THE CREATING HOPE ACT: THE RARE PEDIATRIC DISEASE PRIORITY REVIEW VOUCHER (PRV) INCENTIVE PROGRAM
21 U.S.C. 360ff
What is the Creating Hope Act?
How does the voucher process work?
Are the pediatric vouchers effective?
What new drugs earned a voucher? How many vouchers have been sold and at what price?
FDA Rare Pediatric Disease Priority Review Vouchers, Draft Guidance for Industry
What is the Creating Hope Act?
The Creating Hope Act, championed by Kids v Cancer and passed into federal law in 2012, created 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 provides that after September 30, 2024 FDA may only award vouchers for approved rare pediatric disease product applications if a company has a rare pediatric disease designation for the drug granted 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.
Are the pediatric vouchers effective?
Yes. In the 20 years before the enactment of the Creating Hope Act, FDA approved only two drugs that had been developed specifically to treat a pediatric cancer: Erwinase and Clofarabine. Since 2014, when the first voucher has been issued, 22 new drugs for rare diseases in kids have been approved, including two drugs for childhood cancers.
Many vouchers have been sold, creating almost $2 billion in sales – a powerful incentive for the companies. Executives of pharmaceutical companies have expressed their interest in earning a voucher and have said it is a valuable incentive. And it has not cost patients or taxpayers a penny.
Drug companies are developing more drugs for rare pediatric diseases than before. During drug development process and prior to submitting a new drug application and requesting a voucher, companies apply to FDA for the rare pediatric disease designation (and/or other designations, such as orphan drug, breakthrough therapy, fast track, etc). The number of applications to FDA for rare pediatric disease designation – a signal from drug companies developing drugs for kids that they are interested in earning a voucher — has been rising steadily. (Not every drug that receives a rare pediatric disease designation will be approved, and the designation is not a guarantee of the voucher award.)
Rare Pediatric Disease Designation Requests Submitted and Pediatric Priority Review Vouchers Issued, 2013-2019
*Rare pediatric disease designation was created by the Creating Hope Act in 2012.
What new drugs earned a voucher? How many vouchers have been sold and at what price?
The first rare pediatric disease (RPD) pediatric voucher was awarded in 2014, two years after the Creating Hope Act was passed into law. Since then, a total of 22 RPD vouchers have been awarded. The vouchers have been sold for up to $350 million, and recently have been selling for about $100 million. See the list of issued and sold vouchers here.
FDA Rare Pediatric Disease Priority Review Vouchers, Draft Guidance for Industry,
In July 2019 FDA updated its draft guidance on the Creating Hope Act Priority Review Vouchers, entitled: Rare Pediatric Disease Priority Review Vouchers, Guidance for Industry, which the agency initially issued in November 2014.
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.
The Creating Hope Act provides for a rare pediatric designation process to create greater certainty earlier in the drug development process that a drug or biologic would qualify for a voucher, should it be approved. The request for a rare pediatric designation can be made at the same time or after a request for an orphan designation is made.
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 is $2,167,116, which is the lowest amount since FY2011, when the Food and Drug Administration Amendments Act created the fees for redeeming PRVs, and which is significantly less than the $2,457,140 fee in FY2019.
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.
GAO reports
The Government Accountability Office has produced two reports on priority vouchers, including rare pediatric disease PRVs. The first report, published in March 2016, was titled “Too Early to Gauge Effectiveness of FDA’s Pediatric Voucher Program.” It stated: “Given that the typical drug development process often exceeds a decade, insufficient time has elapsed to determine whether the 3 year-old program has been effective.
The second report, titled “Drugs Development: FDA’s Priority Review Voucher Programs”, was published in January 2020. It states:
- “All 7 drug developers we spoke to indicated that the vouchers were a factor in their decisions.”
- Drug companies “indicated support for their reauthorizations, with some noting that PRV program expirations may negatively affect overall drug development and the willingness of drug sponsors to work in these areas.”
- “The potential for additional revenue from either marketing a drug about 4 months sooner or from selling the PRV could provide an incentive for drug sponsors to develop drugs for these diseases or conditions.”
- “One study found evidence of an effect of a PRV program on drug development. Specifically, it found that drugs to treat rare pediatric diseases, which could be eligible for a rare pediatric disease PRV, were more likely to advance from phase I to phase II clinical trials when compared to rare adult disease drugs.”