Filling Drug Gaps

ANY DAY NOW, the Food & Drug Administration is expected to give Novartis the nod to sell Coartem, a drug that combines two key malaria treatments in one pill. Malaria isn't a major threat in the U.S., and it is doubtful the Swiss company will rack up significant domestic sales. But the approval will give Novartis something more valuable: a coupon good for expediting FDA's review of another product.

Coartem is the test case for Priority Review Vouchers (PRVs), an incentive created in 2007 under FDA's Amendments Act. A PRV essentially allows a drug approval application to skip to the head of the agency's review line and compress the time FDA takes to make a decision by anywhere from four to 12 months.

The catch is that only companies winning approval of novel drugs for neglected diseases are eligible for a PRV, which they can then apply to any other drug in their pipeline, auction off, trade, or sell to a competitor. The goal of the PRV program is to convince more scientists to devote their time to finding cures for some of the world's most devastating and underserved diseases. It's a new tool for public and private organizations seeking creative ways to promote research in areas where there is need but not much commercial potential.

The need to find new and better drugs for neglected diseases is staggering: Each year, some 1.6 million people die from tuberculosis, more than 1 million people fall at the parasitic hands of malaria, and about 500,000 people—mostly children—are hospitalized with dengue fever.

To date, drugs to combat 16 tropical diseases—including malaria, tuberculosis, cholera, leprosy, and dengue fever—are eligible for a PRV, although nonprofits and public-private partnerships devoted to finding cures for such diseases hope the list will be expanded. A company must ask for the voucher when it files its New Drug or Biologics License Application with FDA. Currently, Novartis is believed to be the only company to participate in the program.

Congress laid the groundwork for PRVs in 1983, when it introduced the Orphan Drug Act to encourage research on diseases that impact a small portion of the population. Under the act, companies developing a drug for a disease that affects fewer than 200,000 people in the U.S. are granted tax incentives for clinical research, funding for clinical trials, a waiver of the nearly $1 million fee to file for approval, and seven years of marketing exclusivity on their product. According to FDA, more than 300 drugs to treat rare diseases have been approved since 1983, compared with just 10 during the decade before the act was passed.

With PRVs, the U.S. government is trying to build on that success by spurring development of drugs needed in developing countries. "For companies to engage meaningfully, we need to find ways to enhance the underlying market opportunities," says Wendy Taylor, founder and vice president of strategy and operations at BIO Ventures for Global Health (BVGH), a nonprofit focused on encouraging the biotech industry to develop medicines for neglected tropical diseases.

The goal is to raise the value of a product enough to merit the investment dollars needed to push it all the way through development, Taylor says. Although Novartis is a pharma giant, the biotech companies pursuing neglected diseases typically can't get financial support for expensive late-stage trials on drugs or vaccines because the commercial potential is too limited.

The three Duke University professors who formally proposed PRVs in a 2006 article in the policy journal Health Affairs estimate that using a voucher to get a potential blockbuster product to market faster could be worth anywhere from $100 million to more than $300 million to a drug company. Although the market value of vouchers will vary, the proceeds will likely be enough for a small firm or nonprofit to push other drugs through the pipeline.

"PRVs are not a magic bullet," Taylor says. However, they might raise the value of a drug for a neglected disease enough that the corporate scales are tipped in favor of developing it.

THE VOUCHER PROGRAM is not without its critics. The Campaign for Access to Essential Medicines, sponsored by Doctors Without Borders, has said Coartem's test-case status "does not bode well" for the PRV program. It questions Novartis' motives, noting that the drug has been available in developing countries for years, whereas the intent behind PRVs is to reward innovative products. The nonprofit also voiced concerns that the act does not guarantee drugs developed for neglected diseases will be affordable.

Even the supporters of PRVs concede it has potential downsides. The act dictates that no active ingredient that has been approved in any other application is eligible for a voucher. The language is intended to keep copycats from exploiting the system by simply making, say, a different salt of an active ingredient to cash in on the voucher without providing any added therapeutic benefit for patients.

But some say the wording is so restrictive that it would exclude novel drugs in development. Coartem, for example, is a combination treatment that includes a derivative of artemisinin, considered the most effective weapon against malaria. If Coartem wins a PRV, any other malaria treatment in development that contains an artemisinin-based ingredient is no longer eligible.

"It is a solidly written piece of legislation, but there are ways in which it could be improved," says Melvin Spigelman, chief executive officer of TB Alliance, a nonprofit product development partnership working to speed up the discovery of new tuberculosis drugs. As is the case with malaria, the best new tuberculosis treatments are often fixed-dose combinations of new and old drugs, and thus, they would encounter the same hurdle as products that trail Coartem. Developers of vaccines, in particular, could lose out because so many vaccines use the same adjuvants or other components to deliver their therapeutic payload.

In those cases, "the spirit of the law should apply," Spigelman says. "There are tweakings of the legislation that will be necessary to consider down the road."

BVGH's Taylor thinks the legislation should be allowed to breathe a bit before any changes are made. "Yes, it has its limitations, but those were put in place by Congress to prevent abuses," she says. "The most important thing, rather than jumping in and trying to tinker with it, is to first let it have a chance to work."

Of course, the success of the program rests on just how much a PRV is worth to a drug company hoping to get a key product on the market a few months early. After all, estimates by the Duke professors aside, the young program has yet to see any vouchers granted, let alone traded.

DESPITE THE potential loopholes in the legislation, the philanthropic community is encouraged by FDA's effort to motivate companies to take a second look at underserved populations. Clearly, the need to direct "more investment and more resources toward neglected diseases is unbelievably crucial, and it's really a tribute to Congress and FDA for recognizing and acting on it," Spigelman says.

People active in improving health care in the developing world are advocating for more approaches like PRVs to ignite industry interest in neglected diseases. "We need to start building packages of incentives for neglected diseases," Hannah E. Kettler, senior program officer and economist at the Bill & Melinda Gates Foundation, said at a recent conference on raising venture capital for health care in Africa.

Along with PRVs and the Orphan Drug Act, other measures that could inspire more research in neglected diseases include advanced market commitments (AMCs), tax credits, and government and foundation grants. With an AMC, groups commit to pay a certain amount for a product once it becomes commercial, thus creating a market where one previously did not exist. AMCs have so far only worked for vaccines, but, Taylor says, one nascent idea is to create an AMC with earlier rewards, such as milestone payments, so that small companies that need cash to keep going can benefit.

"We do need to be thinking about the right menu of incentives to motivate industry and recognize that the needs of a small company may be very different from those of a midsized company with a proven track record," Taylor notes.