Transcript Bilateral Engagement and Global Public Health

Global Public Health Product
Innovation: Theory and Practice
Saul Walker
Senior Access to Medicines Policy Advisor
Berkeley Law, 19 February 2009
1 Palace Street, London SW1E 5HE
Abercrombie House, Eaglesham Road, East Kilbride, Glasgow G75 8EA
Outline
• DFID, health and product innovation
• Challenges for Bilateral Agencies
• Designing incentives
• One Size Fits All?
• Push and Pull
• What DFID has done
• Where next?
1 Palace Street, London SW1E 5HE
Abercrombie House, Eaglesham Road, East Kilbride, Glasgow G75 8EA
Page 1
DFID, Health and Innovation
• DFID’s mission: reduce poverty
• Health has reflexive relation to poverty
• Commission for Macroeconomics and
Health
• Systems based approach (plus priorities)
including access to medicines
• Numerous places to intervene along the
medicines value chain
• Not a given that development money
should fund R&D
Page 2
Breaks in the ATM Value Chain
Discover
Develop
& Test
• Low commercial incentives
• Limited product development
expertise in public sector
• Limited R&D/trial capacity in
developing countries
• Limited ID and Dev Country
expertise in private sector
Approve &
Register
Scale-up &
Manufacture
• Poor demand
data
• IP challenges
• Limited technical
capacity for some
products
• Regulatory
• Unclear pathways for first
launch in DCs
• Multiple approvals and
registration (little harmonisation)
• Standards for new classes
• Very limited capacity at country
level – approval, quality,
pharmacovigilence
Procure
Distribute
• Weak logistics,
infrastructure and
information
• Poor coverage
• Leakage
• Mark-ups
• Inefficiencies
• Limited and/or
unpredictable
financing
• Multiple channels
• Poor use of
pricing info
• Non-transparent
• Poor demand
forecasting
Prescribe &
Dispense
Demand
& Use
• Affordability/ lack
of social financing
• Limited access
• Social barriers
• Poor information
• Low health
literacy
• Poor adherence
• No utilisation data
• Lack of EML and
STG
• Limited HR (MDs
and pharmacists)
• Informal sector
• Limited regulation
• Unethical
promotion
• Poor practice
Value Chain: DFID Responses
Discover
Develop
& Test
Approve &
Register
Scale-up &
Manufacture
Procure
Distribute
Prescribe &
Dispense
Demand
& Use
Push Investment
Pull Mechanisms
Innovation
Regulatory Paths and Capacity
TRIPS Flexibilities/Patent Pools/IP
Enabling
Environment
Industry Good Practice
Global Funds
Bilateral Country Programmes
Affordable Medicines Facility Malaria
Medicines Transparency Alliance
Health
Systems
International Health Partnership
Bilateral Support for R&D
• Development agencies have accepted
R&D is a legitimate investment
• Innovation necessary for sustainable
health improvement
• Accept ‘market failure’ argument
• Increase in number of donors and scale
of funding
• Political commitments
• G8, CIPIH/IGWG, Expert Working Group
Page 5
Global ND R&D Spending
George Institute for International Health. ‘G-finder neglected disease research and development:
how much are we really spending?’ Feb 2008
Page 6
Global ND R&D Spending
George Institute for International Health. ‘G-finder neglected disease research and development:
how much are we really spending?’ Feb 2008
Page 7
Bilateral Support for R&D:
Competing demands and challenges
• Limited technical capacity
• Public health not innovation backgrounds
• Unfamiliar partners, activities and costs
• Politics of opportunity cost
• Increase coverage of existing
interventions
• Risk of failure – particularly if funds go to
non-traditional partners
Page 8
Bilateral Support for R&D:
Competing demands and challenges
• Cost-effectiveness difficult to calculate
• Limited data on attrition rates
• High-risk/high-impact, low-risk/lowimpact etc
• Impact dependent on uptake and
coverage
• Managing risks and timeframes
• Political cycle requires quick results
• Risk, money and speed trade-offs
Page 9
Bilateral Support for R&D:
Competing demands and challenges
• Strategic coordination
• Share technical capacity
• Reduce transaction costs
• Promote collaboration
• Spread risk
• Barriers
• R&D fits with broader health ‘priorities’
• Funding instrument constraints
• Biggest players aren’t traditional
development partners
• Weak country voices/capacity
Page 10
Global ND R&D Spending
76.55%
George Institute for International Health. ‘G-finder neglected disease research and development:
how much are we really spending?’ Feb 2008
Page 11
Global Disease Burden
Mathers CD and Loncar D. ‘Projections of Global Mortality and Burden of Disease from 2002 to 2030’
PLoS Medicine Vol. 3, No. 11
Page 12
How much is enough?
