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Jill Wechsler is Pharm Exec's Washington Corespondent
The PPP approach asks pharma to identify promising drugs and conduct pre-clinical tests, instead of paying for costly late-stage clinical trials.
In the last few years it has become good business and good politics for pharmaceutical companies to develop drugs and vaccines to treat deadly diseases plaguing poorer nations of the world. The Bill & Melinda Gates Foundation deserves much of the credit for moving third-world diseases to the top of the research agenda, while donor nations have often ignored these opportunities (see "Public Money Is Tight").
Fueling this development is a group of non-profit organizations with expertise in drug development and knowledge of third-world nations and diseases. They are encouraging public-private partnerships (PPPs)—a new drug-research model that promises to reduce costs for industry and produce affordable treatments that meet local needs.
PPPs replace the more recent "push-pull" strategy for boosting industry research on treatments that have little market value in industrial states. US and European governments have offered tax breaks and patent extensions to "push" R&D, as well as advance-purchase commitments (APCs) to "pull" new products to market. But some analysts consider these only minimally effective tactics, which yield treatments with low value for patients in poor countries. Some products still are too expensive for developing nations, and have dosing and distribution requirements that undermine access and compliance.
While governmental and international agencies continue to back the push-pull drug-development model, these new collaborative arrangements have already altered the R&D landscape for drugs that treat neglected diseases, according to an important study by researchers at the London School of Economics, headed by Dr. Mary Moran, now based in Australia. This September 2005 report published by the Wellcome Trust shows how in the last five years PPPs have spurred R&D to seek new treatments for malaria, tuberculosis, leprosy, leishmaniasis, schistosomiasis, dengue fever, and other diseases of the developing world. The report can be obtained from firstname.lastname@example.org
From 2000 to 2004, partnerships such as Medicines for Malaria Venture (MMV), the TB Alliance, Drugs for Neglected Diseases (DNDi), and the Institute for One World Health (iOWH), launched 63 new research projects that should translate into nine or 10 new drugs by 2010. And the funding has come primarily from Gates, the Rockefeller Foundation, and other private donors, as opposed to national health programs.
This new trend represents an important shift from the previous 25 years, when pharma companies developed only a handful of new drugs to treat neglected diseases, and gave away many of these treatments. In the 1990s, multinational pharma companies were actively closing down neglected-disease research, says Moran. Now pharma and biotech companies are joining PPPs and investing their own resources in this area, as seen in moves by multinational pharma companies, such as GlaxoSmithKline, Novartis, AstraZeneca, and Sanofi-Aventis, to form their own neglected-disease R&D units. These corporate investments do not expect to make a profit, but seek to conduct research in a way to avoid large losses. In addition to developing useful drugs, these initiatives may deflect criticism over past inaction in this area, and also help multinational companies reach major emerging markets in India and China.
Public Money Is Tight
For a growing number of niche biotech companies, PPPs provide prime opportunities to expand research programs, similar to developing orphan drugs for small patient populations at home. R&D partnerships enable these firms to parlay expertise in genomics, bioinformatics, and other innovative technologies into new development programs, as well as to gain opportunities to license intellectual property to larger partners. And both pharma and biotech companies anticipate that these no-profit R&D efforts eventually may yield spin-off products with commercial value in the West.
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 email@example.com