Funding the Development and Distribution of Medicines and Diagnostics for Developing and Emerging Economies Proposal for an International Finance Facility for neglected diseases – IFFnd – SecureAid December 2007

Innovative Funding for Vaccine Distribution Sustainable Vaccination Programmes Secure Aid Push Funding e.g. IFF IFFIm – Funding GAVI vaccination programs. US$1bn bond issues Nov 2006, a further US$3bn of sovereign pledges to draw on MARKETS PUBLIC PRIVATE

Creating a Global Fund to Develop Affordable Medicines Effective allocation of Capital Secure Aid Making a critical intervention in the drug development Pipeline, fixing a gap to ensure a sustainable flow of affordable medicines from Research to Utilisation Diversified Portfolio of Medicines, Vaccines and Diagnostics IN CLINICAL DEVELOPMENT Currently 16 to 20 Phase I to Phase III TREASURY FUNCTION – ENSURING CAPITAL IS AVAILABLE TO KEEP A PIPELINE FLOWING

Creating a Global Fund to Develop Affordable Medicines Effective allocation of Capital Secure Aid Diversified Portfolio of Medicines, Vaccines and Diagnostics IN CLINICAL DEVELOPMENT Push Funding e.g. IFF Pull Funding e.g. AMC, Subsidies, Prize funds ODA Grant Funds Private Funds Making a critical intervention in the drug development Pipeline, fixing a gap to ensure a sustainable flow of affordable medicines from Research to Utilisation MARKETS PUBLIC PRIVATE TREASURY FUNCTION – ENSURING CAPITAL IS AVAILABLE TO KEEP THE PIPELINE FLOWING

LARGE SCALE HIGH IMPACT INTERVENTION IN HEALTCARE SUPPLY FOR EMERGING ECONOMIES Harness private sector financial and management skills to create sustainable and affordable pipelines of medicines formulated for developing and middle income countries SECURITISE PLEDGES to CREATE LONG TERM LARGE SCALE FUNDING 1. Secure Sovereign Pledges and Prize Funds structure and issue bonds. Assure affordable pricing. 2. Manage Development with Existing teams. 3. Engage with The Global Fund procurement and distribution processes. SUSTAINABLE FUNDING for SELF SUFFICIENT HEALTHCARE 1. Incremental substitution of Trade for Aid as economies strengthen. 2. Engage the Intellectual Capital in emerging economies to assure self sufficiency 3. Transfer private sector investment and management skills PURPOSEMODELOBJECTIVES SOURCING MEDICINES Large Pharma and Not for Profit Pharma (PPP) DISTRIBUTION The Global Fund OVERVIEW Private Sector Skills creating Public Sector Impact SECURING PLEDGES 1. Developed countries 2. Middle income Economies – BRICS 3. Differential price contributions Create a series of Structured Funds in which the proportion of Public to Private proportions are incrementally reversed with each fund Secure Aid

Slide 6 *Global Alliance for Neglected Diseases (GAND) BACKGROUND BACKGROUND on IFFnd/*GAND It has been 3 years in formulation aided by a prior 3 years on work on a commercial model. It is being informally led by SecureAid with support from a shadow board, including Goldman Sachs, Linklaters, PwC, Deloitte, leading PDPPP and GFATM. The Netherlands and German governments are prepared to discuss support and UK Treasury will consider discussing support if another country takes a lead. GFATM will take proposals to Japan prior to G8. GFATM, GBC, GAVI, WHO, Large Pharma, World Bank, SHELL Rockefeller and Gates Foundations are in discussion and leading businesses are being approached. Similar to IFFIm/GAVI, US$4bn over 20 years is being targeted for IFFnd/GAND OBJECTIVES Operationally IFFnd funds will enable a Treasury function to be instituted for efficient allocation of capital to maintain a pipeline of affordable, essential medicines from development to distribution Strategically IFFnd provides a financial architecture, structured to allow commerce and middle income and developing governments progressively take on the management and funding of healthcare as their economic growth accelerates assisted by the private sector

Secure Aid Slide 7 Improve Health to Reduce Poverty PURPOSE Assist developed countries meet their Millennium Development Goals (MDG) and combat poverty by providing wide based, balanced and sustainable public healthcare programmes The predominantly grant based aid from developed world is inadequate to provide for healthcare in developing and middle income countries and existing efforts too fragmented This proposal integrates large scale, long term, (20 year term) business driven healthcare models that will accelerate economic growth and progressively enable a business model that integrates, finance, operations, and logistics to accelerate self-sufficiency in healthcare The financial component of the integration was pioneered in November 2006 by UK government resulting in a first US$4bn debt issue the International Finance Facility for immunisation programmes (IFFIm) implemented with exemplary governance.

Secure Aid Slide 8 Involving Capital Market Innovation to help solve Poverty MODEL Involve the capital markets to provide 20 year term, debt based, up to US$4bn funding for a sustainable pipeline of medicines and vaccines to combat existing diseases and disease resistance (IFFIm provides a foundation on which to build this approach collaborating with G8 governments) During the 20 year funding term economies will grow and allow partial repayment of G8 government guaranteed bonds by commercial receipts from various sources OR the size of healthcare funding to be expanded by these receipts Portfolios of medicines and vaccines in clinical development (some 24) are being assembled to spread risk and ensure that while some fail there is a sustainable flow of treatments (Similar to upstream oil prospecting that feeds downstream distribution to keep share holders consistently satisfied.) Commercial returns from distribution in developed and middle income countries, travellers, expatriate and military markets will be secured and expand the overall healthcare funding. In addition differential co-payments will be secured, initially these will be small, derived from middle income and developing countries but will grow as their economies accelerate by benefiting from improved healthcare A key driver is to partner with, and fund, the ‘Intellectual Capital’ from developing and middle income countries to enable progressive self sufficiency and involve large public and private organisations.

Secure Aid Slide 9 Collaborating to enable Trade to incrementally replace Aid OBJECTIVES Trade needs to substitute for grant based aid to enable the currently developing countries become self sufficient and the proposed IFF for neglected diseases, IFFnd, has been formulated to accelerate this process Operationally IFFnd funds will enable a Treasury function to be instituted for efficient allocation of capital to maintain a pipeline of essential medicines from development to distribution Strategically IFFnd provides a financial architecture, structured to allow commerce and middle income and developing governments progressively take on the management and funding of healthcare as their economic growth accelerates assisted by the private sector 2007 provides a point of takeoff and all components for this wide based integrated approach are in place. Business ‘know how’ will be incorporated in the committees that are being formed to guide logistics, sustainable project development and relationships with developed and developing governments to make a significant contribution to improving healthcare and reducing poverty. All individuals and organisations contributing to IFFnd can gain beneficial exposure from association with government and large public and private institutions whose collective input will enable a new approach to combat poverty and improve health

Secure Aid Slide 10 Parties and Benefits Balancing the interests of Participants ORGANISATIONSBENEFITS Bond Holders Get long dated, high rated bonds Government Guarantors Meet MDGs plus a reducing % of Public funds over repeat bond issues PPPs & Pharma Replicable, assured, long term funding and accessible markets LMICs - differential payments Get accelerated public healthcare & economic growth Commercial Players Can grow equity returns in emerging markets

Secure Aid Slide 11 Enabling Public Health to accelerate Economic Growth For further information contact Peter Brown SecureAid 1 Nash House 18 Park Village East LONDON NW1 7PY United Kingdom TEL: +44 (0) MOB: +44 (0)