A framework for tuberculosis research and development expenditure based on the return on investment criterion

Abstract

Research and development (R&D) covering diseases that disproportionately affect developing nations is grossly inadequate. In particular it has been noted over a long period that governments of countries with high tuberculosis (TB) disease burden under invest in TB R&D, despite having 40% of the world’s notified TB cases. For instance, South Africa’s (SA) annual expenditure on TB R&D, of US$1,2 million in 2012, is insignificant relative to its disease burden, of 1 003 per 100,000 population. New tools are required to stop TB; these tools require R&D investment. However a recent report has noted that for the first time in eight years, global spending on TB R&D decreased in 2012 compared with the previous year. This drop in R&D investment threatens to undermine the possibility of any future insights from TB research. The important question remains: how can public investment in TB R&D be stimulated or incentivised, especially within those countries of high prevalence and sizeable R&D budgets (such as India, SA, China and Russia)? In an attempt to answer such a question, this research followed a quantitative, case study methodology based on secondary data analysis of information from the World Health Organisation (WHO) and the SA National Strategic Plan (NSP) 2012-2016, looking at the costs associated with TB treatment in SA and identified areas of potential savings as a consequence of well directed R&D. For additional information on external funding and TB R&D investment, the study used the Organisation for Economic and Development (OECD) and Treatment Action Group (TAG) data. A return on investment estimation method for suitable R&D projects was then used to compute the optimal TB R&D investment range. The results of the research show that there are higher returns on the optimization of TB drug regimens versus new drug development. The argument proposed by this research is that further TB R&D expenditure can be justified from a purely economic return on investment consideration, considering that expenditure of public funds on TB treatment is high and significant savings can be made through improvements to the current drug regimen optimisation. This report will help policy makers in increasing public health R&D expenditure from present levels to those targets set by the World Health Organisation’s Consultative Expert Working Group (CEWG) and others. This return on investment will only be realised if public-funded R&D is focussed more directly on public health priorities.