Confronting Neglected Diseases

Jeffrey Moe, PhD
Adjunct Associate Professor
Senior Director, Business Development
Duke University Health Sector Management

Jeff Moe co-teaches Strategy and Economics of the Pharmaceutical Industry and the Health Sector Management seminar series at The Fuqua School of Business. His research interests include the diffusion of clinical guidelines at the point of care, under-investment in innovation for neglected diseases, the commercialization of pharmacogenomics, and pricing and reimbursement issues for health care products. He also leads Duke's Health Sector Advisory Council.

In 2002 Henry Grabowski, David Ridley, and I were awarded a grant to consider the dilemma of "neglected diseases." These are tropical and infectious diseases (e.g. African trypanosomiasis, leishmaniasis, Dengue fever) which bring death, disability and significant hardship to millions of patients in developing countries. They are "neglected" due to the limited financial incentive for companies to invest in discovering and testing new treatments: the patients and their governments have very little ability to pay for new medicines.

There are existing medicines that don't get to patients due to poor health systems, weak distribution mechanisms, and other problems. But for many of these diseases, there is a need for new, breakthrough medicines. As David, Henry, and I discussed economic and management approaches to create new and more compelling incentives, we arrived at a novel approach: the priority review voucher (PRV). We propose to reward the successful development of a new medicine for a neglected disease with a voucher which allows a second drug, to be marketed in the U.S., to receive priority review by the Food and Drug Administration.

What's the value of such a voucher to the pioneering companies, patients, and society? Our analytic work was to determine how much faster a drug, on average, comes to market when receiving priority review and to estimate the other costs and benefits of the voucher. We also developed cursory recommendations for the implementation logistics for the neglected disease drug. We estimate the voucher is worth ~ $300 million, because of the added time a company has to enjoy exclusive marketing rights to a successful treatment. And the developer of a treatment for a neglected disease would likely have half of its research and development costs covered by tax credits under the Orphan Drug Act. We argue this level of new incentive could be appropriate for the neglected diseases while larger and different incentives are more appropriate for tuberculosis, malaria, and HIV/AIDS.

In 2006 our article, "Developing Drugs for Developing Countries," was published in the journal Health Affairs [see sidebar to access the full article]. Fortunately, health policy reporters and other journalists wrote about several of the international health articles in that issue of the journal, and in turn that coverage caught the eye of some Congressional staffers. We were pleased and a little surprised when we were invited to Capitol Hill in Spring 2007 to meet with Senate staffers about the PRV. We were elated when a neglected diseases amendment (putting PRV into legislative language) sponsored by Senators Sam Brownback (R-Kansas) and Sherrod Brown (D-Ohio) was attached to the Food and Drug Administration Revitalization Act (FDARA) and passed the Senate on May 9, 2007, by an overwhelming majority.

In July the House passed its own version of FDARA which did not include the neglected diseases amendment. Senate staffers included us in the e-mail discussions where they set a strategy of using the conference between the House and Senate to fight for inclusion of the PRV amendment in the final bill.

It has been revealing to exchange e-mails almost daily with Congressional staffers who are developing the pre-conference language for the final bill. As academics, we analyzed and proposed a plausible and pragmatic new incentive. But through the filters of partisan politics, many facets of PRV are being re-examined. Transferability of the voucher from one company to another, which we advocated in our article, makes pragmatic sense, but creates debate between Republicans and Democrats. The final list of diseases, how that list is developed and updated and whether new chemical entities v. new formulations of existing drugs are eligible for the voucher, have all been re-examined for political value and feasibility. We have evolved into experts in the background providing non-partisan views out of the self-interest that we want to maintain the integrity of PRV. This behind-the-scenes role has proven to be very effective to inform and frame the partisan debates and ultimately shape the final language of the bill. No one on Capitol Hill has lobbied for PRV, beyond our two Senate sponsors, which amazes people who know how Washington works. Whether the neglected diseases amendment will survive remains to be seen. But the prospect that it might pass and has been given so much attention contrasts with the skeptical view that no outside-the-beltway idea can get traction in deeply partisan D.C.

It's been an advanced civics education for David, Henry, and me. Each of us has previously had some experiences in Washington, but nothing compares to seeing your own novel idea subjected to the tests of the legislative process. Through PRV we've gained important insights into the challenges facing any new health care idea proposed to the 110th Congress as the parties position for the crucial 2008 presidential election. Our hope is the amendment passes along with FDARA; yet equally as important to us, is that it does so without changes that severely distort the incentive. Our intention, which began in 2002, is that PRV or some other new incentive can more deeply engage the private sector to develop drugs for developing countries and eventually bring relief to millions of the world's poorest patients.

Taking Action Against Neglected Diseases

The Honorable Sam Brownback
United States Senator, Kansas

Sam Brownback has represented Kansas in the U.S. Senate since 1996, and serves on the Appropriations, Judiciary, and Joint Economic Committees. Brownback is the ranking member on the Joint Economic Committee, the Financial Services and General Government Appropriations Subcommittee, as well as the subcommittee responsible for the Constitution.

According to the World Health Organization, more than one billion people – nearly one of every six people worldwide – are affected by at least one neglected or tropical disease. By definition, neglected and tropical diseases disproportionately impact impoverished populations. Neglected and tropical diseases encompass well-known diseases such as AIDS, tuberculosis, and malaria, as well as lesser-known neglected tropical diseases including trachoma (eye infection that causes blindness), schistosomiasis (a waterborne disease caused by parasitic worms), and leishmaniasis (a parasitic disease spread by infected sand flies).

