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InnovationFinancing of vaccine R&D– gaps and opportunitiesfor innovationArticle by Paul A Wilson (left) and Robert Hecht (right)The purpose of this paper is to identify gaps anddeficiencies in existing funding for vaccine research anddevelopment (R&D) and explore ways that innovativefinancing mechanisms could fill these gaps. Our focus is onAIDS vaccines, but new funding mechanisms could alsosupport development of vaccines for other diseases thatprimarily affect the developing world, such as malaria andtuberculosis. We begin to construct an analytical frameworkand use it to characterize and evaluate funding mechanismsfor vaccine R&D.There has been considerable innovation in global healthfinancing in recent years, including the establishment of theGlobal Fund for AIDS, Tuberculosis and Malaria (the “GlobalFund”) and the GAVI Alliance (formerly the Global Alliance forVaccines and Immunization) 1 . GAVI itself is now funded inpart by an innovative mechanism, the International FinanceFacility for Immunization (IFFIm), which raises resourcesthrough the sale of bonds backed by future donorcommitments 2 . In the R&D area, public-private productdevelopment partnerships (PDPs), which first appeared in themid-1990s and are supported primarily by grants fromgovernments and foundations, are another important newfunding mechanism 3 . A pilot Advance Market Commitment(AMC) for pneumococcal vaccines, intended to spur privatesector investment in development and manufacture ofvaccines for developing world markets by creating asubstantial subsidized market for these products, wasannounced earlier this year 4 .Despite this dynamism, funding of global health R&Dremains inadequate. Innovative financing mechanisms couldaccelerate R&D by increasing the total volume of funding andby improving its focus, flexibility, and predictability and thuseasing some of the inefficiencies that currently hamperprogress. Innovative financing could also help to mitigate thescientific and commercial risk associated with drugs andvaccines for diseases of the developing world and in this wayallow the private sector to contribute more to the developmentof these new technologies.Current investments in AIDS vaccine R&DFunding for AIDS vaccine R&D has grown substantially inrecent years. Between 2000 and 2006, funding from thepublic and the philanthropic sectors rose from US$ 327million to US$ 854 million, as existing funders increasedtheir contributions and were joined by new donors 5 . If privatecommercial funding is included, total spending on AIDSvaccines reached $933 million last year (Figure 1). Publicsector funders continue to provide the large majority (83%) ofresources for preventive HIV vaccine R&D, while in 2006 thephilanthropic sector provided 8.4% and the commercialsector accounted for the remaining 8.4%.Where are the gaps in vaccine R&D financing? How couldinnovative financing make a difference?While financial resources devoted to AIDS vaccine R&D haveincreased substantially, there are a number of deficienciesthat must be addressed:✜ Insufficient volume of funding. The Global HIV VaccineEnterprise estimated in 2005 that US$ 1.2 billion isneeded annually to speed the search for an HIV vaccine.Current spending is thus about US$ 270 million lessthan what is required. Moreover, sustained support ateven current levels is by no means assured: in recentyears, the overall NIH budget has levelled off, and onetimegrants from foundations cause funding from thissector to fluctuate from year to year. There are strongarguments for expanded government funding of vaccineR&D: vaccines are in important respects “public goods”,in that by interrupting disease transmission theyindirectly benefit people who are not themselvesvaccinated. Moreover, many people who need thesehealth tools are very poor, which further weakens thepower of market forces alone to drive their development.Short political cycles and immediate pressures to spendon today’s health care services can make it difficult forgovernments to devote adequate resources to longer-terminvestments in new drugs and vaccines.✜ Allocative inefficiencies. Certain activities areinadequately resourced, leaving gaps in critical parts ofthe R&D continuum. Under-funded areas include appliedresearch to address key scientific constraints, such as thechallenge of finding a vaccine capable of eliciting broadlyneutralizing antibodies; translational research and designof novel vaccine concepts; and trial capacity sufficient toconduct several proof-of-concept efficacy trials in parallel 7 .These gaps mean that scientific knowledge is not being088 ✜ Global Forum Update on Research for Health Volume 4