• Know what is being spent but don’t know
if it’s enough
• Variable risk and cost structures across
different technologies
• Various costing exercises but very
different methodologies
• Focus resources or risk ‘fair’ but
insufficient allocations?
Page 13
Designing Incentives :
Top down or bottom up?
One size fits all?
• General support for innovation
• Funding levels, political commitment
• Policy environment
• Currently - design the mechanism then
fit in the innovation
• Public health experts
• Macro-economists
• Need innovators, engineers etc
Page 15
One size fits all?
• Technology specifics and innovation:
• Scientific challenges/risk profile
• Target Profile – NCE or adaptation?
• Entry costs and investment profile
• Who has necessary skills
• Regulatory and ethical issues
• Capacity for research
• Forecasting demand
Page 16
Technology Challenges
HIV vax & Malaria Drugs
HIV Vaccine
Malaria Drug
Science challenge
High
Low/medium
Clinical material
High cost/low capacity
Low cost/good capacity
Cost of trials
High (large)
Low
Stage/Scale $$
High/Early
Moderate/Even
Regulatory
High – biologicals
Moderate – pharma
Ethics
Prevention trial/incurable
disease
treatment/curable
Skills distribution
Big pharam – process/manf
Public – clinical trials
Widespread manufacturing
Public – clinical trials
Research
Infrastructure
Limited – prevalence
Good
Demand forecasting
No existing product
Existing product
Manufacturing
Long lead time/$$$
Short lead time/$
Page 17
Technology Challenges:
Microbicides
Discover
Academic
Pharma
(Comp Lib)
Develop
& Test
Approve &
Register
PDPs
Govt
Scale-up &
Manufacture
Generic
Contract
Originator
Formulation
FDA?
EMEA?
Other
Generics?
Procure
Distribute
Prescribe &
Dispense
Public
Soc Market
Private (generic)
SRH/HIV?
MoH
Agent
Soc Marketer
etc
Demand
& Use
No historic
data
Prescription?
OTC?
Gatekeepers
Page 18
Push and Pull Characteristics
Push
Pull
Reward
Effort-focused
Outcome-focused
Amount of R&D
Companies not invest if
reward is not attractive
Decision-maker
Effective at increasing
R&D
PDP, ADIP, donor
Better at getting
project
Started
Completed
Capital at risk
Donor’s
Private companies
Recipient countries
PDPs have credibility
May be suspicion of
private sector
A.Towse, Office of Health Economics 2008
Private companies
Page 19
Combining Push and Pull
• Combine push/pull along
value chain
*
• Technology specific combos
• DFID pushes via PDPs
• DFID supports pull via AMCs
and GHPs (GAVI etc)
• Limited collaboration on:
• priority setting
• technical evaluation of best
push-pull mixes
• performance evaluation for
R&D investments
*A.Towse, Office of Health Economics 2008
Page 20
DFID Push - PDPs
• First government donor to PDPs
• IAVI (1997)
• Currently fund 5 PDPs ~£25m p.a
• IAVI, MMV, IPM, TB Drug Alliance & DNDi
• Increase commitment to £220m over 5ys
• Renewals
• Expand portfolio to increase
Page 21
DFID Push - PDPs
Donor Challenge
PDP Model
Limited Technical
Capacity
Expertise – science and
industry
Picking winners
Portfolio Mgmt
Unfamiliar Partners
Partner Mgmt
Cost-effectiveness
Target profiles
Leveraging inputs
Politics & Opp Costs
Advocacy & country
engagement
Impact = Uptake
