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Obama Administration’s FY2016 budget presents mixed outlook for global health R&D

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White House

On Monday the White House turned heads by releasing, for the first time since 2010, an on-time budget. Overall the White House presented a mixed outlook for global health research and development (R&D).

February 4, 2015 by Jenny Howell

The President release

On Monday the White House turned heads by releasing, for the first time since 2010, an on-time budget. Overall the White House presented a mixed outlook for global health research and development (R&D). At US$4 trillion, the President’s budget ignores the current budget caps and makes a clear case for Congress to do away with sequestration. While the overall federal budget request would provide a 6 percent increase in OVERALL funding for R&D—with a broader focus than global health—overall implications for global health R&D were mixed.

State Department and US Agency for International Development (USAID)

Although the White House’s overall request for the State, Foreign Operations, and Related Programs account—which funds activities at State and USAID—would increase by 8 percent, global health programs would see a slight 3 percent decrease compared to fiscal year (FY) 2015 levels. While this is a disappointing trend, not all accounts were treated equally. One significant cut was to the Global Fund to Fight AIDS, Tuberculosis and Malaria, which compared to FY2015 levels would drop from $1.35 billion to $1.1 billion. While disappointing, this cut was expected and continues to meet the US commitment to provide $1 for every $2 pledged by other donors for the FY2014 – FY2016 replenishment. We were very disappointed to see the White House continue to low ball the funding for tuberculosis (TB) and neglected tropical diseases, which would see a 19 percent and 14 percent cut, respectively. It will once again be up to our champions in Congress to protect funding for these already underfunded accounts. Nutrition, vulnerable children, and global health security (formerly listed under the line item “pandemic influenza and other emerging threats”) also would see significant decreases. Funding for malaria, HIV and AIDS, the President’s Emergency Plan for AIDS Relief (PEPFAR), and family planning would be essentially flat funded.

As mentioned earlier, not all accounts were treated equally, and GHTC is glad to see the President recognize the US commitment to ending preventable maternal and child deaths within a generation through an 8 percent increase to the maternal and child health budget line and an 18 percent increase to GAVI, the Vaccine Alliance.

Something new in this year’s budget was a request for $300 million for a new PEPFAR Impact Fund to help countries re-align their national HIV and AIDS programs to focus on high burden areas. Also included was $94 million for the Commodity Fund, one function of which is to fund HIV vaccine development and research for microbicides. The congressional budget justification (CBJ) showed strong continued support for the Global Development Lab, specifically highlighting the lab’s role in battling the Ebola outbreak. The budget also continues to list the promotion of research, development, and innovation as a top focus of the Administration’s Global Health Initiative.

It’s great to see strong commitments in language for global health R&D, but for long-term change to occur, we’ll need to see the Administration continue to back up its recognized priorities with the necessary investments.

US National Institutes of Health (NIH)

Photo: PATH/Will Boase
The NIH would receive 4 percent increase under President's plan. Photo: PATH/Will Boase

Under the President’s plan, the NIH would be funded at $31.3 billion, a 4 percent increase from FY2015 funding. According to an accompanying US Department of Health and Human Services (HHS) factsheet, NIH estimates that in FY2016 the agency can support a total of 35,447 research grants, including over 10,000 new awards. GHTC is glad to see this budget line continue to increase, albeit slower than we’d like.

Within NIH, the National Institute for of Allergy and Infectious Diseases would receive an almost 6 percent increase. Within this account, funding for emerging and infectious diseases, infectious and immunologic diseases, HIV and AIDS research, and research project grants would all receive significant increases. These accounts are critical for developing new tools in the fight against AIDS/HIV, TB, and malaria.

Funding for the National Center for Advancing Translational Sciences, the National Institute of Child Health and Human Development, and the Fogarty International Center would all see modest increases of 4 percent, 2 percent, and 3 percent, respectively. One of the major implications for the NIH budget is the President’s new Precision Medicine Initiative, which split across multiple agencies adds up to a request of $215 million ($130 million for the NIH).

Photo: CDC/ Dr. Scott Smith
The National Center for Emerging and Zoonotic Infectious Diseases would see a 70 percent increase in funding. Photo: CDC/ Dr. Scott Smith

US Centers for Disease Control and Prevention (CDC)

Under the President’s plan, the overall budget at the CDC would remain relatively the same with a slight (almost 2 percent) increase. Global health funding would fare quite well, particularly in a few of the areas GHTC tracks. At $448 million, funding for global health programs at the CDC would be $32 million above the FY2015 enacted level (which does not include the $30 million CDC received in additional Ebola funding for FY2015). We’re glad to see that the Administration’s request does not seem to penalize important programs based on additional emergency funding received last year. Within the CDC’s global health programs, the President included a $12 million increase to expand the Global Health Security Agenda, a $10 million increase to support global health capacity building, and a $10 million increase for the US commitment to polio eradication. The largest increase for global health R&D at the CDC was for the National Center for Emerging and Zoonotic Infectious Diseases, which would see an increase of over 70 percent (going from $405 million to $699 million). Nearly all of this additional funding would go towards the implementation of the National Strategy to Combat Antibiotic-Resistant Bacteria, which among other priorities, is working to accelerate basic research for new antibiotics, therapeutics, and vaccines.

