USAID and Innovation

The recent Life Science Innovation Northwest conference (held March 16-17 in Seattle, Innovation NW) had a prominent yet unusual luncheon keynote speaker.  It was Dr. Rajiv Shah, the new administrator of the US Agency for International Development which is better know for its role in international aid rather than innovation in biotech.  Dr. Shah has substantial credentials for his new position and has ties to the Seattle area; he has an MD from the University of Pennsylvania and served as Chief Scientist at the  Department of Agriculture and as deputy director of policy and finance for the Gates Foundation’s Global Health Program (Shah Bio).  Although I was unable to find a text or video version of his talk, I saw he was interviewed by Luke Timmerman, national biotechnology editor for Xcomony, one of the best sources for news on emerging technology-based companies in the US (Xconomy).  In response to being asked what he saw was the USAID’s role in promoting Gates-type private-pubic partnerships and getting innovations in drugs, diagnostics, and vaccines  “out in the field and actually helping people in poor countries,” Dr. Shah said:  “We make a significant amount of direct investment in research and product development.”  And then he clarified his statement (a bit):  “We buy a lot of health commodities for low-income communities and low-income countries. They range from contraceptive commodities to malaria drugs to vaccines for children. That significant purchasing power could be used to create financial incentives for more technology development.”  (Shah Interview)

As a part-time advisor to several startups in global health that are scrounging about for funding, the first comment caught my attention.  First, I noted that USAID is not one of the agencies that have strong research programs and are subject to the Small Business Innovation and Research (SBIR) set aside, not that the SBIR program has had any role in promoting global health (GH) product development to date.  As I noted in my posting of November 5, 2009, only $15 million of the NIH’s annual $700 million SBIR funding goes into global health-related R and D.  Next I went to (, the website that lists recently posted grant opportunities for the entire government.  There are 104 USAID-sponsored RFAs (requests for applications) listed, covering a range of topics from implementation of good government practices to delivery of HIV/AIDs care, but none were specifically for technology development nor did the few I looked at in detail include such funding.  The RFAs are in keeping with the USAID’s mission of aid delivery and the standard government practice of hiring contractors to put our billions to work.   I note that, in the interview, Dr. Shah stated that one of his agency’s goals is to improve the contracting process by emphasizing monitoring results and involving more NGOs and non-profits organizations, which, to my thinking, would be a revolution in international aid.

Next, I checked the USAID website and found that the primary global health group is the Bureau of Global Health (Bureau of Global Health) which was funded at $4.15 billion in fiscal year 2007 (update needed, please).  The Bureau seems also be the key department for implementing the Global Health Initiative as announced by President Obama last May (GHI Statement).  The resulting headline was widespread and welcome (“$63 billion over 6 years”), but details were lacking.  Presumably the Bureau’s guidance for spending its share ($10 billion in FY 2010?) is provided by the Implementation of the Global Health Initiative Consultation Document (GHI Document), which, again, has no mention of product R and D support.  I found a similar story at the website for the Bureau’s Neglected Tropical Disease Initiative (NTD Initiative) which lists as its goals: monitoring and evaluation for integrated control programs; drug supply and delivery; operational research for improving implementation of mass drug administration; and selecting countries for inclusion in the Initiative.  No R and D support is mentioned, not even a listing of their current contractors (NTDI Contracts).

Clearly, Dr. Shah is interested in a role for the USAID in promoting innovation, and perhaps has a task force working on the specifics.  As he mentioned, as a buyer of global health products, USAID can create financial incentives, but only if the specifications for the needed products and the demand (quantity and price) are clear (and attractive) to prospective suppliers.  Rather than RFAs, the Agency could put out requests for proposals (RFPs) specifically aimed at developing the needed products with an attached advance purchase commitment (like the AMCs for vaccine used by GAVI which Dr. Shah worked on while at the Gates).  Clearly most of the Agency’s annual funding must be applied to purchasing and deploying current products to address the immense current need, but some portion could be used for stimulating the development of the next generation of products.  As an example, currently USAID is looking for two contractors to help them spend $450 million dollars in TB care over the next 5 years (TB Care RFA).  The RFA mentions the lack of useful (rapid and low-cost) diagnostics for HIV, TB, and MDR TB but not from where these products will come; at least the contractors could be required to purchase such products, should they be available, at some specific amount or percentage of diagnostics purchases.  This type of RFP could be done for a number of needed products; Dr. Shah alluded to publishing some kind of needs list to stimulate product development in the interview (“We’ll publish a focused, prioritized list of what the challenges are out there”).  I hope it appears soon with product specifications and terms for AMCs.

In addition, the USAID clearly knows a lot about the environments in which the next generation products will be used (and perhaps has a role in creating them), has relationships with the recipient countries’ governments which regulate and register new products, and knows the methods and costs of product delivery.  All of this experience and knowledge should be useful to companies seeking to enter the global health market and could be shared.  The USAID already has a large archive of documents resulting from their work (USAID Documents), perhaps it could be the basis for the Agency’s outreach effort to biotech companies interested in global health.

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