September 18th 2017 Joint UNICEF, UNFPA & WHO meeting, Copenhagen Clinton Health Access Initiative

Stimulating introduction of new, innovative in vitro diagnostics

• CHAI Overview

• Stimulating introduction of new, innovative in vitro diagnostics

• Resources

Agenda

2

CHAI and our partners have completed many agreements that expand

access to public health commodities while meeting commercial goals

• Provided price support for

development of generic

protease inhibitors (LPV/r

and ATV/r)

• Arranged funding for

development of

specialized pediatric

formulations (dispersible

and flavored ABC/3TC)

• Ongoing R&D to develop

improved formulations of

Efavirenz, Tenofovir, and

Darunavir

• Arranged licensing

agreements for new HIV

drugs and unique FDCs

• Direct purchase of

$400M in ARVs for the

UNITAID program to

create markets for 2nd

line and pediatric ARVs

• Advisor to the

government of South

Africa on the biannual

>$300M tender for

ARVs to drive

registration of FDCs

Developing Better

Products

• Led the development of

the Roche and UNAIDS

Viral Load Access

Program reducing by

>40% the cost of VL tests

• Led negotiations for the

GeneXpert TB test “buy

down” triggering 10X

increase in funding

• Created Bayer (Jadelle)

Merck (Implanon) access

programs to secure

$300M in funding for 40

million long acting

contraceptives

• Negotiation lead on behalf

of GAVI for purchase of

$750M+ in vaccines

Triggering

Increased Funding

Buying with a

purpose

3

• CHAI Overview

• Stimulating introduction of new, innovative in vitro diagnostics

– What makes up an innovative IVD?

– Challenges in developing IVDs for neglected diseases?

– Malaria RDT case study

– What can a manufacturer do?

• Resources

Agenda

4

The value of a diagnostic test:

Perspective of the Laboratory

Analytical validity

The test’s ability to

measure the analyte

of interest accurately

and reliably:

the quality of the

measurement

Key indicators:

Accuracy:

• Sensitivity

• Specificity

Precision

Robustness

The Lewin Group,, for AdvaMed, Sept 2009

It depends…

Source: Lewin Group, for AdvaMed

The value of a diagnostic test:

Perspective of the Clinician

Analytical validity

The test’s ability to

measure the analyte

of interest accurately

and reliably:

the quality of the

measurement

Key indicators:

Accuracy:

• Sensitivity

• Specificity

Precision

Robustness

The Lewin Group,, for AdvaMed, Sept 2009

…

Clinical validity

The test’s ability to

detect the disorder

associated with an

analyte measurement:

the test’s value to

clinical decision-

making

Key indicators:

Positive predictive

value (PPV)

Negative predictive

value (NPV)

Analytical validity

The test’s ability to

measure the analyte

of interest accurately

and reliably:

the quality of the

measurement

Key indicators:

Accuracy:

• Sensitivity

• Specificity

Precision

Robustness

Source: Lewin Group, for AdvaMed

The value of a diagnostic test:

Perspective of the Patient

…

Analytical validity

The test’s ability to

measure the analyte

of interest accurately

and reliably:

the quality of the

measurement

Key indicators:

Accuracy:

• Sensitivity

• Specificity

Precision

Robustness

Clinical validity

The test’s ability to

detect the disorder

associated with an

analyte measurement:

the test’s value to

clinical decision-

making

Key indicators:

Positive predictive

value (PPV)

Negative predictive

value (NPV)

The balance of risks

and benefits

associated with the

use of a test:

The usefulness of

information to the

person tested

Key indicators:

Health outcomes:

Mortality, morbidity

Quality of life

Adverse effects of

Dx use or Rx

Source: Lewin Group, for AdvaMed

8

Point-of-care (POC) tests have the potential to improve the management of infectious diseases

A = Affordable

S = Sensitive

S = Specific

U = User-friendly

R = Rapid and robust

E = Equipment-free

D = Deliverable

Accurate

Accessibility

Affordability

Source: LSHTM

Quality Assured

9

But there may be trade off: Ease of Detection vs Confidence in diagnosis (Dengue)

Ease of detection

Confidence

DIRECT METHODS:

Pathogen Detection

INDIRECT METHODS:

Host Biomarkers

Culture Genome

detection

Antigen

detection

Serology

IgM

Serology

IgG

Adapted with permission from J. Cardosa

Time to Result:

