Executive Summary – The FDA’s Accelerated Approval (AA) pathway has been instrumental in
expediting treatments for serious conditions, but recent scrutiny, as highlighted in the BioSpace article, FDA’s Accelerated Approval Pathway Under Fire, raises questions about its sustainability and oversight. Only about half of AA drugs convert to full approval, creating uncertainty for associated incentives like the Priority Review Voucher (PRV) program. PRVs, which reward the development of treatments for neglected diseases, are transferable and often sold for substantial sums, but their status when an AA drug fails confirmatory trials remains a gray area. This article explores the potential implications of AA drug withdrawals on PRVs, concluding that current FDA policies ensure PRV validity regardless of the associated drug’s fate. While this stability is crucial for the PRV market, stakeholders should consider risk mitigation strategies, including insurance, to safeguard against potential regulatory changes or reputational risks. The FDA’s Accelerated Approval (AA) pathway has faced growing criticism. Designed to fast-track therapies for serious conditions using surrogate endpoints, the AA pathway relies on post-approval confirmatory trials to validate clinical benefits. However, as
the article notes, only about half of AA drugs achieve full FDA approval, with the remainder facing withdrawal due to insufficient efficacy or safety concerns. This has sparked debate about the pathway’s oversight and the potential consequences for incentives tied to it, such as the PRV program.

The Priority Review Voucher Program – The PRV program incentivizes the development of treatments for neglected diseases by granting vouchers that expedite FDA reviews for other drugs. PRVs, transferable and often sold for significant sums (e.g., $100 million or more), have created a robust secondary market. However, the interplay between the AA pathway and the PRV program introduces critical questions: What happens to a PRV if the drug granted AA, which earned the PRV, later fails to secure full approval? Could such a PRV be revoked, and what are the implications for stakeholders?

Current Policy and PRV Validity – Under current FDA policies, once awarded, PRVs remain valid and can be sold or redeemed, regardless of the regulatory status of the drug that earned them. This decoupling ensures that even if an AA-granted drug is withdrawn due to failed confirmatory trials, the PRV retains its usability and market value. This policy protects the financial integrity of PRV transactions and ensures continued incentives for the development of treatments for neglected diseases.

Implications for PRV Transactions – The decoupling of PRV validity from the fate of AA drugs has significant implications for the PRV market:
● Financial Stability: PRVs have been sold for high sums, such as Ipsen’s $158 million PRV sale in August 2024. Their market value would be at risk if they could be invalidated due to AA withdrawals.
● Market Confidence: Buyers and sellers in the PRV market rely on the assurance that PRVs remain valid, regardless of the subsequent performance of the associated drug.

However, as the BioSpace article emphasizes, the challenges facing the AA pathway highlight potential risks. If future regulatory changes were to link PRV validity to AA outcomes, it could destabilize the PRV market and diminish its value as an incentive.

Risk Mitigation Strategies – To address these uncertainties, stakeholders should consider the following strategies:

1. Insurance: While PRVs are currently insulated from AA-related withdrawals, insurance
   products could be developed to cover broader business risks, including reputational or financial impacts.
2. Regulatory Vigilance: Stakeholders should closely monitor FDA policies and guidelines to anticipate potential changes that could impact PRV validity.
3. Market Safeguards: Buyers and sellers may adopt contractual safeguards to manage risks associated with PRV transactions tied to AA drugs.

Planning for Accelerated Approval: The Imperative of Immediate Marketing Readiness – Sponsors generally retain their PRVs; however, they risk forfeiture if a drug granted a PRV under the Rare Pediatric Disease pathway is not marketed in the U.S. within 365 days of receiving the voucher.
To maximize the impact of Accelerated Approval (AA) and ensure compliance, companies must plan their marketing and commercialization strategies well in advance, enabling a swift launch immediately upon approval. This proactive approach delivers several key benefits:
● Rapid Patient Access: Ensures life-saving therapies reach patients in critical need without delay.
● Market Leadership: Establishes a competitive advantage in areas with significant unmet
medical needs.
● Sustainability: Builds momentum for confirmatory trials while securing strong initial uptake and market penetration.

Key considerations include aligning manufacturing, distribution, and payer engagement strategies to overcome logistical and financial barriers. Companies must also adhere to regulatory obligations tied to AA, such as post-marketing studies, to maintain approval status and long-term success.
By being market-ready at the moment of approval, companies can solidify their standing in the industry while fulfilling their commitment to improving patient outcomes and preserving valuable incentives like PRVs.

Broader Context and Challenges – The BioSpace article underscores the broader challenges of the AA pathway, including the need for improved oversight and transparency around confirmatory trials. These challenges extend to the PRV program, which exists within the same regulatory framework.
Ensuring clarity and stability around PRVs is essential for maintaining their role as a powerful incentive for innovation, particularly in neglected areas.

