Would pooling of donor funds accelerate global health R&D?

1. Would pooling of donor funds accelerate global health R&D? ICIUM Antalya, 16 November 2011 Center for Global Health R&D Policy Assessment Cheri Grace and Mark Pearson, HLSP

2. What is pooled funding for R&D? Donors would support a common fund for a specific purpose (e.g., neglected diseases R&D; a specific technology) Current Landscape Landscape with a Pooled Fund We assessed three of several recent proposals: • The Product Development Partnership Financing Facility (PDP-FF) • The Fund for Research in Neglected Diseases (FRIND) • The Industry Research Facilitation Fund (IRFF)

3. Pooled Funding for Global Health: The Proposals • Industry R&D Facilitation Fund (IRFF) • Main problem it seeks to address: predictability of funding for PDPs, by gaining donor commitments of 5 years and agreeing an allocation share upfront. Making it possible for smaller donors to enter this space. “Topping up” funding to bring PDPs to “optimum” portfolio. • Fund for Research in Neglected Disease R&D (FRIND) • Main problem it seeks to address: inefficient allocation of resources – by adopting milestone based approach to payment, central oversight and allowing wide eligibility of recipients • Product Development Partnership Financing Facility (PDP-FF) • Main problem it seeks to address: resource constraints by frontloading resources and providing a choice of funding modalities (guarantees, royalties, premiums)

4. How might pooled funding drive R&D?

5. What did we find from ouranalysis? Some promising features – but weak against our “added value” criteria. Possible fresh source of funding from capital markets Potential to make funds more long term and predictable for PDPs Unclear that portfolio would generate significant revenues Frontloaded funding – risk of exhausting funding earlier Risk of favoring projects with potential commercial markets PDP-FF FRIND IRFF Could stop wasteful spending on low quality projects Could improve information flow and sharing across PDPs Risk of over centralized decision-making Reduced predictability and flexibility for PDPs Increase in governance and operating costs Could incentivize more PDP-biotech collaborations Potential to make funds somewhat more predictable (<5 years) Unclear how PDPs and portfolios would be “certified” Would reward spending, not advances to new products PDP-industry collaboration problem is already solved? Potential to attract new, more risk averse donors and/or with limited scientific review capacity

6. What did we learn from donors and PDPs? Limited appetite amongst donors for a pool • Concern about loss of control • Skeptical about gains in portfolio management • “Times are tough” Lack of consensus on the nature of the problem • How big is the funding gap? • Do PDPs or industry better manage portfolios? • What metrics to optimize investment across all of global health product R&D?

7. Are there ways to build on “nuggets of gold” in these pooled funding proposals? One Microbicide ~$500 million One TB Vaccine One TB Drug One ACT Evaluation of several diagnostics FRIND with a narrower focus -- a targeted pool to support late stage clinical trials?

8. Are pooled funds for global health R&D dead on arrival, or still alive? Is there a pooled approach that will • bring new money to the table? • improve portfolio performance? Should funders, PDPs, and global health advocates work together to design a modified pooled funding proposal? www.healthresearchpolicy.org