2009 Neglected Disease Research and Development

New times, new trends: background to the G-Finder survey

Acknowledgements

W

e would like to extend our gratitude to all the participants in our survey. The continued commitment and cooperation of a wide range of survey respondents, including government and multilateral agencies, academic and research institutions, Product Development Partnerships (PDPs), pharmaceutical and biotech companies, and philanthropic organisations, has allowed us to continue to provide accurate up-to-date financial information in the field of neglected disease R&D. Without their involvement and patience, this project would not be possible.

A warm thanks goes to the members of our Advisory Committee, Stakeholder Network and other experts for their continued and invaluable technical advice on the design and scope of our study. We would particularly like to acknowledge the HIV Vaccines and Microbicides Resource Tracking Working Group, and the Treatment Action Group (TAG) for sharing data with us and coordinating their initiatives with ours where possible.

In addition, this year various trade organisations helped us identify and make contact with previously unsurveyed organisations in the field of neglected disease R&D. We would especially like to thank AdvaMed (Advanced Medical Technology Association) and BVGH (BIO Ventures for Global Health) for their enthusiasm and dedication to our work.

This organisational feat would not have been possible without the magic worked by our project manager, Fred Zmudzki, and the unflagging efforts of our administrative team, Louise Anderson and Susan Hall.

Our contract researchers Vipul Chowdhar y, Maria De la Pava, Suzi Edwards, Adeel Hamad, Rita Issa, Peace Masinde, Anjali Nayyar, Lillian Parsons, Huayi Rui and Ye Rong should also be acknowledged. Their dedicated efforts to make and follow-up contacts worldwide was a key factor behind this year’s expanded survey participation.

Finally, The George Institute for International Health would like to thank the project funder, the Bill & Melinda Gates Foundation, for their ongoing support.

Executive Summary

The survey

The second G-FINDER survey analyses and reports on 2008 global investment into research and development (R&D) of new products for neglected diseases. It covers:

• 31 neglected diseases
• 134 product areas for these diseases, including drugs, vaccines, diagnostics, microbicides, and vector control products
• Platform technologies (e.g. adjuvants, delivery technologies, diagnostic platforms)
• All types of product-related R&D, including basic research, discovery and preclinical, clinical development, Phase IV and pharmacovigilance studies, and baseline epidemiological studies.

Significant efforts were made to capture an even more accurate picture of global investment into R&D for neglected disease products, with survey expansion to several hundred more groups, including an additional Innovative Developing Country (IDC) (India) and many more small to medium size pharmaceutical companies and biotechnology firms (SMEs). These efforts resulted in 808 organisations receiving the survey in 2009, a 46.6% increase from those surveyed in 2008. Building on the momentum created by the inaugural G-FINDER report, the number of organisations completing the survey also increased substantially, from 150 to 208 respondents, with 96.3% of top funders providing their 2008 data.

Findings

Total reported funding for R&D of new neglected disease products in 2008 was $2.96bn ($3.09bn in unadjusted 2008 US$), an overall increase of 15.5% on reported funding for 2007 ($2.56bn). However, three-quarters of this increase ($295.8m) was due to expansion of the survey to include data from new countries and participants. The increase in absolute year-on-year funding was only $100.1m (an increase of 3.9% on 2007 funding). This increase was largely driven by the Bill & Melinda Gates Foundation, which increased its funding by $164.9m in 2008, masking decreases in real funding from all other sectors apart from multinational companies (MNCs), who showed a small increase of $0.9m. Funding from High-Income Countries (HICs), IDCs and multi-laterals, all exhibited real decreases in year-on-year funding in 2008, dropping by $31.4m collectively ($26.3m, $5.0m and $0.1m respectively). Similarly, absolute year-on-year funding from SMEs decreased by $23.8m

Disease findings and trends

As in 2007, three diseases captured the lion’s share of funding, together accounting for nearly three-quarters (72.8%) of global investment: HIV/AIDS ($1,164.9m, 39.4%), malaria ($541.7m, 18.3%) and tuberculosis ($445.9m, 15.1%).