Conclusion – The AA pathway’s strengths and weaknesses, as explored in the BioSpace article, highlight the importance of balancing regulatory rigor with innovation incentives. For the PRV program, the current policy of separating PRV validity from AA drug outcomes provides much-needed stability. However, stakeholders should remain vigilant, prepared for potential regulatory shifts that could alter the landscape of expedited drug approvals. Proactive measures, including insurance and market safeguards, can help mitigate risks and ensure the continued success of both the AA and PRV programs.

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References: These references provide a solid foundation for understanding the interplay between the FDA’s Accelerated Approval pathway and the PRV program, as well as the regulatory and financial considerations involved.

1. Accelerated Approval – Expedited Program for Serious Conditions, Dec. 2024: This updated guidance
   document, building upon the May 2014 version, offers comprehensive information on the FDA’s
   expedited programs, including Fast Track designation, Breakthrough Therapy designation, Accelerated Approval, and Priority Review designation. It outlines the criteria, processes, and regulatory framework for each program, providing valuable insights for navigating these pathways for drugs and biologics.
2. FDA’s Priority Review Designation: This FDA resource explains the Priority Review designation, which
   aims to expedite the review process for drugs that offer significant improvements in the treatment,
   diagnosis, or prevention of serious conditions. It details the goals and implications of such designations.
3. Ipsen’s Sale of Priority Review Voucher: In August 2024, Ipsen announced the sale of its rare pediatric
   disease Priority Review Voucher for $158 million. This transaction exemplifies the substantial market
   value of PRVs and their role in the pharmaceutical industry.
4. FDA’s Rare Pediatric Disease Priority Review Voucher Program: This FDA page provides an overview of the Rare Pediatric Disease Priority Review Voucher Program, including eligibility criteria, the process for obtaining a voucher, and guidelines on transferability and use.
5. GAO Report on FDA’s Priority Review Voucher Programs: The U.S. Government Accountability Office’s report offers an analysis of the FDA’s Priority Review Voucher programs, discussing their
   implementation, effectiveness, and the financial aspects of voucher transactions.
6. Understanding-the-FDA-Priority-Review-Voucher-System: This article delves into the mechanics of the Priority Review Voucher system, exploring its origins, objectives, and impact on drug development for neglected diseases.
7. Fast Track, Breakthrough Therapy, Accelerated Approval, Priority Review: This FDA resource outlines
   the various expedited programs available for drug development, detailing the criteria and benefits
   associated with each pathway.
8. PRV Market Insights and Strategic Implications: Please contact the authors.

Authors

Dr. Nana Mainoo, PharmD, MA
Chief Executive Officer at Cleracs Consulting
Email: nkmainoo@cleracs.com
With over 16 years of experience in the healthcare industry, Nana has held key roles at Pfizer and Komodo Health and co-founded Medsfinder, a healthtech platform. As CEO of Cleracs Consulting, he specializes in regulatory strategy, focusing on orphan drug regulatory affairs. Nana holds a Doctor of Pharmacy from Nova Southeastern University, a Master of Arts from IE Business School, and certificates in Health Leadership and Finance from INSEAD and Cornell University, respectively, along with a Bachelor of Pharmacy from KNUST.

Christian Girard, MiM
Co-Founder at The PRV Fund Project
Email: christian@prv.fund
Christian is a co-founder of The PRV Fund, an initiative focused on providing non-dilutive funding to early-stage biotech companies developing treatments for rare pediatric-onset disorders. Christian has over 30 years professional background marked by his commitment to advancing rare pediatric disease drug development, from lab bench to approval. His involvement in this sector highlights his dedication to supporting innovative therapies aimed at improving the lives of children with rare diseases. He is a graduate of ESCP Europe, an European business school.

Dr. Jean Chatellier, PhD
Partner, EVP & Managing Director at KYBORA
Email: jean@kybora.com
Jean is a Partner and EVP at KYBORA, a global advisory firm specializing in M&A, licensing, fundraising, and strategic advisory services in biopharma. He contributed to the divestiture of Bayer’s PRV to argenx for $98M [1]. With over 24 years of experience, he has held key leadership roles, including CBO at Besins Healthcare and pivotal positions at Avadel Pharmaceuticals, Micromet (now Amgen), and Crucell (now J&J). He was the founding CEO of Avidis (now Osivax) and has worked with Nobel laureates during his postdoctoral research. Jean holds a PhD in Biochemistry and Molecular Biology and has led significant industry partnerships and transactions throughout his career.
[1] On November 2020, argenx enters into agreement to acquire Priority Review Voucher https://www.globenewswire.com/newsrelease/2020/11/23/2131371/0/en/argenx-Enters-Into-Agreement-To-Acquire-Priority-Review-Voucher.html.