In May 2014, the World Health Organization’s member countries passed decision 67(15) instructing WHO Director-General Margaret Chan to explore, with TDR, the possibility of hosting a pooled funding mechanism for R&D. In preparation for the Executive Board (EB136) in January 2015, the WHO Director-General has prepared document, EB/136/30, Follow-up of the report of the Consultative Expert Working Group on Research and Development: Financing and Coordination, describing the contours of how such a fund operate, under the management of TDR and its relationship with the proposed Global Health Research and Development Observatory and the “future coordination mechanism”.
With respect to the scope and the principles of the R&D fund, the Director-General’s report stresses that the
focus of the fund would be the development of effective and affordable health technologies related to type III and type II diseases and the specific research and development needs of developing countries in relation to type I diseases, taking into account the principles formulated by the Consultative Expert Working Group on Research and Development: Financing and Coordination, namely delinkage of the delivery price from research and development costs, the use of open knowledge innovation, and licensing for access.
While noting that the CEWG demonstration projects are “independent of the possible creation of a pooled funds, the Director-General’s report notes that,
together with the budget line established by the Special Programme for Research and Training in Tropical Diseases to accommodate their funding, as well as the Global Observatory, could provide the nucleus for the development of the fund. WHO and the Special Programme for Research and Training in Tropical Diseases will work in collaboration to maximize the opportunities to use the demonstration projects to inform the development of the final research and development fund.
In terms of governance, the report notes that the pooled fund will be managed by TDR, and the global observatory and the coordination mechanism would be managed by the Secretariat. According to the Director-General’s report, the observatory and the coordination mechanism would identify the priority research gaps to be financed by the pool fund. The report, while noting that health technologies financed by the pooled fund could be provided to those in need through “at cost, preferential, non-exclusive licensing agreements” or licenses to the WHO or TDR, is short on details of these provisions.
3. In resolution WHA66.22, the Health Assembly recognized the interlinkage of monitoring, coordination and financing of health research and development. That interlinkage will inform the scope of the fund, which would finance research and development projects to address priority research gaps as identified by the Global Observatory and the future coordination mechanism. A functional research and development observatory and a coordination mechanism are essential to ensuring that the fund meets the Health Assembly’s expectations. The fund will be managed by the Special Programme, and the Global Observatory and the coordination mechanism will be managed by the Secretariat. The focus of the fund would be the development of effective and affordable health technologies related to type III and type II diseases and the specific research and development needs of developing countries in relation to type I diseases, taking into account the principles formulated by the Consultative Expert Working Group on Research and Development: Financing and Coordination, namely delinkage of the delivery price from research and development costs, the use of open knowledge innovation, and licensing for access. The contractual arrangements for the funding of projects will ensure that any future health technologies financed through the fund will be accessible to those in need. Arrangements could include clauses on at-cost or preferential pricing, non-exclusive licensing agreements or licences to WHO or the Special Programme.
4. The priorities of the fund would be informed by the analysis of the research landscape provided by the Global Observatory. General priority areas would be recommended by the coordination mechanism. WHO is currently examining options for such a mechanism.
In terms of management of the Fund, the Director-General’s report notes that TDR would establish a new scientific review group which would “prepare and manage calls focusing on priority needs in line with the WHO’s global strategy and plan of action on public health, innovation and intellectual property” (EB/136/30). The scientific review group would work in concert with the priorities identified by the global observatory and the recommendations of the coordination mechanism. TDR’s Joint Coordination Board (JCB) would approve the final set of projects submitted by the scientific review group.
With regards to membership of the scientific review group,
The membership of the scientific review group would reflect the scientific disciplines required, experience of product development, gender balance and representation of disease-endemic countries, taking into account the expanded scope of diseases from the Special Programme’s current mandate. Management of conflicts of interest for members of the scientific review group would follow WHO’s current policy for expert committees.
The Director-General’s report makes clear that the establishment of the pooled fund and the Global Observatory is contingent on the availability of new funding sources. The report that fundraising for the pooled fund and the global observatory falls under the purview of the WHO not TDR.
The report provides the following models of financing for consideration:
(i) Some organizations rely on ad hoc voluntary contributions, including the Special Programme for Research and Training in Tropical Diseases and the UNDP/UNFPA/UNICEF/WHO/World Bank Special Programme of Research, Development and Research Training in Human Reproduction, as well as most product development partnerships. The disadvantage of such a mechanism is that funding is difficult to predict.(ii) Other organizations use a replenishment model, in which each donor independently fixes its contribution in the form of a pledge. Pledges are public, legally non-binding statements on planned contributions. Contributions are voluntary as donors themselves fix the amount of pledges, but such a mechanism provides for some planning security as pledges span a certain time period. Examples of this model are the Global Fund to Fight AIDS, Tuberculosis and Malaria, the International Drug Purchase Facility (UNITAID) and the GAVI Alliance, with the latter using additional innovative financing mechanisms.Countries may want to consider implementing innovative funding mechanisms at national or regional levels to raise financial resources and to ensure a sustainable flow of funding. The pooled fund should also be able to accept voluntary, preferably unspecified funding by non-State actors such as philanthropic foundations following WHO’s rules on acceptance of donations. The Special Programme for Research and Training in Tropical Diseases will ensure appropriate management of conflicts of interest in subsequent decisions on allocation from the fund, in other words that such contributions have no impact on the process of selection of projects
In terms of the financial management of the fund, the report provides two options for EB136 to consider.
FINANCIAL MANAGEMENT OF THE FUND11. There are two main options for the financial management of the fund account (receiving donations and making payments). If the fund is held directly by the Special Programme for Research and Training in Tropical Diseases, the current arrangement is for WHO to implement an administrative charge that covers costs associated with the administration of the Special Programme’s designated funds. Alternatively, the fund could be held as a trust fund account by a third party, for example, the World Bank, which is a cosponsor of the Special Programme. The third party trustee would disburse funding on the Joint Coordinating Board’s instruction, in line with the Health Assembly’s recommendation regarding the division of the research and development fund. It would invest the funds according to the trustee’s investment strategy and report on financial management to the Joint Coordinating Board. These options are being investigated in order to identify the most
efficient mechanism.
As the global health community considers establishing a pooled fund for R&D, predicated upon the principle that R&D costs must be de-linked from product prices, there is a window of opportunity to pave the way for creating global norms on R&D funding. Of course this is contingent on countries stepping up to the plate.