Minutes Days/Hours

Microscopy

Source: LSHTM

10

Diagnostic Trade off: Access vs Accuracy vs Affordability

Urban

Semi urban

Rural

Urban

Semi

urban

Rural

Urban

Semi

urban

Rural

Accurate ✓✓✓

Cheap×

Fast/simple×

Accurate ✓✓

Cheap ✓

Fast/simple✓

Accurate ✓

Cheap ✓✓

Fast/simple✓✓

Diagnostic

Targets

Product

Prototype

Lab &

field

evaluation

Test

adoption

Policy and

guidelines

for use

Proof of

Principle

Technology

platform

The Diagnostics Bench to Bedside Pathway

Regulatory Approval: 2-5 years

Valley of Death:

Target Product

Profile

Policy & Uptake 5-7 years

R & D: 2-10 years; $ 10-100 million

In addition, there are some unique challenges in developing diagnostics for neglected diseases

Source: LSHTM

There are also regulatory challenges: Lack of standards and harmonization

• Tests are sold and used in much of the developing world without evidence of effectiveness

• Duplication in clinical performance studies and manufacturing inspections pose major barriers to market entry, resulting in delay in access and unaffordable pricing

• Companies with quality tests unable or unwilling to compete in market flooded

with low quality tests

• Companies often do not bother marketing in countries with small markets

• Regulatory science has not kept pace with technological innovation

<<insert picture of low quality RDT>>

Source: LSHTM, CHAI

• CHAI Overview

• Stimulating introduction of new, innovative in vitro diagnostics

– What makes up an innovative IVD?

– Challenges in developing IVDs for neglected diseases?

– Malaria RDT case study

– What can a manufacturer do?

• Resources

Agenda

13

14

Since 2010, RDT spend and volumes have increased significantly

0

50

100

150

200

250

300

350

400

2010 2011 2012 2013 2014 2015 2016

Market volume (in # of tests)

In m

illions

Source: WMR

15

Many suppliers entered the market

# of manufacturers that meet WHO procurement criteria (per results of the WHO/CDC/FIND product testing program

0

20

40

60

80

100

120

R1 R2 R3 R4 R5 R6 R7

Mft RDT

2017 2014 2013 2012 2011 2010 2008

Introduction of fees

Source: WHO

16

Competition caused a rapid reduction in price

From 2010 - 2016 average Pf prices across procurers have declined by 60%

Median price in 2016 was $0.19

Source: PQR data, PMI transactions May 2017

$0.15

$0.20

$0.25

$0.30

$0.35

$0.40

2013 2014 2015 2016

Average HRP II Pf Test Price

PPM

NON PPM

PMI

17

… in turn, this has suppressed margins

SOURCE: PQR data, PMI transactions, PMI tear down analysis.

Average price and implied margin Malaria Pf $USD / test

Margin Compression

In 2013, the average per test price was $0.32; assuming steady production costs, estimated gross margin was ~56% (≤ 41% for small suppliers)

In 2016, average price was $0.21, estimated gross margin was ~32% (≤ 10% for small suppliers)

In recent years, suppliers have been seen to bid as low as $0.14 - $0.16 for competitive tenders

$0.10

$0.15

$0.20

$0.25

$0.30

$0.35

2013 2014 2015 2016

Average Price

Estimated Production Cost(Large Producer)

Estimated Production Cost(Small Producer)

18

This has led to consolidation, very unhappy suppliers, a supply risk and very little incentive to innovate

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

8

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2016 2015 2014 2013 2012 2011 2010 2009

Market share

Source: PQR data, PMI transactions May 2017

• CHAI Overview

• Stimulating introduction of new, innovative in vitro

diagnostics

– What makes up an innovative IVD?

– Challenges in developing IVDs for neglected diseases?

– RDT case study

– What can a manufacturer do?

• Resources

Agenda

19

20

One approach that may be helpful is “value based health care”

• A cost-efficient healthcare system needs to reduce waste and align all

stakeholders involved in the delivery of healthcare

Delivering the best patient outcomes for a given cost….

