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Public-Private Product Development Partnerships for Global Health R&D: Issues & Challenges Suerie Moon Giorgio Ruffolo Doctoral Fellow in Sustainability.

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Presentation on theme: "Public-Private Product Development Partnerships for Global Health R&D: Issues & Challenges Suerie Moon Giorgio Ruffolo Doctoral Fellow in Sustainability."— Presentation transcript:

1 Public-Private Product Development Partnerships for Global Health R&D: Issues & Challenges Suerie Moon Giorgio Ruffolo Doctoral Fellow in Sustainability Science & Doctoral Candidate in Public Policy Center for International Development, Harvard Kennedy School of Government suerie_moon@hksphd.harvard.edu Presentation to: Designing Strategies for Neglected Disease Research Spring 2009 UC Berkeley: Law 284.26/Public Policy 290, 190 UC Berkeley: Law 284.26/Public Policy 290, 190 Professors Stephen Maurer & Amy Kapczynski 10 March 2009

2 Overview 1. Introduction: History, Organizational Form, and Funding 2. Strengths and Weaknesses 3. Targeted Diseases 3. Targeted Diseases 4. Access Provisions: Policies & IP Management 5. PDPs in the broader R&D Ecosystem 6. Governance Issues 7. Conclusions

3 1900s-1950s: National R&D efforts led to ‘trickle-down’ approach 1960s-80s: International bifurcated public/private system Public: e.g. UNICEF-UNDP-World Bank-WHO Special Programme for Research and Training in Tropical Diseases (TDR) Public: e.g. UNICEF-UNDP-World Bank-WHO Special Programme for Research and Training in Tropical Diseases (TDR) Private: e.g. Industry, globalizing intellectual property rights system Private: e.g. Industry, globalizing intellectual property rights system 1990s: Global health & neglected diseases Linkages: research, health, development Linkages: research, health, development Medicines as global public good: access to AIDS treatment Medicines as global public good: access to AIDS treatment Global health needs: 10/90 Gap and neglected diseases Global health needs: 10/90 Gap and neglected diseases 2000s: Global health for all? New system for Neglected Diseases (Type III): New system for Neglected Diseases (Type III): PDPs “a fad and a sacred cow”? PDPs “a fad and a sacred cow”? Trust and networks built; low-hanging fruit harvested Trust and networks built; low-hanging fruit harvested Honeymoon period over? Honeymoon period over? Diseases of global incidence? (Type I) Diseases of global incidence? (Type I) 1.1 Introduction: History of global health product development

4 Source: Ziemba, 2005. 1.2 Introduction: History of PDPs

5 1.3 Introduction: Definition & Examples of PDPs Definition: Public health driven not-for-profit organisations that drive neglected disease drug [product] development in conjunction with industry groups (Moran et al., 2005) 1.3 Introduction: Definition & Examples of PDPs Definition: Public health driven not-for-profit organisations that drive neglected disease drug [product] development in conjunction with industry groups (Moran et al., 2005) Aeras: Global Tuberculosis Vaccine Foundation Aeras: Global Tuberculosis Vaccine Foundation BVGH: BIO Ventures for Global Health BVGH: BIO Ventures for Global Health CONRAD: Contraceptive Research and Development Program CONRAD: Contraceptive Research and Development Program CICCR: Consortium for Industry Collaboration in Contraceptive Research CICCR: Consortium for Industry Collaboration in Contraceptive Research DNDI: Drugs for Neglected Diseases initiative DNDI: Drugs for Neglected Diseases initiative EMVI: European Malaria Vaccine Initiative EMVI: European Malaria Vaccine Initiative FIND: Foundation for Innovative New Diagnostics FIND: Foundation for Innovative New Diagnostics Gates/UNC: Gates Foundation/University of North Carolina Partnership for the Development of New Drugs Gates/UNC: Gates Foundation/University of North Carolina Partnership for the Development of New Drugs GMP: Global Microbicide Project GMP: Global Microbicide Project HHVI: Human Hookworm Vaccine Initiative HHVI: Human Hookworm Vaccine Initiative IAVI: International AIDS Vaccine Initiative IAVI: International AIDS Vaccine Initiative IDRI: Infectious Disease Research Institute IDRI: Infectious Disease Research Institute IOWH: Institute for OneWorld Health IOWH: Institute for OneWorld Health IPM: International Partnership for Microbicides IPM: International Partnership for Microbicides LAPDAP: LAPDAP Antimalarial Product Development LAPDAP: LAPDAP Antimalarial Product Development MDP: Microbicides Development Program MDP: Microbicides Development Program MMV: Medicines for Malaria Venture MMV: Medicines for Malaria Venture MVI: Malaria Vaccine Initiative at PATH MVI: Malaria Vaccine Initiative at PATH MVP: Meningitis Vaccine Project at PATH (Program on Technologies for Health) MVP: Meningitis Vaccine Project at PATH (Program on Technologies for Health) PDVI: Pediatric Dengue Vaccine Initiative PDVI: Pediatric Dengue Vaccine Initiative PneumoADIP: Pneumococcal Vaccines Accelerated Development and Introduction Plan PneumoADIP: Pneumococcal Vaccines Accelerated Development and Introduction Plan RotaADIP: Rotavirus Vaccine Program RotaADIP: Rotavirus Vaccine Program SAAVI: South African AIDS Vaccine Initiative SAAVI: South African AIDS Vaccine Initiative TB Alliance: Global Alliance for Tuberculosis Drug Development TB Alliance: Global Alliance for Tuberculosis Drug Development Source: Ziemba 2005

