Funding future research
Importantly, the FRIND mechanism would function within the framework of the existing intellectual property system. Companies, academic groups or other applicants for funding would allocate to the fund exclusive licenses for the specific indication linked to a neglected disease. Intellectual property covering other indications with commercial potential would not be affected.
“In some cases, innovation consists of simply having a drug where there was none before. But we also need to get safer drugs in areas where existing treatments have serious side effects, or to replace drugs that have become ineffective because of resistance,” Dr. Herrling said. “What we are trying to do here is get this great pipeline to patients. The model is based on mechanisms that pharmaceutical companies have found to be successful in the past in other contexts – minus the profit.”
Exploring innovative financial models.
Earlier this year, the FRIND proposal received a crucial endorsement from an Expert Working Group established by the World Health Organization to explore innovative models to finance neglected disease research and development. In its report to WHO Director-General Margaret Chan, the Expert Working Group acknowledged a persistent and growing concern that the benefits of advances in health technology are not reaching the poor who bear a double burden of poverty and disease. "There is a need for incentive structures to stimulate research and development when there is no market, or there is market failure in the production and diffusion of knowledge," the group added.
“There is a need for incentive structures to stimulate research and development when there is no market.”
A key factor in the WHO’s positive assessment is that the FRIND model builds on the foundation of so-called Product Development Partnerships, widely viewed as donors’ vehicle of choice to disburse neglected-disease funding. Product Development Partnerships are quasi venture capital funds that operate on a not-for-profit basis in the domain of developing world health. They raise funds from a wide range of public, private and philanthropic sources and usually play a central role in developing and managing a product portfolio in a given disease area.
Novartis works closely with some of the biggest Product Development partnerships including Medicines for Malaria Venture (MMV), the Global Alliance for TB development, Drugs for Neglected diseases Initiative and Institute for One World Health. Novartis and MMV, a nonprofit foundation based in Switzerland, jointly developed Coartem Dispersible, a new pediatric formulation of the pioneering antimalarial therapy Coartem, and are collaborating on development of other potential treatments against malaria.
“Product Development Partnerships are one of the business models that emerged from market failure in terms of producing new drugs and vaccines for diseases such as TB,” said Antony Mbewu, Executive Director of the Global Forum for Health Research. Today, Product Development Partnerships manage roughly 20% of funding for neglected disease research worldwide.
One flaw in the current Product Development Partnership model is the lack of a reliable, long-term revenue stream. “Most product development for the developing world is underfunded and relies on short-term grants – very hand to mouth,” said Mary Moran, Director of Health Policy at the George Institute, a healthcare think tank based in Sydney, Australia. “Running a 10- to 15-year development program when you are funded year to year is a hopeless way to make products. A number of groups have been set up to examine how to do this better.”