Drug or a vaccine for a tropical disease. Or, for a rare pediatric disease, I didn't put medical countermeasures. Medical countermeasures would potentially be in here. Medical countermeasures being biocerror.

Or pandemic threats. Um, that… that program's on hold, so I'm not sure about that. This is potential there, too. But for the first two categories, you get a priority review voucher. What's a priority review voucher? I'll tell you in a minute.

Or, if you have a product controlling mosquitoes. So, let me see if I can… do I have a laser here that… or at least, uh…

Looks like maybe I've got… what is this a… oh, that's a pin.

Forgive me, I'm playing around with my, uh, options for… well, I'll just move my arrow around for now.

So, um, or if you have a product that controls mosquitoes.

You might be eligible for a vector expedited review voucher. And the last, if you have a new antimicrobial.

Uh, there might be some things happening in Europe in that space. So I was in Brussels on Friday, speaking to.

At a technical briefing for the members of the European Parliament.

They're wanting to take action to motivate more development of antimicrobials.

They're thinking about some incentive mechanisms, which could include a priority review voucher.

Or, uh, an exclusivity voucher. I'll tell you what all this is in a moment. But all of this is to say, if you have one of these technologies somewhere in your organization.

Uh, this information might be helpful. Okay, so I want to tell you about priority review vouchers.

And then I'll tell you about vector expedited review vouchers, I'll give you some policy updates, what's happening in the U.S. And what's happening in Europe.

And, uh, again, I'm… I'm keeping an eye on the Q&A, I'm keeping an eye on the chat, I'm keeping an eye on to see if any hands go up.

And I hope that Ashley will also help me, in case I overlook something, someone will interrupt me and say there's a hand.

So we wrote this paper in Health Affairs in 2006. And it became law the following year. So you see this is this paper here I highlighted. It was the lead… it was the lead article in Health Affairs.

It was Henry Grabowski and Jeff Moe and me. Published this paper proposing the Priority Review Voucher. We called the paper Developing Drugs for Developing Countries, because at the time, we were focused on tropical diseases.

Later, the voucher program expanded to Rare Pediatric. But here's a quote from Senator Brownback. We worked with Senator, uh, Sam Brownback, a Republican.

And Senator Sherrod Brown, a progressive. Joe Lieberman was also somewhat involved.

And, um, they were all members of the Senate Health Education Labor Pension Committee.

And every 5 years, there's must-pass legislation, uh, regarding the FDA, regarding the FDA user fees.

2007 was one of those years, so our paper became law in 2007.

Okay, so what is the priority review voucher due? I think a key point here that a lot of people are concerned about, so…

Important message here. For every voucher, there are two drugs. Here, I've represented as a blue drug and a red drug.

There's the blue drug wins the voucher. It's for a tropical disease or rare pediatric disease.

The red drug uses the voucher. And that can be any disease.

So why is that? Well, this drug, the blue drug, is not very profitable.

Uh, this might be for river blindness, or in the case of my Duke colleague, a.

Ultra-rare pediatric disease, like, 100 babies a year, born without the ability to make T cells.

So they're gonna get infections and not live very long. Um, about her biologic saves those babies, okay? But it's only 100 babies a year, so…

Given R&D costs, that's not going to be super profitable, but it is profitable.

If this drug also gets priority review. So, both of these drugs get priority review.

This one, for the good deed that's not profitable. This one gets a priority review because it uses a voucher.

So, if you do the good deed. We're gonna give you faster review of a different drug.

They both get fast review, but this is the one that has commercial potential. Speeding an unprofitable drug isn't profitable.

Speeding a drug for river blindness is not profitable. That drug's not going to make any money anyway.

But, if you get a second drug that you can speed.

That has value. And the voucher is transferable. You can sell it to a different company. Why? Again, my Duke colleague has no use.

For that voucher for another drug, she's not working on other diseases.

She needs the ability to sell it to another company. Literally, there was a voucher, for example, for river blindness, onchocerciasis, not profitable.

And in fact, it was developed by not-for-profit in Australia. They got a… they got a voucher.

And, uh, they sold it for about $100 million. To someone else who needed it. They didn't have any use for it.

The only value to them was attracting investment. So because of the potential to… to get a voucher and sell it, they were able to get, I don't know, $15 million up front. I should know, the amount is actually public, they've announced it, but they got, let's say, $15 million from investors.

Because the potential of maybe, in a few years, getting a $100 million battle trip if they succeeded.

Okay, so just a reminder, there's the first. Drug, unprofitable, probably.

