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FDA offers new incentive for development of drugs for neglected diseases

1 Aug 2008

Tatum Anderson

Source: TropIKA

Public-private drug development partnerships creating drugs and vaccines for many neglected diseases, stand to gain considerably from a tweak to US laws on drugs registration, which will come into force in September 2008.

The system seeks to provide new types of incentive to improve research into ‘tropical diseases’ – as defined by US regulations. A company that registers a drug aimed at these diseases with the Food and Drugs Administration (FDA) could be eligible for what is called a Priority Review Voucher.

The voucher could be extremely valuable, because it can be used by the owner to gain a fast-track approval for other drugs it might want to register in the future. This could reduce the average registration time from ten to six months.

The thinking behind the system is that shorter approval times are worth a lot of money to many manufacturers, who may want to bring commercially valuable products, such as blockbuster drugs, on to the market as quickly as possible.

It is hoped that a company that has shelved research into a tropical disease product, because of its limited commercial returns, will be given incentives to make that product available, in return for help bringing a drug with more chance of commercial success to the market.

David Ridley was one of a group of academics at Duke University, USA who first proposed the idea in a paper in 2006 (1). It was incorporated into US law last year. ‘We were amazed that academic papers could be taken so seriously by senators,’ he said. He calculates that the vouchers could be worth up to $300 million to a pharmaceutical company that wants to bring a product to the market before its competitors.

But although it was designed for pharmaceutical companies, or perhaps smaller biotech companies, the consensus is that product development partnerships are likely to gain huge benefits from the voucher system.

This is because vouchers could be sold on to other companies and the money raised could be used for clinical trials. Several partnerships have yet to secure funding for phase III trials because they are so expensive. Indeed, it is hoped that competition amongst pharmaceutical companies and even private equity companies will push the price of the vouchers up. Partnerships may even be able to borrow money from banks against the value of vouchers, in order to fund trials.

Dr Tadataka Yamada, executive director of the Global Health Program at the Bill and Melinda Gates Foundation, talking earlier this year at Imperial College in London, said the foundation was confident that it would be able to raise money for phase III trials using the system. ‘This is a huge, huge incentive and I think it will fundamentally change the dynamic of industry commitment for global health,’ he said. ‘I think there will be a competition for funding the late stage that wasn’t there before.’

Similarly Dr Jerald C Sadoff, president and CEO of the Aeras Global TB Vaccine Foundation said: ‘We regard the new priority review voucher programme as an interesting and promising pull mechanism. We are hoping our partners will find them a strong incentive to make the investments required to help us develop TB vaccines.’

Unintended consequences?

Nevertheless, some industry observers say the new incentive system may have unintended consequences. Rather than provide incentives for new drugs, the system might tempt companies that already have drugs on the market in other countries to register their drugs in the US and collect a handsome windfall.

Others say that few companies are now managing to develop blockbuster drugs. That means returns may not be great enough to justify spending large sums on vouchers. (It is also not clear whether a company that has bought a voucher can sell it on, influencing the voucher’s price).

Vouchers may not be worth as much as predicted says Dr Mel Spigelman, director of research and development at the Global Alliance for TB Drug Development. ‘The biggest unknown is the value of the voucher – estimates range from near zero to hundreds of millions of dollars but no one knows. It’s the unknown that makes what we’re going through challenging,’ he said.

But one particular rule on the use of vouchers may undermine incentives to create drugs in the right formulations for developing countries, say critics; rewards may be had only if the active ingredient (including any ester or salt of the active ingredient) has not been approved before.

Paediatric formulations and stable forms of drugs that do not need refrigeration are often desperately needed, but typically cost more money to develop. Critics say the system provides no incentive to create these types of formulation, because companies are able to receive a voucher for the basic chemical entity, whatever formulation they develop.

The same rule will also mean there are no incentives for pharmaceutical companies to invest in research for new uses of existing formulations, a popular route for getting new drugs on to the market quickly.

Many companies have already developed and registered commercially successful formulations which might also have properties useful in fighting neglected diseases. However, many go no further without significant push from product development partnerships (Sanofi-Aventis’ eflornithine, a key ingredient in a facial cream which is now being tested against sleeping sickness, is one example).

Speculation as to how successful Priority Review Vouchers might be is bound to continue well after the first vouchers are awarded. The FDA declined to say how many companies have already tried to register drugs under the scheme but said the first vouchers can legally be issued by 27th September.

Diseases covered by new FDA rules

The term ‘tropical disease’ means any of the following:

(A) Tuberculosis

(B) Malaria

(D) Buruli ulcer

(E) Cholera

(F) Dengue/dengue haemorrhagic fever

(G) Dracunculiasis (guinea-worm disease)

(H) Fascioliasis

(I) Human African trypanosomiasis

(J) Leishmaniasis

(K) Leprosy

(L) Lymphatic filariasis

(M) Onchocerciasis

(N) Schistosomiasis

(O) Soil transmitted helminthiasis

(P) Yaws

(Q) Any other infectious disease for which there is no significant market in developed nations and that disproportionately affects poor and marginalized populations, designated by regulation by the Secretary.

Source: Federal Drug Administration Amendments Act 2007

Reference

1. Ridley DB, Grabowski HG, Moe JL (2006). Developing drugs for developing countries. Health Aff (Millwood); 25(2):313-324.