The world needs a new mechanism to stimulate innovation. In this paper, we propose a mechanism by which the U.S. government should create a transferable exclusivity voucher program to incentivize the development of infectious disease drugs.
Under the scheme, the government will reward developers who create treatments or vaccines for pre-defined, neglected diseases by issuing coupons to extend the marketing exclusivity of another high-demand product. Vouchers can be used or sold.
Each voucher will cover two drugs: a drug for which the developer receives an incentive and a drug for which the developer receives extended exclusivity. The rationale for this approach is that the first product, such as a malaria drug, may not be profitable. Therefore, expanding its exclusivity does not provide meaningful incentives. Instead, extended exclusivity will shift to a different, more profitable product.
Solve the problem
Exclusive coupons have been Discussion since at least 2000. MeterMPs in Reassessment of the Antimicrobial Products Act 2018. However, the exclusive coupon proposal has yet to become law.
Support for previous voucher proposals has been limited due to concerns about costs to patients and windfall profits for developers. These early voucher proposals also struggled to gain support from stakeholders due to concerns about whether the product would be novel enough for patients to use.
We believe Congress could design a voucher program to address these issues.in the recently published white paper, we propose a plan that provides $1.5 billion worth of awards to drug developers and addresses concerns about cost, windfall, innovation and access. Here are four principles a voucher program should follow.
First, an exclusive coupon program should limit excessive costs for U.S. patients. Fortunately, drug costs and generic and biosimilar savings are mostly paid for through insurance premiums and taxes. In this way, the costs of delaying the expiration of patents on profitable products are spread widely, just like a tax. Furthermore, while an exclusivity extension may delay cost savings, it is still politically feasible. E.g, Drug exclusivity to encourage pediatric clinical trials There is broad support.
Second, coupons should provide incentives large enough to cover the research and development costs of infectious disease products, but not create excess profits.The cost of a successful clinical trial is approximately $1.3 billion (excluding preclinical costs), the $1.5 billion Target Voucher award will incentivize drug developers to advance treatment candidates through clinical trials and help fund efforts to make products available in low- and middle-income countries.
To reduce excess profits, we propose variable exclusivity extensions. Exclusivity will be set to the expected number of quarters it will take for the product to reach a given threshold of sales revenue based on previous year sales. The exclusive extension is for a minimum of three months and a maximum of one year.
Third, vouchers should only be issued to developers of high-quality innovations that have not been launched outside the United States for more than three years. We recommend setting up a target product profile that outlines the desired product characteristics that must be met to qualify. The U.S. Food and Drug Administration (FDA) will be responsible for reviewing products submitted to the voucher program to ensure they meet established eligibility criteria.
Fourth, voucher programs should ensure that people in low- and middle-income countries have access to medicines. Voucher programs should require companies to submit access plans that are publicly available on the FDA website to promote accountability.
The need for new treatments for neglected infectious diseases is enormous. The COVID-19 pandemic is a chilling reminder of the dangers infectious diseases can pose to society. The benefits of a new treatment for a global infectious disease are likely to outweigh the costs. Now is the time for new policy mechanisms to encourage the development of much-needed medicines and vaccines. Now is the time to explore exclusive coupons.
Although the authors wrote this article while working at Duke University and received funding from the Bill and Melinda Gates Foundation, their views do not necessarily reflect those of the University or the foundation.