapies expressly for children with rare and life threatening diseases (these companies are often but not always small and midsize biotechs).
The FDA collects a priority review fee from the drug company to compensate the FDA for the additional effort that the FDA must undertake to perform a priority review. The FY 2020 fee is $2,167,116.
How does the voucher process work?
There are 3 steps:
1. A company develops a treatment for a rare pediatric disease.
2. The company requests a rare pediatric disease designation prior to submitting a new drug application and requesting a voucher.
3. The FDA approves the treatment and the voucher request. Upon approval, the FDA issues a voucher to the company.
4. The company exercises the voucher it wants to request an FDA priority review of another drug that would otherwise receive standard review. Or, the company may sell the voucher to another company. The vouchers have been selling for around $100 million, though they have sold for as much as $350 million.
For companies developing pediatric rare disease drugs:
The criteria for a Rare Pediatric Disease Product Application leading to a pediatric voucher are that a drug or biological product:
- Is for the prevention or treatment of a Rare Pediatric Disease;
- Contains no active ingredient that has been previously approved in any other application;
- Is submitted under section 505(b)(1) of this Act or section 351(a) of the Public Health Service Act;
- Itself qualifies for priority review;
- Relies on clinical data derived from studies examining a pediatric population and dosages of the drug intended for a pediatric population.
The term “rare pediatric disease” means a disease that is a serious or life-threatening disease in which the serious or life-threatening manifestations primarily affect individuals aged from birth to 18 years.
For companies wishing to exercise a voucher:
A sponsor who wishes to exercise a priority review voucher would likely have a large-market adult drug or biologic that would otherwise be reviewed by the FDA pursuant to a standard review. By exercising a pediatric voucher, the sponsor would then be able to receive a priority review for that drug or biologic. This would get the drug or biologic to market more quickly, perhaps ahead of a similar competing drug or biologic, thereby generating significant value.
The pediatric voucher program does not alter the criteria for a FDA approval. Drugs subject to priority review must still conform to all the FDA requirements to be approved.
A sponsor of a drug or biologic application that is the subject of a pediatric voucher shall pay a user fee. The amount of the user fee shall be based on the difference between the average cost incurred by the FDA of a priority review and the average cost incurred by the FDA of a standard review. This amount shall be adjusted annually to reflect current costs. For FY2020 the fee rate was $2,167,116.
The Creating Hope Act provides that the sponsor must notify FDA of its intent to submit a drug application with a pediatric voucher at least 90 days prior to submission. The user fee shall be due upon the notification.
Pursuant to the Creating Hope Act, the FDA may revoke a pediatric voucher awarded if the Rare Pediatric Disease Product Application for which such voucher was awarded is not marketed in the United States within a year.