Lecture 9: Non-profit incentives and alternative drivers in drug development

What percentage nowadays is aimed towards neglected disease?

1%

What are 3 problems with current drug-development paradigm?

1. High prices

• Counterfeiting

2. Bias toward symptom relief

3. Wastefulness

• Excessive marketing

• Patent protection

Pull mechanism

Rewarding successful innovators through enhanced profits (e.g. patents).

Push mechanism

Reduce the cost of research by providing some or all of the funding for R&D directly (e.g. public funding).

What is a non-profit alternative?

• Product development partnerships (PDP)

• Example: Drugs for neglected diseases initiative (DNDi)

What are 3 market based drivers?

1. Prize funds

• Example: Health impact fund (HIF)

2. Patent pools

• Example: Medicines patent pool (UNITAID)

3. FDA priority review voucher

• Example: miltefosine

PDPs

Product development partnerships; mainly the first problem/struggle in drug development.

Name 7 characteristics of a PDP.

• Type of Public Private Partnership (PPP)

• Non-profit business model

• Bringing together public, private, academic and philanthropic sectors

• Focus on technology or disease area

• Portfolio

• Virtual R&D

• Could be called push-type incentive

What is the main problem for PDPs?

Funding is primarily public and philanthropic.

De-linkage

Are prize funds a push or pull mechanism?

Pull machenism

Name 2 types of prize funds.

1. Milestone prizes

2. End prizes

• Public buy-out of relevant patent + distribution

• Open source, no IP protections

What are 3 critericia for prize funds?

Should:

• be big enough to create real incentives

• have credible governance institutions and clear rules

• have reputable scientific advisory committee

Health Impact Fund (HIF)

Market-based solution to create incentives for global health idea developed by team. It is a better way of rewarding innovation, because it has a strong incentive to address neglected diseases (in developing countries).

What does the design of HIF look like?

1. Pool of funds from public sources

2. Register with HIF instead of using patent

• Distribute product world wide at cost

• Reward from fund in proportion to impact of product

• Impact measured by QUALYs (The more you increase the QUALY, the higher the prize)

3. After reward period, generic production allowed

Positives about prize funds

• Pay only for success

• Positive results for Gates foundation

• Endorsed by WHO expert working group

Negatives prize funds

• Can the government determine the appropriate reward for innovations without relying on intellectual property rights to reveal their value to consumers?

• We can get the same or better results with retained IP and stronger government policies.

What is patent pooling?

Patent holders share their IP with the Patent Pool

What are the 2 types of patient pooling?

• Downstream

• Upstream

Downstream patent pooling

Make recently approved treatments more affordable

Facilitate the development of new fixed-dose

Upstream patent pooling

Facilitate R&D of new compounds

Positives patent pooling

• MPP operational

• Relatively cheap

• Generic competition has cut ARV prices with 99%

Negatives patent pooling

• Access main focus, can it drive innovation?

• Quality assurance

What is another example of a pull mechanism?

FDA priority review voucher

FDA priority review voucher

1. Neglected tropical diseases

2. Shortens regulatory review time

• 6 months instead of 10-18 months

• Use for other drug

• Sell to other company ($100 million)

3. In place at FDA since 2007

• 10 awarded until 2019

4. Under discussion at EMA

Positive FDA priority review voucher

“New” type of pharmaceutical companies

Negatives FDA priority review voucher

• Public money in the development

• Registration of drugs already in use

• High prices prevent access

• No apparent increase numbers