Reducing Research Risk
PPPs ask the non-profit partner to manage and assume risk for large-scale clinical trials in developing countries as part
of the "no profit-no loss" approach to industry R&D. Instead of underwriting the costly late-stage clinical development process,
the new approach calls on pharma to be more involved in identifying promising compounds and conducting early tests. Then the
non-profit partner, with its local research networks and experience navigating national regulatory requirements, takes over
the riskier process of conducting clinical trials and seeking product registration in multiple countries.
The private sector's prime expertise is finding drugs, explained Moran at a conference sponsored by the Brookings Institution
in Washington, D.C. last April. "Where they're less interested and less expert is doing large-scale trials with pregnant women
and children in remote developing countries in diseases that they don't know about." So the new model "swaps roles round,"
she explained. "Industry moves upstream" to do high-level innovation that carries less liability risk, and public groups move
downstream to clinical development and dealing with regulatory authorities and patient groups. Lower expenditures produce
drugs at not-for-profit prices, which offer higher health value to patients in developing countries.
The collaborative models differ. Some PPPs are establishing their own labs to develop drugs without any industry partner,
often contracting out clinical research, product formulation, and manufacturing to separate entities. Fairly sophisticated
generics firms in India, China, and South Africa have considerable expertise in formulation chemistry, low-cost scale-up,
and third-world product distribution. Some of these larger generic manufacturers also are taking on more of the R&D work as
PPPs provide opportunities to expand from basic production to drug development.
Many PPPs promote their "industry mindset" as key to success. MMV president Chris Hentschel, who comes from the biotech industry,
explained at the Brookings conference that being able to drop unsuccessful projects is key. "If they're not meeting milestones,
we have to kill them," he said, "and we operate exactly like industry in that way."
"Manufacturability" is another important consideration for identifying potentially successful products, noted Jerald Sadoff,
president of the AERAS Global Tuberculosis Vaccine Foundation and formerly with Merck. Most projects fail because they can't
be made at an acceptable cost or in a reliable way for millions and millions of doses. The PPPs have expertise in the field,
he noted, but experience in good-manufacturing-practices (GMP) reporting and data management comes from industry. Lynn Marks,
senior vice president of the GSK Medicine Development Center, noted that voluntary licensing of products allows manufacturing
in low-cost plants in developing countries to "get outside our cost structure."
The calculation of research costs is an important element in all of these projects. Hentschel explained that MMV doesn't count
opportunity cost in estimating the resources needed to develop a new antimalarial. But that does not mean they play no role
on the industry side. Marks pointed out that GSK has to consider the cost of lost opportunities in assessing investment in
this type of drug development: If the company has 200 or 300 people working on areas where it expects no return on investment,
"they're not working on other important diseases such as Alzheimer's, cancer, or stroke." Such investment decisions are made
at the CEO level based on "responsibility to society at large," Marks said, so that there are investors who "decide to invest
in your corporation based on those types of alignment." Or because "it's the right thing to do."
Jill Wechsler is Pharm Exec's Washington correspondent. She can be reached at firstname.lastname@example.org