Leprosy, rheumatic fever, trachoma and Buruli ulcer again received minimal funding, less than $10m (<0.4% of global funding) each; while the remaining neglected diseases or groups of diseases secured between 1% and 5% of total funding each: kinetoplastids ($139.2m, 4.7%); diarrhoeal diseases ($132.2m, 4.5%); dengue ($126.8m, 4.3%); bacterial pneumonia and meningitis ($90.8m, 3.1%); helminth infections ($66.8m, 2.3%) and salmonella infections ($39.5m, 1.3%).

The modest increase in absolute funding during 2008 was unevenly distributed, with four areas receiving the bulk of the additional funds: malaria (a $42.1m increase), bacterial pneumonia and meningitis ($23.9 m), HIV/AIDS ($14.3 m) and helminth infections ($9.8m).

Funders

As in 2007, the onus of funding neglected disease R & D fell on public and philanthropic donors, who collectively provided 87.6% of total funding ($ 2.59 bn). HIC governments and multilateral groups together provided $1.80bn (60.8%), while philanthropic funders invested $716.5m (24.2%). IDCs (Brazil, India and South Africa) accounted for 2.6% of total global funding ($76.6m).

The US Government was by far the greatest public sector contributor to neglected disease R&D, providing 67.2% ($1.26bn) of total public funding in 2008. The European Commission and European governments collectively contributed 22.0% ($411.8m) of total public funding. Two developing countries were among the top 5 government funders of neglected disease R&D in 2008, Brazil with an investment of $ 36.8m (2.0%) and India ($32.5m, 1.7%).

Philanthropic funding was again dominated by two organisations – the Bill & Melinda Gates Foundation and the Wellcome Trust – who collectively provided 94.6% of the total philanthropic contribution. The role of the Gates Foundation was particularly notable. Unlike many other donors, the Gates Foundation increased its funding by over a third in 2008 bringing its investment to $617.0m (20.9% of the global total). As a result, the Gates Foundation ranked as the world’ s second largest funder, outstripped only by the US National Institutes of Health (NIH), which provided $1.08bn, or 36.5% of total global investment into neglected disease R&D.

As in the first G-FINDER survey, pharmaceutical industry funding was aggregated for confidentiality reasons. Companies surveyed in 2007 collectively decreased their funding by $23m in 2008, with cutbacks being primarily driven by SMEs. However, greater industry participation in the 2008 survey meant that reported industry investment increased to $365.3m (up from $231.9m in 2007), with industry again ranking as the third largest global investor behind the NIH and the Bill & Melinda Gates Foundation.

Funding flows

Just under one-quarter (23.2%) of global funding was invested internally by public research institutions and private companies, with the remainder granted externally to either Product Development Partnerships (PDPs) and intermediaries, or directly to researchers and developers. PDPs continued to play a key role, managing just under one-fifth (19.6%) of global grants in the neglected disease R&D field.

Conclusion

We are impressed and heartened by the contribution of so many groups to R&D for neglected diseases, where there is limited hope of reward beyond improvement to the health of many in the developing world. However, the neglected disease product gap remains wide and will only be closed by broader contributions, including from those wealthy countries who barely figure in this report. We hope that funders will find the information in G-FINDER a useful platform on which to base future health funding decisions.

Introduction

Background to the G-FINDER survey

The first G-FINDER report shed light on 2007 global investment into research and development (R&D) of new products to prevent, diagnose, manage or cure neglected diseases of the developing world, providing this data in a manner that was comprehensive, consistent and comparable across all diseases.

This second G-FINDER report repeats this process for 2008 global investment into neglected disease R&D, as well as examining changes against the 2007 baseline and identifying early trends and patterns in light of the recent global financial crisis.

The survey

Which diseases and products are included ?