Innovationefficiently converted into candidate vaccines and thatcandidates are not being efficiently tested and compared.In the case of early stage research, we believe that newfunding mechanisms are needed to encourageexperimentation and support ideas that existing fundingsources were not designed to target. Such mechanismsshould be able to respond rapidly to opportunities, have ahigh tolerance for risk, and reach beyond the mainstreamof HIV research to bring in ideas from other areas ofvirology and immunology. A related inefficiency stemsfrom the fact that existing R&D funding mechanisms aremostly national in scope and primarily support researchand product development within individual OECDcountries (Organisation for Economic Co-operation andDevelopment). In light of the growing science andtechnology capacity of certain developing countries suchas Brazil, China, India and South Africa, there is a needfor truly global funding mechanisms that could supportneglected disease R&D wherever it can be done.✜ Technical inefficiencies. Most funding for AIDS vaccineR&D comes from national research bodies such as theUSA’s National Institutes of Health (NIH), the UK’sMedical Research Council (MRC) and France’s AgenceNationale de Recherche sur le Sida (ANRS), whichaward grants directly to researchers and productdevelopers; or from government and foundation grantschannelled through public-private partnerships like theInternational AIDS Vaccine Initiative (IAVI). Recently, theBill & Melinda Gates Foundation has also made grants toapplied research consortia composed mainly of academicinvestigators. Funds from these national research bodiestend to be relatively short-term, typically three years inthe case of NIH, while financing from Gates or IAVI mayextend somewhat longer. In both cases, the duration offunding is not always consistent with the long-terminvestments that complex vaccine research projectsrequire or with product development through proof-ofconceptstage, which can take five years or longer.In addition, existing research grants tend to cover only afraction of the total cost of a scientist and his laboratory.Scientists therefore have to divide their time among severalprojects and are not able to focus as they could if their entireresearch programme were covered by a single large vaccineR&D grant. This fragmented system of financing canundermine the technical efficiency of resource use.This analysis suggests that new financing mechanismscould make AIDS vaccine R&D faster and more efficient byexpanding the volume of funding; encouraging researchers tofocus full-time in large labs and laboratory consortia on keyscientific challenges; stimulating more biotechnologycompanies to develop new vaccine concepts and platformtechnologies suitable for an AIDS vaccine; and supporting thedevelopment of clinical trial sites in high-incidence populationcohorts where rapid Phase II proof of concept and largerPhase III efficacy trials could be conducted.A framework for assessing vaccine R&Dfinancing optionsIn the previous section we outlined current funding forAIDS vaccine R&D and identified some important gaps thatnew kinds of support might fill. To give structure to ourdiscussion of innovation in R&D financing, we focus on threedimensions of financing mechanisms: source, use andfinancial modality.SourceFunding for R&D can come from the public sector, from thecommercial private sector or from foundations. Moreover,especially in the case of public funds, the source can be anational body such as the NIH or an international institutionsuch as the World Bank or a United Nations agency. Sourcesof commercial private funding of R&D include thepharmaceutical industry, venture capital and private equityfirms, and individual investors. A growing number offoundations are now backing R&D activities too, along withphilanthropic initiatives of for-profit firms.It is sometimes useful to distinguish between proximateand ultimate sources: for example, PDPs like IAVI act in partas financing intermediaries, channelling resources raisedfrom national governments and foundations to specific R&Dprojects along with scientific and technical support. MostUnited StatesCommercialsector (8.4%)Philanthropicsector (8.4%)Public sector(83.2%)United States (84.3%)Europe (10.5%)Other public sector (4.9%)Multilaterals (0.3%)EuropeOther public sectorMultilateralsTotal = US$ 933 millionFigure 1: Public, philantrophic and commercial funding for HIV vaccines in 2006Global Forum Update on Research for Health Volume 4 ✜ 089
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Editorial Advisory Board:Luis Gabri
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Contents096 Child immunization: acc
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IntroductionResearch contributions
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IntroductionType IType IIType IIIPr
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Introductionmaking), takes account
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Access to healthStrengthening healt
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Access to healthDeterminantsAvailab
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Access to healthThe authors are inv
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Access to healthCombining health an
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