6 1.4 Introduction: Basic PDP model PDP is a non-profit entity that manages a globally- dispersed portfolio for a disease. PDP is a non-profit entity that manages a globally- dispersed portfolio for a disease. Generalize with great caution Generalize with great caution PDPs vary on: PDPs vary on: One disease or multiple One disease or multiple Breadth or depth in portfolio management Breadth or depth in portfolio management External or in-house research & production capacity External or in-house research & production capacity Relative emphasis on public vs private sector Relative emphasis on public vs private sector Level and diversity of funding sources Level and diversity of funding sources Definition of core and secondary missions Definition of core and secondary missions Approach to intellectual property management Approach to intellectual property management Governance structures and styles Governance structures and styles Scientific & political challenges faced Scientific & political challenges faced

7 1.5 Introduction: Basic PDP model Frequently-conducted functions include: Frequently-conducted functions include: Finances research ($ to and from private & public sectors) Finances research ($ to and from private & public sectors) Negotiates access to private sector compounds, experts, labs Negotiates access to private sector compounds, experts, labs Reduces risk of projects Reduces risk of projects Offers reputational benefits, CSR, employee morale Offers reputational benefits, CSR, employee morale Provides access to research with profitable spillovers (Amyris) Provides access to research with profitable spillovers (Amyris) Liaises with developing countries re: clinical trials & delivery Liaises with developing countries re: clinical trials & delivery Helps open up new emerging markets Helps open up new emerging markets Focuses on adaptedness and affordability Focuses on adaptedness and affordability Advocates for more R&D Advocates for more R&D Sometimes: Sometimes: Conducts in-house research (Aeras, IAVI) Conducts in-house research (Aeras, IAVI)

8 1.6 Introduction: ND R&D Funding to PDPs Source: From: Neglected Disease Research and Development: How Much Are We Really Spending? Moran M, Guzman J, Ropars AL, McDonald A, Jameson N, et al. PLoS Medicine Vol. 6, No. 2, e30 doi:10.1371/journal.pmed.1000030Neglected Disease Research and Development: How Much Are We Really Spending?10.1371/journal.pmed.1000030 Of $2.5 billion invested in ND R&D in 2007, 23% ($575 mln) routed through PDPs.

9 Source: Ziemba, 2005. 1994-2004 1.7 Introduction: PDP Funding 1994-2004

10 1.8 Introduction: PDP Funding Neglected disease research: $2.5 billion in 2007 Neglected disease research: $2.5 billion in 2007 Overall global health research: $125 billion/yr Overall global health research: $125 billion/yr Largely financed by bilateral donors and foundations, Gates in particular Largely financed by bilateral donors and foundations, Gates in particular Gates is majority funder of many PDPs (Aeras, FIND, IoWH) Gates is majority funder of many PDPs (Aeras, FIND, IoWH) Funding short term & uncertain: Funding short term & uncertain: Long-term strategic planning difficult Long-term strategic planning difficult Missed opportunities when rapid reaction needed Missed opportunities when rapid reaction needed Weakened negotiating leverage due to risk Weakened negotiating leverage due to risk Dramatically increased future needs as products move through clinical trials Dramatically increased future needs as products move through clinical trials Answers?: Answers?: Profit-making to underwrite research? Profit-making to underwrite research? Auctioning assets e.g. using PRV? Auctioning assets e.g. using PRV? UNITAID-type global tax? UNITAID-type global tax? CGIAR-type donor support? CGIAR-type donor support?

