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Three Donor Investment Choices: What Would You Do?

Three Donor Investment Choices: What Would You Do?. Adrian Towse Office of Health Economics, United Kingdom. Agenda. Choice 1. Funding R&D as compared to greater access to existing treatments? Choice 2. Which PDP? How to measure PDP performance?

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Three Donor Investment Choices: What Would You Do?

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  1. Three Donor Investment Choices:What Would You Do? Adrian Towse Office of Health Economics, United Kingdom

  2. Agenda • Choice 1. Funding R&D as compared to greater access to existing treatments? • Choice 2. Which PDP? How to measure PDP performance? • Choice 3. To fund Push or Pull – the role of AMCs?

  3. Choice 1: The Basic Framework R&D INVESTMENT OUTLAY FOR DONOR R&D RETURN FOR DONOR Annual cost for each phase of R&D Duration of each phase Current distribution of PD PPP programs by phase Failure rate by phase Estimate expected quality of product Estimate the likely take-up of product in target markets Estimate the number of DALYs averted in target markets DALYs $X Cost of getting products to market DALYs averted across countries R&D Cost-Effectiveness Combine DALYs averted with R&D cost estimates to generate cost/DALY ratio Donor decides how that compares with other options

  4. TARGET REGIONS

  5. Efficiency frontier • PD PPP technology pushes efficiency frontier outwards

  6. Introduction of new technology

  7. Base case results for notional portfolios

  8. Conclusions and Policy Issues • Funding R&D via PDPs for neglected diseases offers good value to donors. • Crucial feature of the donor-funded R&D approach is the extent of participation/co-operation required from the recipient countries. • If the latter do not adopt a new technology in spite of its proven cost-effectiveness, then the donor’s R&D funding will have been wasted. • Donors could end up in the position of having to fund take-up to ensure that the fruits of its R&D investment are realised. • Linked to this is the issue of recipient governments placing a very low willingness-to-pay value for a DALYas compared to the donor.

  9. Choice 2:PDP metrics -FSG Report • It is possible to classify PDP performance metrics in a way that makes sense for PDPs and donors. • Four areas of performance • R&D to Commercialisation • Organisational Strength • Enabling Environment • Health Impact

  10. Portfolios • Donors have to deal with the low likely success rates of individual projects. The best way to do this is through a portfolio of investments. • PDPs are better placed to manage a portfolio of projects. • PDPs need quantifiable objectives to enable donors to assess performance. • Donors should seek to align funding with objectives: • Productivity goals can only be achieved with realistic portfolios. Having a portfolio that is large enough to deal with project failure is crucial. • Supply of candidate projects is an issue in some disease areas. There is no point in PD-PPPs building a portfolio that is larger than justified by the scientific merit of the projects available.

  11. Measuring Performance: • Use of productivity goals: • specific goals help funders evaluate performance • some PD-PPPs do have measurable goals • But funders still have to judge whether goals are ATTAINABLE, REALISTIC or TIMELY

  12. Choice 3: Push versus Pull

  13. Results of sensitivity analysis

  14. Push versus Pull

  15. Summary

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