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Incentivizing new vaccine development

Incentivizing new vaccine development

Issue:

Tuberculosis (TB) is one of India’s severest health crises. It kills two Indians every 3 minutes and more than 1,000 people every day. India accounts for 27% of the world’s 10.4 million new TB cases, and 29% of the 1.8 million TB deaths globally. This says something about the crisis in our public health policy.

Vaccine for Tuberculosis (TB):

  • ·         TB is difficult to diagnose, and the BCG vaccine that is currently in use (developed in the early 20th century) is ineffective for young people and adults. A new vaccine, cheaper and effective diagnostic tests, and treatment for the drug-resistant strains of TB are needed. Research and development (R&D) requires a concerted effort by both governments and the private sector. The government typically supports basic research while pharmaceutical companies focus on product development, clinical research or implementation research.
  • ·         The lack of progress in developing a vaccine for TB is part of a larger problem. Relative to their social need, there is a dearth of overall R&D on diseases concentrated in poor countries.
  • ·          Only 10% of global health research is devoted to conditions that account for 90% of the global disease burden—the ‘10/90 Gap’. Specifically with regard to TB, while the public sector globally contributed 61% of the R&D funding between 2009-15, the private sector only spent 17%.

Reason for the lack of private investment:

1.      The potential consumers (patients and governments) are poor.

2.      The benefits of the research on these diseases spill over to many countries, so none of the small countries has an incentive to unilaterally support the research.

3.      Governments have a poor record of respecting patents. WHO’s The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) has provisions for ‘compulsory licensing’ that allow governments to license the production of essential drugs to local manufacturers who must then pay royalties to the innovator.

Solutions:

·         The medical innovation industry doesn’t consider poor countries as their market. The solution, then, lies in increasing the value proposition of serving these markets.

·         The creation of incentives to complete the research cycle, from product development to implementation, is key to controlling the infectious diseases associated with poverty. One important proposal in this regard is made by Harvard researcher Michael Kremer and Rachel Glennerster of the Abdul Latif Jameel Poverty Action Lab, who suggest the use of advance purchase commitments (APCs).

·         In an APC, a sponsor (whether a government or a donor agency) commits to fully or partially finance the purchase of vaccines for a disease at a pre-specified price.

·         The funds are spent only if the desired product is developed. This would create a larger market, with more certainty, which would attract more firms to develop new products. Thus, APCs could replicate the incentives that have led pharmaceutical companies to pursue drugs to treat baldness and depression in dogs, while millions are sick from preventable or treatable infectious diseases.

·         During the budget speech in 2017, the finance minister announced the goal to eliminate TB by 2025. The main features of the proposed National Strategic Plan (NSP) for TB Elimination, 2017-2025 are providing incentives to private hospitals to follow standard protocols for diagnosis and treatment, giving cash transfers to patients to compensate them for the direct and indirect costs of undergoing treatment as well as incentives to complete treatment. This is in addition to free diagnostics and treatment for TB at government hospitals. Given the fact that incomplete treatment and improper care leads to the development of drug-resistant TB, these interventions are welcome.

Way forward:

All these years, the government should have focused more on creating a vaccine; they are easy to administer, need little diagnosis before use and can be taken in a few doses rather than involving long treatments. But what is gone is gone and the government must take steps to encourage research, both basic and applied, using APCs. It could make budgetary accommodation, or use its position in global diplomacy to encourage other nations and donors to do so. Ultimately, it will have to appeal to the interest of private companies for medical innovations.

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