Incentives, Where There Were None

With the expected funding shortfall of the pipeline, efforts to develop a market-based solution to the R&D problem have been energized. "The challenge over the next few years is financial innovation as much as product innovation," says Peter Hotez, MD, president of the Sabin Vaccine Institute, a nonprofit developing vaccines for hookworm and other diseases. Here are some new ideas to spur neglected R&D.

Priority review voucher At press time, the PDUFA date for Novartis' gold standard antimalarial Coartem (artemether–lumefantrine) had come and gone without any decision, but all eyes are on the drug as it waits to hear from FDA on its eligibility for a PRV.

"This can make a big difference to a company with a blockbuster in its portfolio, jumping the queue to get FDA review," says Peg Willingham, senior director of external affairs from Aeras Global TB Vaccine Foundation. "Even as a nonprofit, we could trade the waiver or sell the waiver and then plow that money back into our work."

Critics say that PRVs have the potential to distort the philanthropic motive and "pseudo-commercialize" the neglected disease research field, which may impact the willingness of organizations to collaborate. As an initial test run, Coartem is a bad example because it could reward Novartis with a voucher, though countries in Africa and Asia get no new technology since Coartem has already been widely available in the public sector for some time. Critics say that sends the wrong signal to companies to scour their current portfolios for relevant indications rather than engage in new research.

But among the wider industry, the idea is resonating. "It's stimulating many companies, including ours, to think about how we might be able to take advantage of that," says Margaret McGlynn. "The real value will play out over time, when you see if this actually leads to quicker approvals."

Milestone grants The new Funding model for R+D in Neglected Diseases (FRIND) recently proposed by Novartis' Paul Herrling goes further to mitigate the risk of developing drugs and vaccines for neglected diseases. Under the model, funds from donors and governments are pooled and used to award milestone-specific grants to organizations carrying out R&D projects where there is no commercial return. If a therapy is successfully developed and approved, the inventors then can license their intellectual property to FRIND for the specific neglected-disease indication—while retaining IP rights for all other indications they might develop. This could be useful, for instance, when investigating a compound for Dengue fever, which might show activity in the closely related disease hep C, a commercial blockbuster indication.

Advance market commitments are agreements through which governments or other bodies promise to purchase a specified amount of a product if it is successfully developed. The goal is to stimulate research by guaranteeing a market to the manufacturer—provided that the product meets a particular profile.

The first AMC, signed in 2007 by Canada, Italy, Norway, Russia, the United Kingdom, and the Gates Foundation, committed $1.5 billion to finance a pneumococcal vaccine for the world's poorest countries. (Prevnar, on the market since 2000, does not protect against certain serotypes common in poor countries.) Vaccines that fit the profile are moving quickly to market. In early January 2009, GlaxoSmithKline's candidate pneumococcal vaccine, Synflorix (pneumococcal Haemophilus influenzae Protein D conjugate vaccine), which protects against three additional pneumococcal strains, was recommended for approval. A 13-valent vaccine, developed by Wyeth, is due on the market later in 2009. Based on this progress, experts believe that a suitable vaccine in sufficient quantities can be rolled out as early as 2010, and can save 7 million lives by 2030.

The pneumococcal AMC also addresses price. At a specified point, after development costs have presumably been recouped, the agreement calls for manufacturers to drop down to a sustainable "tail price," or to license technology to other manufacturers. "The AMC offers a reasonable return for the significant investment we are going to make, and at the same time is at a price point that is affordable for the countries poorest in the world," says Jim Connolly, head of Wyeth's vaccines.

This sort of planned price structure is a good deal for the industry, says Orin Levine, an associate professor for Johns Hopkins Bloomberg School of Public Health, and executive director of PneumoADIP. "It's money in advance, diminished uncertainty around the product characteristics, and offers a price that should allow [both manufacturer and purchaser] to offset legitimate risks and costs and let countries feel comfortable about the sustainability of the vaccines."

The issue of demand is important. GAVI requires each government in its programs to pay a copay to help finance vaccine development. And while prices are mostly subsidized, they still take up a substantial portion of a developing nation's budget. "Demand generation is the critical factor," says GSK's Kate Taylor. "AMCs will be successful if countries know there's robust financing available, and therefore have the confidence to introduce [vaccines] in a timely manner."

But for pharma to feel comfortable agreeing to a low, long term price, they need good forecasts, and good forecasts are not generally available. "A lot of governments will wait to see exactly what's happening, who signs up and what the deal might be," says Jarrett of UNICEF. "Prevnar is one thing. But if you're talking about a 10- or 13-valent, end-price still may be quite expensive from a point of view of a poorer country. The industry has always said that it's very difficult for them to sign up to an end-price."

A second AMC is already in development, but companies express caution. "These are all important initiatives," says Fred Hassan. "But given that it takes 10 years to develop a drug, it's not easy to implement these ideas because people and policies change over a number of years."