Pharmaceutical innovation is crucial to solving global threats from infectious diseases and bioterror. Alternatives to market-based incentives are guaranteed to fail.

(Sonja, directs RAND Europe’s portfolio of research in the field of healthcare innovation, industry and policy, previously led RAND Europe's institutional partnership with The Healthcare Improvement Studies Institute at Cambridge University, member of the Cambridge Centre for Health Services Research and expert advisor on innovation to the NHS England and NHS Improvement cancer programme, and Carolina Feijao, analyst working in the areas of science and emerging technology at RAND Europe, “Pharmaceutical Innovation for Infectious Disease Management”, Rand Europe, May 2020, https://www.rand.org/content/dam/rand/pubs/perspectives/PEA400/PEA407-1/RAND_PEA407-1.pdf)

We need to ensure scalable and sustainable approaches for pharmaceutical innovation in response to infectious disease threats to public health As key actors in the healthcare innovation landscape, pharmaceutical and life sciences companies have been called on to develop medicines, vaccines and diagnostics for pressing public health challenges. The COVID-19 crisis is one such challenge, but there are many others. For example, MERS, SARS, Ebola, Zika and avian and swine flu are also infectious diseases that represent public health threats. Infectious agents such as anthrax, smallpox and tularemia could present threats in a bioterrorism context.1 The general threat to public health that is posed by antimicrobial resistance is also well-recognised as an area in need of pharmaceutical innovation. Innovating in response to these challenges does not always align well with pharmaceutical industry commercial models, shareholder expectations and competition within the industry. However, the expertise, networks and infrastructure that industry has within its reach, as well as public expectations and the moral imperative, make pharmaceutical companies and the wider life sciences sector an indispensable partner in the search for solutions that save lives. This perspective argues for the need to establish more sustainable and scalable ways of incentivising pharmaceutical innovation in response to infectious disease threats to public health. It considers both past and current examples of efforts to mobilise pharmaceutical innovation in high commercial risk areas, including in the context of current efforts to respond to the COVID-19 pandemic. In global pandemic crises like COVID-19, the urgency and scale of the crisis – as well as the spotlight placed on pharmaceutical companies – mean that contributing to the search for effective medicines, vaccines or diagnostics is essential for socially responsible companies in the sector. 2 It is therefore unsurprising that we are seeing industry-wide efforts unfold at unprecedented scale and pace. Whereas there is always scope for more activity, industry is currently contributing in a variety of ways. Examples include pharmaceutical companies donating existing compounds to assess their utility in the fight against COVID19; screening existing compound libraries in-house or with partners to see if they can be repurposed; accelerating trials for potentially effective medicine or vaccine candidates; and in some cases rapidly accelerating in-house research and development to discover new treatments or vaccine agents and develop diagnostics tests.3,4 Pharmaceutical companies are collaborating with each other in some of these efforts and participating in global R&D partnerships (such as the Innovative Medicines Initiative effort to accelerate the development of potential therapies for COVID-19) and supporting national efforts to expand diagnosis and testing capacity and ensure affordable and ready access to potential solutions.3,5,6 The primary purpose of such innovation is to benefit patients and wider population health. Although there are also reputational benefits from involvement that can be realised across the industry, there are likely to be relatively few companies that are ‘commercial’ winners. Those who might gain substantial revenues will be under pressure not to be seen as profiting from the pandemic. In the United Kingdom for example, GSK has stated that it does not expect to profit from its COVID-19 related activities and that any gains will be invested in supporting research and long-term pandemic preparedness, as well as in developing products that would be affordable in the world’s poorest countries.7 Similarly, in the United States AbbVie has waived intellectual property rights for an existing combination product that is being tested for therapeutic potential against COVID-19, which would support affordability and allow for a supply of generics.8,9 Johnson & Johnson has stated that its potential vaccine – which is expected to begin trials – will be available on a not-for-profit basis during the pandemic.10 Pharma is mobilising substantial efforts to rise to the COVID-19 challenge at hand. However, we need to consider how pharmaceutical innovation for responding to emerging infectious diseases can best be enabled beyond the current crisis. Many public health threats (including those associated with other infectious diseases, bioterrorism agents and antimicrobial resistance) are urgently in need of pharmaceutical innovation, even if their impacts are not as visible to society as COVID-19 is in the immediate term. The pharmaceutical industry has responded to previous public health emergencies associated with infectious disease in recent times – for example those associated with Ebola and Zika outbreaks.11 However, it has done so to a lesser scale than for COVID-19 and with contributions from fewer companies. Similarly, levels of activity in response to the threat of antimicrobial resistance are still low.12 There are important policy questions as to whether – and how – industry could engage with such public health threats to an even greater extent under improved innovation conditions. The COVID-19 pandemic is a game-changer among global public health threats. The risk to human life (both in terms of morbidity and quality of life), the economic risks, the epidemiology of the disease and speed of escalation have led to a crisis-response by many governments around the world. This has in turn influenced the immediate industry efforts. Many other infectious disease threats may not manifest as crises in the short term and in the same way as COVID-19, but they could nevertheless escalate. They are not considered to be crises from a short term perspective because they are contained to specific regions and affect fewer people at present – or are re-emerging (e.g. Ebola) – or their impacts have not yet materialised at a scale that would qualify as an immediate crisis (e.g. growing risks of antimicrobial resistance to some infectious pathogens). However, such diseases and issues are recognised as global threats that could become crises in the future.13 The emerging threats raise important policy questions about how government and the pharmaceutical industry can work together to ensure that pharmaceutical industry innovation is incentivised sustainably and at scale. This is important to help mitigate against current and emerging threats becoming crises further down the line. At present, there are no clear and specific criteria to determine when a disease can trigger the types of healthcare-innovation-related policy actions that have been deployed in response to the COVID-19 crisis. For example, this applies to criteria for securing financial resources for innovation-related activities, reforming regulation to accelerate trials and regulatory approval processes, and securing reimbursement mechanisms that help enable industry engagement and the search for rapid solutions. The WHO guidance on what constitutes a pandemic phase does provide guidance on national policy response options, but not specifically as they relate to healthcare innovation activity.14 There are also questions as to whether such policy initiatives and incentives should only be applied in crisis situations, or also as part of proactive government and industry efforts to innovate in the areas of public health threats in order to prevent future global calamities. A crisis and ‘emergency mode’ response may be inevitable for some diseases, but more can be done to mitigate against the need for such a response – especially in cases where emerging threats and their consequences can be foreseen and are known to be a risk. We need to anticipate and act now in terms of how we plan and incentivise better for the future, and how we distinguish between different types of infectious disease threats and phases in framing incentives and regulation. Innovative financial instruments must be integral to any sustainable and scalable approach to incentivising pharmaceutical innovation for tackling emerging threats to public health from infectious diseases The pharmaceutical industry has a responsibility to both its shareholders and to society at large. Incentivising the pharmaceutical industry to innovate solely on the grounds of being a socially responsible sector is unlikely to lead to a sustainable and scalable approach for innovating in response to emerging infectious disease threats. There are also potential challenges to the types of innovation (i.e. how radical or incremental) a reliance on incentives rooted solely in a social responsibility argument can lead to. Donating existing compounds for testing is important, but it is different to at-scale, industry-wide intensive investment in R&D geared at developing highly innovative diagnostics, medicines and vaccines. Even in the case of COVID-19, there are significant differences in the scale of innovative activity that focuses on repurposing existing products and technologies – for example, through testing existing antiviral compounds for potential therapeutic value – and more radically innovative R&D efforts aimed at developing something that acts on the COVID-19 virus in fundamentally novel ways.