Funding future research
In addition to FRIND, the WHO’s Expert Working Group recommended further analysis of several proposed funding models. Product Development Partnerships were the focus of proposals from two other groups: the Product Development Partnership Financing Facility (PDPFF) and the Industry Research and Development Facilitation Fund (IRFF).
PDPFF is a proposal developed by the International AIDS Vaccine Initiative, the Aeras Global TB Foundation and the PATH Malaria Vaccine Initiative that proposes raising funds by selling bonds in private capital markets to support development of vaccines. Bond holders would be repaid from royalties on sales of the vaccines in high-and middle-income countries as well as donor-funded premiums on distribution of vaccines in developing countries. Borrowing by the fund would be backed with guarantees from governments and possibly donor foundations.
IRFF is a funding vehicle designed to continuously reimburse a large proportion of money distributed through Product Development Partnerships. Most funding would go to product development partnerships that advanced their portfolios most efficiently.
The report of the WHO’s Expert Working Group observed that Product Development Partnerships provide “optimal funding allocation at all stages of research and development” and high health impact in developing countries, as well as operational efficiency. “However, a mechanism is needed to assist donors to fund across product development partnerships, in a simpler manner than is currently possible,” the Working Group added, and raised the possibility of combining the three proposals to provide reliable, long-term funding to accelerate global health R&D.
“We need a mechanism that provides not only long-term funding but a lot more money than we had before - in a super risk-averse environment.”
Defining core principles
In early April 2010, Dr. Herrling met with representatives of PDPFF and IRFF to explore possibilities of consolidating the best elements of each individual proposal within a single, joint mechanism to fund Product Development Partnerships. By mid-May, the talks had produced a preliminary agreement; core principles of the Product Development Partnership Plus (PDP-Plus) Fund were outlined for stakeholders during the WHO’s annual meeting in Geneva, Switzerland.
“There is no point in each of our three organizations pursuing this on its own,” Dr. Moran of the George Institute said. “This is a proposal that looks at existing Product Development Partnerships that are underfunded and have products about to fall off the cliff for want of the dollar. We need a mechanism that provides not only long-term funding but a lot more money than we had before – in a super risk-averse environment. So we need to reduce risk by pooling and address other needs of organizations and governments that don’t currently donate to neglected disease R&D.”
Many details – including diseases products and stages of R&D to be covered by the Fund – are yet to be finalized. While the PDP Plus Fund would offer donors a single point of contact with Product Development Partnerships, portfolio management and resource allocation options remain under discussion.
The next step in evolution of the PDP Plus Fund will be further consultations with stakeholders. “Clearly, we need to continue discussions with donors, representatives of Product Development Partnerships and other stakeholders in the global health and R&D worlds,” said Holly Wong, Vice President, Public Policy at the International AIDS Vaccine Initiative. “We have to figure out what our priorities and what trade-offs among our proposals might be possible. After getting these projects this far, it would be a tragedy for all of us if nothing more can be done to get these treatments to the patients who need them most.”