11 Overview 1. Introduction: History, Organizational Form, and Funding 2. Strengths and Weaknesses 3. Targeted Diseases 3. Targeted Diseases 4. Access Provisions: Policies & IP Management 5. PDPs in the broader R&D Ecosystem 6. Governance Issues 7. Conclusions

12 2.1: Strengths & Weaknesses: Challenges for Evaluation Evaluating individual PDPs difficult because: Varying disease profiles Scientific Economic Political Long lead times Complex expectations Varied approaches For a full discussion of the challenges of evaluating PDPs, see “Toward a New Approach to Product Development Partnership Performance Measurement,” June 2007, by FSG Social Impact Advisors.

13 Strengths: Renewed ND R&D Renewed ND R&D From 2000-2005: 0 to 63 drug projects = 8 or 9 new drugs expected From 2000-2005: 0 to 63 drug projects = 8 or 9 new drugs expected Affordability & adaptedness as central criteria for new products Affordability & adaptedness as central criteria for new products Harnessing private sector capacity for public ends (CSR) Harnessing private sector capacity for public ends (CSR) Light networked structure Light networked structure Global coordination of scarce investments Global coordination of scarce investmentsWeaknesses: Untested institutional model: will it work? Untested institutional model: will it work? Financial sustainability unclear Financial sustainability unclear Governance unclear (accountability, decision-making, transparency) Governance unclear (accountability, decision-making, transparency) Developing country participation is limited Developing country participation is limited Risk that private interests undermine public goals Risk that private interests undermine public goals Limited to ND (diseases without a market) Limited to ND (diseases without a market) Sources: Kettler & Towse (2001), Ziemba (2005), Moran et al. (2005), Widdus (various), Buse (various), Turner & Makgoba (2008), Moon (forthcoming) 2.2: Strengths & Weaknesses: What does the literature say?

14 2.3: Strengths & Weaknesses: Selected Achievements* New products: 1.Paramomycin (V.leishmaniasis in India) 2.ASAQ (malaria) 3.ASMQ (malaria) 4.Pediatric AR-LU (Coartem for malaria) Phase III clinical trials/equiv: 1. Moxifloxacin (TB) 2. Pyronaridine+AR (malaria) 3. Dihydroartemisinin (malaria) 4. Paramomycin (V.leishmaniasis in Africa) 5. FastPlaque diagnostic (TB) 6. LAM-based diagnostic (TB) 7. Synthetic artemisinin (malaria) *Based on study of only 8 PDPs – list is non-exhaustive.

15 2.4: Strengths & Weaknesses: Open Questions How many PDPs? One disease vs. Many? Compete vs Collaborate? Push vs Pull mechanisms? Access/affordability vs. Sustainability? Efficiency vs. Capacity building? Product development vs Delivery?

16 Overview 1. Introduction: History, Organizational Form, and Funding 2. Strengths and Weaknesses 3. Target Diseases 3. Target Diseases 4. Access Provisions: Policies & IP Management 5. PDPs in the broader R&D Ecosystem 6. Governance Issues 7. Conclusions

17 3.1: Target Diseases: Overview Dengue: PDVI Dengue: PDVI Diarrheal Disease: IOWH, Rotavirus: RotaADIP Diarrheal Disease: IOWH, Rotavirus: RotaADIP Family Planning: PATH, CONRAD, CICCR Family Planning: PATH, CONRAD, CICCR HIV: IAVI, SAAVI HIV: IAVI, SAAVI Hookworm: HHVI Hookworm: HHVI Malaria: MMV, EMVI, MVI, IoWH, DNDi, LapDap, FIND Malaria: MMV, EMVI, MVI, IoWH, DNDi, LapDap, FIND Meningitis: MVP Meningitis: MVP Microbicides (HIV & STIs): IPM, MDP, GMP Microbicides (HIV & STIs): IPM, MDP, GMP Pneumonia: PneumoADIP Pneumonia: PneumoADIP Tropical Neglected Diseases (Multiple): IOWH, DNDi, BVGH, FIND, Gates/UNC, IDRI Tropical Neglected Diseases (Multiple): IOWH, DNDi, BVGH, FIND, Gates/UNC, IDRI TB: Aeras, FIND, GATB TB: Aeras, FIND, GATB