The scope of the G-FINDER survey is determined by applying three criteria (see Figure 1). Application of these criteria results in a list of neglected diseases and products, for which R&D would cease or wane in the absence of donor funding.

All product R&D is covered by the survey, including:

• Drugs
• Vaccines (preventive and therapeutic)
• Diagnostics
• Microbicides
• Vector control products (pesticides, biological control agents and vaccines targeting animal reservoirs)
• Platform technologies (adjuvants, diagnostic plat forms and deliver y devices). These are technologies that can potentially be applied to a range of diseases and products, neglected and commercial, but which have not yet been attached to a specific product for a specific disease.

We note that all product types are not needed for all diseases. For example, effective pneumonia management requires new point-of-care diagnostic tools suitable for low income settings, but does not need new drugs as therapies are either already available or in development.

Funders were asked to only report investments specifically targeted at developing-country R&D needs. This is important to prevent neglected disease data being swamped by funding for activities not directly related to product development (e.g. advocacy, behavioural research); or by ‘white noise’ from overlapping commercial R&D investments (e.g. HIV/AIDS drugs and pneumonia vaccines targeting Western markets); and investments in platform technologies with shared Western applications. As an example, G-FINDER defines eligible pneumonia vaccine investments by strain, vaccine type and target age group; while eligible HIV/AIDS drug investments are restricted to developing-country relevant products such as fixed-dose combinations (FDCs) and paediatric formulations. Eligibility for inclusion is also tightly defined for platform technologies to ensure that only funding for platforms for developing world applications are included, as opposed to investment into platforms developed for commercial markets. Private sector investment into platform technologies is therefore excluded (see Annexe 5 for outline of R&D funding categories, setting out inclusions and exclusions).

The initial scope of G-FINDER diseases and definition of eligible R&D areas was determined in 2007 in consultation with an International Advisory Committee composed of experts in neglected diseases and neglected disease product development (see Annexe 2). A further round of consultations took place in 2009. As a result of this process, the typhoid and paratyphoid fever disease category was broadened to include non-typhoidal Salmonella enterica (NTS) and multiple salmonella infections; while diagnostics for lymphatic filariasis was added as a neglected area. The final agreed scope of G-FINDER diseases, products and technologies is shown in Table 1. Additions to the 2008 scope are highlighted in blue.

click on the table to enlarge it

What types of investments are included ?

G-FINDER quantities neglected disease investments in the following R&D areas:

• Basic research
• Product discovery and preclinical development
• Product clinical development
• Phase IV/ pharmacovigilance studies of new products
• Baseline epidemiology in preparation for product trials.

Although we recognise the vital importance of activities such as advocacy, implementation research, community education and general capacity building, these are outside the scope of G-FINDER. We also exclude investment into non-pharmaceutical tools such as bednets or circumcision, and general therapies such as painkillers or nutritional supplements, as these investments cannot be ring-fenced to neglected disease treatment only.

How was data collected ?

Two key principles guided the design of the G-FINDER survey. We sought to provide data in a manner that was as consistent and comparable as possible across all funders and diseases, and as close to ‘real’ investment figures as we could get.

G-FINDER was therefore designed as an online survey into which all organisations entered their data in the same way according to the same definitions and categories, and with the same inclusions and exclusions. All funders were asked to only include disbursements, as opposed to commitments made but not yet disbursed; and we only accepted primary grant data. Survey respondents were asked to enter every neglected disease grant they had disbursed or received in 2008 into a password-protected online database. The exception was the US National Institutes of Health (NIH), for whom funding data was collected by mining the NIH’s Research, Condition and Disease Categorization (RCDC) system, launched in January 2009.

Multinational pharmaceutical companies (MNCs) agreed to provide full data on their neglected disease investments. However, as these companies do not operate on a grant basis, the reporting tool was varied somewhat in their case. Instead of grants, companies agreed to enter the number of staff working on neglected disease programmes, their salaries, and direct project costs related to these programmes. All investments were allocated by disease, product and research type according to the same guidelines used for online survey recipients. As with other respondents, companies were asked to include only disbursements rather than commitments. They were also asked to exclude ‘soft figures’ such as in-kind contributions and costs of capital.