Earns a voucher. An example is onchocerciasis. The second drug uses the voucher. An example here.

So, examples of the blue drug, vouchers have been awarded for Lishmaniasis, oncocerciosis, malaria, tuberculosis, dengue, chagos, Ebola.

A lot of rare pediatric diseases, smallpox. Vouchers have been used for HIV, diabetes, cholesterol.

Migraine. Obesity, uh, etc.

A few other notes about these two drugs. The voucher is awarded after the blue drug gets approved, and it can be used for the red drug.

Both the blue and the red drugs get priority review at the FDA.

So the FDA looks at their paperwork, and about 6 months instead of 10.

The blue drug gets priority review at the FDA, because it's really novel and important.

The red drug gets priority review at the FDA because it's using a voucher.

And the red drug might not necessarily be a totally new drug, it might be an existing drug.

For a new application. Think about the GLP-1 drugs, these miracle drugs, these miracle obesity drugs, turns out there's a lot of potential indications for these.

And so you could use the voucher. For a new indication, not necessarily… for FDA review for a new indication, not necessarily an entirely new drug.

This is a list of diseases that are eligible for vouchers. If there's no parentheses, it was one of the originals in 2007.

If there's parentheses, the disease eligibility was added later, either by the FDA or by Congress. So, for example.

Uh, when the Ebola, uh, outbreak happened, the U.S. Congress added.

Ebola to the list of eligible diseases. That was in 2014. That was led by my senator, Richard Burr.

Who is also on the Health, Education Labor Pension Committee at the time.

Uh, other diseases, uh, Chagas, for example, added by the FDA in 2015.

Congress added rare pediatric diseases, and that's a big category. I don't give it much space on this slide, but that's a big category. Congress added that in 2012.

Congress added medical countermeasures in 2016. But, uh, that has lapsed, and, um, I don't know whether Congress will bring it back.

So, these are the first drugs you win a voucher for.

These are the second drugs that you use a voucher for. And again, it's… you can use it for anything, but it's been used for.

Hiv, for example, Gilead's awesome. Hiv drug Bictarvy used it.

Uh, Eli Lilly's very lucrative obesity drug, Manjaro, uh, used it.

Um, Teva used it for one of their… for their new anti-migraine drug, an injectable drug.

Sanofi used it for a cholesterol drugs, Sanofi used it for a diabetes drug, etc.

So, uh, the voucher shortens your regulatory time. So instead of the FDA looking at your paperwork in 10 months, it looks at it in 6. Your clinical trial time has not changed. You still have to… run, uh, the same clinical trials.

The difference is the FDA looks at your paperwork faster. As you get on the market sooner and start making sales sooner.

Here's a list of vouchers awarded. Those are the… that's the bars.

So, became law in 2007. Got off to a slow start. Why? R&d takes time?

Also, there was really limited awareness of the voucher program because.

Came out of, you know, the idea came out of some… university faculty, so nobody really heard of it. Also, people weren't really confident that it was for real, that it had value. What FDA really review things faster?

It, uh, it wasn't really until… drug companies had some more time to run their clinical trials, takes a couple… two, three years for Phase 3 trials.

Even, you know, and if you're going back to Phase 2, it's going to be even longer.

Um… And it took some sales to generate some confidence. But the market did really take off.

So the bars are the number of vouchers awarded, and you can see that in recent years, it's been largely a rare pediatric program.

The line is the average price for voucher sales in that year.

And initially, investors were really cautious. But after a few were sold, they gained more and more confidence, and eventually prices got to about $300 million, which is what we predicted in our 2006 paper. Our 2006 paper, we thought.

We predicted that voucher prices would get to be about $300 million. They did.

But then they came down, in part because of supply and demand of vouchers.

I think the price may have come down too low. We sort of helped talk the price down, unfortunately, because we said.

The price should be more like $100 million or less. Based on sales of recent drugs and previous years.

But I… we… we… our sample of… drugs in recent years was actually kind of an unlucky sample of kind of bad years for drug sales, and it's really taken off more.

The price has recently ticked up, and in my opening slide, I showed you that Bavarian Nordics sold their voucher for $160 million this year.

So prices have been, let's say, around $150 million this year.

So the value of this comes from getting to market 4 months faster. Is 4 months really worth a lot of money? Well, it's not just those 4 months, it extends beyond that, because.

This, uh, the sales curve shifts forward. But then at each year, you're at a higher point on it, because the sales don't immediately jump up.

They, they, uh, they grow over time. And, um, and with that growth, there does continue to be value for years, so…

The value of the voucher is the area between those two curves, and so it's not just the first four months that extends beyond that.

