REPURPOSING - SOCIAL IMPACT BONDS FOR MEDICINE LAURA HAJEK IES17206 & MICHAEL ADAM IES17

Solution: Repurposing drugs Introduction 500 million people globally suffer from one of 7,000 diseases that lack a known, effective treatment Industry address only 10 to 30 additional diseases each year  250 to 700 years to find treatments for them all! Development of a new drug takes $2 billion and 10-15 years Solution: Repurposing drugs REPURPOSING SOCIAL IMPACT BONDS FOR MEDICINE LAURA HAJEK & MICHAEL ADAM

But how to fund this projects? Drug Repurposing But how to fund this projects? SIB Pay-for-Success ? T taking existing scientific or medical knowledge and technology that is “approved” for human use in one disease or condition Applying this knowledge and technology to other diseases or conditions Less risky way to have the opportunity to treat all disease Drugs which failed could be reused It allows innovation from practice REPURPOSING SOCIAL IMPACT BONDS FOR MEDICINE LAURA HAJEK & MICHAEL ADAM

Repetition: SIB 5 2 1 3 4 GOVERNMENT BOND-ISSUING ORGANISATION Payment based on defined outcomes Returns dependent on outcomes GOVERNMENT BOND-ISSUING ORGANISATION INVESTORS Outcomes contract 2 1 SERVICE PROVIDERS Funds Services Process 3 Outcomes measurement EVALUATOR 4 TARGET POPULATION REPURPOSING SOCIAL IMPACT BONDS FOR MEDICINE LAURA HAJEK & MICHAEL ADAM

SIBs Today Peterborough Prisoners Program UK 5 million pounds Newpin Child Care Program Australia US $7 million Central California Asthma Cooperative USA US $0.66 million REPURPOSING SOCIAL IMPACT BONDS FOR MEDICINE LAURA HAJEK & MICHAEL ADAM

Advantages and Criticism of Pay-for-Success Could mean improved efficiency and effectiveness of governments and non-profits government agencies will learn to quantify the costs of social issues nonprofits will learn to quantify the benefit of their interventions PFS is an important step toward making governments and nonprofits accountable PFS employs private capital to serve a social need, the money is well spent appropriate only for a narrow cohort of nonprofits: they must be able to effectively deliver and measure their social impact must be able to translate that impact into financial benefits or cost savings that are traceable inability of these other organizations to raise PFS funding could hamper their ability to deliver social services evaluating any nonprofit’s impact is both expensive and necessarily complex high transaction cost of the initial PFS contracts REPURPOSING SOCIAL IMPACT BONDS FOR MEDICINE LAURA HAJEK & MICHAEL ADAM

Potential of SIBs for Repurposing Creating an economic engine Funneling private investment Financial incentives Creates a new, potentially profitable market Investors can take risk in return for associated possible returns Returns can potentially beat benchmark interest of safe investments by a lot Social/ethic incentives Giving back to society Helping less fortunate people in need  “warm feeling” Leave a mark / cause lasting impact Positive image REPURPOSING SOCIAL IMPACT BONDS FOR MEDICINE LAURA HAJEK & MICHAEL ADAM

Creating an economic engine Funneling private investment Potential of SIBs Creating an economic engine Funneling private investment Possible synergies Increasing efficiency and succes rate Life quality improvements for sick people Financial and social incentives Savings for government Profits for investors Decreased healthcare cost More available funding Many projects/ trials Increasing number of found cures WIN-WIN-Situation – that is what for examples Cures Within promotes and wants to realise REPURPOSING SOCIAL IMPACT BONDS FOR MEDICINE LAURA HAJEK & MICHAEL ADAM

REPURPOSING SOCIAL IMPACT BONDS FOR MEDICINE Cures Within Reach Partners Global Cures Findacure Numbers for Good Costello Medical UK’s National Health Service Bridges Social Impact Bond Fund US-based global nonprofit organization Prepares to pilot a first SIB for the repurposing of generic drugs  “CureAccelerator™” REPURPOSING SOCIAL IMPACT BONDS FOR MEDICINE LAURA HAJEK & MICHAEL ADAM

Pilot SIB - Structure £ £? Sovereign Wealth Funds NHS as “Payer” Private Investors Impact Investors (e.g. Bridges Social Impact Bond Fund) NHS as “Payer” Clinical trials at disease centers of excellence in the UK Cures Within Reach Issues and manages SIB Selects 10 projects External evaluator will check the success factors: Improvements for patients Savings in health care Results - Success? Improvements for patients through repurposed drug? Savings for NHS? Sovereign Wealth Funds REPURPOSING SOCIAL IMPACT BONDS FOR MEDICINE LAURA HAJEK & MICHAEL ADAM

Vision of future Global SIB £ £? Private Investors Impact Investors (e.g. Bridges Social Impact Bond Fund) NHS as “Payer” Clinical trials at disease centers of excellence in the UK Cures Within Reach Issues and manages SIB Selects 10 projects External evaluator will check the success factors: Improvements for patients Savings in health care Results - Success? Improvements for patients through repurposed drug? Savings for NHS? UN / WHO / World Bank supported forming of global fund International funding from various investor types Sovereign Wealth Funds International NGOs specialized on drug repurposing If the pilot succeedes, they want to expand Globally spread clinical trials Linked through open source platform REPURPOSING SOCIAL IMPACT BONDS FOR MEDICINE LAURA HAJEK & MICHAEL ADAM

Conclusion If the pilot SIB is successful, it has the potential to eliminate the lack of economic incentive for drug repurposing. An “economic engine” could fire up and flush lots of funding into the sector, instantiating drug repurposing efforts globally. An increased rate of finding cures can potentially be life changing for millions of people. But keep in mind: Incentivizing the “payer” + sufficient success rate is crucial! Sovereign Wealth Funds General Take-Away: Finance is a fundamental lever to change the world – for the better or the worse! And that outcome depends on how the financing is handled. REPURPOSING SOCIAL IMPACT BONDS FOR MEDICINE LAURA HAJEK & MICHAEL ADAM

REPURPOSING SOCIAL IMPACT BONDS FOR MEDICINE Wisdom on Finance “Finance is a fundamental lever to change the world – for the better or the worse… the outcome depends on how the finance is applied.” Michael Adam Sovereign Wealth Funds General Take-Away: Finance is a fundamental lever to change the world – for the better or the worse! And that outcome depends on how the financing is handled. REPURPOSING SOCIAL IMPACT BONDS FOR MEDICINE LAURA HAJEK & MICHAEL ADAM

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