US Food and Drug Administration (FDA)

Photo: FDA photo by Michael J. Ermarth
The CBJ recognized the important role of FDA in global health R&D. Photo: FDA/ Michael J. Ermarth

Under the President’s budget, the FDA’s budget authority would grow by 6 percent, an increase of $147 million. GHTC is pleased to see the CBJ recognize the important role the FDA plays in global health R&D by highlighting the agency’s accomplishments in improving global health through international collaboration, research, and information sharing. Also highlighted was FDA’s role in the International Conference on Harmonization and the International Conference of Drug Regulatory Authorities.

GHTC is glad to see the Administration starting to build back up many of the basic research structures and baseline funds that were hit especially hard during sequestration. However, the development of life-saving new tools and technologies for vulnerable populations requires a whole-of-government approach which necessitates robust funding across all accounts involved in R&D. We’re pleased to see funding for many of these programs at the NIH, CDC, and FDA moving in the right direction, but are disappointed to see more of the status quo for USAID’s global health programs which play a vital role in ensuring new tools are developed and delivered to those who need them. We’ll now be looking to Congress to finish what the President started.

About the author

Jenny HowellGHTC

Jenny Howell is a senior policy and advocacy associate at GHTC, leading the coalition's US Congressional advocacy.

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WHO Executive Board agrees on set-up of pooled fund for global health R&D

Written by Alexandra Heumber / Drugs for Neglected Diseases initiative
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WHO is moving forward on creating of new pooled fund to finance R&D. PATH/Patrick McKern In this guest post, Alexandra Heumber—head of policy affairs at the Drugs for Neglected Diseases initiative—discusses actions taken during the World Health Organization (WHO)’s Executive Board meeting which could impact financing for the research and development (R&D) of new health technologies for developing countries. Earlier this week, the WHO’s Executive Board concluded its 136th annual executive board meeting. Given the Ebola epidemic and ongoing debates about chronic underinvestment in health R&D for developing countries, it was no surprise that global health R&D featured prominently on the board’s agenda. The board discussed the follow-up of the report of the Consultative Expert Working Group on Research and Development (CEWG): Financing and Coordination, which proposed establishing a voluntary pooled fund to finance global health R&D. The board agreed to move forward with establishing this fund at the WHO Special Programme for Research and Training in Tropical Diseases (TDR). The fund will finance R&D for type II and III diseases, as well as specific needs of developing countries in relations to type I diseases. During discussions, member states stressed the importance of this fund, recalling the CEWG recommendations and citing the Ebola crisis and growing antimicrobial drug resistance in justifying its urgent need. At the same time, member states recognized that the success of the fund will depend on securing adequate funding, particularly new funding from new donors. There was broad agreement among member states representing different regions to move forward in creating the fund and more broadly in setting up the four elements to serve as a framework to monitor, coordinate, and finance global health R&D based on the CEWG report. These include: The global R&D observatory to monitor funding for R&D and expenditures A coordinating body with a scientific review committee The pooled fund at TDR Ongoing demonstration projects to illustrate how the fund would work and how CEWG principles such as delinkage—separating drug prices from the cost of R&D—and incentive mechanisms could be implemented During the board meeting, several member states pledged funding to advance these ongoing efforts: Switzerland pledged US$6 million to the demonstration projects and observatory budget line, of which $4 million has already been allocated to the TDR pooled fund. The remaining $2 million will be awarded through matching grants from low- and middle-income countries (LMICs) at the rate of $1 for every $2 contributed. Forty-thousand will be used to start the global health R&D observatory. Norway pledged $1.3 million including$650,000 to the TDR pooled fund and $650,000 to be awarded through matching grants from LMICs, again at the rate of $1 for every $2 contributed. Brazil pledged $1 million. It is encouraging to see the overall CEWG process being reinvigorated and concrete outcomes moving forward. Nevertheless, more mobilization by stakeholders and member states, including political and financial commitments, must occur. Public leadership by all countries is now crucial to make the proposed framework a reality.
Policy Cures
February 3, 2015

