Remarks at FAPESP on Biomedical Research and Innovation

Alex M. Azar II

FAPESP [São Paulo Research Foundation]
São Paulo, Brazil

The growing cost of healthcare is a challenge in the United States, as I know it is in Brazil. But we cannot let these costs tempt us to eat the seeds of tomorrow’s health innovations. I look forward to discussing how we can work with you to nourish innovation in the United States and in Brazil.

As Prepared for Delivery

Thank you for having me here today at FAPESP [São Paulo Research Foundation]. It is a great honor to join you at one of the Americas’ premier public institutions for biomedical research.

FAPESP has led the way in São Paulo’s embrace of science and innovation, and São Paulo leads Brazil.

As many of you know, the agency I run, the U.S. Department of Health and Human Services, or HHS, is also home to a major biomedical research institution, the National Institutes of Health.

HHS also includes the Food and Drug Administration, our food and drug safety agency.

We are also home to the world’s largest payer for healthcare, the public insurance programs at the Centers for Medicare and Medicaid Services. And when I say largest, I mean largest by a long shot: Between Medicare, our program for elderly Americans, and Medicaid, our program for low-income and disabled Americans, and a few other programs, HHS spends $1 trillion each year paying for American healthcare services.

Actually, next year, it’s projected to be $1.1 trillion.

So we at HHS have a tremendous amount of power not just to support research directly, like you do here at FAPESP, but also to help advance innovation through our regulatory and payment policies.

By the very nature of our organization, we understand that many different sectors must come together to make innovation possible. But we also believe that it is important for government to understand the particular role it should play, and leave much of the work up to the private sector.

It can be tempting, when it comes to government support for research, to insist that public investments yield a certain return for the government, or that the results must be available on the market at a certain price. But those policies come at a real risk.

I once came upon someone using an African proverb to describe this challenge: “You can’t be so hungry as to eat the seeds,” it says.

Through institutions like FAPESP and NIH, government has an important role to play in planting the seeds of biomedical innovation. But eating those seeds—putting restrictions on how government funding supports innovation—will threaten the growth of the fruits we need.

In the United States, we have very specific policies that are intended to protect the seeds. We protect the rights of private sector innovators to make profits from their work, because we know that is the best way to ensure patients, in the United States and around the world, reap the fruit.

So today, I want to discuss with you several points: why we are at a special moment for cooperation on health innovation, a few areas in which we are proud of our work with Brazil, and how we work within the United States to ensure that we are planting seeds, not eating them, so as to allow patients to harvest the fruit.

The United States, Brazil and the whole world stand at a unique moment of opportunity in biomedical research. Our knowledge of key biological mechanisms is growing faster than ever, with techniques like CRISPR and gene therapy opening up whole new areas for research.

Technological advances are also allowing us to pursue discoveries faster and in a more collaborative manner, by using the vast troves of data we generate and analyzing them with “Big Data” techniques.

In both the public and private sectors, I have been able to see how Big Data advances are allowing the rapid advancement of innovation and discovery.

The possibilities at hand have demanded that the United States updates our approach to biomedical research. These efforts took a major step forward with a new law both houses of our legislature passed overwhelmingly in 2016, the 21st Century Cures Act – PDF.

The 21st Century Cures Act not only provided substantial support for biomedical research, but it also sought to improve the efficiency of research across government and the private sector.

It aims to alleviate administrative burdens that can prolong the start of clinical trials, enhance data-sharing among government-supported researchers, and break down barriers to collaboration.

One key element of information-sharing efforts can be having health record systems that are interoperable, which has been a challenge in the United States and elsewhere. In the United States, however, we do not wish to micromanage the world of electronic health records.

Rather, we have set down simple rules of the road and simple expectations for how patients ought to be able to access their own data.

Then, we let the private sector take care of the rest. Rather than mandating that firms find one common technology standard, for instance, we have helped them link patients’ data using smartphone apps, allowing the patients themselves to make use of it as well. When they do so, both patients and private firms have the chance to benefit.

We are seeing the results of the new research opportunities I’ve just described in our work with Brazil, which has one of NIH’s largest portfolios of collaboration in the Western Hemisphere.

NIH and FAPESP fund U.S. and Brazilian scientists in parallel across a range of subjects. For instance, NIH is finalizing a joint call for research proposals with Brazil’s federal Ministries of Health and Science/Technology/Innovation/Communication. This joint call was developed under the U.S.-Brazil Collaborative Biomedical Research Program, a program established by NIH and Brazil’s government in 2014.

In total, NIH’s National Institute of Allergy and Infectious Diseases, or NIAID, has more than 50 years of research collaboration with Brazil. Brazil participates in several NIAID-supported clinical trials networks and programs, and NIAID currently supports more than 100 projects here.

Our bilateral science collaboration can provide huge benefits during an infectious disease outbreak, and we’ve seen that with the Zika in Infants study, or ZIP.

ZIP is a multi-site, multi-country study designed to improve our understanding of the health effects of Zika virus infection on pregnant women and their developing fetuses. This study is a collaboration between various parts of NIH and Brazil’s Fiocruz. NIH and Fiocruz were able to quickly launch this study shortly after the Zika outbreak, in part because of our long history of scientific cooperation and the new technological tools researchers have at their disposal.

