This blog post was written by Ben Comer of Pharmaceutical Executive magazine.
Recognizing that traditional market forces – namely incentives related to intellectual property and a steady demand for products – have failed in developing countries, the World Health Organization (WHO) asked a member state-nominated group to come up with ways to fund R&D and pay for the treatment of neglected diseases in the world’s poorest nations. The group’s proposals will be discussed at the sixty-fifth session of the World Health Assembly, beginning today in Geneva. Dr. Paul Herrling, a member of the group and head of the Novartis Institute for Tropical Diseases, sat down with PharmExec to explain the group’s process, conclusions and next steps.
Paul Herrling was a member of the previous WHO group [Expert Working Group on Research and Development: Coordination and Financing] asked to examine the problem of financing R&D and treatment in developing countries, which reported in 2010. However, disagreements among various constituents over the transparency of the process and the criteria for considering different proposals led to a stalemate, which this new group – the Consultative Expert Working Group on Research and Development: Financing and Coordination (CEWG) – was created to overcome. This time, member states appointed the members of the group, instead of WHO Director-General Margaret Chan. Herrling was selected to represent Switzerland.
Ben Comer: You were the only person from the drug industry appointed to the CEWG, and some other groups protested your inclusion.
Paul Herrling: On principle they didn’t want to have the pharma industry in there, which is completely crazy because the pharma industry is a key stakeholder and part of the solution. It was decided that when discussions on my model – The Fund for R&D in Neglected Diseases (FRIND) – took place, I would step out of the room, and I would also not participate in written debates on the FRIND model. An that’s what I did. The whole group was roughly 20 people and I was the only one who had actually ever done R&D. There were a few medical people, but really doing drug discovery, I was the only one. But the overall mission – to find a way to bridge the R&D gap in funding for neglected diseases – was something that everybody around the table subscribed to, so we were able to work together. The chairman of the group, John-Arne Røttingen, deserves a lot of credit for that.
BC: What did the new group accomplish?
PH: On the positive side, we were able to avoid discussions about abolishing IP, which aren’t helpful. Instead, we talked about keeping IP in place where it works and concentrated on solutions for where IP doesn’t work, where there are not markets. Second, and this is positive from the industry’s point of view, we did not talk about just squeezing industry for funds and forcing industry to pay. This time, the primary responsibility is put on government. Commercial industries can only go so far, they aren’t not-for-profits or charities. And there’s also a limit on what charities can do, even the Gates Foundation.
BC: What criteria did you use to evaluate the various proposals?
PH: The criteria are published in our report [criteria on page 48]. The basic criteria were, does it contribute to the funding of neglected diseases, and does it delink the costs of R&D from the actual price of the medicine. And this is why we need the help of the governments because the delinking will be done by the noncommercial organizations: pay for the R&D so that we can make the drugs available at cost, or even for free to the patients that need them. Another aspect has to do with capacity building, because it doesn’t make sense to build up a scientific medicines pipeline and then send it to countries where nobody has a clue what that is or what to do with it. The [226 page] report is comprehensive; a lot of people had a lot of messages to pack in there. The stuff on data exclusivity I tried to get out, but I didn’t win that one. But I won others…the key thing is that the proposals are viable and everyone involved is content with it.
BC: Can you describe some of the most promising proposals?
PH: There’s one proposal called the Milestone Prizes, which is similar to mine [FRINDS], where you get funding only for one step in the process and if it fails, fine, it was paid. But if you reach the milestone, then you’re eligible for the next phase. The pooled funds, of which FRINDS is one of them, has a delinking component because of the exclusive license that you give to the fund. It meets the coordination part because you do it through a kind of portfolio management. [Herrling’s FRIND model would let a compound’s originators patent the molecules to be used under the auspices of FRIND, but in return for the money received, would give an exclusive license for the neglected disease (and the neglected disease only) indication to FRIND. The originators would maintain ownership for composition of matter and any other indications for which a commercial return might be expected.]
BC: How much will you ask governments to contribute?
PH: One way that we’re proposing is that governments pay a small portion of their GDP, as a guideline for how much to invest in R&D for neglected diseases. That way, the ones who can pay more, pay more, but everyone is part of it, so they can take ownership.
BC: Won’t it be difficult to get governments to vote on a commitment to give a percentage of GDP to neglected diseases?
PH: There are many different proposals so different governments could pick out the one they like most. But yes, some will go home and say we’re going to give 0.01% of our GDP [and no more] because it restricts our flexibility. Somebody likes to buy more guns. So that’s what we try to avoid. Developing countries, for example, would probably go for capacity building in their own countries, whereas developed countries that already have [R&D] capacity, would hopefully go for R&D financing through allocation of part of the development portfolio.
BC: What are the next steps?
PH: The report will be discussed at the World Health Assembly, and they could say, like last time, that some countries oppose the fundamental position, so go away, and then maybe they’ll create a fourth working group. But they could say, okay, we’ll accept this report and we are going to set up whatever mechanisms are necessary to start the discussions around this type of treaty.
This interview was drastically condensed from the original.