Saul Walker

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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
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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
3
DFID, Health and Innovation

• DFIDs 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
  RD

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Breaks in the ATM Value Chain

• Weak logistics, infrastructure and information
• Poor coverage
• Leakage
• Mark-ups
• Inefficiencies

• Poor demand data
• IP challenges
• Limited technical capacity for some products
• Regulatory

• Affordability/ lack of social financing
• Limited access
• Social barriers
• Poor information
• Low health literacy
• Poor adherence
• No utilisation data

• Low commercial incentives
• Limited product development expertise in public
  sector
• Limited RD/trial capacity in developing
  countries
• Limited ID and Dev Country expertise in private
  sector

• 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

• 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

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Value Chain DFID Responses
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
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Bilateral Support for RD

• Development agencies have accepted RD 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

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Global ND RD Spending
George Institute for International Health.
G-finder neglected disease research and
development how much are we really spending?
Feb 2008
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Global ND RD Spending
George Institute for International Health.
G-finder neglected disease research and
development how much are we really spending?
Feb 2008
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Bilateral Support for RD 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

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Bilateral Support for RD Competing demands and
challenges

• 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

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Bilateral Support for RD Competing demands and
challenges

• Strategic coordination
• Share technical capacity
• Reduce transaction costs
• Promote collaboration
• Spread risk
• Barriers
• RD fits with broader health priorities
• Funding instrument constraints
• Biggest players arent traditional development
  partners
• Weak country voices/capacity

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Global ND RD Spending
George Institute for International Health.
G-finder neglected disease research and
development how much are we really spending?
Feb 2008
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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
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How much is enough?

• Know what is being spent but dont know if its
  enough
• Variable risk and cost structures across
  different technologies
• Various costing exercises but very different
  methodologies
• Focus resources or risk fair but insufficient
  allocations?

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Designing Incentives Top down or bottom up?
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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

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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

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Technology ChallengesHIV vax Malaria Drugs
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Technology ChallengesMicrobicides
Academic Pharma (Comp Lib)
PDPs Govt
Public Soc Market Private (generic) SRH/HIV?
No historic data
Generic Contract Originator Formulation
MoH Agent Soc Marketer etc
Prescription? OTC? Gatekeepers
FDA? EMEA? Other Generics?
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Push and Pull Characteristics
A.Towse, Office of Health Economics 2008
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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 RD investments

A.Towse, Office of Health Economics 2008
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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

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DFID Push - PDPs
Donor Challenge PDP Model
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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

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AMC - Pneumo Pilot
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• Technical Product Profile (TPP) -
  www.who.int/immunization/sage/target_product_profi
  le.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

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AMC - Pneumo Pilot

• 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

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AMC Envelope
Top up 5.00
AMC Price
Tail Price
2.00
GAVI
AMC
Period
Tail
Period
Source Tania Cernuschi, AMC Manager, GAVI
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AMC Commitments and Incentives
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• 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 suppliers
  dedicated capacity in years 1, 2 3, respectively

Source Tania Cernuschi, AMC Manager, GAVI
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Pneumo AMC Cumulative Deaths Averted (M)
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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
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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

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Where Next?Market Monopoly Paradigm

• UK recognises importance of IP for RD
• 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

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Additional Slides
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Intellectual Property Patent Pools
Voluntary Licenses with No Pool
Voluntary Licenses with Patent Pool
Drug 1
Drug 2
Drug 1
Drug 2
Medicines Patent Pool
Distributor 3
Manufacturer 1
Distributor 1
Distributor 2
Manufacturer 2
Manufacturer 1
Distributor 1
Distributor 2
Manufacturer 2
Distributor 3
Country 1
Country 2 (patent)
Country 3 (no patent)
Country 4
Country 5 (patent)
Country 1
Country 2 (patent)
Country 3 (no patent)
Country 4
Country 5 (patent)
Adapted from E. Richard Gold Jean-Frédéric
Morin, IPDS July 2007