The global financial crisis threatens to stall advances made over the last decade in research and development for medicines and vaccines addressing neglected diseases, a new report warns.

In real terms, overall funding for neglected-disease R&D fell by 3.4% year on year in 2010 to US$3,063 million, according to the fourth annual G-FINDER survey funded by the Bill & Melinda Gates Foundation and conducted by independent research group Policy Cures.

That followed a 7.2% increase in R&D funding for neglected diseases from US$2,956 million in 2008 to US$3,169 million in 2009. The figures for all three years were adjusted for inflation and reported in 2007 US dollars. In current (2010) dollar terms, a total of US$3,173 million was invested in neglected-disease R&D last year.

Public sector hit

Not surprisingly, the impact of recession was felt particularly in the public sector, which still contributed nearly two thirds or US$2.0 billion of global funding for neglected disease R&D in 2010.

That was US$136 million less than in 2009, though, with eight of the top 12 government funders – accounting for 93.1% of overall public funding – reducing their contributions last year.

The UK was one of the few countries in which public funding for neglected-disease R&D actually rose (by 14.9% year on year), driven by a US$12.8 million increase from the Department for International Development.

Philapthropic funding also took a substantial hit, down by US$79.8 million or 12.4% against 2009 and reflecting largely a US$101.7 million drop in funding from the Gates Foundation, as a number of Foundation-backed products reached maturity.

Funding for Product Development Partnerships (PDPs), a favoured vehicle for neglected-disease R&D among governments, pharmaceutical companies and donors such as the Gates Foundation, declined significantly for the second year running.

It was down by US$46.9 million or 8.8% year on year in 2010, coming on the back of a US$50.0 million decrease in 2009 versus 2008.

The drop in PDP funding reflects “both healthy funding cuts (for instance, the US$72.6 million drop in RTS,S-related funding to PATH [the malaria vaccine initiative] as the vaccine candidate nears successful completion) but also more worrying trends, with the majority of funders freezing or decreasing their PDP investments in 2010”, the G-FINDER report comments.

Pharma steps up

One very notable trend last year was a substantial increase in pharmaceutical industry funding for neglected-disease R&D.

While this may partly be a function of industry’s strategic imperatives in fast-growing emerging markets, it does show that companies are serious about addressing past accusations that drug development is geared mostly to diseases that pay well, and in markets that can afford to pay.

Specifically, industry funding for neglected-disease R&D in 2010 was up by US$107.3 million or 28.2% to US$503.5 million. Multinational companies were the engine for this growth, hiking their R&D investment by 35.1%.

This more than offset a year-on-year decline of 49.9% in investment from small and medium-sized enterprises (SMEs) in Innovative Developing Countries, while SME investment in the developed world was just 0.9% or US$0.4 million lower.

Where the money went

The changes in funding patterns also influenced the type of research and development for neglected diseases seen in 2010. Worst hit by recession were diseases reliant on public and philanthropic investors, such as HIV/AIDS, malaria, kinetoplastids and diarrhoeal diseases, while diseases that attract substantial industry funding (e.g., tuberculosis and dengue fever) were largely protected.

The three ‘top tier’ diseases – HIV/AIDS ($1,073 million, 35.0% of the total), tuberculosis (US$575.4 million, 18.8%) and malaria (US$547.0 million, 17.9%) – once again received the bulk of global funding (71.7%) for neglected disease R&D last year, although this was down from 77% in 2007.

The reduced proportion was due to shrinking funds for the top three diseases (-US$82.5 million year on year), rather than any increase in funding for other neglected diseases.

Among the ‘second tier’ diseases, dengue fever and diarrhoeal diseases each attracted more than 5% of global R&D funding for the second year running. ‘Third tier’ diseases remained underfunded, with leprosy, Buruli ulcer, trachoma and rheumatic fever each receiving investment of less than $10 million, the G-FINDER report notes.

The biggest increase in R&D funding last year (+52.9%) was for bacterial pneumonia and meningitis R&D. Funding for TB was up by 5.5% or US$29.6 million over 2009.

These improvements were not enough, though, to make up for significant declines in R&D funding for kinetoplastids (-9.6%), diarrhoeal diseases (-10.3%) and malaria (-7.8%), although the malaria figures did reflect the advanced status of the RTS,S vaccine programme.

Public-sector support critical

 While the sharp increase in the pharmaceutical industry’s funding for neglected-disease R&D is undoubtedly welcome, Policy Cures made it clear that public-sector support remains critical.

“In the past, the Bill& Melinda Gates Foundation provided over 20% of global investment into new neglected disease products, but those days have gone,” said report author Dr Mary Moran, director of Policy Cures.

 “It’s time for governments to step up to the plate, otherwise we risk losing a decade of investment that is on the verge of delivering badly needed new medicines and vaccines for the developing world.”