[Ip-health] Conflicts of Interest, and the WHO evaluation of the FRIND and the PDP Plus funding proposals by the CEWG

Thiru Balasubramaniam thiru at keionline.org
Tue Jan 18 23:38:40 PST 2011


Conflicts of Interest, and the WHO evaluation of the FRIND and the PDP  
Plus funding proposals by the CEWG

By thiru
Created 18 Jan 2011 - 1:19pm
This note provide additional context for those who are just now  
following the issue of conflicts of interest and the WHO Consultative  
Expert Working Group (CEWG) on R&D Financing.

The CEWG follows a controversial, flawed and failed effort by an  
earlier group, the WHO Expert Working Group (EWG) on R&D Financing, to  
identify sustainable sources of funding, and new incentive mechanisms,  
including those that

"examine current financing and coordination of research and  
development, as well as proposals for new and innovative sources of  
funding to stimulate research and development related to Type II and  
Type III diseases and the specific R&D needs of developing countries  
in relation to Type I diseases."

The problems with the first EWG were many, including the superficial  
analysis giving to new sustainable sources of funding, the failure to  
fairly examine proposal to de-link R&D costs from product prices, the  
lack of transparency of the process, the favored access by the  
pharmaceutical industry and the Gates Foundation, the penetration of  
and improper influence of the group by the IFPMA and its member  
organizations, and the conflicts of interest involving Mary Moran, who  
gave top rating to two spending proposals never formally submitted to  
the group, including one she authored and another for IAVI, a group  
for which Moran was a consultant.

Now the CEWG is being asked to "deepen" the analysis done by the EWG,  
and to revisit projects specificially rejected by the EWG. Among the  
most important elements of the CEWG work will be to re-examine the  
three spending mechaqnisms earlier endorsed by Moran the EWG. These  

	• Fund for Research and Development in Neglected Diseases (FRIND)
	• Industry Research and Development Facilitation Fund (IRFF)
	• Product Development Partnership Financing Facility. (PDPFF)
In addition to the FRIND, IRFF and PDPFF, the CEWG is expected to look  
at the new PDP Plus proposal, which is being developed jointly by the  
original proponents of the FRIND, IRFF and the PDPFF.

Briefly, the FRIND would create a highly centralized funding  
mechanisms that would allocate billions of dollars to private sector  
and non-profit research organizations, in some versions supervised by  
industry experts on R&D. The FRIND was developed by Paul Herrling, and  
often described as the IFPMA proposal. The author of the IRFF was Mary  
Moran, and it involved a fund to subsidize 80 percent of PDP's  
payments to private industry (non-profit research organizations would  
not be eligible for the subsidies). The PDPFF was developed by IAVI,  
and involved government guarantees of bonds that would be paid back by  
the future sale of vaccines at a profit. Mary Moran was also a  
consultant to IAVI. Only the FRIND was formally submitted to the EWG  
for review.

Last Spring, Moran, Holly Wong of IAVI, and Paul Herrling of Novartis,  
began meeting to present a new PDP Plus proposal, that combined the  
FRIND, IRFF and PDPFF proposals. So, to be clear, the CEWG will spend  
a lot of time dealing with FRIND, and PDP Plus.

Switzerland has nominated Paul Herrling, the author of FRIND and the  
co-author of PDP Plus, to a seat on the CEWG. The WHO Secretariat has  
short-listed the Herrling nomination, and vigorously defended his  
nomination at the Monday WHO Executive Board meeting.

As noted in earlier blogs, Paul Herrling is a knowledgeable and well  
liked executive from Novartis who has spent considerable time focusing  
on issues relating to neglected diseases. KEI and other public health  
groups have a great deal of respect for Dr. Herrling, and value his  
many contributions. However, his appointment of the CEWG would put Dr.  
Herrling in the position of evaluating proposals that he either wrote  
or co-authored, or competing proposals.

In August 2010, Novartis published a five page paper titled: Funding  
neglected disease R&D, The next hurdle [1]. The paper spells out the  
role of Dr. Herrling in shaping and advocating the leading funding  
proposals that the CEWG will certainly consider. Here are a few  
sections from the August 2010 Novartis paper:

Over the past three years, Dr. Herrling has been the driving force in  
design of a new financing mechanism – The Fund for R&D in Neglected  
Diseases, or FRIND – to support development of medicines and vaccines  
against neglected diseases. Funding would come primarily from a pool  
fed by donors ranging from industry and non-governmental organizations  
to private charities as well as governments, which increasingly are  
rechanneling existing funds already reserved for developing countries  
into research and development.

Novartis further notes:

Earlier this year, the FRIND proposal received a crucial endorsement  
from an Expert Working Group established by the World Health  
Organization to explore innovative models to finance neglected disease  
research and development. . . .

In addition to FRIND, the WHO’s Expert Working Group recommended  
further analysis of several proposed funding models. Product  
Development Partnerships were the focus of proposals from two other  
groups: the Product Development Partnership Financing Facility (PDPFF)  
and the Industry Research and Development Facilitation Fund (IRFF).