Because these diseases predominately affect poor people living in developing countries, little has been invested to produce treatments for these diseases. In fact, less than one percent of the roughly 1,400 drugs registered between 1975 and 1999 treated such diseases.

While traveling in Africa, I saw firsthand the devastating impact of neglected and tropical diseases. As a result, I have attempted to draw attention to the devastating impact of neglected and tropical diseases and the need to combat neglected and tropical diseases prevention and treatment.

In 2006, I introduced the Elimination of Neglected Diseases (END) Act which was designed to provide incentives for drug companies to produce neglected and tropical disease treatments. The original END Act would have provided patent extensions of up to two years on existing lifestyle drugs to companies that produced a neglected or tropical disease treatment. However, I encountered significant opposition to the END Act in the Senate due to the general aversion to providing patent extensions for pharmaceuticals.

As I contemplated reintroducing the END Act in the 110th Congress, I was made aware of a research paper written by a group of several Duke economists, led by David Ridley, titled "Developing Drugs for Developing Countries." The paper proposed a creative incentive for producing neglected and tropical disease treatments that avoided the political divisiveness of pharmaceutical patent extensions. Ridley and his colleagues proposed creating an incentive structure based on a "priority review voucher" that could be applied to a drug in a company's pipeline in return for bringing a neglected or tropical disease treatment to market.

I immediately saw the merits of the idea and modeled my new Elimination of Neglected Disease legislation after the proposal by Ridley and his colleagues. My legislation was drafted as an amendment, which was cosponsored by Senators Sherrod Brown (D-OH) and Joseph Lieberman (I-CT), and was adopted as Section 505 Food and Drug Administration Revitalization Act (S. 1082). The next step in the process will be a conference committee in which the House and Senate versions of the bill will be reconciled.

I thank Ridley and his colleagues for dedicating their time and energy to developing an innovative solution to ending neglected and tropical diseases. I am proud to have been able to work with them, and I look forward to making their proposal a life-saving reality.

Enlightened Self-Interest

Dr. Muhammad Ali Pate
Human Development Sector Coordinator
The World Bank

Muhammad Pate ('06) is the Human Development Sector Coordinator and Senior Health Specialist in the Papua New Guinea and the Pacific Islands Cluster, East Asia and Pacific region of the World Bank. He leads teams to carry out policy dialogue on human development and designs program interventions financed by the World Bank and other development agencies in the region.

We live in an era of unprecedented accomplishments for mankind. More than half of the entire increase in human life expectancy realized in history occurred in the last one hundred years. Advances in technology and economic development paved the way for rapid progress in the biological sciences, medicine, and public health, which contributed to the increase in life expectancy that we now observe. Yet, despite these accomplishments, nearly half of the world's population lives on less than $2 a day, one in six children in the world is chronically hungry, and global disparities in disease burden are glaring. Communicable diseases account for almost 80 percent of the difference in morbidity and mortality between the richest and poorest populations of the world. In all age groups, communicable diseases are more the diseases of the poor than of the rich. It is not surprising that in sub-Saharan Africa, South Asia, and parts of East Asia and the Pacific regions, communicable diseases account for a larger share of the total burden of disease.

Behind each of the global numbers of children and adults dying each day because of a preventable and treatable communicable disease is a person. As you read this, a child in the Western Highlands of Papua New Guinea is dying because there are no appropriate antibiotics at hand in the district health center to cure his pneumonia. Another child in the Eastern African country of Zambia is lying ill because of resistant malaria treated inappropriately; treatment options are limited and combination therapy is too expensive. Recently in the United States an adult with multi-drug resistant tuberculosis triggered a public health emergency in the East Coast, primarily because treatment options for his disease are limited and other people may get infected. In the human family, we are all interconnected, and with globalization, the same person with resistant TB in the United States could spread it the next day in Asia, and vice versa.

According to the Global Forum for Health Research, 90 percent of the US $70 billion per year devoted to health research and development was spent on diseases afflicting rich countries while only 10 percent was spent on diseases uniquely afflicting poor countries. But, the diseases afflicting the poor are mostly public goods, in that controlling them is non-rival, non-exclusive, and they have large externalities. Therefore, market mechanism alone cannot be relied on to address the inequities in efforts to control those diseases. Research and development is one area where external players with legitimacy could intervene to tackle such public goods.

The priority review voucher scheme proposed in the article by David Ridley et al. provides an elegant solution to part of the incentive problem that will help address the market failure related to the neglected diseases. It will potentially help tilt the balance in allocation of the R&D dollars towards finding treatments for the neglected diseases. Not surprisingly, the United States Senate passed the Amendment to the FDA Act on May 9, 2007 to allow the tradeable priority review voucher for developers of drugs for the neglected diseases. This offers an important example, where academic research informs public policy and results in legislative action for the public good. The implication is not limited to the U.S., but it extends to potentially help the children of Africa, Asia, and other parts of the world. Beyond the priority review voucher scheme, additional instruments will be required in addressing the issue of inequity in product development for the neglected diseases. Public financing for research targeted towards those diseases could be increased, public-private partnership arrangements at the national and global level could be further promoted to create synergy and focus additional resources towards these neglected diseases. By helping to address the neglected diseases that affect poor people elsewhere, the developed world is making its own homes safer. This is enlightened self-interest.