The state of reproductive health R&D for developing countries

Written by Dale Halliday / Impact Global Health
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In this guest post, Dale Halliday—an analyst at Policy Cures—discusses the finding of Policy Cures’ report on funding for reproductive health technology research and development (R&D) in developing countries. Developing countries need better reproductive health tools According to the World Health Organization, 800 women died each day in 2013 due to complications from pregnancy and child birth. Nearly all of these deaths occurred in developing countries, and many could have been prevented if effective and appropriate reproductive health technologies were available. Unfortunately, current products for reproductive health are often not suited to those living in developing countries who need them most. For example, contraceptives currently on the market may be ill-suited to the target population, have a prohibitively high cost, require highly trained providers or specialty equipment, or require refrigeration, a barrier in some developing countries. Although there is a great deal of investment into reproductive health R&D, the vast majority is for commercial research directed towards developed markets. While there is some overlap in the reproductive health needs of developed and developing countries, there is little investment into new products that address the complex needs specific to developing countries. A new report for reproductive health R&D Today, Policy Cures launched a first-of-its-kind, comprehensive report on the landscape of reproductive health R&D funding focused on products for developing countries. This new report—Reproductive Health: R&D for the developing world—examines how much is invested in reproductive health R&D for the developing world and how this funding is allocated among product areas. The report found that in 2013, total funding for developing country-specific reproductive health R&D was just under US$88 million. Investment in reproductive health R&D for developing countries is focused on contraceptives The majority of reproductive health R&D funding, US$63 million, was directed towards contraceptives. The pharmaceutical industry was the largest funder in this area, providing $33 million; followed by the philanthropic sector, which gave $17 million; and the public sector at US$13 million. This large investment from industry funders comes as little surprise considering the crossover between commercial and developing country markets in this area. Funding directed towards R&D for other reproductive health areas was considerably lower. Each of the following areas received less than US$10 million each: multipurpose prevention technologies, postpartum hemorrhage, platform technologies for reproductive health, diagnostics for sexually transmitted infections, and core funding to reproductive health R&D organizations. Several areas for which there was an identified need for new products received no R&D investment at all, including syphilis drugs and ultra-short-acting contraceptives. There is a global imbalance in R&D funding for reproductive health A major finding of the report was that R&D funding for reproductive health relies heavily on a limited number of funders. Excluding industry, the top three funders (the Bill & Melinda Gates Foundation, the US Agency for International Development, and the Indian Council for Medical Research) together provided almost half of total reported global funding (US$41 million, 47 percent). The lack of funders for reproductive health R&D means that future funding, and therefore the future of lifesaving tools, could be vulnerable if exposed to unexpected economic shocks. This vulnerability is amplified by the large geographic imbalance among investors into new technologies. Although funders in both the United States and Europe provide substantial support for programmatic, operational, and capacity development work for reproductive health in developing countries, when it comes to R&D funding, the US-based funders provide much greater investment than European funders—contributing over 15 times that of the whole of Europe. India alone contributed more than all European funders combined. New technologies to save lives are in development Although the report finds that R&D funding for reproductive health technologies for developing countries is not particularly high, it identifies a number of key technologies that could revolutionize reproductive health for women living in developing countries. FHI 360’s portfolio of contraceptive technologies includes a longer-acting injectable that would provide women with six months of protection from a single shot. This could offer an alternative to current options that provide protection for only 1 to 3 months and require up to 12 visits to a health clinic each year—a potential barrier to access in low-resource settings. CONRAD—a US-based product development partnership—is developing an innovative intravaginal contraceptive ring that also provides protection against HIV and herpes simplex virus type 2 infection. This product has the potential to transfer the decision-making power for reproductive health to women while also providing protection against sexually transmitted infections. A heat-stable formulation of inhaled oxytocin—a drug used to prevent postpartum hemorrhage (PPH)—is being developed through a collaboration between Monash University and GlaxoSmithKline. If successful, this product could replace the injectable oxytocin formulation that is the current standard in PPH prevention and treatment but is ill-suited to developing country settings due to its need for refrigeration. Reproductive health R&D has severe funding gaps Considering the health burden, capacity for health improvements, and potential impact on broader poverty indicators, as well as the size of the reproductive health R&D sector as a whole, investment in R&D for reproductive health products in developing countries is small. Perhaps the most important point to be taken from the report is the large amount of space within this sector for more funders. Despite the strong portfolios demonstrated by well-established product developers, only a few dedicated funders provide necessary resources for new products. With several of these lifesaving technologies approaching the mid-to-late stages of product development, now is the ideal time for a high-impact investment. Hopefully this will be the trend in times to come. The G-FINDER Reproductive Health report was launched in Washington, D.C. on February 4th 2015 by the report’s lead author, Dr. Mary Moran, Executive Director of Policy Cures , and an international panel of experts. Conducted by Policy Cures and funded by the Bill & Melinda Gates Foundation, G-FINDER reports on global funding of R&D for new products for neglected diseases and reproductive health.