18 3.2 Target Diseases: Priority-Setting Among diseases: no norms for how to measure needs and translate into investments Among diseases: no norms for how to measure needs and translate into investments Within diseases: PDP Scientific Advisory bodies Within diseases: PDP Scientific Advisory bodies

19 Overview 1. Introduction: History, Organizational Form, and Funding 2. Strengths and Weaknesses 3. Target Diseases 3. Target Diseases 4. Access Provisions 5. PDPs in the broader R&D Ecosystem 6. Governance Issues 7. Conclusions

20 4.1: Access provisions: Affordability Affordability a central part of the mission: But, most access provisions confidential (“trust me” approach): why? But, most access provisions confidential (“trust me” approach): why? Fear of loss of competitive advantage among firms Fear of loss of competitive advantage among firms Loss of negotiating leverage for PDP Loss of negotiating leverage for PDP Compromised patent application for firms Compromised patent application for firms Lack of detailed information on compound in early stages Lack of detailed information on compound in early stages

21 4.2: Access provisions: Strategies Limited Experience Limited Experience Access strategies include: Access strategies include: Global market segmentation (tiered pricing) Global market segmentation (tiered pricing) Country categories often undefined Country categories often undefined Challenge: Middle income countries Challenge: Middle income countries Public sector vs private markets in LMICs Public sector vs private markets in LMICs e.g. TB drugs in India e.g. TB drugs in India Exclusive licensing Exclusive licensing Cost audits Cost audits Target prices Target prices Open access (no patent or multiple licenses) Open access (no patent or multiple licenses) DNDi DNDi

22 2.3: Strengths & Weaknesses: Selected Achievements* New products: 1.Paramomycin (V.leishmaniasis in India) 2.ASAQ (malaria) 3.ASMQ (malaria) 4.Pediatric AR-LU (Coartem for malaria) Phase III clinical trials/equiv: 1. Moxifloxacin (TB) 2. Pyronaridine+AR (malaria) 3. Dihydroartemisinin (malaria) 4. Paramomycin (V.leishmaniasis in Africa) 5. FastPlaque diagnostic (TB) 6. LAM-based diagnostic (TB) 7. Synthetic artemisinin (malaria) *Based on study of only 8 PDPs – list is non-exhaustive.

23 4.3: Access provisions: Intellectual Property Management Ideally PDPs get access to desired compounds & technologies and maximize control over IP. Practically, will depend on negotiating leverage: Size of firm, Size of firm, Stage of development, Stage of development, Disease area, Disease area, PDP PDP Who paid? Who paid? How to strengthen leverage: Priority review voucher? Priority review voucher? Mandatory donor access provisions? Mandatory donor access provisions? Reliable, plentiful funding? Reliable, plentiful funding?

24 Source: Giorgio Roscigno, “Revolutionizing disease control with innovation in new diagnostics.” June 2006. Available at: http://www.finddiagnostics.org/about/innov_new_diag_for_disease_control_june2006.pdfhttp://www.finddiagnostics.org/about/innov_new_diag_for_disease_control_june2006.pdf

25 4.4: Access provisions: IP Management (cont’d) Generic Competition & Affordability: Factors to consider Non-patent barriers to entry: eg technology transfer Non-patent barriers to entry: eg technology transfer Economies of scale & competitor’s cost audits Economies of scale & competitor’s cost audits License to multiple producers when significant benefits expected License to multiple producers when significant benefits expected Follow-on innovation: No norm (yet) of open access No norm (yet) of open access Information sharing across PDPs Information sharing across PDPs “Giant sucking sound”:Unequal contributions by PDPs & private actors? “Giant sucking sound”:Unequal contributions by PDPs & private actors?

26 Overview 1. Introduction: History, Organizational Form, and Funding 2. Strengths and Weaknesses 3. Targeted Diseases 3. Targeted Diseases 4. Access Provisions: Policies & IP Management 5. PDPs in the broader R&D Ecosystem 6. Governance Issues 7. Conclusions

27 5.1 PDPs in the R&D Ecosystem Delicate balance: charitable vs profitable enterprise Effects of new market-based incentives? (AMC, PRV): Firms may seek market-value remuneration if available Small firms may enter disease areas and reduce PDPs’ ability to build portfolios and synergies across firms/research groups; Priorities of PDPs may shift toward products that can generate revenue to keep an organization running; PDPs may have stronger leverage with PRV PDPs may be reluctant to share information with each other if competing for the same valuable reward (e.g. PRV).

