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Gates Foundation Health Chief on Coaxing Pharma to Do Good

Xconomy National — 

Bill Gates can summon the CEOs of every major global pharmaceutical company, and get them thinking and talking about things that won’t help them make more money. Pharma and biotech companies, cast as the villain pretty much everywhere, certainly like the PR boost they get from working with Gates and putting their immense resources to work for people who live in poverty.

But when the handshakes fade, warm and fuzzy feelings wear off, and people go back to their day jobs, someone needs to ride herd and make sure things get done. Trevor Mundel, president of the foundation’s global health operations, is one of the key people charged with doing that.

Mundel, 53, came to the Seattle-based Bill & Melinda Gates Foundation, the world’s largest charitable foundation, about two years ago. He had a long career in the for-profit pharmaceutical industry, including stints at Parke-Davis, Pfizer, Alkermes, and, finally, as the head of global development at Switzerland-based Novartis. At the Gates Foundation, he oversees a vast global health grant portfolio that seeks to combat diarrheal infections, HIV, tuberculosis, malaria, and many other illnesses that the global capitalist system has largely ignored.

Trevor Mundel, president of global health at the Bill & Melinda Gates Foundation.

Trevor Mundel, president of global health at the Bill & Melinda Gates Foundation.

The foundation, started by a titan of capitalism, understands that if it’s going to make any kind of dent in these huge health problems, it needs to tap into the resources of pharma and biotech. Total funding for global health has flatlined, after a decade of fast growth spurred largely by Gates. Industry spends about $130 billion a year on biomedical R&D—a sum far, far greater than anything Mr. Gates, as rich as he is, will ever be able to put under his own roof.

Since the foundation’s inception in 1994, it has given out $8.8 billion for global health. The U.S. and European pharmaceutical companies collectively employ about 1.35 million people. The Gates Foundation employs a little more than 1,000. What the foundation can do, given Gates’s influence, is push, pull, drag, and lever more people into working on global health. The foundation has about $40 billion in assets, some of which it spreads every year across its portfolio of grants for global health, global development, and education.

I sat down with Mundel in his Seattle office a few weeks ago, and talked with him about what he’s done to shake things up, and what he wants to accomplish in this job. He’s a native of South Africa, with a doctorate in mathematics from the University of Chicago. He comes across as a soft-spoken, slightly shy, and thoughtful individual. He was most animated when we talked about some immunology work being done at a Gates Foundation investment called Atreca, a spinout from Stanford University.

Although I don’t doubt the foundation’s good intentions, I wonder about how sincere and committed its partners are. Just a couple weeks after interviewing Mundel, I met in New York with a scientific leader of one of the world’s top pharma companies. This person was pitching a story about a new humanitarian initiative his company was doing in partnership with the Gates Foundation. When I asked him how many people his organization has working on this global health problem, he stammered, and then volunteered that maybe 20 people were working on it. When I asked how much progress the company had made in a couple years since starting the program, he said the team was still working with collaborators on the best ways to measure that. Suffice to say, I walked away unimpressed. And it made me think back to the kind of organizational inertia Mundel and his colleagues are up against.

With that, here’s an edited version of the conversation with Mundel, which I think will be informative and hopefully useful for many potential partners in biotech and pharma. It’s lengthy, so I’m splitting it into two installments, with the second part coming tomorrow.

Xconomy: What excited you about this job?

Trevor Mundel: Obviously there are many factors. But I was looking at the way the pharmaceutical industry was going. Given the pricing pressures, there was a huge focus in moving towards rare diseases. From a regulatory viewpoint, the programs were much less expensive—they might be accelerated. Particularly, the industry was interested if you could work on a rare disease that could be expanded into other markets.

So I had a team, for instance, a large team, more than 100 people, working on one of these rare diseases, Muckle-Wells Syndrome. At the time we started working, there were about 3,000-4,000 identified families in the world with the disease. We had an antibody that was the sort of magic bullet for this. That antibody, an IL-1 antagonist, has got a lot of other utility.

On the other hand, I was also responsible for Coartim development, around the Coartem Dispersible. I had a team of about five people. We worked on the dispersible form for malaria in kids. It was distributed in West Africa to a huge effect, helping millions of kids who couldn’t take the tablet form.

