The after-market for priority vouchers reached dizzying new heights this week with the $350 million sale by United Therapeutics Corp to AbbVie Inc of a priority review voucher which will allow AbbVie to accelerate the review process for one of its drugs. The voucher will shave four months from the standard 10 month FDA new drug review time. That values accelerated time to market at almost $90 million per month. AbbVie haven’t said for which drug they intend file for expedited review, but Abbvie obviously has a blockbuster in mind.
Whenever a new fee is introduced or there’s an annual increase there are the inevitable protests about raising costs – usually accompanied by much grinding of teeth and wringing of hands about the terrible slowness of it all.
But there’s the rub. The real costs are in the time, not the fees.
Certainly it’s not a new idea to suggest that regulator fees provide a means of achieving better resources to speed up review times. If AbbVie ‘s commercial judgement is right – there seems to be a considerable scope for creativity.
The obvious question then is perhaps – if the after market in vouchers is so extraordinarily strong – why doesn’t FDA just cut out the middle man?
The notional face value of the vouchers is around $4.6 million – that’s the additional fee set in 2011 which FDA levies when the voucher is used. Surely there’s scope for the FDA to switch its model to non-transferable vouchers at a higher price. Why not go further and conduct an auction? If Abbvie’s pricing signal is correct, the FDA review costs would be more than covered by the higher sale price and the surplus could be used to improve agency resources across the board – reducing review times for all.
One can imagine the howls of protest of course. Such a process would probably (and rightly) be seen as the big end of the town being able to buy preferential treatment and pushing their smaller competitors to the back of the queue.
But then there’s a bigger question – what are the right regulatory fees. If there’s really an appetite for paying larger fees in order to bring more resources into the regulator – in exchange for faster review times – then isn’t that a conversation worth having? It was a conversation had in Japan a few years ago – and one which eventually resulted in a doubling of review staff, funded by higher fees. Maybe other agencies should be following that lead?