TDR releases report on a Health Product Research & Development Fund: A Proposal for Financing and Operation

The Sixty-seventh World Health Assembly, having considered the follow-up of the report of the Consultative Expert Working Group on Research and Development Financing and Coordination,

(4) noted, without prejudice to future discussions in the context of recommendations of the Consultative Expert Working Group on Research and Development Financing and Coordination and actions on other sustainable mechanisms for financing health research and development, the assessment made by the Secretariat and the possibility of using an existing mechanism to host a pooled fund for voluntary contributions towards research and development for type III and II diseases and the specific research and development needs of developing countries in relation to type I diseases;

(5) requested the Director-General to further explore this option with the UNICEF/UNDP/World Bank/WHO Special Programme for Research and Training in Tropical Diseases recognizing the following:
– that the scope of the diseases should not be limited to type III diseases but should be in line with the mandate of the global strategy and plan of action on public health, innovation and intellectual property;
– the need for a sustainable financial mechanism for health research and development;
– the role of Member States in the governance of the coordination mechanism;

find wider adoption and assistance in filling the R&D pipeline gaps for diseases of poverty or to filling other unmet needs, such as the development of new antibiotics to combat antimicrobial resistance or to prepare for potential pandemic outbreaks.

The acknowledgements section notes that the management consultancy, McKinsey, “conducted the data collection and analysis for this report on behalf of TDR between September and December 2015” while TDR led the development of the report, including technical review and management. The Swiss Agency for Development and Cooperation funded the study. What follows is a walkthrough of the Preface and the Executive Summary.

The development of this report was led by Robert Terry, Manager of Knowledge Management at TDR. Dr Ryoko Miyazaki-Krause provided technical review and management, and McKinsey & Company conducted the data collection and analysis for this report on behalf of TDR between September and December 2015. All information was collected from interviewees in strict confidence and will not be made public unless expressively authorized by them. Particular care was taken to ensure that a broad range of perspectives were captured, including different clusters and units within WHO, organizations undertaking R&D, regulatory agencies, funding bodies, intergovernmental organizations, nongovernmental organizations (NGOs), health and other ministries. These inputs have greatly contributed to the development of the approach outlined in this report. We very much appreciate the time and experience people shared.

We would also like to thank the Swiss Agency for Development and Cooperation for helping to fund this study and the resulting analysis and options presented. The contents of this report are the sole responsibility of TDR and can in no way be taken to reflect the views of the Swiss Agency for Development and Cooperation.

Through the decision by the World Health Assembly (WHA67(15)), the Special Programme for Research and Training in Tropical Diseases (TDR) was asked by the Director-General of the World Health Organization (WHO) to explore the possibility of using TDR’s existing governance mechanism to host a pooled fund, raised by the WHO, to support R&D for Type III and Type II diseases and the specific R&D needs of developing countries in relation to Type I diseases. I am pleased to share with you a report detailing work that was undertaken with analytic support from McKinsey & Company. The work focused on the following:

1. developing for the first time, a financial model for a health product R&D Fund for Type III and II diseases;

2. preparing a TDR-based Scientific Working Group (SWG) for the management of R&D project portfolios and a sustainable health product R&D Fund; and

3. designing a compendium of target product profiles (TPPs) for these neglected diseases to assist the work of the SWG and provide a global picture of health product needs for these disease areas.

As you will see in the report, in order to accelerate and fill the gaps in the R&D pipeline for diseases primarily affecting LMICs, the following issues needed to be considered:

• a fund of sufficient scale (e.g. reaching US$ 100 million annually over a 10-year period) should be set up;
• the fund’s project portfolio should be varied by including both short-term repurposing and longer-term discovery efforts;
• the fund must be operated transparently, with clear objectives and non-political, evidence-based decision-making processes; and
• the fund must have a methodology for accepting “new” funders and maximizing leverage.

With respect to R&D funding, the report acknowledges that funding bottlenecks exist, in particular with respect to “translational research and expensive phase III clinical trials.”

1. An operational priority setting mechanism could unite diverse stakeholders to effectively focus on the most critical unmet needs in the R&D of health products, as identified by the WHO Prioritization Mechanism.

2. An active coordinating mechanism could include the creation of a new forum to convene donors, making global R&D activities and funding needs more transparent. Larger donors are unlikely to relinquish control of their independent funding decisions, making formal coordination challenging. However, such a forum could ensure identification of critical R&D gaps and agree on how those areas could be funded. This would provide a formal mechanism for discussion, establish collaboration among funders, and give a “base” level for funding for projects that could benefit from other funders becoming involved.

3. A direct fund could help address some of the most critical R&D financing needs for Type III and II diseases. The potential of various fund sizes to launch new health products by 2030 was investigated. The results indicate that, in the long run, an annual disbursement of US$ 100 million or more would have the possibility of funding a portfolio of the most promising and innovative product development projects, which could overcome some of the larger gaps. This is instead of focusing solely on relatively low-cost activities such as drug reformulation or repurposing. The fund could also address the financing needs outlined below.

• It should be constituted with “new” money, as opposed to redistributing money that is already available to public health researchers and developers.
• The convening power of WHO could help to access such new funds, but care would have to be taken to ensure efficient and transparent processes.
• Building on experience acquired from product development partnerships (PDPs), public-private R&D initiatives, other funds and the private sector, the fund should have a diversified portfolio of projects and enable targeted partnerships along the projects’ development paths. The portfolio should include
  projects that could provide shorter-term projects (development of repurposing drugs or improved point-of-care diagnostics using existing platforms) as well as longer-term discovery efforts

(Source: Health Product Research & Development Fund: A Proposal for Financing and Operation, Executive Summary)

Together with a world-class knowledge of infectious diseases, SWG members should have experience in:
• leading product development;
• assessing risks;
• making challenging portfolio decisions, from feasibility evaluation of chemistry, manufacturing and controls (CMC)7 to clinical trials;
• evaluating regulatory compliance and providing regulatory guidance;
• working in health systems in low- and middle- income countries (LMICs);
• financing or developing businesses, including being able to assess projects’ potential to deliver health impacts and their probability of success, and assess teams’ capacities and experience;
• evaluating potential health impact and values from health economists’ point of views.

1. A fund of sufficient scale (e.g. incremental increase starting at US$ 10–15 million up to US$ 100 million disbursed annually over a 10-year period) should be set up to support health product R&D in Type III and II diseases.

2. The fund’s portfolio of projects (e.g. gradual increase in number of funded projects starting from 5–7 projects per year to an average of 35–40 projects) should be balanced between shortterm repurposing and longer-term discovery efforts.

3. The fund should have transparent, objective and non-political decision-making processes.

4. The fund should be able to access “new” sources of funding.

model the timeline and minimum funding required to develop new drugs, diagnostics and vaccines for populations with limited resources. TDR has used this tool to set out 7 scenarios for a financing mechanism managed under WHO for consideration by its Member States. The P2I estimates how many products, either new or re-purposed, single or complex, that might be developed under such a mechanism. The scenarios range from WHO acting primarily as a convenor to set priorities through the management of funds by TDR of different sizes (US$ 15 million to 500 million annually) that directly supports R&D from promising leads through to the launch of a new product

. (Source: 2 page summary of TDR report obtained by KEI in early February 2016).