Experts Propose New Priority Review Voucher Program to Encourage Generic Drug Development

Because of a lack of competition in some generic drug markets, experts have proposed a new priority review voucher program to incentivize competition in small molecule generics products that currently have few competitors.

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Notably, small molecule generic drugs have historically provided significant cost savings for patients and the wider health care system. However, the lack of competition for small molecule generics has led to higher prices for these critical drugs.

To address this, the authors proposed that companies that develop and market generic drugs in markets with limited or no competition would receive a transferrable priority review voucher (PRV) with no expiration date. These vouchers could be redeemed for an expedited FDA review of a new drug application (NDA), which could lead to a decision granted in 6 months rather than the usual goal of 10 months.

The major aim of the generic drug market is to drive down prices using competitive pressure, but the experts noted that there are few incentives for developers to focus on generics. The number of submitted abbreviated NDAs (ANDAs) peaked in fiscal year 2017 at 1306 and declined to 806 in the 2021 fiscal year. Similarly, the number of FDAapproved ANDAs peaked at 1171 in the 2019 fiscal year but declined to 836 in the 2021 fiscal year.

The proposed PRV program has been successfully used before to stimulate drug development, such as in the Tropical Disease PRV Program, the Rare Pediatric Disease PRV Program, and the Material Threat Medical Countermeasures PRV Program. Although experts have debated the direct effects of these programs, the authors wrote that “there is no doubt that they provide a model for a working ‘pull’ strategy that has been shown to create substantial incentives to enter into traditionally underserved markets.”

PRVs are also attractive to drug developers, who receive an additional 4 months of marketing while under protected exclusivity periods. PRVs can either be used for a future FDA submission or be transferred to another party, typically through a sale.

Between 2009 and 2022, 60 PRVs were awarded. One report published in 2020 found that for drug sponsors, the PRV programs were at least a factor in, if not pivotal to, the development of certain drugs. The incentive is particularly attractive for smaller manufacturers and nonprofit organizations that rely on the PRV to fund their operations.

Under this proposed program, the generic drugs PRV program would be modeled after existing PRV programs. An initial list of the key drug markets eligible for PRVs would be developed by the US Congress and maintained by the FDA, with criteria for inclusion, exclusion, and amendment. The authors proposed that these key markets be defined based on drug class rather than medical indication and that inclusion satisfy both of the following criteria:

• A market of critical importance to the health care system or to national security
• A market that does not yet have a generic drug alternative to name-brand drugs or has a Herfindahl-Hirschman Index greater than 2500, which is the threshold used by the US Department of Justice to indicate a highly concentrated market

Upon approval by the FDA, the applicant manufacturer would be required to create and commit to a comprehensive plan for producing, marketing, and selling the new generic drug for at least 3 years. To discourage misuse or gaming of the program, breaking this commitment would result in a heavy fine and disqualification from future participation in any PRV program. This caveat reflects criticisms that the current PRV programs solely incentivize development and market entry rather than access to or availability of the drugs.

Although this program is merely a proposal, the authors wrote that policy innovation is crucial to expanding access to necessary drugs.

“With prescription drug costs reaching all-time highs and showing no signs of abating, there is bipartisan pressure to find new and innovative solutions to ease the fiscal burden felt daily by millions of Americans,” the authors concluded. “Although generic drug markets are hardly the solution to all our problems, encouraging policy innovation in this proven marketplace would meaningfully improve the lives of many, increasing access and reducing costs for all.”

Reference

Cho T, Dumas P, Miller BJ. A priority review voucher program to fuel generic drug development. Health Affairs. Published online July 6, 2023. Accessed July 17, 2023. https://www.healthaffairs.org/content/forefront/priority-review-voucher-program-fuel-generic-drug-development