NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Friday, December 19, 2014

Earlier this week, U.S. President Barack Obama signed into law a little piece of legislation that may significantly change the economics of making drugs or vaccines to protect against Ebola and other viruses in its deadly family.

And it might at some point provide a tidy windfall for Merck, the company now developing an Ebola vaccine designed at Canada’s National Microbiology Laboratory in Winnipeg.

The bill — S.2917, also known as “Adding Ebola to the FDA Priority Review Voucher Program Act” — dangles a sizable carrot meant to entice pharmaceutical companies into developing vaccines and therapies to prevent or cure infection with the virus and other related pathogens in the filovirus family.

Companies that manage to license an Ebola therapeutic in the United States are now eligible for a priority review voucher from the Food and Drug Administration — which is in effect a promise from the agency that it will swiftly process a future drug or vaccine approval application.

In late November, Merck bought the licence to develop the Winnipeg Ebola vaccine for $50 million from NewLink Genetics, which acquired it in 2010 for $205,000. A priority review voucher would likely be worth more than double Merck’s outlay, say those watching the program to see if it leads to the advances it is meant to inspire.