Saul Walker Senior Access to Medicines Policy Advisor Berkeley Law, 19 February 2009 Global Public...

Saul WalkerSenior Access to Medicines Policy AdvisorBerkeley Law, 19 February 2009

Global Public Health Product Innovation: Theory and Practice

1 Palace Street, London SW1E 5HEAbercrombie 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 5HEAbercrombie House, Eaglesham Road, East Kilbride, Glasgow G75 8EA

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

Discover Develop & Test

Approve & Register

Scale-up & Manufacture Procure

Prescribe & Dispense

DistributeDemand & Use

• 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

• 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

• Affordability/ lack of social financing

• Limited access• Social barriers• Poor information• Low health

literacy• Poor adherence• No utilisation data

• Weak logistics, infrastructure and information

• Poor coverage• Leakage• Mark-ups• Inefficiencies

• Poor demand data

• IP challenges• Limited technical

capacity for some products

• Regulatory

• Limited and/or unpredictable financing

• Multiple channels• Poor use of

pricing info• Non-transparent• Poor demand

forecasting

• Lack of EML and STG

• Limited HR (MDs and pharmacists)

• Informal sector• Limited regulation• Unethical

promotion• Poor practice

Breaks in the ATM Value Chain

Value Chain: DFID Responses

Innovation

Enabling Environment

Health Systems


Approve & Register




Push Investment

Pull Mechanisms

Regulatory Paths and Capacity

TRIPS Flexibilities/Patent Pools/IP

Industry Good Practice

Global Funds

Affordable Medicines Facility Malaria

Medicines Transparency Alliance

International Health Partnership

Bilateral Country Programmes

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

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

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


• Cost-effectiveness difficult to calculate• Limited data on attrition rates• High-risk/high-impact, low-risk/low-impact

etc• Impact dependent on uptake and

coverage

• Managing risks and timeframes• Political cycle requires quick results• Risk, money and speed trade-offs


• 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

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

76.55%

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

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?

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

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

Technology ChallengesHIV 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/manfPublic – clinical trials

Widespread manufacturingPublic – clinical trials

Research Infrastructure

Limited – prevalence Good

Demand forecasting No existing product Existing product

Manufacturing Long lead time/$$$ Short lead time/$

Technology Challenges:Microbicides


Approve & Register




AcademicPharma

(Comp Lib)

PDPsGovt

FDA?EMEA?Other

Generics?

GenericContract

OriginatorFormulation MoH

AgentSoc Marketer

etc

PublicSoc Market

Private (generic)

SRH/HIV?

Prescription?OTC?

Gatekeepers

No historicdata

PushPush PullPull

Effort-focused

Recipient countries

Amount of R&D

Decision-maker

Better at getting

project

Capital at risk

Reward

PDP, ADIP, donor

Effective at increasing R&D

Started

Donor’s

PDPs have credibility

Outcome-focused

Companies not invest if reward is not attractive

Private companies

Completed

Private companies

May be suspicion of private sector

A.Towse, Office of Health Economics 2008

Push and Pull Characteristics

• 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

Combining Push and Pull

*

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

DFID Push - PDPs

Limited Technical Capacity

Expertise – science and industry

Picking winners Portfolio Mgmt

Unfamiliar Partners Partner Mgmt

Cost-effectiveness Target profilesLeveraging inputs

Politics & Opp Costs Advocacy & country engagement

Impact = Uptake Explicit access focus

Strategic Coordination Business CasesDonor management

Donor Challenge PDP Model

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

25

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

http://www.who.int/immunization/sage/target_product_profile.pdf

26

AM

C

Pri

ce

TailPrice

AMC Period Tail Period

AMC Envelope

GAVI

$7

$2.00

Example:

• Firm A commits to supply 50M = $375M of the total $1.5B AMC

• $ 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

Top up: + $ 5.00

Tail Period

GAVI Country Co-pay

$2.00

AMC - Pneumo Pilot

Source: Tania Cernuschi, AMC Manager, GAVI

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

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28

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

Pneumo AMC Cumulative Deaths Averted ($M)


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

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

Additional Slides

Voluntary Licenses with No Pool

Medicines Patent Pool

Drug 1 Drug 2

Manufacturer 1

Country 1 Country 2 (patent)

Country 3(no patent)


Distributor 1

Distributor 2

Manufacturer 2

Distributor 3

Manufacturer 1


Country 3(no patent)


Distributor 1

Distributor 2

Manufacturer 2

Distributor 3

Drug 1 Drug 2

Adapted from E. Richard Gold & Jean-Frédéric Morin, IPDS July 2007

Voluntary Licenses with Patent Pool

License

RoyaltyProductSale

Intellectual Property: Patent Pools

Saul Walker Senior Access to Medicines Policy Advisor Berkeley Law, 19 February 2009 Global Public...

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