As the time and cost to bring a new drug to market continues to increase, pharmaceutical companies, search for new and innovative ways to accelerate the process. In addition to efforts to streamline internal processes at both pharmaceutical companies and CRO’s, some trial Sponsors have turned to the FDA’s Priority Review Voucher (PRV) program to trim months off of the FDA approval timeline.
Established in 2007 by the FDA Amendment Act of 2007, and revised in 2012, under the FDA’s PRV program, the FDA may issue a limited number of vouchers to Sponsors in exchange for the Sponsor dedicating resources to develop drugs for specific indications. Once issued, the vouchers can be resold and used by the acquirer, with some limitations, to accelerate the review of a drug of their choice. The priority review cuts a minimum of four months from the total time the FDA takes to complete their review.
The cost to develop a new drug and get it through FDA approval averages $2.6 billion and takes over a decade.[i]
Using ten years as the average time to market, the cost per day to a Sponsor on a single drug averages over $712,000. Accelerating the time from discovery to approval by four months reduces the cost by over $85 million. However, that does not take into account the opportunity cost of lost revenue for every day a drug is not on the market.
To understand the value to a Sponsor of getting their new drug on the market quicker, consider what companies have recently paid to acquire PRV’s. The purchase of vouchers by Sanofi (May, 2015 for $245 million) and AbbVie (August, 2015 for $350 million)[ii] place a value for each day reduced from the time to market of $2.041 million and $2.97 million, respectively. Having invested in the PRV, one might assume that the potential revenue relative to the investment is expected to exceed the cost of the PRV, further enhancing the value of each day in the market.
Every day spent from discovery through market launch is costly, so time saved throughout that period delivers a significant return to the Sponsor, and helps to save and improve lives by bringing better drugs to market sooner.
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[i] “The Biopharmaceutical Research and Development Process”, Pharmaceutical Research and Manufacturers of America®, http://www.phrma.org/graphic/the-biopharmaceutical-research-and-development-process
[ii] Lorenzetti, Laura, “Drug companies are paying huge sums to fast-track FDA approval”, Fortune, October 20, 2015, http://fortune.com/2015/10/20/pharma-fda-vouchers-resale
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