But for a drug like, uh, Gilead's drug, their HIV drug, Bictarvy, which generates billions in sales each year.

Priority review voucher has a lot of value.

Okay, and uh… delighted to answer any questions, so don't hesitate to raise your hand if something's not clear to you. This is very confusing to a lot of people. It just sounds really weird. There's two drugs.

Why is this one going fast? Um, the intuition is not obvious, so, uh, very happy to ask questions if you have them.

I also want to tell you about vector expedited review vouchers. That was also a proposal by.

Jeff Moe and I, uh, who proposed the. Earlier voucher with Henrik Grabowski, and then this one we did with Nick Heyman. Nick, from the Innovative Vector Control Consortium.

Um, so we propose… we proposed 3 voucher programs. Two in the US, one in Europe.

Two for drugs, one for vector control. The one in Europe has not become law, although that's what was in Brussels talking.

At the European Parliament about on Friday. There's a chance it would this year, although I think it's more likely the Europeans will do something else, and I'll tell you what that is, because I think that's very relevant for you.

Uh, if you're… well, if you're in the antimicrobial space. Um, so, we proposed the priority review voucher for drugs and vaccines for tropical diseases and, uh, rare pediatric diseases and medical countermeasures.

We proposed the vector expedited review voucher. We got better with acronyms by the second time out there. So the vector expedited Review Voucher, or VIRV.

Um, that gives you faster time at the EPA, not the FDA, the EPA, the Environmental Protection Agency. So, if you.

Develop a means of controlling vectors, like mosquitoes that carry diseases.

Then, uh… and… and vector control has made. Arguably a bigger difference with malaria than have drugs and vaccines for malaria. So vector control is a big deal.

If you develop a way of controlling those pests. Then you get faster review for a different product, maybe an herbicide.

At the Environmental Protection Agency.

Yeah, so thanks for the question, Stacy. What do you need to apply for a receipt of a voucher? So, you do need to inform the FDA.

That you want a priority review voucher. But to get a priority review voucher or vector expedited review voucher.

Um, you need to be… the… this blue one needs to be approved by the FDA. So you actually have to have FDA approval.

Before you get the voucher for the other one. Now, you can talk to the FDA before approval about this. For example, the FDA will tell you.

If you're seeking a rare pediatric voucher, the FDA will tell you in advance if your disease is rare and pediatric. So you want to.

Claim to the FDA, fewer than 200,000 Americans have this disease.

And it's disproportionately affecting kids. I'm not sure about the language about the pediatric, so I don't know exactly how we.

Establish that it's pediatric. Um.

But, um, you get the voucher, if you get approval of the drug, but you do need to tell FDA you're applying for this.

And the FDA will tell you well in advance. Whether, um, whether your rare pediatric. In certain cases, with that blue drug, it's sufficiently important that maybe you've already got, like, breakthrough status on that drug. You're already having conversations with the FDA.

So, uh, hopefully they can give you some as early a sense of this as possible.

And I see, uh, I see a link, uh, in the chat also.

Good, good, good. About rare pediatric designation, thank you. Thank you. Uh, and so that was… that was in the chat, and let me just, um…

Can I… I'm gonna type this in… yeah, I'm gonna type this answer.

So I just gotta… I guess just got a link in the chat for some FDA information that I passed along.

Great question, thank you. Um… delighted to have other questions.

And follow-ups, if that wasn't clear, Stacy.

So, I'm talking about the vector X value review voucher Program, and one reason I'm so eager to talk about this is nobody knows about it. I told you that.

The Priority Review Voucher Program took a while to take off.

Because people just weren't really aware of it, in part. And R&D takes a while.

But there's only been one vector expedited review voucher awarded. One voucher has been awarded, and the Verve, whereas.

80 priority review vouchers have been awarded, so… This vector expedited review voucher, and part of it's really new.

I was passed, uh, during the holidays in 2022, so… just two and a half years old.

But, uh, I'd really like for universities to be aware of this.

In case you have some vector control product, the idea would be… at least what we've seen in the priority review voucher space, the drug and vaccine space.

Is that investors have been willing to. Pay some money up front.

To a university lab. With the… and in return, get some share of the voucher sale if the product succeeds. The idea would be to get your researchers some money up front.

Although, if they've already developed the product, don't need the money up front, now there's an opportunity to talk to, um.

Product makers about whether they would be interested in licensing the product.

You guys know your world better than I do, but I just want to throw out all this information in case it's helpful.