Explicit access focus
Strategic Coordination
Business Cases
Donor management
Page 22
DFID Pull – AMCs and GHP
• Establish viable markets in LIC/LMICs
• Existing and new technologies
• GAVI, GFATM, UNITAID etc already
impact market (originator and generic)
• AMC pilot to test pull for development
• Shift risks and need to pick winners
• Only pay if successful development,
supply capacity and demand
• Engage industry (scarce expertise)
• Mobilise new donors
• Pneumo vax as pilot
Page 23
24
AMC - Pneumo Pilot
• Technical Product Profile (TPP) -
www.who.int/immunization/sage/target_product_profile.pdf
• $ 1.5bn - Italy, UK, Canada, Norway, Russia
& BMGF
• Tail price cap: $ 3.50
• Purchase price: $ 7 (tail + AMC funded price)
• Demand forecast: 200M doses by 2020
• Stakeholders: AMC Donor Committee, GAVI,
GAVI-countries, suppliers, UNICEF, WB, WHO
Page 24
25
AMC - Pneumo Pilot
Example:
AMC Price
$7
Top up:
+ $ 5.00
• Firm A commits to supply 50M = $375M of the
total $1.5B AMC
AMC Envelope
• $ 375 M disbursed at a rate of $ 5.00 per dose
(top up)
• $375 M/$5.00 = 75M doses at $7
• 75M/50M = 1.5 years AMC period
• 8.5 years of supply at $2.00 = tail period
Tail
Price
$2.00
GAVI
AMC Period
Country Co-pay
Tail Period
Source: Tania Cernuschi, AMC Manager, GAVI
Page 25
26
AMC Commitments and
Incentives
• Companies make 10 year supply
commitments
• Frontloading by making initial “AMC
price” sufficiently high
• Provide limited demand assurance
• At the time of signature donors & GAVI
commit to purchase 20, 15 and 10 % of
the supplier’s dedicated capacity in years
1, 2 & 3, respectively
Source: Tania Cernuschi, AMC Manager, GAVI
Page 26
27
Pneumo AMC
Cumulative Deaths Averted ($M)
0.60
9
8
0.50
7
0.40
6
5
0.30
4
0.20
3
2
0.10
1
0.00
0
Deaths Averted (millions)
Serious pneumococcal diseases are the primary
vaccine-preventable cause of death in children under 5.
The AMC will save 900,000 lives up to 2015 & 7.7 M lives up to 2030
Source: Tania Cernuschi, AMC Manager, GAVI
Page 27
Where Next?
• Proof of concept – PDPs, AMCs etc
• Bespoke incentives
• Sustainable financing – WHO Expert WG
• Priority setting, governance and country
participation
• Coordination continuum
• Informed investments
• Coordinated informed investments
• Pooled investment
Page 28
Where Next?
Market Monopoly Paradigm
• UK recognises importance of IP for R&D
• Support rights of countries to use TRIPS
flexibilities
• PDPs, patent pools and prizes opening up
uses of IP to support access
• Long-term prospects for IP paradigm?
• Health care costs in north
• India and China development
Page 29
Additional Slides
Page 30
Intellectual Property: Patent Pools
Voluntary Licenses with No Pool
Drug 1
Voluntary Licenses with Patent Pool
Drug 1
Drug 2
License
Royalty
Product
Sale
Manufacturer
1
Distributor
1
Country 1
Country 2
(patent)
Distributor
2
Manufacturer
2
Country 3 Country 4
(no patent)
Medicines Patent Pool
Distributor
3
Manufacturer
1
Distributor
1
Country 5
(patent)
Country 1
Country 2
(patent)
Adapted from E. Richard Gold & Jean-Frédéric Morin, IPDS July 2007
Drug 2
Distributor
2
Manufacturer
2
Country 3 Country 4
(no patent)
Distributor
3
Country 5
(patent)