Ideas to Action:

Independent research for global prosperity


This is a joint post with Kate McQueston.

Products to combat neglected diseases in low-income countries generate low profit margins and—without an obvious end market—research and development tend to be underfunded.  In recent years, R&D funding for neglected diseases has remained low—$3.1 billion in 2010—and substantially less than the almost $150 billion price-tag over seven years recommended by the WHO.

A new report from BIO Ventures for Global Health reviews the current product development landscape, describing the extent to which big pharma, academia/research institutions, and biotech companies are involved in neglected disease.

The report has many findings, but two in particular stand out.

First, only three percent of all biotech companies worldwide are participating in product development relating to neglected diseases. This is just 104 companies out of more than 3,800. This can mean two things: (i) there is room for more engagement of biotech companies or, more likely, (ii) there is an insufficient incentive structure to encourage broader participation. A 2009 paper in Health Affairs cites that, “Given the high cost of conducting research and developing new drugs, it is not surprising that for-profit drug and biotech companies go where the markets are.” Reinforced by this new finding, it seems as if efforts to date to engage industry have not created the necessary markets or incentives to encourage wider expansion into the neglected disease field.

Second, product development partnerships (PDPs) are not the major players in spite of a decade of investment by big donors like the Gates Foundation. PDP are teams made of up academics, industry, and international agencies tasked with leveraging their strengths to overcome some of the basic obstacles of drug development—namely the high costs, lack of potential returns, and need for high levels of technical expertise. Although these partnerships have been created specifically to increase industry involvement in R&D for NTDs, the report finds that the majority of product development (60 percent) for neglected diseases is actually occurring elsewhere. These results are surprising, as the report states, “Given the enormous investment made in the PDP mechanism, we expected a larger percentage participation of PDPs in the overall pipeline.” In fact, the total number of products being developed by the small fraction of biotech companies working on neglected diseases is roughly equivalent to those being developed by PDPs.

So are neglected diseases still neglected—by industry, at least? Yes and no. While the percentage of total industry involvement is small, the total number of products in development is substantial in terms of the total market–comparable to efforts from both research institutions and PDPs. On the other hand, industry involvement could certainly be expanded. Neglected diseases continue to affect over a billion people worldwide and effective treatments and diagnostics are scarce. Perhaps the global health community should redirect some of its focus on PDPs towards better incentives for industry engagement.


CGD blog posts reflect the views of the authors drawing on prior research and experience in their areas of expertise. CGD does not take institutional positions.


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