OBJECTIVES: The U.S. Food and Drug Administration (FDA) assigns a “Priority Review” designation to drugs it believes offer substantial benefit over existing treatments.  However, the extent to which these drugs actually provide additional health benefits over non-priority drugs has not been well established.  We evaluated the incremental QALY gains of newly-approved drugs assigned a Priority Review designation and approved drugs without that designation. METHODS: We used the FDA’s website to identity drugs first approved by the FDA from 1993-2008 (n=474).  For each drug, we used the Tufts Medical Center Cost-Effectiveness Analysis Registry (www.cearegistry.org) to identify pertinent cost-utility analyses (CUAs).  We reviewed each CUA to ensure the drug was evaluated in accordance with the approved FDA label and that the comparator in the CUA was appropriate.  We found 538 relevant CUAs in the Registry.  We used multivariate regression to evaluate the relationship between incremental QALY gains (dependent variable) and the FDA’s Priority Review designation, adjusting for drug approval year and study sponsorship, i.e., whether the study was industry-funded.  The model was adjusted for multiple ratios and multiple CUAs for a drug.  RESULTS: Of the 474 newly approved drugs included in our sample, 192 (40.5%) were assigned a Priority Review designation by the FDA.  Drugs designated as priority review were associated with an increase in incremental QALY gains (0.311; p<0.05), after adjusting for study sponsorship and drug approval year.  CONCLUSIONS: Drugs designated for Priority Review by the FDA showed increased QALY gains relative to approved drugs without this designation.  These findings suggest that the FDA actions have been appropriate in applying the Priority Review designation to newly-approved drugs, in that these drugs offer substantial benefit over existing treatments compared to the benefits provided by non-priority drugs.