Stimulating research and development
Developing and delivering lifesaving global health technologies requires expertise from a wide variety of stakeholders, including private biotechnology and pharmaceutical companies, nonprofit groups such as product development partnerships (PDPs), academia, and public research institutes. Because global health products are primarily needed in low-resource countries, where patients and health providers have limited ability to pay for them, commercial incentives are typically insufficient to spur investment by the biotechnology and pharmaceutical industries, which are the traditional drivers of health product development. This market challenge leaves major gaps in the financing and expertise required to develop and deliver essential health technologies for the developing world.
To fill these gaps, global health and economic experts have designed several strategies—including incentives and innovative financing mechanisms—to stimulate and fund global health research and product development. Incentives and innovative financing encourage a variety of stakeholders with requisite expertise to devote their resources to developing and deploying essential health products for low-income countries. When used in conjunction with global health research investments from the United States and other donors, incentives and innovative financing can leverage knowledge and resources from multiple sectors, particularly the biopharmaceutical industry.
Some mechanisms implemented to date include priority review vouchers (PRVs), small business innovation research (SBIR) awards, procurement pools, patent pools, PDPs, tax credits, and advanced market commitments (AMCs). Other mechanisms have been proposed but not yet implemented. Various US agencies have supported these mechanisms. For example, 11 US federal agencies participate in the SBIR program, which since 1982 has provided American small businesses with funding to conduct research and development, including for global health technologies.24 Incentives and innovative financing mechanisms are essential tools—particularly for governments struggling to allocate increasingly scarce resources—to leverage private-sector investment, to efficiently allocate funding to promising areas of research, and to accelerate the development of game-changing technologies.
Incentives and innovative financing can work
Throughout the past year, there have been several promising advances in the use and impact of incentives and innovative financing mechanisms. For instance, the pilot AMC—an effort currently underway to accelerate the manufacture and delivery of pneumococcal vaccines to millions of children worldwide25—enlisted four private industry partners (GlaxoSmithKline, Pfizer, Panacea Biotec Ltd, and the Serum Institute of India) to provide a long-term supply of pneumococcal vaccine to developing countries at a fraction of their industrialized market price. In December 2010, Nicaragua became the first low-income country with support from the GAVI Alliance to begin immunizing children with a new pneumonia vaccine procured through the AMC. Several other countries, such as Kenya, have followed in 2011 with support from GAVI, representing one of the first times a new vaccine has been launched simultaneously in poor and rich countries.26 Lessons learned from rigorously evaluating the cost-effectiveness and impact of this AMC will inform decisions about whether the mechanism could be replicated for other diseases.
Patent pools, which aim to speed the development of new technologies by making licenses for patents and other intellectual property more widely available, have also shown promise over the past year. In October, the National Institutes of Health (NIH) became the first patent holder to share intellectual property rights on some HIV/AIDS medicines through a patent pool launched by UNITAID, a system that purchases health products and is funded by a mix of taxes and voluntary contributions on airline tickets.27 Another licensing pool, the Pool for Open Innovation Against Neglected Tropical Diseases, engaged an influx of new partners, including academic institutions, government agencies, private industry, and nonprofit partners.28 These diverse partnerships demonstrate that patent pools hold promise for attracting the expertise required to accelerate global health research and product development.
Growing momentum across the US Government
The United States has played a key role in exploring, supporting, and implementing incentives and innovative financing mechanisms for global health, and several decision-makers in the US Government—including those in the US Treasury, the US Agency for International Development (USAID), the White House Office of Science and Technology Policy, the NIH, the Food and Drug Administration (FDA), and Congress—have demonstrated leadership in this area. During the 111th Congress, former senator Sam Brownback (R-KS) introduced a bill that would expand the FDA’s PRV program, which aims to spur research and development by entitling the sponsor of a newly approved drug or biologic that targets a neglected tropical disease to an expedited review of a new drug application.29 Though the bill did not pass, it did garner bipartisan support (Senators Sherrod Brown [D-OH] and Al Franken [D-MN] were co-sponsors), and the legislation was reintroduced this year.
In December, Congress passed the America COMPETES Act, which gives all federal agencies the broad authority to use prizes and challenges to foster innovation.30 The America COMPETES Act authorized USAID to launch the Grand Challenges for Development prize-based initiative, which aims to encourage innovative solutions to global development issues. The first challenge, initiated in March 2011, provides grants to foster innovative prevention and treatment approaches for pregnant women and newborns in rural, low-resource settings.31 USAID also introduced its Development Innovation Ventures program in October 2010, which awards grants to promising projects that have the potential for creating breakthroughs in global development.32
The US Patent and Trademark Office (USPTO) is implementing a pilot program to use the patent review system to spark the development and delivery of technologies that address humanitarian needs, including global health diseases.33 Prizewinners will receive a voucher for fast-track patent review that can be transferred on the open market. Key questions remain regarding the implementation of this mechanism, but the USPTO should be recognized for its innovative efforts to stimulate humanitarian technology development.34
It is commendable that the US Government is helping to leverage incentives and innovative financing to address pressing global health issues. Because these mechanisms are still in their nascent stages, there needs to be further deliberation and evaluation to determine how successful they will be in the long run. The following recommendations should serve as key guidelines for the US Government as it assesses these and other incentive mechanisms.