The second G-FINDER survey was open for an 8-week period from May to June 2009, during which intensive follow-up and support for key recipients led to a total of 7,581 grants or investments being recorded in the database for financial year 2008 (an increase of 48% on the number of grants recorded in 2007).

With the exception of NIH grants, all entries over $0.5m (i.e. any grant over 0.02% of total funding) were then verified against the inclusion criteria and cross-checked for accuracy. Cross-checking was conducted through automated reconciliation reports that matched grants reported as disbursed by funders with grants reported as received by intermediaries and product developers. Any discrepancies were resolved by contacting both groups to identify the correct figure. NIH funding data was supplemented and cross-referenced with information received from the Office of AIDS Research and National Institute of Allergy and Infectious Diseases. Industry data was aggregated for MNCs and for small pharmaceutical companies and biotechs (SMEs) in order to protect their confidentiality.

Who was surveyed ?

G-FINDER is primarily a survey of funding, and thus of funders. In its second year, the survey was sent to 198 funders in 44 countries around the world. These included:

• Public, private and philanthropic funders in:
  • High- and Middle-Income Countries (HICs and MICs) that were part of the Organisation for Economic Co-operation and Development (OECD)
  • European Union (EU) Member States and the European Commission
  • HICs and MICs outside the OECD but with a significant research base (Singapore, Israel and the Russian Federation)

• Public funders in three Innovative Developing Countries (IDCs) (South Africa, Brazil and India).

Particular efforts were made to expand the second G-FINDER survey to new groups, resulting in participation by the Indian Government, and inclusion of many more pharmaceutical companies in the 2008 survey, providing a more accurate picture of both private sector and IDC funding for neglected disease R&D.

In subsequent years, we will seek to extend G-FINDER to include private sector funding in the three participating IDCs, as well as public funding in additional IDCs (China and Cuba) and Low- and Middle-Income Countries (LMICs).

G - FINDER also surveyed a wide range of funding intermediaries, Product Development Partnerships (PDPs), and researchers and developers who received funding. Data from these groups was used to better understand how and where R&D investments were made, to track funding flows through the system, to prevent double-counting, and to verify reported data.

In all, the 2008 survey was sent to 808 organisations identified as being involved in neglected disease product development, a 46.6% increase in the number of organisations surveyed in 2007 (551 survey recipients). These were prioritised into three groups based on their R&D role (funder, intermediary / PDP or developer), level of funding, and area of disease and product activity:

• The maximum priority group included 27 organisations known from previous surveys to be major funders (over $10m per year) or major private sector developers investing internally into one of the target neglected diseases
• A high priority group of 133 organisations included known significant funders ($5-10m per year); potential research funders in high-Gross Expenditure on R&D (GERD) countries ; and a range of academic research institutes, PDPs, government research institutes, multinational pharmaceutical firms and small companies, who collectively provided good coverage of R&D in all disease areas. This represented a large increase (56.5%) in the number of organisations in the high priority group compared to 2007 (85 organisations). This increase was due to inclusion of public funders in India, and of more diagnostic development companies and SMEs; to a greater focus on European countries who had poor response rates in 2007; and to inclusion of groups who were not surveyed in 2007 but were identified by respondents as important funders
• The remaining survey recipients were known smaller funders (less than $5m per year) and other known grant recipients.

The G-FINDER process focused on the 160 organisations in the maximum and high priority groups, who likely represented the majority of global neglected disease R&D funding and activity during financial year 2008.

Survey participation increased substantially in 2008, with 208 organisations providing data (including 12 with no investment to report) – a 38.7% increase on 2007 participation rates. In the maximum priority group, 26 recipients (96.3%) provided funding information for 2008, up from 92.0% in 2007. New maximum priority participants included Merck & Co and Sanofi Pasteur, the vaccine arm of sanofi-aventis. Only one maximum priority organisation did not provide data – the multinational pharmaceutical company Wyeth. In the high priority group, 125 organisations (94.0%) provided full funding information for 2008, up from 90.6% in 2007. See Annexe 4 for a full list of survey participants.