MfgDx

Vx

Rx

ProcurersAdmin-istrators

Gov’ts

Patients

Reg-ulators

Quality

IT

Science

Mfg

IT

Dx

Vx

Rx

Procurers

Admin-istrators

Gov’ts

Patients

Reg-ulators

Quality

Science

Patients

Procurers

Rx

Admin-istrators

Reg-ulators

Gov’ts

Vx

Mfg

IT

Dx

Quality

Science

The core principle of value-based healthcare is to align all stakeholders of a system towards value delivered to patients

Mostly today… Separate Functions

Moving towards… Considering the Patient

Future… Integrated Patient Centric

Source: BioBridge Strategies

21

…

Impact or value analysis compares the costs and patient

outcomes of current medical practice with a new practice

(e.g., a new diagnostic tool or medicine)

Difference in Impact

Current practice

New practice

Include all relevant downstream

cost and outcomes

Source: BioBridge Strategies

22

What are the Benefits of Value or Impact Analyses?

• Help understand the clinical practice

- Current clinical practice

- How practice will change

• Quantify the value of quality or innovation

• Determine the value to key stakeholders

• Quantify the value of positioning strategies

• Help define performance requirements

• Guide R&D and marketing strategies

• Enable value based pricing & reimbursement

• Quantify the budget impact for key stakeholders

• Publish and communicate the value of products

Source: BioBridge Strategies

23

The analysis and the “value story” need to be adapted to key stakeholders….

• Who are the key stakeholders?

• Where is the diagnostic or medicine going to be used under what conditions?

- E.g., Hospitals, primary care…

• Who’s budget is going to be impacted? - E.g., Societal or overall healthcare cost (Health Ministry), hospital lab budget…

• Who is going to pay for it?

• Who else is financially going to be impacted (“follow the money”)?

The analysis and the “value story” need to be adapted to key stakeholders….

Mfg

IT

Dx

Vx

Rx

Procurers

Admin-istrators

Gov’ts

Patients

Reg-ulators

Quality

Science

Patients

Procurers

Rx

Admin-istrators

Reg-ulators

Gov’ts

Vx

Mfg

IT

Dx

Quality

Science

Source: BioBridge Strategies

24

What does it cost to fund a quality assured test?

$3.33

$0.24

$1.92

Source: CHAI

25

Should be a continuous and iterative process…

Early stage of product development (modeling)

Understand value/impact, help the development of target profiles and R&D

in the design of the product and plan clinical trials

Late stage of product development (modeling

and/or outcomes studies)

Implementation strategies and determine pricing

Post launch (modeling and/or outcomes studies)

Continuous evaluation of real life impact for refinements of product

profiles, implementation strategies and new generations

Source: BioBridge Strategies

26

Thank you

Market and market-related reports

• Market and technology landscape: HIV Rapid Diagnostic Tests for Self-testing. 3rd edition (July 2017): https://unitaid.eu/assets/HIV-Rapid-Diagnostic-Tests-for-Self-Testing_Landscape-Report_3rd-edition_July-2017.pdf

• Global Malaria Diagnostic and Artemisinin Treatment Commodities Demand Forecast 2017–2020 (25 May 2017): https://unitaid.eu/assets/Unitaid-ACT-Forecasting_Report-5_May-2017.pdf

• Tuberculosis Diagnostics Technology Landscape. 5th edition, May 2017. https://unitaid.eu/assets/2017-Unitaid-TB-Diagnostics-Technology-Landscape.pdf

Product and price information

• The Global Fund: Information for suppliers : https://www.theglobalfund.org/en/sourcing-management/information-for-suppliers/

• Price and Quality Reporting Database: https://www.theglobalfund.org/en/sourcing-management/price-quality-reporting/

• wambo.org: http://www.wambo.org/home http://www.wambo.org/for-suppliers

• UNICEF Supply catalogue https://supply.unicef.org/unicef_b2c/app/displayApp/(layout=7.0-12_1_66_67_115&carea=%24ROOT)/.do?rf=y

Resources

27

• UNFPA procurement statistics 2016: http://www.unfpa.org/sites/default/files/resource-pdf/UNFPA_Procurement_Statistics_2016_-final.pdf

• Médecins Sans Frontières: https://www.msfsupply.be/?page_id=24

• FIND negotiated product pricing: https://www.finddx.org/find-negotiated-product-pricing/

Bidding opportunities

• UNICEF: https://www.unicef.org/supply/index_25947.html

• United Nations Global Marketplace: https://www.ungm.org/

Resources

28