Yeah, great question. This… it feels… it feels dirty, doesn't it? I presented some of this, uh, to another audience earlier this week, and they, yeah, they said it felt dirty.

That, um, look. What we're trying to motivate is… is for you to work on the blue drugs.

And so, why is there a sale for the red drugs? That feels really dirty.

So, it's to create value. Because this first drug, in terms of commercial value.

So, the example I give here is this river blindness strike. There's a little not-for-profit in Australia called Medicines Development for Global Health. The CEO is Mark Sullivan.

Doing amazing work. For society.

And, um, he can't get any investors for a river blindness drug, because his goal is to… develop a drug and then sell it at cost or give it away if he can.

And so, nobody wants… Rich people don't have oncocerciasis, river blindness.

So, uh, to create… resources for him.

We're leveraging the red pill. So, the red pill has commercial value. It also has patient value.

So again, the example I gave, for example, is Gilead's McTarvey, which is maybe one of the most valuable commercial.

Commercially valuable uses of a voucher. It's actually not so bad that HIV-AIDS patients in the United States got Biktarvy in 6 months instead of 10. That doesn't feel dirty.

It's kind of nice that they got it earlier. Why wasn't the FDA gonna review Bictarvy faster anyway? It's not that novel, it's a combination drug, there's already good HIV drugs out there. It happens to be a little bit better.

Um, but… But FDA wasn't going to review it fast, so now FDA reviewed it fast, so FDA reviewed that red drug faster.

Which is nice for U.S. Patients. And… and that will… and that…

By reviewing it faster, it created value for somebody else through the voucher, which helped the blue drug.

So now you're helping the blue drug and helping the red drug.

And it's all kind of free. Except it's not free to the FDA. The FDA has to now review the paperwork faster. So that's a drag for the FDA.

Instead of a 6-month… instead of a 10-month review, now they're doing a 6-month review. That's worked for the FDA.

To try to anticipate that in our 2006 paper. We said, okay, let's try to… how can we make this easier on the FDA somehow? Well.

For one thing, when you use a voucher, you also have to give the FDA a user fee, which the FDA sets.

So the FDA can set the user fee. I think currently it's about $3 million.

So when you use a voucher, you give the FDA $3 million. And each year, the FDA anticipates, okay.

You're gonna get about 4 vouchers. Redeemed this year. Not awarded, but redeemed, used for faster review.

When you have 4 vouchers, $3 million user fee, that's $12 million. Okay, they get an extra $12 million in their budget.

And, uh, and now they can hire more people. With $12 million, let's say you could hire another, I don't know, 25 more people, more reviewers. Now, you can do everything faster.

So now we're re… now FDA has more resources. We're reviewing everything faster. It's a win-win-win.

That's our goal, anyway. It's a win for the blue drug, because.

And we really need that. It's unprofitable. It's a win for the red drug, that's actually useful for Americans to have that drug sooner.

And it's fine for the FDA, because they're getting the user fees, and.

Initially, the FDA didn't love us, of course. Why are you making us do this?

But I think we've had a lot more buy-in from the FDA in recent years. They're really proud of all the blue drugs being developed. They brag when, you know, one of these blue drugs is approved, they issue a press release. This is the first drug for this rare disease, this is the first drug.

For this awful tropical disease. So, uh, it sounds pretty weird.

But I'd say, arguably, it's… My argument, obviously I'm a little biased.

My argument, it's a win-win-win.

Yeah, what's the value of priority review vouchers? Yeah. So, when we do these calculations, when we predicted the voucher prices would reach $300 million.

We did that by looking at sales of top drugs. In, uh, in the early 2000s. We published this in 2006, we were looking at sales of drugs from, like, the late 90s and into the 2000s.

And, okay, what are its sales over time? And let's do a net present value calculation. Let's do that finance calculation of shifting those sales forward.

So, uh, take the sales curve from some drugs that have been on the market in the past and shift it.

More recently, we've looked at, actually. We've got a working paper on this, we'll publish this someday, I hope.

Uh, looking at sales of drugs that use vouchers. What's their sales curve look like over time? Using tools of finance, net present value, what if we shift that forward?

So, so, so that's the calculation. Um, you know, and if you're just trying to guess, also, past sales are pretty…

Good predictor of current, so I really think that priority review voucher prices should stick at around.

150, and hopefully when we publish this paper, that'll kind of help it stick, because our… preliminary analysis is in that ballpark.

Thanks for the question, Osama.

With regard to value of the vector expedited review voucher, it's going to be smaller.

Uh, herbicide sales are just much smaller than sales of an HIV drug.

And so, um… I would… I would estimate that the value of a vector expedited review voucher would be in the.

