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Jill Wechsler is BioPharm International's Washington Editor, firstname.lastname@example.org.
Health programs seek to establish secure systems to manage the fast-expanding quantities of drugs and medical products going to developing countries.
With millions of impoverished people suffering from AIDS, tuberculosis, malaria, and a host of deadly conditions, biopharmaceutical companies face unprecedented demand for safe and effective treatments for third-world diseases. US, European, and international organizations are pledging billions to curb global epidemics, including the President's Emergency Plan for AIDS Relief (PEPFAR), which plans to spend $15 billion over five years to treat two million individuals with AIDS.
While the immediate goal of donor organizations and AIDS programs is to provide care for infected patients, a broader aim is to encourage development of new therapies, formulations, and production methods to meet burgeoning demand. Biotech manufacturers stand to benefit from new funding or "push" mechanisms available from foundations, governments, and multilateral organizations. This surge in resources is critical for small biotech firms struggling to develop products for these important areas where it is difficult to earn a return on investment.
The good news is that pressure on biopharmaceutical firms to reduce prices and cede patent rights does not seem to be curbing innovation. In July, Boehringer Ingelheim announced FDA approval of its new protease inhibitor Aptivus (tipranavir). Early clinical trial results issued by Massachusetts-based Panacos Pharmaceuticals indicate high efficacy from a new maturation inhibitor antiretroviral (ARV). New studies are examining whether ARVs may be effective in preventing HIV infection in the first place. Increased demand for new vaccines is spurring expansion of manufacturing facilities and new product development (see sidebar).
Vaccine Demand Spurs Production
Advances in biotechnology are also producing new tools and treatments for fighting global infectious diseases. Sequencing of the plasmodium genome may help identify and validate new malaria drug targets, while genomic sequencing of additional pathogens promises to facilitate the development of more accurate diagnostics, safer vaccines, and new formulations of existing products. Manufacturers are developing needle-less powder injection vaccines for infant diarrhea, yellow fever, and TB, and handheld test devices using recombinant antigens may provide fast and accurate HIV testing.
The challenge for manufacturers is to identify testing, licensing, and distribution pathways for new products to treat third-world diseases. Many biotech companies are researching new treatments but often lack the resources and expertise to enter such high-risk areas. To address these concerns, the Bill & Melinda Gates Foundation recently awarded a $5.4 million four-year grant to BIO Ventures for Global Health (BVGH), an organization spun off from the Biotechnology Industry Organization last year to examine barriers in the market and the lab that may prevent promising new products from reaching patients.
BVGH seeks to identify markets that may support development of new technologies. The organization plans to provide companies with critical information on ways to improve product testing, production, and distribution so that manufacturers can build a business case that will attract outside investment or lead to public/private partnerships.
An initial project is to develop a series of business cases to identify key economic and technological mechanisms needed to drive development of safe and effective therapies and medical products. BVGH begins its efforts with a business case for developing a vaccine for tuberculosis. While pharma companies have been researching new multi-drug treatments for TB, there has been little action on the vaccine front. Now several biotech companies are exploring the field, and BVGH aims to spur their efforts by examining what is technically feasible scientifically and what kinds of markets would exist for a successful product.
In addition to identifying viable markets in the developing world, BVGH plans to identify situations where alternative mechanisms are needed to improve the market opportunity for a specific product, explains BVGH Executive Director Wendy Taylor. One strategy is to create advance market commitments (AMCs) or advance purchase commitments (APCs), which have gained support from European financial ministers and the World Bank. Current scenarios call for sponsors (governments, donors, international organizations) to guarantee to pay a company that develops an effective vaccine or treatment for a specific number of doses at a certain price. This might be a $3-billion market guarantee for, say, a malaria vaccine at $15 per treatment for the first 200 million doses. The recipient country would contribute a small co-pay, with the sponsors absorbing the remainder of the bill. Once the manufacturer realizes the $3-billion market commitment, gaining a reasonable return on its investment, it would agree to drop its price to designated countries to ensure them access to the product over the long term.
Similar mechanisms have been included in BioShield legislation in the US in an effort to encourage industry to develop counter-terrorism therapies. To date, these measures have failed to attract broad manufacturer participation on the domestic front, largely due to liability concerns and uncertainty about future returns on investment.
While the noticeable increase in funds available to support treatment programs to combat AIDS and other third world diseases may spur biotech R&D in this area, manufacturers still face many challenges in producing quality products and ensuring their proper distribution in developing countries. Rising global demand for AIDS therapies already is spurring drug counterfeiting and illegal diversion of low-cost fixed-dose combination drugs (FDCs) from third world markets. The United Kingdom's National Health Service reported in April 2005 that it had erroneously purchased ARVs that were illegally diverted from Kenya. The Global Fund to Fight AIDS, Tuberculosis and Malaria recently halted its AIDS programs in Uganda after audits uncovered discrepancies in program accounts.
To prevent such problems, donors and health programs seek to establish secure distribution and warehousing systems to manage the fast-expanding quantities of drugs and medical products going to developing countries. PEPFAR and the US Agency for International Development (USAID) are designing their own secure supply chain management system (SCMS) to procure pharmaceuticals and other medical products for the program's 15 focus countries. USAID is negotiating a contract, which could amount to $7 billion over five years, to establish a "one-stop shopping point" for medical supplies which will also negotiate low prices, prevent drug theft and diversion, and verify product quality.
Many observers consider the PEPFAR/USAID initiative redundant with similar programs already under development. PEPFAR officials claim that local governments and third-party donors will have the option of using their own systems instead of the PEPFAR/USAID SCMS, but organizations receiving PEPFAR funds may well feel pressure to adopt the US program.
Distribution is just one of the many challenges that biopharmaceutical manufacturers face in developing and producing new treatments for needy populations. But the situation also presents an opportunity for industry to demonstrate its ability to provide affordable, effective treatments for deadly diseases affecting so much of the world.
Jill Wechsler is BioPharm International's Washington editor, 7715 Rocton Avenue, Chevy Chase, MD 20815, 301.656.4634, email@example.com