Innovative R&D Financing Discussed At Geneva Health Forum

The recent Geneva Health Forum captured the fevered pitch in the larger ongoing conversation around innovative financing for research and development for public health. A new report on a voluntary pooled fund for neglected diseases was discussed at the forum.

The Geneva Health Forum took place from 19-21 April.

The public health community in Geneva is preparing for what seems to be a busy early summer. Close on the heels of the Geneva Health Forum, early May will see the open-ended meeting of the Consultative Expert Working Group on Research and Development: Financing and Coordination [CEWG]. This will be followed by the 69th World Health Assembly. Later in June, the United Nations Secretary-General’s High Level Panel on access to medicines will release its final report.

Given this year’s theme for the forum of ‘Sustainable and Affordable Innovations in Healthcare’, the conference discussed innovation across a whole range of issues. This included sessions on the multi-sectoral approaches to health in the era of SDGs, in dealing with viruses such as Zika and Ebola, on health cooperatives, on the IT revolution for health, innovation solutions for migrations and health, access to innovation at scale for Universal Health Coverage, and on healthcare insurance, among many others. There were also side events on clinical trials and on the future of global public health procurement.

At an open session on April 21, on ‘Innovation Funding for R&D and Access to Global Health’, TDR – the Special Programme for Research and Training in Tropical Diseases – presented the proposal for a global financial mechanism. The session’s speakers at the Geneva Health Forum included representatives from TDR, Médecins Sans Frontières (MSF), and the University of Geneva.

The financing mechanism was based on a new report released in March 2016 on Health Product Research and Development Fund: a Proposal for Financing and Operation. Hosted at WHO, TDR is a global programme of scientific collaboration to fight diseases of poverty.

The TDR report will also be discussed at an open-ended meeting of member states on 2-4 May and their recommendations from this meeting will be brought to the 69th World Health Assembly being held from 23-28 May. (The findings of the report also were presented to the High Level Panel at the public hearing held in London earlier this year.)

Development of drugs hinges on finding potential markets for future commercial products. This has resulted in inadequate research into the diseases of poverty. Neglected diseases represent a high proportion of the disease burden in Low and Middle Income Countries (LMICs). But so far there have been no universally agreed funding priorities.

The TDR report is a direct outcome of the WHO Consultative Expert Working Group on Research and Development: Financing and Coordination (CEWG) process and is part of past World Health Assembly Resolution WHA66.22 which considered the recommendations made by the CEWG.

The principles of the fund are to meet the desired outcome of the CEWG recommendations by supporting open innovation and de-linking the cost of R&D from the final price of the technology to ensure it is accessible and affordable to populations in developing countries.

This proposal sets out a financial mechanism that combines a priority-setting process with a voluntary pooled fund that operates at a global level under WHO. This will be a first and could provide the focus for a realistic discussion about global health R&D priorities, Robert Terry from TDR, a speaker on the panel, said. The report includes a range of new financial modelling tools and mechanisms, to guide the fund’s operation and address R&D needs for diseases affecting developing countries.

According to the TDR report, the “financing and coordination mechanisms would help to address some of the most critical funding bottlenecks and shortages.” One such mechanism is the direct fund. The fund would need to grow over a 10-year period to reach a steady state of funding of approximately $100 million per year supporting around 40 projects.

“Following a mixed strategy of repurposing known products as well as supporting some innovation for new drugs, diagnostics and vaccines if it was established in 2017 by 2030 the model estimates that the fund might be supporting the R&D for 3 simple repurposed drugs, 1 new drug based on a new chemical entity, 1 complex re-purposed drug,” Terry from TDR, said in an email.

He also clarified that this is dependent on there being a constant rate of new projects to support due to the attrition (failure) of existing projects at the various stages of development. The model covers pre-clinical through to launch following phase III trials so it is not covering the whole cost of the R&D development chain and does not cover the costs of manufacture, he added.

While some experts on the panel felt that the $100 million figure was a fraction of the costs needed to develop a drug, there was recognition that initial capital was important to spur innovation. By broadening the base of investors, the risk will be shared, because pooled funding introduces economy of scale into the R&D system as many donors are able to act together.

Terry highlighted the importance of reaching agreement between countries, identifying the necessary resources and sharing and accessing the information necessary to make better choices about priorities in global health.

Based on earlier CEWG recommendations, member states had also requested WHO to establish the WHO Global Observatory on Health R&D. The WHO Global Observatory on Health R&D will collect data to map and classify into types of health-related R&D, the actors involved and the timelines and funding needs. This will assist in identifying gaps and selecting global priorities for R&D in diseases of poverty. While the TDR report will also tie into the work of the Global Health Observatory, experts say that the real challenge lies in collecting and analysing the data.

Manica Balasegaram of Médicins Sans Frontières (MSF, Doctors Without Borders) said during the discussion that there is a fundamental disconnect on what is required in the field and what is being developed. He also said that there is not enough information on data and methodology while arriving at the actual costs of producing drugs.

According to the TDR report, only four out of 336 new chemical entities (NCEs) registered between 2000 and 2011 were developed and approved for neglected diseases. It also found that in 2009, approximately US$ 2.4 billion, among a global total of US$ 240 billion in annual health R&D investment, was allocated to neglected diseases.

A presentation on ‘Financing the emergency work at WHO’ based on the findings of independent academics from Swiss universities was also made at the session. The forthcoming paper authored by Y-Ling Chi, Jaya Krishnakumar, Jurgen Maurer, Dejan Lonçar and Antoine Flahault, found that earmarking of funds in WHO restricts the usage of resources. While recognising that the traditional financing model backed by donor pledges was unavoidable, the paper suggests taking into account the increasing diversity of actors and new channels of aid. It also suggests imposition of certain taxes to raise resources.

The academic experts said that a “financing dialogue with donors can focus on new types of guarantees, including, “potential ceilings per emergency, improved fund recovery process, partnerships with other organizations (WB/IMF), a trigger mechanism, co-financing (and/or fund matching) and mechanisms to ensure efficiency of spending.” The World Health Assembly in 2015 passed a resolution for the creation of an Emergency Platform and Contingency Fund for Emergencies (CFE) with an initial capitalization of $100 million.

 

Image Credits: GHF