Social Impact Bonds designed to incentivise new uses for off-patent drugs and unprofitable therapies
Open Source Therapies
Incentivising clinical trials for off-patent drugs allows everyone to benefit from affordable medicine
No Risk for Backers
Pay for success contracts mean that backers are guaranteed to only fund a medical breakthrough
1000s of off-patent drugs and nutraceuticals are being ignored
What if a safe and affordable treatment is ready to be tested in patients now but couldn’t get the private funding it needed for large Phase II/Phase III clinical trials to prove efficacy because it was off-patent and you cannot charge a monopoly price? The pharmaceutical industry relies on patenting new drugs so it can charge a monopoly price to make its profits. Patented drugs cost billions of dollars to develop and take over 10-15+ years to reach patients .However, repurposing a generic drug or nutraceutical to obtain regulatory approval can cost less than $10-15m because it possible to immediately start testing in humans. This is the current broken system for incentivising medical innovation. The pharmaceutical industry will never pay for clinical trials without being able to receive a monopoly price using patents. Further, large clinical trials for these off-patent treatments rarely get funded by governments and charities due to the expense ($1-3m+ for a Phase II clinical trial and $5-10m+ for Phase III) and risk of failure (50% – 75%).
What if pharma can’t enforce their patent?
Unmonopolisable Therapies cannot be adequately protected using patents to enforce a monopoly price, because the therapies are cheap and readily available from multiple sources. If a new patented formulation isn’t any better than the off-patent one, why would anybody pay more for it? Due to this market failure, even with a patent, Unmonopolisable Therapies struggle to obtain private funding for clinical trials. Examples include new uses for off-patent generic drugs, supplements, diets and lifestyle interventions.
How it Works
A pay for success contract (e.g. Social Impact Bond/SIB) backed by Healthcare Payers (e.g. govts, large philanthropy, health insurers, public via crowdfunding), correctly implemented, would incentivise Impact Investors to fund large Phase II/ III randomised controlled trials (RCTs) to repurpose generic drugs / unprofitable therapies in return for outcome payments from the SIB if successful. The amount of outcome payments would based on cost savings for Healthcare Payers due to the RCT showing that the off-patent treatments work (e.g. % reduction in hospitalisations or improved remission vs usual care). The whole idea is to transfer risk from Healthcare Payers (who are more risk-adverse) to the market (who are more willing to bear the risk of RCT failure) which would benefit from the spreading of risk and potentially large upside. CFC is currently working with Guidehouse, a global consultancy with a large healthcare / pharma practice to execute a feasibility study with the goal of raising backing for a large fund to support the SIB and its administration.
Crowd FundedCures is an initiative of the Medical Prize Charitable Trust, a registered NZ charity incorporated under the Charitable Trusts Act 1957 (NZ) and having Charity No. CC49977. It was founded by Savva Kerdemelidis in 2013, who is an IP/Commercial/Crypto Legal Consultant and NZ/AU Patent and Trade Mark Attorney. Amir Amraie joined the team in 2018, and is a pharmacist and entrepreneur. The idea of using a flexible prize fund for specific disease classes (a type of “pay for success” contract) to “de-risk” large clinical trials for Unmonopolisable Therapies (including repurposing off-patent drugs) was first proposed in Savva’s 2014 LLM thesis (available here). More recently, the use of Social Impact Bonds (another type of “pay for success” contract) has also been suggested as a means for incentivising clinical trials for repurposing off-patent drugs (see here and here).
A 220-page book, “PATENT PANDEMIC” explains how deadly gaps in the patent system lead to effective treatments being ignored and how to fix it will soon be available on Amazon with 100% of proceeds going to support our mission.
Founder & CEO
Savva is a Commercial/IP Consultant Legal Counsel and a NZ and Australian Patent and Trade Mark Attorney with 18+ years experience working for tech companies. He conducted his LLM thesis on the lack of private incentives to develop off-patent medicines.
Amir is a pharmacist and entrepreneur working with various tech companies and start ups to help with commercialisation. Amir has experience in public speaking, SEO, and managing multi-jurisdictional teams to conduct web development projects.