Research and development for new drugs, vaccines, and diagnostics is a risky business. The average drug can take a decade or longer to make and costs companies and investors millions of dollars. When we consider all of the failures that led to one successful drug – industry analysts estimate that roughly one in 250 candidate molecules entering preclinical studies eventually becomes an FDA-approved drug – the cost grows exponentially, reaching into the hundreds of millions.

Long timelines and steep attrition rates help explain the fact that few biotechnology companies have yet to become profitable. In addition to the scientific and technical risks of any product development effort, developing a new drug, diagnostic, or vaccine for developing countries also adds considerable regulatory and financial uncertainties.

Public Sector Funding Alone is Not Sustainable

For the last 10 years, companies have relied heavily on public sector funders, like global health foundations, to provide financial incentives and eliminate some of the risk associated with developing drugs, vaccines, and diagnostics for diseases with poor markets. But that source of funding is not yet large enough to solve the problems. Philanthropy is also not a sustainable solution for markets.

At BIO Ventures for Global Health, we believe that we must uncover value propositions for companies that make sense and create new commercialization strategies that meet the global health need and also meet the needs of industry.

BIO Ventures for Global Health has participated in the development of two leading market incentives – the Advance Market Commitment and the Priority Review Voucher. We are working to develop and fund further incentives, ones that will be targeted toward biotechnology companies and will bring attention to truly neglected areas, like point-of-care diagnostics and diseases like Chagas.