In 2007, Congress created a fast-track review voucher at the US Food and Drug Administration (FDA) as a reward for approval of a drug for a neglected disease. The developer of a neglected-disease drug receives a transferable voucher for faster review of any other drug. Similar fast-track...

We analyze how rewards and penalties for follow-on drugs affect innovation, profits, and social welfare. Examples of policies that reduce the rate of return for follow-on drugs include the Orphan Drug Act and standard review at FDA, as well as the proposal of the former editor of the New England...