Against the stark backdrop of the FDA job cuts, stakeholders in the rare disease space find themselves facing heightened uncertainty.
In late March 2025, the Trump administration moved forward with its plan for massive layoffs across health agencies under the US Department of Health and Human Services (HHS), including the FDA. These cuts came as part of broader efforts to reduce government size, with the White House announcing a reduction of 10,000 positions across key health departments, shrinking the HHS workforce from 82,000 to 62,000.
Alongside these changes, a key programme—the priority review voucher programme for paediatric rare diseases—also expired. The programme, which was signed into law in 2012, incentivises the development of treatments for serious and rare childhood diseases by offering sponsors a transferable voucher granting priority review for another drug application, thus expediting the FDA review process.
However, US Congress failed to reauthorise it as part of a wider healthcare policy package and the programme expired or entered its ‘sunsetting’ phase on 20 December 2024. Combined with reduced FDA capacity, the lapse of the priority review voucher programme could contribute to a slowdown in investment in rare paediatric drug development, says David Ridley, a health economist at Duke University’s Fuqua School of Business, Durham, North Carolina. Without clear incentives, companies and investors may hold back, putting future treatment pipelines at risk.
Why wasn’t the paediatric priority review voucher programme renewed?
The failure to renew the priority review voucher programme is closely tied to shifting political priorities. Some believe the current administration does not fully support the incentive-based models that have historically supported rare disease treatments. “The previous administration was very focused on rare and orphan diseases, and I think that this administration is more focused on different priorities,” says a US-based regulatory lawyer with expertise on the FDA.
Ridley explains that Congress’s decision to slim down its legislative packages over the past months meant that vital measures, such as the priority review voucher reauthorisation, had to be omitted. “Republicans in Congress wanted to pass really slim legislation…the priority review voucher reauthorisation is uncontroversial; however, it’s tied to some other paediatric [measures] that some people disagree on,” he says. He suggests that this broader political context, rather than a specific policy opposition, led to the priority review voucher programme’s expiration.
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By GlobalDataNonetheless, the FDA can still award vouchers until 2026. But the uncertainty makes it harder for companies to initiate new products, says Ridley. Investors are hesitant to fund initiatives if they think the programme could remain in limbo. “We saw this with previous sunsets that some drug developers didn’t get funding for their work until after the reauthorisation, so there are surely drug developers [and investors] sitting on the sidelines,” Ridley says.
The opposition to the priority review voucher programme
Despite widespread support for it, the priority review programme does face some opposition, particularly around the practice of companies redeeming these vouchers for non-rare disease drugs, while critics argue vouchers should only be granted for rare disease treatments. However, supporters, including Jamie Sullivan, vice president of policy at the Washington DC, US-based EveryLife Foundation, defend the broader scope of the programme.
“The point is that the priority review voucher gets redeemed for a drug that wouldn’t otherwise qualify for priority review. So that the trade-off is that a kid who would not have a treatment otherwise, without this incentive, might have hope, and we’re okay with that trade-off,” Sullivan explains.
While some argue that high-revenue drugs end up receiving vouchers unnecessarily, Sullivan counters that the programme remains critical to ensuring investment in the development of rare disease treatments, while there is potential for high financial returns later in the process.
An earlier proposal to limit priority review vouchers to only rare disease products was shot down last year. “That would decimate the market value of them, because two-thirds of rare disease drugs qualify for priority review anyway,” Sullivan says, defending the need for a broader application of the programme to maintain its efficacy.
The case for reauthorisation
Proponents of the programme argue that its renewal is critical for incentivising innovation in rare paediatric diseases. Rare paediatric diseases, often genetic, are particularly complex to research because it is challenging to conduct clinical trials with children. Also, she says, “You’re going to need to be able to deliver a treatment early to show benefit, yet we have a system where you don’t diagnose that disease until it’s too late.”
“The innovation environment is so challenging. Priority review vouchers derisk that investment a little bit, or at least add the potential for more return on that investment,” Sullivan says, which is particularly relevant for smaller companies without a large financial cushion.
It is generally assumed that the voucher programme will be reauthorised before 2026, according to Ridley, but he says investors remain wary. He notes the increasing value of these vouchers on the secondary market—ranging from $100m in 2024 to $150m this year (2025). “If we thought they were totally going away, the prices would go up above $300m. But that increase in voucher prices [from $100m to $150m] illustrates the fact that investors are nervous and the pharmaceutical and drug developers are nervous,” Ridley notes.
The impact on drug development
While there is hope for the voucher programme’s eventual reauthorisation, its current stalled status poses significant risks to drug development in the paediatric rare disease space.
Without the voucher incentive, smaller companies may simply choose not to invest in these rare conditions. The regulatory lawyer explains, “Without the potential to make $100m off the development of a drug that can help a small number of people, thousands of people rather than millions of people, it’s going to be hard to convince companies to really invest in those kinds of drugs.”
Moreover, Ridley says investors are getting increasingly cautious and may be willing to fund projects only after the programme is reauthorised to limit their risk.
Broader regulatory and political landscape
The uncertainty surrounding the priority voucher programme is part of a larger picture of reduced focus on rare disease and public health priorities in the face of budget cuts and shifting policy priorities. The recent wave of FDA job cuts, which have reduced the agency’s workforce significantly, is expected to lead to slower drug approvals and less communication between the FDA and industry.
“We’re expecting significant delays. I’m expecting a significant reduction in interactions between the agency and sponsors, and I think that we’re going to see a lot more insularity coming from the agency, where the agency isn’t as open and isn’t as forthcoming as it has been in the past,” says the regulatory lawyer.
Sullivan echoes these concerns, noting that significant divisions within the Centers for Disease Control and Prevention (CDC) were cut. “The blood disease and genomics group that does a lot of surveillance for some rare diseases is gone, and there’s no one to answer emails.”
Despite these setbacks, there are still efforts to secure the future of rare disease advocacy. Sullivan points to the FDA’s rare disease innovation hub, which was established last year and continues to operate. “We’re going to fiercely fight for that,” she says.
While advocates remain hopeful, the uncertainty surrounding the priority review voucher programme’s reauthorisation and the broader healthcare cuts, means the future of paediatric rare disease research hangs in the balance.
“We’ve got to think innovatively and find innovative ways to push things forward,” Sullivan concludes.