So I’m looking at an industry that’s facing pricing pressures, rarer diseases, stratifying populations, and massive resources in the area of oncology. It was very much focused on the diseases of the developed world. And then I saw what a small group can do to have a massive impact on a miniscule, shoestring budget by comparison.

You have to think about where you want to go. I always thought I’d want to go back to Africa and do some work over there, having grown up in South Africa. With those thoughts in mind, the Gates opportunity came up. At that point, you have to decide, are you going to jump in or just say ‘Oh, I’ll do that one day.’

X: This is the opposite of the rare disease model, what you’re doing here.

TM: It’s the absolute opposite of rare disease. There’s a community, a public health perspective, which is completely different.

There’s this notion that the Gates Foundation is completely obsessed with technology. And [some say] it should be just focused on deployment of low-cost, simple solutions, in low-resource settings. I thought there’s some validity to that argument. But as I’ve come to understand, the infrastructure deficiencies in some of the areas we work in are so great, you could wait 50 years to have well-functioning healthcare systems.

Because of the deficiencies for the foreseeable future, you actually need more sophisticated technology in some ways. The vaccine you may be making for developing countries needs to meet certain product profile criteria, which are more stringent than what you could deploy here. It doesn’t matter here if you have to come in for three doctor visits, or if you need refrigeration for a vaccine. All of those things are easily taken care of here. It matters hugely whether you have three or one dose of a vaccine for kids in developing countries, or whether you have to put it in the refrigerator, or whether it will be stable on a shelf for two years.

So, contrary to what I thought naively at the start, the technology hurdles are that much higher if you want to have effective interventions in some of these most infrastructure-poor areas.

X: So you jumped in. Like you said earlier, at some point you have to decide whether you really want to jump in and do this. You did. Two years ago. What was that like, getting started? I imagine there’s a lot absorb early on, in terms of figuring out how this place works, what it does well, what it can do better. What were your initial impressions?

TM: A lot of confusion. There are a huge number of projects underway here. How do you make choices? It seems like we have a lot of resources, with a couple of billion dollars we invest in global health areas. But if you take the aggregate industry investment in R&D—which has stabilized now at about $130 billion a year—what we have is a drop in the ocean. It’s not as if we can just be very profligate in our choices.

X: To clarify, isn’t it about $1 billion from the Gates Foundation per year?

TM: In human healthcare R&D, it’s about $600 million a year.

X: So it’s $600 million from the Gates Foundation a year, out of a total pie of $130 billion in aggregate pharmaceutical industry R&D? A drop in the ocean…

TM: Right. We’ve got about $2 billion a year, when you include healthcare delivery, and agriculture, and all the sanitation, hygiene work. Across the broader portfolio, it’s close to $3 billion a year. But strictly in R&D, it’s about $600 million.

So you have to make choices.

For example, we’ve got a proposal in which people have shown there’s tremendous value if you give families a third bednet in Zambia for malaria. The program with bednets for malaria in Zambia has been very successful, one of our most successful countries. And there’s a proposal if you give families a third bednet, you could really make a lot more progress. And that’s versus developing a tuberculosis vaccine. How do you value those two things?

Then we have male surgical circumcision for HIV transmission versus a new drug for malaria. Then there’s a new diagnostic, second generation to the Cepheid nucleic acid diagnostic test for TB.

So you have these radically different modalities. Some things are not even therapies. It could be a new algorithm for triaging sick kids with fever, which would take into account their respiratory rate, their oxygen saturation, and would be a simple algorithm for a healthcare worker in the field to say, ‘This kid’s probably got a cold, and this kid has probably got serious pneumonia and needs to be shipped as fast as we can to some facility.’ Developing an algorithm like that is another kind of intervention. How do you value those radically different things?

X: There are a lot of people with a lot of ideas.

TM: Yes, there are a lot of ideas, and they are radically different. And they have radically different segments of the population that they can have impact on.

The first exercise that I thought was necessary was figuring out how to put them in some kind of format so that we have some kind of idea of their value. This is so we don’t make bad mistakes—putting a huge amount of resources into something that actually, although it seems important, has a really low return in terms of disability and death averted. Or it could be incredibly costly for every death averted.

