Feasibility study on a TDR pooled fund for R&D to be released on 20 February 2016

In May 2014, the 67th World Health Assembly (WHA) of the World Health Organization (WHO) passed Decision WHA67(15) providing WHO the mandate to explore the feasibility of creating a voluntary pooled fund fund on R&D hosted by the UNICEF/UNDP/World Bank/WHO Special Programme for Research and Training in Tropical Diseases (TDR). The Decision outlined three principles guiding the consideration of the pooled fund:

(a) that the scope of the diseases should not be limited to type III diseases but should be in line with the mandate of the global strategy and plan of action on public health, innovation and intellectual property;

(b) the need for a sustainable financial mechanism for health research and development;

(c) the role of Member States in the governance of the coordination mechanism.

In January 2016, the WHO provide the following status update on the pooled fund to the 138th session of the WHO Executive Board:

Subsequently, the Special Programme has undertaken an extensive consultation with stakeholders from the public and private health product development sectors, including industry, civil society and the donor community. The conclusion of this exercise is that, subject to the availability of new funding, the Special Programme can adapt the mechanisms it has in place to accommodate a new financial mechanism, certainly within the early start-up phase. This would integrate with WHO’s plans for a coordinating group and the priorities it would identify through data from the newly established global observatory on health research and development. The Special Programme will publish in advance of the open-ended meeting a detailed analysis of several aspects that contribute to the design of a new financial mechanism.

In a discreet footnote, the Secretariat document notes: “A full report will be available at: http://www.who.int/tdr/en/. This work was supported by a 2 million Swiss francs designated award from the Swiss Agency for Development and Cooperation.” According to informed sources, McKinsey won the bid to conduct this feasibility study. From the scant information contained in this footnote, it us unclear as to how much this feasibility study cost. Was the entire 2 million CHF award used to commission the study? Perhaps Member States could seek further clarification from the TDR Secretariat or the Swiss Agency for Development and Cooperation.

On Tuesday, 19 January 2016, Switzerland chaired an informal meeting of a few member states (at the WHO) in which the TDR presented the findings of the McKinsey study (to be released on 20 February 2016). KEI has obtained a 2 page précis of the McKinsey study entitled “Exploration of financing mechanisms to support health product R&D – why pooled fund under WHO meets a public health need.”

On the first page of the summary, a table is presented with “Pipeline Size” plotted on the x-axis, and “Commercial Market Size” on the y-axis listing the market potential and pipeline size for 1) Neglected Tropical Diseases (NTDs), 2) Dengue, 3) TB, malaria and 4) HIV. For NTDs, the table states: “Most Type III and Type II diseases with limited R&D; for dengue, the table notes: “Some commercial markets developed through combination of middle-income country self-financing and interest. For TB and malaria, the McKinsey table reports, “Donor organizations (e.g. Global Fund, GAVI, UNITAID) provide funding assistance (or directly procure), creating visible/predictable demand and incentivizing research.” For HIV, the table states: “Larger pipelines higher incentives to invest in R&D (also benefiting diseases in LMICs).”

The summary of the feasibility study on the TDR-hosted pooled fund is divided into three sections: 1) Modelling a financial mechanism to support health product R&D, 2) Mapping the health product pipeline – a compendium of Target Product Profiles and 3) Managing an R&D portfolio – using expertise and incentivising innovation.

Under the first section “Modelling a financial mechanism to support health product R&D”, the summary notes:

TDR has developed a ground-breaking new tool, the Portfolio-to-Impact tool (P2I), model the timeline and minimum funding required to develop new drugs, diagnostics and vaccines for populations with limited resources. TDR has used this tool to set out 7 scenarios for a financing mechanism managed under WHO for consideration by its Member States. The P2I estimates how many products, either new or re-purposed, single or complex, that might be developed under such a mechanism. The scenarios range from WHO acting primarily as a convenor to set priorities through the management of funds by TDR of different sizes (US$ 15 million to 500 million annually) that directly supports R&D from promising leads through to the launch of a new product. The P2I tool will be published as a global public good for others to use and add to.

In describing the 7 funding scenarios, the authors of the summary prepared a table with three columns with the following headings: 1) Annual fund size, 2) Description and 3) If development starts in 2017, what is expected by 2030?

Under the most passive scenario for the annual fund size (of the TDR pooled fund): 1) Passive contribution – Up to US$1 million, the description of activities include “Define and communicate global priorities across diseases” with no text under the projected outputs for 2030. Under scenario 3, with annual contribution of US$15 million, the table notes that this funding allotment would “fund 3-4 projects” but be unable to fund “innovation focused projects”; this scenario projects the development of 3 simple repurposed drugs by 2030. For scenario 4, the annual contribution would be US$50 million (PDP size) which would fund 15-20 projects (including a “few innovation focused products”); this scenario estimates the production of 1 simple new chemical entity and 3 simple repurposed drugs. Under scenario 6, the annual funding contribution to the pooled fund would be US$300 million; the projected output by 2030 would include 1 simple biologic, 1 complex repurposed drug, 1 simple NCE and 3 simple repurposed drugs. Under the most ambitious scenario, the annual funding contribution to the pooled fund would be $US500 million; the projected output by 2030 would include “1 complex NCE, 1 simple biologic, 1 complex repurposed drug, 1 simple NCE and 3 simple repurposed drugs.”

The penultimate paragraph of this 2 page précis notes:

There are many calls besides this one for new finance to be directed toward health R&D to meet different challenges, including antimicrobial resistance, preparing for potential pandemic outbreaks and the persistent issue of targeting diseases of poverty. However, all share a common characteristic of being underserved by the commercially-driven R&D model so public finance is needed to leverage funds and provide incentives to cover the risk of R&D.

When TDR releases the feasibility study on 20 February 2016, one hopes the study’s assumptions on the costs of drug development will be made transparent, in particular, as they relate to the 7 scenarios for the size of a possible TDR-hosted pooled fund for R&D.

Update: During the 138th session of the WHO Executive Board (25 – 30 January 2016), the TDR secretariat circulated a glossy, 6 – paged brochure describing the proposed R&D Fund (this document is attached below). The conclusion of this document states:

The development of a new R&D Fund under WHO would create for the first time a mechanism to identify and cost out health products at a global level. The fund would ensure that any products that are developed would be affordable, accessible, acceptable and and available to all countries that need them.