The Economics of Orphan Drugs: The Effectiveness of Priority Review Vouchers on the Development of Drugs to Combat Neglected Tropical Diseases

Neglected tropical diseases (NTDs) such as malaria and cholera affect more than 1.4 billion people a year. Pharmaceutical companies have historically neglected these diseases, as the affected populations are also some of the world’s poorest. In 2007, a bill was signed into US law that created a Priority Review Voucher (PRV) program. This program grants developers of drugs for neglected diseases a waiver that reduces the time needed for FDA drug approval. This waiver can be sold to other pharmaceutical companies hoping to expedite the process for potential blockbuster drugs. This law is still in its early stages at the time of this paper, and it would not be feasible for any drugs to be fully approved due to the long drug development timeline. By analyzing FDA clinical trial data, though, initial trends can be analyzed for the development of drugs for NTDs. The clinical trial data does not fully support the effectiveness of the PRV program, but recent sales prices support that the market incentives are working correctly.