28 5.2 R&D Ecosystem: Unintended Consequences of Market-based Incentives “We note that commercialising low-value neglected disease markets, for example, through the use of advance purchase commitments or roaming patent extensions, is likely to increase industry activity (particularly by small companies), but at the cost of curtailing these positive behaviours and returning R&D to the more secretive and non-collaborative approaches that are characteristic of commercial R&D.” (Moran et al., 2005) Prizes, AMC, PRV could make a big difference, but… Prizes, AMC, PRV could make a big difference, but… Careful attention to system-wide effects of new incentives Careful attention to system-wide effects of new incentives

29 Overview 1. Introduction: History, Organizational Form, and Funding 2. Strengths and Weaknesses 3. Targeted Diseases 3. Targeted Diseases 4. Access Provisions: Policies & IP Management 5. PDPs in the broader R&D Ecosystem 6. Governance Issues 7. Conclusions

30 6.1 Governance: Transparency Transparent re: Composition of Board, Scientific Advisory, Stakeholders, Staff, Composition of Board, Scientific Advisory, Stakeholders, Staff, Limited transparency re: Funding sources Funding sources Budgets & Spending Budgets & Spending Very little transparency re: Decision-making procedures Decision-making procedures Agreements between PDPs and industry Agreements between PDPs and industry Cost of R&D Cost of R&D How much transparency should we expect or demand from a hybrid public-private entity? From a non-profit organization?

31 6.2 Governance: Endemic country involvement Clinical trials Clinical trials Research Research Production Production Governance Governance Governance BRICS vs LDCs? BRICS vs LDCs?

32 Source: Ziemba, 2005.

33 6.3 Governance: Sustainability Scientific: need to invest in capacity of more countries to contribute Scientific: need to invest in capacity of more countries to contribute Financial: need innovative financing model Financial: need innovative financing model Political: need broader base of support Political: need broader base of support How do PDPs fit into a rapidly changing institutional landscape? How do PDPs fit into a rapidly changing institutional landscape?

34 6.4 Governance: Accountability Accountable to: mechanism Donors: future funding Donors: future funding Partner firms: future partners Partner firms: future partners Patients: reputation Patients: reputation Public (as taxpayers and potential beneficiaries): reputation Public (as taxpayers and potential beneficiaries): reputation Hybrid structure = unclear expectations of accountability Example: FDA Priority Review Vouchers New neglected disease product gets tradable voucher for accelerated FDA review New neglected disease product gets tradable voucher for accelerated FDA review Worth up to ~300 million USD Worth up to ~300 million USD Who decides how to spend, how to invest, how to ensure public interest? Who decides how to spend, how to invest, how to ensure public interest?

35 6.5 Governance: Public goals and private partners Tension between public & private objectives: Impacts governance (secrecy) Impacts governance (secrecy) Impacts innovation (secrecy, patent applications, competitiveness, delays [moxifloxacin]) Impacts innovation (secrecy, patent applications, competitiveness, delays [moxifloxacin]) Impacts affordability (price discrimination) Impacts affordability (price discrimination) Impacts financial position: direct tradeoff between control over end-user access and PDP investment Impacts financial position: direct tradeoff between control over end-user access and PDP investment Impacts public trust: public money to private sector Impacts public trust: public money to private sector Private free-riding on PDP knowledge-generation Private free-riding on PDP knowledge-generation Unintended consequences of private incentives on public-private cooperation? Unintended consequences of private incentives on public-private cooperation?

36 7. Conclusions Advances of PDPs over old pure public or private R&D: Increased resources for R&D dedicated to diseases affecting world’s poorest Increased resources for R&D dedicated to diseases affecting world’s poorest Improved emphasis on access & adaptedness Improved emphasis on access & adaptedness Increased transparency (compared to private) Increased transparency (compared to private) Key questions re: PDP model: Financing: how to sustain? Financing: how to sustain? Governance: Who sets the agenda? How is IP managed? Transparency? Public accountability? Governance: Who sets the agenda? How is IP managed? Transparency? Public accountability? Sustainable: how to achieve scientific, financial, political sustainability of global public goods provision? Sustainable: how to achieve scientific, financial, political sustainability of global public goods provision? How do we manage the tensions inherent in harnessing private actors for public ends? What expectations should we have? How do we manage the tensions inherent in harnessing private actors for public ends? What expectations should we have?

37 Thank you Questions to: suerie_moon@hksphd.harvard.edu


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