BOSTON — GW Pharma's Epidiolex (cannabidiol) on Tuesday became the first medicine derived from a marijuana plant to receive a thumbs up from U.S. regulators. It's a noteworthy approval, and even more meaningful for GW in that it hands the company a powerful tool known as Priority Review Voucher.
The Food and Drug Administration doesn't award PRVs very often, only when drugmakers successfully develop treatments for tropical or rare pediatric diseases. Once in hand, the voucher may be used on another drug application to speed its review time from the typical 10 months to around six. Faster reviews can lead to faster approvals, and in turn speedier launches.
Pharmas know all too well how a few extra months on the market can equate to millions of dollars in drug sales. PRVs have therefore become a coveted commodity for the industry; in 2015, AbbVie shelled out $350 million to buy one from United Therapeutics.
AbbVie, however, likely overpaid. Evidence presented at the Drug Information Association's 2018 annual meeting illustrated how the value of PRVs has been trending down as of late, and could diminish considerably more depending on how many vouchers the FDA issues in the coming years. Recent PRV sales appear to back up that conclusion, with prices settling in the $100 million to $130 million range.
The state of PRVs
As of June 1, the FDA had doled out 19 PRVs and seen seven redeemed. (Notably, Alexion Pharmaceuticals announced on June 19 it applied a rare pediatric disease voucher to its filing for ravulizumab.)
Among that latter group, all but one were successful, resulting in a quick approval of the drug application onto which it was applied.
Though the PRV program has been around for a little over a decade, the vast majority of vouchers issued came in 2015 or later.
It would appear many more are on the horizon as well. Andrew Robertson, head of global regulatory science and policy in Sanofi's North American business unit, estimates that nearly 60 PRVs will be awarded over the next decade.
The prediction is based on a study that analyzed number of PRVs already doled out, cross-referenced with drug programs under development. Of the 19 vouchers issued thus far, around two-thirds have been for rare pediatric disease treatments. Robertson sees the ratio persisting, but noted that could be problematic for keeping the program healthy and enticing in the future.
"I hate actually saying this, but something [to question] if we're going to look at long-term survival of program is 'Do we really need one for rare pediatric diseases? And the reason behind that is there's so many coming out right now," he said during a Tuesday presentation at DIA.
Regulators are also trying to expand the PRV program to include medical countermeasures related to chemical, biological, radiological threats, nuclear threats and emerging infectious diseases, but that has yet to play out.
Saturation reduces value
PRVs are valuable because of their regulatory perks, but also simply because there are so few of them.
With the voucher supply poised for growth, expectations are that the demand will fall. In a single year timeframe, a PRV could be worth at least $200 million if it's the only one awarded, or worth less than $100 million if regulators gave out four or more, according to a study published in the journal Health Affairs back in 2016.
Robertson and his colleagues found similar findings through their research. They estimate that if the FDA awards three PRVs in a year, the minimum value for each is $250 million. But that decreases to $144 million at four, $98 million at five. Last year, regulators issued a whopping six PRVs — putting each at a minimum value of $77 million by Robertson's standards.
The current trend is about four PRVs issued each year and valued around $120 million to $140 million. Recent voucher sales mostly fall within that range, including Sarepta and Gilead Sciences' deal worth $125 million, Ultragenyx and Novartis' deal worth $130 million, and Spark Therapeutics and Jazz Therapeutics' deal worth $110 million.
However, the roughly 15 unused PRVs still floating around drop the per-voucher value to around $20 million to $30 million, according to Robertson's study.
The weakened values put added pressure on pharma companies interested in using or buying a PRV to select the right target.
In addition to pricing trends, Robertson's study looked at top-selling products approved from 2005-2012 to see which would have benefited most from coming to market four months earlier.
It ended up with a list of 47 drugs that fit the bill. The number one drug was Merck & Co.'s Januvia (sitagliptin), which could have experienced a $793 million benefit from having a PRV. Within the top 10, five were for diabetes and nine were from multinational biopharma companies.
"So that's your consumer base for the folks that might want to buy a voucher," Robertson said, referring to the big pharmas.
Benefits of $350 million or more were seen with five other products as well. Eight products would have benefited between $250 million to $350 million, while four would have benefited $150 million to $250 million.
However, the study found most of the higher benefits were with products that came to market near the beginning of the time period. Just four products approved in 2008 or beyond would have benefited from a PRV.