How were changes in scope managed ?

It is important when comparing 2007 and 2008 figures to distinguish between real increases in funding and apparent increases due to expanded survey coverage. Year-on-year trends and overall funding increases have therefore been broken down to identify:

1. Funding increases due to increased survey scope or participation, which do not indicate a true increase in neglected disease funding but rather an improvement in G-FINDER’s coverage of the field
2. Funding increases reported by Year One sur vey participants, which represent real funding increases.

These funding breakdowns are only reported at the disease and organisation level since year-on- year funding trends cannot be reliably analysed for specific product types.

Reading the Findings

All reported funding is for investments made in the 2008 financial year (Year Two). Comparison is made, where relevant, to investments made in the 2007 financial year (Year One).

For consistency, 2008 funding data is adjusted for inflation and reported in 2007 US dollars (US$), unless indicated otherwise. This is important to avoid conflating real year-on-year changes in funding with changes due to exchange rate fluctuations. For reference purposes, unadjusted 2008 figures are also occasionally included. When this occurs, the unadjusted (nominal) figure is shown in italicised text in parenthesis after the adjusted figure. For example, “In 2008, reported funding for R&D of new neglected disease products reached $2.96bn ($3.09bn)”. In this example, $3.09bn represents the unadjusted nominal 2008 figure. In Tables, unadjusted figures are also labelled as ‘FY2008 Nominal (US$)’. Unlike 2007, the 2008 survey includes aggregate industry figures in top 12 lists (2007 comparators have also been updated to include aggregate industry data, and therefore differ from published top 12 figures for 2007).

Unless noted otherwise, all DALY (Disability Adjusted Life Year) figures in the report are 2004 DALYs for LMICs, as reported by the World Health Organization (WHO) in their 2004 update of the Global Burden of Disease,¹ these being the most comprehensive and recent figures available. In some cases, WHO estimates are lower than those derived using other methods or published by other groups, however they allowed the most consistent approach across diseases.

For brevity, we use the term ‘Developing Countries’ (DCs) to denote low- and middle-income countries as defined by the World Bank ² (except the Russian Federation and Mexico, Turkey and Poland which are part of the OECD; and ‘Innovative Developing Countries’ (IDCs) to refer to developing countries with a strong R&D base (South Africa, Brazil, India, China and Cuba). The OECD countries, EU Member States, European Commission, Singapore, Israel and the Russian Federation are collectively denoted by the term High Income Countries (HICs). These terms differ somewhat from their common use, but are valuable shorthand for this report. MNCs are defined as multinational pharmaceutical companies with revenues of over $10bn per annum.

Around 3% ($74.7m) of funding was reported to the survey as ‘unspecified’, usually for multi-disease programmes where funds could not easily be apportioned by disease. A proportion of funding for some diseases was also ‘unspecified’, for instance, when funders reported a grant for research into TB basic research and drugs without apportioning funding to each product category. This means that reported funding will be slightly lower than actual funding for some diseases and products, with the difference being included as ‘unspecified’ funding. This is likely to particularly affect figures from the NIH for individual diseases, as the NIH had a higher number of multi-disease grants than other donors.

A further 3.4% ($101.1m) was given as core funding to R&D organisations that invest in multiple disease areas, for example, the Institute for One World Health (iOWH) and the Special Programme for Research and Training in Tropical Diseases (TDR). As this funding could not be accurately allocated by disease it was reported as unallocated core funding. In cases where grants to a multi- disease organisation were earmarked for a specific disease or product, they were included under the specific disease-product area.

Finally, readers should be aware that, as with all surveys, there are limitations to the data presented. Survey non-completion by funders will have an impact, as will methodological choices (See Annexe 1 for further details).

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