Tens of millions of dollars. So, the value today of leveraging that would be in the millions of dollars. So we're not talking about a huge return.

But, if you already have the technology and already have some resources to move that technology forward, hopefully it's cheaper to develop.

It's much more expensive to develop a drug or a vaccine because you have to clear, uh… Uh, you have to do all this… these clinical trials, Phase 1, Phase 2, Phase 3, and clear FDA. Hopefully, the development is cheaper for the vector control products.

Because the value of those vouchers, the sale price of those is going to be lower.

Okay, this was our paper proposing the vector expedited review voucher.

The Verve, better acronym. Okay, I want to talk to you about some things happening in 2025, also.

The rare pediatric program. Uh, will end… in, um…

Fall of 2026. Unless Congress takes action. Will Congress take action?

I think so. I can't promise it, but I think so.

Why will Congress want to renew the rare pediatric voucher program?

It helps sick kids, and it's free. Members of Congress like to help sick kids for free.

Members of Congress are being lobbied right now. Um, there are… the rare disease community is very active.

Uh, moms and dads are the kid who's suffering. Are very active trying to figure out how to save their kids' life.

And, uh, and they will go to Congress and walk the halls and ask Congress to renew this. So I think Congress will.

Um, on the House side, jurisdiction is under the. House Energy and Commerce Committee, and they just voted unanimously. All the Republicans, all the Democrats.

Voted to, uh, reauthorize the rare pediatric voucher Program, so… Um, so my guess is that…

It will be reauthorized. Can't promise it, though. Um, there's always… turns out there's a little uncertainty in Washington, and sometimes it's hard to pass bills.

Uh, turns out the government's shut down right now. So, not everything's easy.

But I think it'll get done. One quick aside on the government shutdown. The FDA is still operating reasonably well in some way, or let me take that back. And Trump won.

When Scott Gottlieb was FDA commissioner. The FDA kept operating during a shutdown.

Because they relied on user fees. I mentioned that $3 million user fee when you use a voucher, you have to provide a user fee.

The FDA not… was able to keep afloat during the previous shutdown, thanks to user fees.

Okay, let me see what Colleen's got to say.

That's right. That's right. So, great, great, uh, clarification from Colleen. So, when you're submitting that blue pill.

You need to let FDA know. In your new drug application or biologic licensing application.

That, um, that you plan… that you would like a voucher. There have been at least one case where… some stuff happened after approval, but I certainly wouldn't rely on that. So you… yeah, so when you're filing.

Your application… when you're submitting your data for approval with the FDA for your drug or biologic.

Um, be sure to ask for that voucher. Thank you, Colleen.

Okay, so Rare Pediatric is potentially sunsetting. If it does… The priority review voucher price is going to go through the roof.

Because, um, there'll be fewer vouchers available. If the rare pediatric were to end forever next year, I think voucher price would go to $300 or $400 million, because we'd only be getting one or two.

Tropical disease drugs a year, maybe 2 or 3 with a higher price.

Um… But I… but I, again, I think, uh… I think rare pediatric will be renewed by Congress. Congress likes to help sick kids.

Especially when it's free to the Congress. They don't have to, you know, raise the debt ceiling, they don't have to, uh… create new taxes to pay for it.

The… this summer, uh, FDA Commissioner Marty McCary announced a new Commissioner's Priority Review.

Pilot. Um, still don't know what exactly this is gonna be, because none of these have actually been awarded yet.

I think it's not quite accurate to call… I would have used… Commissioner didn't ask me. I don't know the commissioner, but if you did, I would have called it, um.

Commissioners, uh, breakthrough, uh, platform designation. Because this is not really… it's not exactly priority review, it's really rolling review.

And it's not exactly for a drug, it's really more for a platform.

But, uh, and this is not so relevant. Actually, this is not so relevant for tech transfer offices, but I'll just mention this in case there's a little confusion with the priority review voucher Program.

It's a good sign, it's sort of signaling that at least the commissioner kind of likes the priority review voucher concept.

Well, this is not exactly the same application. So the idea is a drug company is working on really important diseases.

I think as a company, I guess it could be a university, I don't know, but somebody working on really important diseases.

Would get this designation, and then they would get rolling reviews with the FDA. So as you get.

Data available, you give it to the FDA, and then the FDA can just make the decision faster. When you do the final submission, the FDA's already seen a lot of the stuff up to that point, and they can make a decision really fast.

Okay, I mentioned that we proposed 3 vouchers, the 2 in the U.S. Became law, the one in Europe has not, so we said the Europeans should do this, too. They have not yet.

