Push mechanisms move research forward
New ways to encourage research and development
When a well designed clinical trial or medical test cannot achieve an improvement in disease outcome, it is not a failure, but rather another step forward in learning more about the nature of the science along the way to an eventual product. Push mechanisms harness and support scientific exploration, especially when medical effect is uncertain or hard to find. For diseases endemic primarily in the developing world, push mechanisms are essential to ensure that scientific innovation is captured to help solve some of the world’s most pressing health issues.
Grants
Grant mechanisms to fund research projects in global health include:
- Biomedical research grants from the National Institutes of Health (NIH), the single largest source of research and development (R&D) investment in the United States. NIH allocates several grant funds that support different areas in global health: traditional hypothesis testing from investigators; targeted programs such as neglected disease infrastructure; small business entities known for creative and innovative capability; crosscutting biological system projects; and high-risk research and innovation that benefit all disease research. Academies and universities are the largest recipients of NIH grants and often transfer results of their work to others for further R&D and to bring products to scale.
- Grants from philanthropies such as the Bill & Melinda Gates Foundation or the Wellcome Trust or from governments to product development partnerships (PDPs). These grants allow nonprofits with product and research infrastructure to work closely with industry partners to advance global health technologies. The nonprofit entity may take on costs of laboratory work or conducting clinical trials, for example, in exchange for an agreement that successful products will be sold only at low or negligible costs in developing countries. Often the source of original early biomedical knowledge to organize the PDP comes from NIH academic grantees or company donations. PDPs are frequently organized around a single disease or product. Although PDPs are most often associated with nonprofit groups, private pharmaceutical companies are also adept at creating PDP-like nonprofit ventures and research centers within their corporate structures. Novartis and Merck Sharp & Dohme Corp. are two companies that recently announced such ventures, the latter in partnership with the Wellcome Trust.
Sharing R&D costs
To reduce costs of R&D, stakeholders can transfer or share research discoveries or data in several ways. Sharing or transfer can be conducted for common use and good with little or no charge. NIH scientists who perform their own research are able to transfer permission to develop their discoveries to public stakeholders at no cost—for example, to nonprofits working with neglected diseases. They may also advertise its use by the nonprofit. This “donation” of scientific information to nonprofit product developers has helped spur efforts to find cures for malaria, tuberculosis, and several infectious diseases. Sharing data and materials across multiple laboratories or research centers organized into consortia may also reduce costs.
Special funds and fundraising
Various mechanisms have been proposed to reduce costs of capital or raise alternative revenues through direct grants from general government revenue accounts. R&D for neglected diseases, for example, may be supported by specially designed government-backed bonds. The bonds are repaid over a long term, with some repayment from sale of medical products. This mechanism, which has been used for existing marketed products but not for unavailable products, is in early stages.
Fundraising by means of voluntary taxes on goods such as airline tickets or “sin taxes” are also being explored.
Tax credits
Tax credits have been used for products known as “orphan drugs"—drugs for domestic diseases that affect an unusually small number of people or that face other serious barriers to investment. An important consideration for this mechanism is that only income-earning companies would receive any benefit. For this reason, tax credits may be ineffective for many small biotechnology entrepreneurs because they have no profits to tax.
For more information on the above data, see:
Bill & Melinda Gates Foundation.
Novartis. Novartis Vaccines Institute for Global Health (NVGH).
Science. Can patents deter innovation? The anticommons in biomedical research.
BIO Ventures for Global Health. Clarify the Orphan Drug Tax Credit.
