Funding neglected disease drug R&D: The Industry R&D Facilitation Fund (IRFF) Dr M Moran mmoran@thegeorgeinstitute.org Pharmaceutical R&D Policy Project The George Institute for International Health March 2006

Neglected disease R&D: An active field 63 neglected disease drug projects (end 2004) Translates into 8-9 new neglected disease drugs by 2010 3 new neglected disease drugs registered since 2000

The main players This R&D activity involves public groups, Public-Private Partnerships, big and small companies, Contract Research Organisations and academics The bulk of R&D activity is driven by PPPs who now conduct 75% of all projects It is happening outside government policies and incentives and largely without government funding

Performance metrics (1) Health value: Public-private partnering delivered the highest health value products 12 of the 13 neglected disease products under the industry-alone model had a low overall health value to developing country patients 3 of the 8 “partnered” products developed between 1975 and 2004 had a major health impact e.g. halved global burden of river blindness in 10 years Levels of breakthrough innovation: 8% of industry finished products before PPPs 63% of projects now conducted by Industry under the partnered approach Half of all PPP projects R&D cost: The PPP approach is significantly cheaper than industry-alone approaches e.g. under $12 million from lab bench through to Phase I trials for synthetic peroxide AND $35 million to registration

Performance metrics (2) Drug development timelines Industry PPPs MMV projects TDR projects TB Alliance projects DNDi projects

Correlates of success Our analysis shows that: The correlates of successful drug R&D are: A sole focus on neglected disease drug development Early public involvement Early industry involvement Management with an industrial mindset and experience Adequate funding The PPP framework performs best because overall it most closely matches these correlates (Public + Industry + Neglected Disease focus) But within this framework PPPs performance varies corresponding to how closely they match the correlates of success The two key factors in performance variability were: Level of funding Level of industry input

A solution to these gaps: the IRFF Industry R&D Facilitation Fund Based on this information, we designed an incentive to: Support the best framework (PPPs) Address the two key gaps within this framework Funding Industry input a proposed long-term public fund to specifically fund industry involvement in PPPs Industry incentive NOT a direct PPP funding mechanism Industry R&D Facilitation Fund

IRFF: A simple 2 - step process How it works: PPPs contract industry deals as they do now Their funds are depleted restricting their ability to sign up new projects The IRFF subsequently reimburses PPPs for payments they have already made to industry (80%?) IRFF PPPs PPPs MNCs CROs SMEs

IRFF impact IRFF Increased cash flow allows PPPs to: Do more deals with industry Be more viable long-term company partners A stronger and more efficient R&D framework IRFF DC MNCs SMEs CROs Academic Translation PPPs PPPs MNCs CROs SMEs

The cost of the IRFF Average US $7 million/year per OECD country to subsidise industry input into all PPP neglected disease drug R&D to 2015 Average <$140 million/year until 2010 – plateaus at average $200 million/year IRFF would cover up to half of total PPP costs (industry R&D component)

Why the IRFF (1)? Funds and strengthens an active successful model rather than setting up another new approach The proposal is: Based on real-life data, projects, budgets and business models Developed in close consultation with industry and PPPs as to their needs “Jam today not jam tomorrow” for industry Addresses funding and performance gaps for PPPs

Why the IRFF (2)? Addresses government needs: Feasible amounts Simple Reduces public risk Rapid developing country health returns for the public investment Maximises value for government funding Funds the most effective approach (PPPs) Further improves performance within this approach Provides independent centralised information for donors Supports academic translation (and potential spin-offs) Widely supported by stakeholders

0 % 7% of projects: unknown partners (TDR still providing info)