Europeans are going to do something this year on antimicrobials. They're probably not going to do the priority review voucher, they're probably going to do an exclusivity voucher.

Either way, if you have. An antibicrobial that's sufficiently novel.

You could benefit from this. So we think a priority review voucher in Europe for an antimicrobial, if there's just a couple each year, could be worth about 100 million euros, which is about $100 million, effectively doubling the value of, uh.

Of developing a product. If you get the US and the European. So, tuberculosis drug, for example.

Would get a priority review voucher as a tropical disease, and we'd get an antimicrobial voucher.

Uh, in Europe. What's more likely than a priority review voucher in Europe is an exclusivity voucher.

So rather than getting you to market faster on the front end.

It gets you… it keeps you… it delays the patents longer on the back end.

Which has a downside. So the Europeans are gonna maybe delay.

Patents on that, um, on that voucher-using drug. Again, the priority review voucher Program has nothing to do with delaying patent expiration.

But the exclusivity voucher, which the Europeans are thinking about. Would delay a… patent expiration and would delay generics.

The bad news about that is it delays generics. The good news about that is it has enormous value. So, uh…

During the discussion, panel discussion, I was in on Friday in Brussels, they were talking about about $500 million.

Euros. So about 5 times what I just, uh, said for a priority review voucher.

Would be the value of a, um… exclusivity voucher.

So that's really valuable for the company, and if it's really valuable for… it's really valuable for the red pill.

To get an extra year, that's worth $500 million, so if the red pill is valuable, it's gonna make the blue pill more valuable. It's gonna be a stronger incentive to develop the blue pill, the antimicrobial.

So, um… So that might happen this year. The Europeans are gonna pass major pharmaceutical legislation this year. They've been saying this for a couple years.

Ever since COVID, they've been coordinating more on pharmaceutical policy. And they're gonna pass something, I think.

It's probably going to be the exclusivity voucher. But if people really don't like extend… effectively extending patents, and people really don't like delaying generics, they might default.

To the priority review voucher, which is… less powerful, 500 million euros versus 100 million euros, but still an incentive and it doesn't delay generics.

We'll see if that happens. But if you're working on the antimicrobial space, I think there's a chance there's going to be a new incentive.

Coming from Europe. Soon. This year?

Okay, I'll conclude, and then, uh, delighted to answer other questions if you got them.

Uh, so we discussed a couple priority… a couple voucher programs.

Uh, we discussed the priority review voucher, the vector expedited review voucher, and maybe a third, an exclusivity voucher.

And a reminder, there's a blue pill, the red pill is two products.

Um, and the Priority Review Voucher Program could expand if Europe does it, or it could contract if the rare pediatric goes away. So there's still some political uncertainty with all this.

Here's my webpage. I don't do a great job of keeping up with it, but there's a little video there.

And there's some other information at priorityreview Voucher. Dot org.

Uh, I'm gonna throw it back to Ashley, but I'm gonna keep an eye on the Q&A, in case anybody has questions.

Hey, David, there was a question in the chat. I want to make sure that you got that one, too. I think that's the only thing that we might have… Yes.

No, no problem, it just came in a few minutes ago.

Oh, I see it. Yeah, yeah, yeah. Thank you, Ash. I'm sorry I missed that, and Mark… I did… I did overlook that.

Yeah, so it's a two-year window. Let me, uh, if I may, I'll share again.

Okay. Whoops. Where did I talk about that? Yeah, so, it's funny, so…

I think, on the one hand, Congress is clever, on the other hand, they weren't.

On the one hand, Congress was really smart. Uh, to realize that.

There should be a window between the time the program doesn't get renewed.

And when vouchers are stopped being awarded, because it takes a long time to do R&D. Imagine you make a big investment in a rare pediatric disease in Phase 3, and then the thing sunsets.

So, knowing that, they said, okay, the program might end this year.

And then we'll have this 2-year window. Where vouchers will still be awarded, and people can still have confidence in this.

That makes a lot of sense. However… Congress knows that! So Congress knows it can expire, because it didn't really expire.

So, the fact that they have this 2-year window means that Congress is not in a big hurry.

And so, on the one hand, I think it was really brilliant to set this up this way, so that people have time.

But on the other hand, Congress knows they have time, so… That's the reason for this quirky window, so…

Um, it technically expired in 2024, but it didn't. Fda is still… Awarding rare pediatric vouchers, and indeed, FDA is still awarding rare pediatric designations, so they're still designating.

Even though the thing might sunset. Because they think it's gonna come back.

