from Asia Unbound and Global Health Program

Pharmaceutical PPPs and China’s Contribution to Global Health Security

March 22, 2016

Blog Post
Blog posts represent the views of CFR fellows and staff and not those of CFR, which takes no institutional positions.

One of the major challenges in developing new medical countermeasures against threats to global health security—be it a new flu pandemic or rapid spread of a neglected disease—is the lack of an underlying commercial market to support the financial investment needed for expeditious drug development and scale-up. This challenge was demonstrated at the outset of the 2014 Ebola outbreak: even though the lethal virus was known for nearly forty years, there was no cure or vaccine on the market. Paradoxically, while political attention to global health issues has revved up since the Ebola outbreak, funding is as short as ever when it comes to research and development (R&D) to address novel or neglected diseases. The funding shortage could be exacerbated by competing global challenges such as the need to raise money for funding the initiatives of the COP21 and implementation of the UN Sustainable Development Goals.

Defined as any informal or formal arrangement between private and public sector entities, a public-private partnership (PPP) can offer an integrated and systematic approach to the development and purchase of needed vaccines, drugs, and therapies for public health challenges. It enables companies to realize shared value while furthering public health goals by sharing risk, mobilizing significant resources for diseases where private entities have no incentive to invest in new drug development, and bringing together data or expertise that resides with different parties. PPPs become particularly relevant in dealing with public health emergencies of international concern, when there is an urgent need for pooling of resources not only to accelerate the development of medical countermeasures but also to make large scale manufacturing feasible.

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While PPP is increasingly becoming a buzz word in the Chinese economy, pharmaceutical PPPs remain largely alien in China’s new drug development. On the one hand, there are excessive government restrictions on foreign entities intending to get involved in government-funded projects. On the other hand, local researchers remain predominantly government funded and, despite growing state funding, their ability to innovate has been seriously constrained by institutional, policy, and capacity-related challenges. In contrast to the market failure in the development of drugs for rare or neglected diseases, what we have seen in China is a government failure behind the unsuccessful efforts to incentivize original drug development.

Despite this, private foundations and international NGOs have forged partnerships with Chinese state-owned enterprises in R&D. Through a generous grant from the Bill & Melinda Gates Foundation, for example, an international non-nonprofit organization called PATH in 2009 signed a collaboration agreement with the government-owned Chengdu Institute of Biological Products (CDIBP) to develop a vaccine for Japan Encephalitis (JE). PATH provided technical and financial support so that CDIBP could meet the strict standards required for prequalification by the World Health Organization (WHO). Three years later, the vaccine became the first single-dose JE vaccine that the WHO has approved for use on children. By 2017, the JE vaccine is anticipated to reach nearly 290 million people in Asia.

PPPs have also been used in China’s development of anti-Ebola drugs. During the outbreak, China announced the development of two Ebola drugs: one through a PPP, the other not. Its first Ebola drug, JK-05, was developed by a government research institute affiliated with the military. The drug was claimed to show anti-Ebola activity during cell experiments and testing on animals. There were also reports that by mid-October China had sent enough of the JK-05 to Western Africa to treat 10,000 people. The efficacy of the drug in humans nevertheless remains unknown. In fact, the WHO in its publications did not mention it as a promising drug against Ebola.

But the other Chinese-developed experimental drug (MIL77) juxtaposed with ZMapp in being highlighted by the WHO and the scientific community as two monoclonal antibody cocktails specifically developed for Ebola. When a limited supply of ZMapp was quickly exhausted in the fall of 2014, a small private Chinese company, Beijing Mabworks, produced about 100 doses of MIL77 within three months, making more potentially lifesaving treatments available for desperate patients. The drug was reported to have successfully treated a British military nurse who contracted Ebola while serving in Sierra Leone. Even though the Chinese drug was similar to ZMapp in the antibodies it used, Mabworks had a more efficient manufacturing process developed prior the outbreak: supported by Chinese government grants, it was able to use mammalian cells to quickly produce antibodies targeted against viral diseases in humans.

Relying on PPPs to deal with global health security threats has its own drawbacks. As Stefan Elbe noted, partnership in the private sector is often confined to smaller companies, which usually do not have the capabilities and expertise to cross the so-called “valley of death”, or the transition from laboratory success to human clinical trials. There are also intellectual property roadblocks. Indeed, the use of information by Mabworks on the ZMapp patents raised concerns of potential IP infringements by the Chinese company. Still, PPPs offer an important means to engage China to contribute to global health security in an efficient and effective manner.

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