Looking for alternative models

With our medical teams crying out for new and better medical tools, we need to work imaginatively within the constraints of the present system to promote more medical innovation.  With increasing governmental concern that the current system is failing to deliver, it is in everyone’s interest that new mechanisms are found, and soon.
Countries and companies need to engage constructively in this effort to explore new ways to reward investments into R&D that are not biased against the world’s poor:
Creating specialist entities to address areas of neglect: Product Development Partnerships
Over the past few years a number of not-for-profit product development partnerships (PDPs – sometimes called public-private partnerships or PPPs) have been created to develop new drugs, diagnostic tests, and vaccines for neglected diseases. Examples include the International AIDS Vaccine Initiative, the Medicines for Malaria Venture, or the Global Alliance for TB Drug Development.
The Drugs for Neglected Diseases initiative (DNDi) founded by MSF and six partners is one of these partnerships.  In 2007, thanks to a radical new drug development strategy, DNDi brought out its first product: a simple, affordable and effective anti-malarial fixed-dose combination, combining two anti-malarials (artesunate and amodiaquine) in a single pill. Since then it has gone on to bring a total of four new products to the market, a second new treatment for malaria and treatments for Visceral Leishmaniasis and Human African Trypanosomiasis (HAT)/ Sleeping sickness.
There are a wide variety of PDPs in existence and not all are equally successful, or have the same approach to ensuring that access to the products they develop is ensured for the people who need them. For PDPs to truly meet the needs of the populations they are established to serve it is important that they adopt robust access policies. For example, DNDi’s policy for working with companies is to ensure that all Intellectual Property barriers are overcome before the partnership is signed, since they know that overcoming these barriers is critical to being able to get their products to the widest population, at the lowest cost. When DNDi developed ASAQ in partnership with sanofi-aventis they insisted that the newly developed medicine not be patented.  In doing so they have now been able to start work on transferring technology to an additional African industrial partner to produce and sell the medicine. Such policies are best practice and unfortunately not all PDPs meet these high standards.
PDPs are part of the answer but they are not enough by themselves to bridge the gaps we face in medical innovation. For example, if we look at the low number of new drug candidates in the pipeline for tuberculosis, for which PDPs exist, and compare that to the vastly greater number of potential new drugs under development for cancer or cardiovascular disease, it is clear to see the shortcomings of relying solely on PDPs. For this reason a range of mechanisms beyond PDPs must be created to ensure that the priority health problems facing the world are addressed.
And another winner is…the prize model
Prizes have been used as incentives for innovation for centuries. The idea is that a lump sum is be given as a reward for developing a new medical tool or overcoming a significant scientific barrier on the road towards developing a product.  Rather than paying for R&D through high prices, prizes pay for the R&D through an upfront payment and then introduce competition so that prices can be kept low. They also steer R&D towards areas of greatest medical need, and since the specifications for winning the price are set at the outset, developers work to create a product according to these specifications. For example, a prize for a TB point-of-care diagnostic test would make the ability to diagnose the disease in HIV co-infected patients a condition for winning the prize. 
Prizes can be large or small, but must be designed carefully to ensure that the reward that is offered provides a sufficient incentive to encourage developers to focus on the challenge set by the prize. A small prize that is purely tokenistic will not be enough to encourage those outside of a particular field to enter into research in an area. 
So-called ‘milestone’ prizes can also be used to get researchers to focus on important scientific challenges that have been neglected. For example in 2011, the US$1 million ALS Biomarker prize was awarded to a scientist who developed a novel tool to track the progression of the disease amyotrophic lateral sclerosis (ALS) This tracking tool represents a key first step along the road to finding a treatment for the disease. As these prizes only take the research so far, it is important that adequate measures are put in place to make sure that when a final product relying on this innovation is developed, access for the populations in need is secured.
Pooling patents to facilitate the development of better medicines: the patent pool
Patent pools have been used to drive innovation in a number of different fields - in the 1800s one was formed to produce better sewing machines and new combat aircraft during the First World War were also the result of a patent pool.  More recently, they have been used to drive innovation in certain digital compression technologies. The working principle behind them is that companies, researchers or universities  - all those who own licences - license the patents on their inventions - in this case their medicines - to one entity: the patent pool.
The idea is that any company wanting to use the inventions to produce generic versions of the patented medicines can get a licence from the Pool, in exchange for the payment of royalties.  The major benefit of patent pools is on the access to medicines front, as by stimulating generic competition on patented medicines, the Pool would drive prices down. But a Pool would also make the development of more adapted medicines easier – a company wanting to combine drugs in a new fixed-dose combination (when several drugs are in a single pill) would only have to deal with the patent pool – and not all the patent-holding companies. 
UNITAID’s Medicines Patent Pool opened for business in 2010. 
Advanced Market Commitment
An advance market commitment (AMC) is an innovative financing model that provides an incentive for pharmaceutical companies to develop and produce new medical tools by creating a subsidized market for the products that are needed. The subsidy is meant to reduce the risk for pharmaceutical companies of investing in products for developing country markets with limited purchasing ability, and is only paid once a drug, diagnostic test, vaccine or other health technology, meeting certain specifications is purchased by eligible developing countries (or donors on their behalf ) at a pre-set price. The subsidy covers an agreed volume of the producct, after which a more affordable long-term price (also called ‘tail price’) is offered to countries. This is aimed at ensuring the product is a sustainable option that will be used by countries beyond the duration of the subsidy.
... But does it work ?
A pilot AMC was employed by the Global Alliance for Vaccines and Immunisation to speed up the delivery and boost the production capacity of a vaccine for pneumococcus for use in developing countries in 2010. MSF believes that this arrangement gave away far too big a subsidy to the main pharmaceutical companies involved and that without more careful calculations, AMCs risk becoming just a giant subsidy for industry. 
Last update: July 2011
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