So, um, so that's the reason for that, that, that quirky two years.

There was a decent chance that FDA… that Congress was going to renew it last December, right before the holidays.

Right before the holidays, Congress passes. An omnibus bill.

They don't love every part of it, they kind of compromise, they hold their noses, they get it done before the holidays, and they go home.

But last December, they were going to do that, including reauthorization of the rare pediatric.

And Elon Musk said, boy, this bill is really fat. Nobody could possibly read this whole bill, which is true, they're just…

You know, every… a lot of stuff's piled in. Some staffers read each element, but not everything.

So Elon Musk said, this is way too fat. Congress cut it down. One of the things that got cut out was the rare pediatric.

So, um, my guess is… Elon's not around, uh, right now.

They'll do it in next December, there'll be a big bill with a lot of stuff in it.

That's my wild guess. And that's happened before. Uh, I think it was around December 2016?

Was when it got reauthorized on a previous time. Okay, let me go back to the chat, see if I got anything else.

Yeah, what share of the voucher goes back to the licensor?

It depends. It depends on what you negotiate. So that's up to you.

So when you're negotiating a deal with, uh… with a partner, like NIH did with Bavarian Nordic.

We saw the example there that Bavarian… that NIH got 20%.

Which seems maybe about right? You know, because the Phase 3 testing is going to be borne by, say, a Bavarian Nordic, and that's going to be very expensive, and…

Um… And again, uh, with the… well, I'll just leave it at that. So it's up to negotiation.

20%… seems about right, um, depending on what still has to be done in terms of, say, Phase 3 clinical trials.

Looks like there's maybe one question in the Q&A that came in while you were answering those two chats.

Good, okay, thank you. Okay, um, yes.

You're welcome.

Yeah. Yeah, great question from Alexandra. So.

Let me share screen again…

So his question is, why is Europe doing this rather than this?

And why is Europe doing some… why did the U.S. Choose this, and Europe chose this? Okay.

So, a couple possibilities. One… so… The second possibility that Alexander gave is that.

Uh, the exclusivity voucher's more valuable, and he's absolutely right. It's more bang for the buck.

Or, sorry, not more bang for the buck, that's not true. More punch.

Uh, more bang. Um… And likewise.

With regard to number one, it's definitely the case that industry likes exclusivity vouchers. They'd rather have the $500 million voucher than the $100 million voucher, not surprisingly.

So, industry is out there supporting the exclusivity voucher. Who's out there advocating for a priority review voucher?

Not really anybody. Because, um, I mean, me, that's why I was in Brussels advocating for it.

And fortunately, there's at least a few members of the European Parliament who are sympathetic who invited me.

But, um, industry wants the more… lucrative exclusivity voucher.

And people who don't like pharma companies don't want any of this stuff.

You know, they're afraid that this could lead to pharma companies making money, and they find that distasteful.

Um, and they say, you know, let's give more money up front instead, and say, push funding or grants or something like that.

But actually, that's not feasible, because the… the European Union can't easily fund.

Grants, easily anyway, because Europe can't… Europeans… the European Union can't easily tax and spend.

So the reason, like, they like these voucher schemes is they're indirect financing.

It's hard for, like, the European Union, rather than individual member states, to tax. Okay.

So, companies like the exclusivity voucher. They're okay with a priority review voucher, but again, they'd rather get the bigger.

Bang, and so nobody's really advocating for it. It's more of the case that.

If the exclusivity voucher fails. Then there will be advocates for the second best from their perspective, Priority Voucher.

The other issue is… other difference between the U.S. And Europe, though, is that… An exclusivity voucher is less harmful in Europe than in the US for this reason. Okay, so in the US, we have really high brand prices, and we have…

I'll stop sharing again. Um, in the US, we have really high brand prices, and we have low generic prices.

So we have lower generic prices than the Europeans do. Why? Because we have a massive market. The U.S. Is a big market.

A bunch of generic companies come in, and they compete the price down.

A given European member state, Spain, is a pretty small market. Okay, so the Europeans, as you know, have lower brand prices and higher generic prices.

So the delta there of delaying patents is not as big of a difference as it is in the U.S.

And part of that… part of the value of the voucher is actually.

Losses to the generic, but we don't care if the generics make less money.

So, um… so… The delta is smaller.

And some of the value is coming from not people paying more, but the generics capturing less. Because the generics, actually.

Make… so, in the US, the generics really make razor-thin margins, a very competitive space. European market, they're actually making more of a margin, they're capturing more of the value.

Hope some of that was useful for you, Alexander.