Now we’re working at the public health level. We’re thinking about the 2012 number, of the 6.9 million kids [under age 5] that are dying. We developed something, which I took from industry approaches, which is a portfolio matrix. It’s a great graphic. All it does is replace net present value estimates of the cost-effectiveness or measure of return—we replace that with death/disability averted or disability-adjusted life years. It’s a summary measurement. And we want the cost of that, so we look at dollar cost per disability life year averted.

X: Is that really how they do it in industry, or are you taking a page out of the payer’s playbook?

TM: You need both approaches, actually. You want to address the major burdens of disease. We depict that on our bubble chart. The size of the bubble is the burden of disease, so you can see graphically, instantly, that HIV is huge, TB is huge, malaria is huge. It’s contrasted to sort of what you could do about that disease with existing measures. Let’s say we effectively deploy what already exists with TB drugs. Then you have a relative burden of disease that can be addressed by your new intervention.

X: What’s an example of a past program that might not have passed this test? Would the (GlaxoSmithKline) RTS,S vaccine for malaria have passed? I know that was a big investment, and we have some data now.

TM: How do we generate this portfolio matrix? We develop a target product profile. What would the criteria be, for example, for a vaccine we’d want for malaria? We’d want something very effective. Better than 60 percent effective in reduction of severe disease, and effective in young infants. A vaccine that meets those parameters is very cost-effective and addresses a very big burden of disease.

We are in the debate now whether RTS,S itself meets that kind of product profile and can have that kind of impact. It clearly is not in the optimal situation with its product profile. But it validates the question of whether we should be investing in a malaria vaccine at all. Yes, we should. If you have a good vaccine, it will make a huge difference. It will be bigger than most malaria drugs because of the way of delivering them.

X: What kinds of things have you stopped doing because of this portfolio approach?

TM: You have to ask ‘what do you know?’ A lot of things are speculative. A vaccine for malaria or HIV, these are unknown things. Everything is contrasted now with known things like bednets for malaria. There’s male surgical circumcision for HIV, which is actually cost-effective, because you avert hospitalizations and opportunistic infections. The question for any new thing that comes in is ‘should we rather be investing in the third bednet, or male surgical circumcision?’ There’s an alternative thing we could do with the resources.

I should tell you the other dimension on this matrix, as it is probability of technical and regulatory success. That’s kind of essential. Anybody who wants to formulate a great value will get huge value [in the portfolio matrix], but if the probability of success is incredibly low, then we should be skeptical of that. In biotech or pharma, you can easily spend for 10 years and get nothing. So you need to have some balance.

For example, look at visceral leishmaniasis in northern India and some parts of East Africa. We’ve looked hard at what kind of vaccine would be needed, and the likelihood we’d get a vaccine. We’ve shifted into a much earlier research space with those vaccines. And drugs are also very tough for that. So we refocused our efforts there on vector control, and away from drugs and vaccines. It’s because vector control has been proven to work, and it’s here and now.

I don’t want to give the impression that we use this system rigidly, because the uncertainty around these things is considerable. It brings me to the second set of things I wanted to mention related to this matrix.

To do it, you have to actually know the state of the world. Our way had been through IHME, the Institute for Health Metrics and Evaluation—Chris Murray’s group at the University of Washington. They published the 2010 Global Burden of Disease (GBD) report last year. It is great. It’s the first time there’s been this total accumulation, trying to fit everything—all the deaths from important conditions—into a single envelope about everyone who dies on the planet. It’s a fantastic enterprise. They have got the biggest analytic capacity of anybody in the world addressing burden of disease globally. The problem is it publishes every couple of years. It’s every decade for the full thing, with some updates on particular topics every couple of years. That’s too infrequent to drive real measurement. At the end of the day, we’d like to be able to say this malaria intervention is effective, because we’ve seen the burden of malaria drop year by year in the region we’re working in. But there’s no way the data can support that now. So we’ve invested in the GBD 2.0, which is to bring them online in real-time. When new data sets come in, we want that whole GBD recalculated on the fly, without waiting a couple years.