Driving innovation for global health

How incentive financing can be used to spur new health tools

In the current global economic crisis, how can the United States support and foster research for essential new global health tools? How can the country ensure that its investments in research for new health products—such as vaccines, drugs, and diagnostics—are cost efficient and a wise use of limited resources?

Incentives and innovative financing mechanisms have the potential to help answer these questions by spurring research and development for much-needed global health products while also ensuring that financial investments are cost-effective. When used in conjunction with existing global health research investments from the United States and other donors, incentive financing can harness existing expertise and resources from multiple sectors, particularly the biopharmaceutical industry. Some incentive mechanisms require no additional funding and have the potential to drive the creation of health tools that can save lives around the world. Others require relatively small financial commitments and can result in huge gains in global health. For example:

The Food and Drug Administration’s (FDA) priority review voucher (PRV) program awards a voucher to the sponsor of a newly-approved drug or biologic that targets a neglected tropical disease. The voucher entitles the bearer to a priority review for any future new drug application. This mechanism requires no additional funding and encourages companies to pick low-hanging fruit and pursue research for promising compounds and targets.

Advance Market Commitments (AMCs) pool donor funding to guarantee a future market, at a specified price, for companies that develop a certain product for low- and middle-income countries. In 2009, the governments of Italy, the United Kingdom, Canada, Russia, Norway, and the Bill & Melinda Gates Foundation launched an AMC, administered by the GAVI Alliance, to spur development and production of a pneumococcal vaccine specifically tailored to the needs of developing countries.

Prizes have also been proposed by a number of organizations to drive biopharmaceutical innovation for global health. For example, a milestone prize would be awarded based on the completion of a previously-defined condition, or reaching a target “milestone.”

As these examples demonstrate, there are highly cost-effective ways to drive the development and delivery of critical global health products. Indeed, incentive and innovative financing mechanisms are fast becoming essential tools, particularly for policymakers who are struggling to allocate increasingly scarce resources.

The US Government’s leadership has been essential in exploring, implementing, and supporting many of these new mechanisms, and that leadership will be critical to further accelerate global health product development and delivery and save lives throughout the developing world. To strengthen this leadership, the US Government should:

Form a cross-agency working group to explore US investment in incentive and innovative financing mechanisms.
Invest in a portfolio of incentives and financing mechanisms to stimulate needed research and development (R&D) at all stages of the product development process.
Engage with other governments and donors to explore and support innovative financing.
Conduct continuous rigorous assessments of each incentive and financing mechanism in which the US invests.

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