And then we have a new one in the chat from John, yeah.

Good.

Okay, and so I'm mostly focused on the blue drugs today being involved with.

Uh, with vouchers. So, um… to get funding for your unprofitable drug.

You rely on the voucher. For the red drugs, the profitable drugs.

You're going to be developing those anyway. Because you're gonna make money on those. I mean… they're gonna develop the drugs for cholesterol and HIV and diabetes, assuming they're sufficiently.

Scientifically promising to… Those are potential commercial markets that are likely to be lucrative.

Um, so how often, though, is the… is the… And I… I don't know.

I think there's a sec… I don't know if it's public or not, I think there's a second case where the NIH.

Was involved in a voucher sale and received proceeds from it.

Um… I can think of a couple not-for-profits, Medicines Development, Global Health, and Mundo Sano, who've been… and Drugs for Neglected Diseases Initiative.

Who've been involved in vouchers and received some proceeds from them.

Um, again, my Duke colleague was involved with one of these.

Um, but I don't know, I… Yeah, I'd love to have more transparency on…

How many of these… It's possible, uh…

It's possible, John, that it's small. If this is not part of your negotiations, so for example.

If universities are not thinking about the fact that that blue drug could get a voucher, and we should retain some value associated with that.

Uh, there may be some missed opportunities there. So, it's a long way of saying I don't have a great answer for that one, John, although I'm making a note. I think it would be interesting to look at, um.

Uh, see if I can dig that out in some data. If any of you have been involved, I have a great story for me, I'd love to hear it.

So if you've been involved in licensing any of these technologies, I kind of know about the.

The NIH examples, just from talking to NIH people, so I'd love to talk to you. Also, if you happen to be involved in the vector control space, again, I don't know anybody working on.

Pursuing a Vectrex Valley Review Voucher. I think they're probably out there. I just do most of my work in the.

Drug and vaccine space, so I don't talk to the backdoor control people very much at all, and I'd love to learn more about what they're doing and whether.

If there's any sort of research we could do, or, or… talking to people, that could be helpful.

So if you've got stories for me of past successes or failures.

Or if you've got potential for something moving forward. Uh, would love to be in touch with you.

Oh, that's fabulous. Thank you, Amit.

Please keep me updated.

Looks like we have a raised hand, let me…

Okay.

Where are my participants?

And, uh… I don't… I scroll down and see if there… My names are all alphabetized, so I don't see any raised hands.

Well, I think it's someone.

But feel free to let me know if there is one.

Maybe it was, um, a mistake, but if anybody who has any… if anybody wants to raise their hand, please feel free.

Okay.

Nobody has any more questions for David, we can end in early, but we do have some time, so don't hesitate.

There's some coming in now, or at least one. Another one from John.

Yeah, how does this relate to, uh. The activities of the Trump administration. So, I mentioned to you that U.S. Prices are here and European prices are lower, and the President would like those to converge more, either bring down the U.S. Price or bring up the European price, or both.

Um, does this relate to the voucher program at all? It certainly, um… If it's making…

So, on the one hand, it's potentially helpful for drug makers to get the market to market faster and make money faster. That helps pharma companies, but if you're decreasing.

Their prices, decreasing their sales. The potential effect in Europe is.

That, um, either European prices will go up. Or that, uh, Europeans will be delayed in getting drugs. The British.

Are… I'm gonna say cheap, uh, they put a value of a year of life at 20,000 to 30,000 pounds. This is nice. The National Institutes of Clinical Excellence, the National Health Service.

Put a value of a year of life on 20,000 and 30,000 pounds, that's 30,000 to $40,000. That means your drug… can't cost more than $40,000 for a year.

And if you've got a miracle cystic Fibrosis drug, or gene therapy.

Uh, you got a problem. You're probably not going to be covered, uh, by the British government.

Anyway, uh… I think all of this is pretty minor.

Uh, what I've seen so far of the Trump activities so far.

Um, I think it's… I think some list prices for cash pay people will come down, but very few Americans are paying cash for drugs. That's not gonna have a big effect.

Pfizer said it will… it will provide low prices for Medicaid. Pfizer's already provided low prices for Medicaid. Under law, Pfizer has to give the U.S. Government its best price in the U.S.

Or a big rebate, and it has to pay rebates when it raises its price.

We're already getting pretty low prices for Medicaid. I do think the British will pay a little bit more.

But then they'll end up clawing it back, so British prices will go up a little bit, and then they'll say, oh, but pharma companies need to give us a share of their profits.

So, uh… I think this is not going to have… The action so far…

Uh, will not have a major impact.