In a noteworthy deal, Gilead Sciences agreed to pay $125 million to Sarepta Therapeutics for a priority review voucher. But one Wall Street analyst expressed disappointment over the price tag and suggested the deal raises questions about how much these controversial vouchers can fetch going forward.

Priority review vouchers were created several years ago by the Food and Drug Administration to encourage development of pediatric and tropical disease medicines. These vouchers are valuable to drug makers, because companies can later redeem them when seeking approval from the FDA for another medicine to treat any illness. And the agency is obligated to review the other drug in six months instead of the standard 10 months.

Moreover, a drug maker can sell a voucher to another company. The FDA has issued more than a dozen vouchers, but so far, only a few have changed hands. Until today, though, the prices for reported deals have been climbing.

In July 2014, the first such sale took place when Sanofi and Regeneron Pharmaceuticals spent $67 million to buy a voucher. Three months later, Gilead Sciences paid $125 million for a voucher. In May 2015, Sanofi paid $245 million for a voucher and then, in August 2015, AbbVie spent $350 million for a voucher. Gilead reportedly bought a second voucher, but details were not disclosed.

But with the latest transaction, Wall Street analysts believe these rising values may not be sustainable. A drug maker, after all, has to justify what Leerink analyst Joseph Schwartz called the “increasingly astronomical’’ upfront payment with the potential benefit of winning a faster FDA product review.

In part, this reflects the recent passage of the 21st Century Cures Act, which renewed the pediatric voucher program and may eventually increase the number of such vouchers awarded by the FDA. Why? The language may widen the patient population for which a drug may be used by broadening the definition of a rare pediatric disease to include symptoms that emerge any time before 18 years of age.

Put another way, diseases that are extremely severe in childhood but tend to be less severe in adulthood may qualify for vouchers. As a result, Schwartz believes the value of these vouchers could start to decline if the supply increases. “We cannot help but wonder if this [latest] transaction reflects a broader decline in interest among bidders or an undervalued asset sale,’’ he wrote to investors.

There is another factor to consider, according to Baird analyst Brian Skorney. He noted that there are “fewer mega-blockbuster launches on the horizon,’’ which suggests that big drug makers may have less impetus to seek a voucher to accelerate a review of a medicine they bet can generate outsized sales. Given the circumstances, he wrote to investors that the $125 million that Sarepta is getting from Gilead amounts to a “decent deal.’’

We should note that, while vouchers have been embraced by drug makers and patient advocacy groups, they have also generated controversy for a couple of reasons.

Last year, FDA officials told the Government Accountability Office that they had not seen any evidence the program has encouraged increased development of drugs for rare pediatric diseases. The FDA officials also maintained the program hinders their ability to set public health priorities, because agency staff must provide priority reviews of new drugs that would not otherwise qualify.

At the time, FDA officials cautioned that drug makers might redeem vouchers for medicines that would otherwise receive a standard 10-month review for illnesses that already have available treatments, such as diabetes or cholesterol. In effect, they complained that the voucher program allows a company to “purchase’’ a priority review at the expense of other important public health goals. For its part, the GAO issued a report saying it was soon to know whether the program works.

Meanwhile, the tropical disease voucher program continues to spark criticism. Doctors Without Borders and other groups have been lobbying Congress to close what they say are two loopholes. They point to language that allows a medicine to earn a voucher, but does not have to be a new treatment for people affected by neglected diseases. The group also is concerned that companies are not required to ensure any drug that earns a voucher is accessible and affordable.

Separately, a bill was introduced in Congress to create a voucher program in hopes of spurring development of generic drugs for which there is little or no competition and prices of existing medicines are deemed out of reach for many patients.

STAT

Ed Silverman can be reached at ed.silverman@statnews.com. Follow Ed on Twitter @Pharmalot.