Hannah E. Kettler, PhD

Institute for Global Health, UCSFSan Francisco CA

• The global health problem• R&D for new products

• Push and Pull Incentive Proposals• Conclusions – opportunities for win-win solutions

for industry

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0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Africa EMEs

% o

f D

AL

Ys

Injuries

Non-communicable

Communicable,maternal, perinatal

WHO, 1999.

Disease Deaths in 1998 DALYs (Disability Adjusted Life Years)* lost 1998

Acute respiratory infections (including pneumonia and influenza)

3.5 million 83 million

AIDS/HIV

2.3 million 71 million

Diarrhoeal diseases

2.2 million 73 million

TB

1.5 million 28 million

Malaria

1.1 million 39 million

Measles

0.9 million 30 million

• One DALY is one lost year of healthy life • [Source: Removing Obstacles to Healthy Development, WHO 1999]

Catalyst, 2001.

• 4% of the $55.8 billion invested in health R&D inearly 1990s

• 1% of the 1,123 NCEs launched between 1975 and1997

• 4% of the 11,054 private R&D projects underway in1998

• Less than 0.5% of the $41,887 million invested inresearch by the NIH in 2001

New drugs for tropical diseases 1975–1997Less than 1% of approved new chemical entities marketed were for tropicaldiseases (Trouiller and Olliaro, 1999)

Chagas’ disease Benznidazole 1981 Veterinary R&D (Roche)Nifurtimox 1984 Veterinary R&D (Bayer)

Human Africantrypanosomiasis

Eflornithine (DFMO) 1990 Anticancer R&D (MMD / WHO)

Schistosomiasis Praziquantel 1980 Veterinary R&D (Pfizer / WHO)

Oxamnaquine 1981 Veterinary R&D (Pfizer)

Helminthicinfections

Albendazole 1987 Veterinary R&D (SKB)

Onchocerciasis Ivermectin 1989 Veterinary R&D (Merck /WHO)

Malaria Artemether 1997 (China / RPR / WHO)

Atovaquone / proguanyl 1997 (Wellcome)

Halofantrine 1989 (WRAIR / SKB / WHO)

Mefloquine 1987 (WRAIR / H-LaRoche / WHO)

Catalyst, 2001.

• Developing countries = 80% of the world’spopulation; purchase 18% of the world’spharmaceuticals

• Percentage of GDP in developing countries spenton pharmaceuticals is already comparable with thatspent in the developed world

A = reduce costs

R&D costNet revenue froma viable market*

Time

*NB expenditure on clinical studies, manufacturing, marketing etc

continues after launch but for simplicity has been netted out.

Patent expiry

Launch

£ $

Exp

end

itu

re

Rev

enu

eB = increase expected return

Push - Share Risks & Costs Pull - Increase Expected ReturnsImprove intellectual property protection for LDC medicines Roaming market exclusivityR&D tax credits Purchase funds, price guaranteesR&D grants Tax credit on salesSocial venture capital funds Creating functioning markets in LDCsInvestments in clinical trial infrastructure in LDCsSpeed up the approval process

• 25 of 900 US orphan designations targeted atdiseases of poverty

• 12 of a total 227 approved orphan drugs to treatdiseases of poverty– 2 malaria– 1 leishmaniasis– 2 meningitis– 4 TB– 1 trypanosoma– 2 leprosy

FDA, Office of Orphan Product Dev., June 2002.

• Well advertised list of targeted “priority” diseases

• Tiered tax credits that reflect disease categoriesand that cover international as well as “homebased” clinical trials

• Fast track approval• Grant funding for both applied and basic research• Genuine “pull” incentive in the form of a purchase

fund or roaming market exclusivity

• Cabinet Office and Treasury proposals to the UKgovernment to support for disease-specific basic andapplied research, tax incentives for R&D (passed 2001,never enacted)

• EU Clinical Trials Initiative• US Vaccines for the New Millennium Act of 2001 proposal

(dropped)• US Biological and Chemical Weapons Countermeasures

Research Act (under review)• UNAIDS Aids Fund proposal• G8 Fund proposal..

• And so on...

• Companies with the know how, infrastructure andexperience lead and fund the R&D.

• More private companies invest in R&D infrastructure inneglected disease fields.

HOWEVER• Success depends on governments taking the initiative and

making long term commitments to the incentives.• There are no guarantees that companies will respond.• Incentives on their own will not solve the complex problem.

roaming patent,creative licenses

financingpush and pullexclusively

LDCsIII

roaming patent,creative licenses

differential pricingin limited cases,

financing

push andpull, PPPs

mostly LDCsII

CL, creativelicenses

differentialpricing, financing

region-specificversions

globalI

IPRAccessR&DMarkets

LDC = Less Developed Countries

• Industry participation is essential

• Innovative solutions AND billions of dollars are stillneeded

• Experience to date shows that win-win solutionsare possible for companies when:– Public funds and management are committed and

deemed credible– IPR rights are respected– Industry contributes to the planning as well as the

execution of the program

Companies’ Contributions to Diseases ofPoverty

Access and Donation Programs Companies R&D Partnerships Companies

In-house Tropical Disease Research Programs (excl. HIV)

HIV

Abbot, BI, BMS, GSK, Pfizer, Merck, Roche, Agouron HIV Vaccines: IAVI

Targeted Genetics, Maxygen, Therion, Alphavax, Becton Dickenson, GSK, Roche, BI, BMS, Merck GSK

Malaria GSK, Novartis HIV Drugs: ICCADD

GSK, DuPont, Pfizer, Merck, AZ, BI, BMS, Roche, Novartis, Pharmacia, Agouron, Ajinomoto, Gilead, Sigma-Tau, Triangle Rx, Trimeris Astra Zeneca

Afr. Tryp. Aventis, BMS Malaria Drugs: MMV

GSK, Roche, Bayer, Korea SP Pharm., Jacobus Pharm, BMS Novartis

Leprosy NovartisMalaria Vaccines: MVI

Apovia, Pervion Biotech, GSK, Baharat Biotech, Oxxon, Progen Industries Microsciences

LF GSK, Merck TB Drugs: GATB

Chiron, Novartis India, Lupin Labs India Sequella

Onchocerciasis MerckParasitic Drugs: IOWH Celera Tropix

Trachoma PfizerDengue Vaccines: PDVI Aventis, Acambis Corixa/IDRI

Illustrative, not an exhaustive list Sources: IPPPH, IFPMA, IAVI, MVI, MMV, Kettler, 2002