PDPFF is a proposal developed by the International AIDS Vaccine  
Initiative, the Aeras Global TB Foundation and the PATH Malaria  
Vaccine Initiative that proposes raising funds by selling bonds in  
private capital markets to support development of vaccines. Bond  
holders would be repaid from royalties on sales of the vaccines in  
high-and middle-income countries as well as donor-funded premiums on  
distribution of vaccines in developing countries. Borrowing by the  
fund would be backed with guarantees from governments and possibly  
donor foundations.

IRFF is a funding vehicle designed to continuously reimburse a large  
proportion of money distributed through Product Development  
Partnerships. Most funding would go to product development  
partnerships that advanced their portfolios most efficiently.

The report of the WHO’s Expert Working Group observed that Product  
Development Partnerships provide “optimal funding allocation at all  
stages of research and development” and high health impact in  
developing countries, as well as operational efficiency. “However, a  
mechanism is needed to assist donors to fund across product  
development partnerships, in a simpler manner than is currently  
possible,” the Working Group added, and raised the possibility of  
combining the three proposals to provide reliable, long-term funding  
to accelerate global health R&D. . .

In early April 2010, Dr. Herrling met with representatives of PDPFF  
and IRFF to explore possibilities of consolidating the best elements  
of each individual proposal within a single, joint mechanism to fund  
Product Development Partnerships. By mid-May, the talks had produced a  
preliminary agreement; core principles of the Product Development  
Partnership Plus (PDP-Plus) Fund were outlined for stakeholders during  
the WHO’s annual meeting in Geneva, Switzerland.

“There is no point in each of our three organizations pursuing this on  
its own,” Dr. Moran of the George Institute said. “This is a proposal  
that looks at existing Product Development Partnerships that are  
underfunded and have products about to fall off the cliff for want of  
the dollar. We need a mechanism that provides not only long-term  
funding but a lot more money than we had before – in a super risk- 
averse environment. So we need to reduce risk by pooling and address  
other needs of organizations and governments that don’t currently  
donate to neglected disease R&D.”

Many details – including diseases products and stages of R&D to be  
covered by the Fund – are yet to be finalized. While the PDP-Plus Fund  
would offer donors a single point of contact with Product Development  
Partnerships, portfolio management and resource allocation options  
remain under discussion.

The next step in evolution of the PDP-Plus Fund will be further  
consultations with stakeholders. “Clearly, we need to continue  
discussions with donors, representatives of Product Development   
Partnerships and other stakeholders in the global health and R&D  
worlds,” said Holly Wong, Vice President, Public Policy at the  
International AIDS Vaccine Initiative. “We have to figure out what our  
priorities and what trade-offs among our proposals might be possible.  
After getting these projects this far, it would be a tragedy for all  
of us if nothing more can be done to get these treatments to the  
patients who need them most.”

Regrettably, this would not be the first time such a conflict would  
take place, in the context of the WHO's efforts to address the topic  
of sustainable financing for R&D. Earlier, Mary Moran, a member of the  
previous WHO Expert Working Group (EWG), played the key role in  
evaluating the proposals, and the EWG ended up giving her own proposal  
its highest ranking. Moran also gave high marks to a proposal by IAVI,  
a group that she had a consulting relationship with. Now, as noted by  
Novartis, Moran, IAVI and Novartis are trying to merge the three  
competing proposals into a single, PDP+ proposal, that will be  
considered by the CEWG.

Here are some reports from the PDP Plus launch at the World Health  
Assembly in May 2010.

	• James Love, PDP+ presented at WHA to skeptical audience [2],  
KEIonline.org , 17. May 2010.
	• Holly Wong, Mary Moran and Paul Herrling, "The PDP+ Fund:  
Accelerating R&D in New Products for Diseases of Poverty [3], Center  
for Global Health Policy, May 17, 2010.
	• Kimberly Mannon Reott, "The Emerging PDP+ Fund, [4]" Results for  
Development, May 19, 2010
	• Martin Enserink, Another Global Health Fund? Here's Why [5],  
Science, 19 May 2010
	• Declan Butler, "Neglected diseases fund touted: Initiative seeks  
billions of dollars to develop promising drugs and vaccines. [6]," 18  
May 2010 | Nature 465, 277 (2010) | doi:10.1038/465277a.
This is a link to Malini Aisola's 2010 analysis of the Novartis/IFPMA/ 
FRIND, IAVI and Moran proposals:

A closer look at the WHO EWG endorsed proposals on funding product  
development partnerships [7]

[1] http://www.novartis.com/downloads/newsroom/news/2010-08-05_Herrling.pdf
[2] http://keionline.org/node/843
[3] http://sciencespeaksblog.org/2010/05/17/the-pdp-fund-accelerating-rd-in-new-products-for-diseases-of-poverty/
[4] http://healthresearchpolicy.org/blog/2010/may/19/emerging-pdp-fund
[5] http://news.sciencemag.org/scienceinsider/2010/05/another-global-health-fund-heres.html
[6] http://www.nature.com/news/2010/100519/full/465277a.html
[7] http://keionline.org/node/751
[8] http://keionline.org/sites/default/files/2010-08-05_Herrling.pdf


Thiru Balasubramaniam
Geneva Representative
Knowledge Ecology International (KEI)
thiru at keionline.org

Tel: +41 22 791 6727
Mobile: +41 76 508 0997

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