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

2. 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

3. 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

4. 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

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

6. 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

7. 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

8. 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

9. 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

10. 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)

11. 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

12. 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

13. 0 %
7% of projects: unknown partners (TDR still providing info)