Results from the ZIP study will inform how we fight this serious threat for our entire hemisphere and safeguard the health of Zika-exposed pregnant women and their newborn infants.

In what I’ve just described, you can see the U.S. has put a particular emphasis on researching Zika and other infectious diseases. We have also set up cross-cutting initiatives, such as a new research effort to combat opioid addiction and promote healthier methods of pain management.

But NIH is composed of 27 different institutes and centers. Almost by definition, they are not oriented around a central plan of research. It is the scientists at the institutes and centers who set their research agenda, looking for the most promising areas for discovery.

That same decentralized approach also informs how we support the next step after basic biomedical research—supporting the actual development of medical products.

Funding from NIH largely supports basic research, with some early-stage development.

These discoveries and early-stage medical products, funded by NIH at institutions around the world, can then be out-licensed through technology transfer and cooperative agreements, to the benefit of the researchers and of private-sector entities.

These private-sector firms then invest hundreds of millions or even billions of U.S. dollars to bring these products to market.

The U.S. and NIH do not retain intellectual-property rights or set pricing controls for this federally funded research. Choosing not to do so spurs investment, innovation and commercialization.

We need the strongest possible incentives for these discoveries because it is a long and risky pathway from basic research all the way to marketable products. In fact, so many ideas don’t make it from early research to the market that the gap between these two stages has been called “the valley of death.”

The challenge became a particularly acute issue in the 2000s, as we became more aware of the danger posed by biological threats, whether deliberate, like the anthrax attacks perpetrated on the United States after September 11th, or natural, like pandemic flu.

Developing medical products to address these types of threats is challenging and risky for business in part because there is not typically a commercial market for them.

This was the motivation for HHS’s starting what is known as the Biomedical Advanced Research and Development Authority, or BARDA.

To many, the obvious answer to this problem would be a centralized government effort to support these products all the way to market. But in the U.S., we took a different path: BARDA works with private-sector firms to invest in their innovations and coordinate what’s needed to develop them, rather than controlling the entire process.

BARDA has already played a role in innovation here in Brazil, on some of the common biological threats our hemisphere faces. In particular, BARDA has been engaged with the Butantan Institute, which I had the pleasure of visiting today with Minister [Gilberto] Occhi.

For over a decade, they have been working together to build capacity to provide pandemic influenza vaccine.

Since 2016, BARDA has also provided funding and subject-matter expertise to support development of a Zika vaccine candidate produced in cell cultures, an important step forward in developing a vaccine.

And today at the Butantan Institute, I heard about how they are completing Phase 3 trials on a tetravalent dengue vaccine that was developed in collaboration with NIH.

The candidate vaccine completed Phase 1 and 2 trials in the United States, Brazil, Bangladesh and Thailand.

Now, as a result of the technology transfer from NIH, the ongoing Phase 3 clinical trial in Brazil, and the completion of a state-of-the-art manufacturing plant, the Butantan Institute is well positioned to produce the vaccine and make it available for large-scale immunization initiatives in Brazil.

Another successful example of true public-private cooperation is the CARB-X initiative. CARB-X uses funding from governments and philanthropies to attract private-sector capital for the development of new tools to combat antimicrobial resistance, a challenge both the United States and Brazil face.

The vast majority of CARB-X’s funding comes from the private sector. For every dollar the U.S. government and our partners have invested, private-sector firms have invested eight dollars.

Importantly, CARB-X provides non-dilutive funding, meaning the private firms that are actually developing the drugs retain full ownership and have the greatest incentive possible for success.

In just the first two years, CARB-X has exceeded expectations.

The funding awarded to date has supported a portfolio of 33 new investigational products, including 10 novel classes of antibiotics with the potential to address a particularly dangerous type of bacteria.

This is a remarkable achievement: There has not been a new approved class of antibiotics to treat this type of bacteria since 1962.

CARB-X investigators are already located in seven countries around the world, and we are eager to have Brazilian scientists apply under CARB-X and engage in this important work.

I’ve described a few specific efforts we have made to support true public-private cooperation in health innovation. But there are so many more areas where we have to ensure that we are letting the private sector make the best use of public research.

That is why, in looking at how we run the U.S. health system, we are always attentive to the incentives we create for innovation.

In working to bring down the price of prescription drugs in the United States, we aim to use private-sector incentives, negotiation and competition. This philosophy has a successful track record of helping us build a biopharmaceutical industry that produces so many of the world’s new cures.

We have seen success in the last few decades with our thriving market for generic medicines, which allows us to pay lower prices for many generic drugs than many peer countries.

We apply the same mindset to efforts to transform how we pay for health services, as we transition from paying for sickness and procedures to paying for outcomes and health.

Some countries have tried to implement this transformation by undertaking centralized assessments of which interventions are most effective and paying for those.

In the United States, we have taken a different approach. We believe that those closest to patients, and the patients themselves, are best equipped to make decisions that will secure better healthcare at a lower cost.

The growing cost of healthcare is a challenge in the United States, as I know it is in Brazil. But we cannot let these costs tempt us to eat the seeds of tomorrow’s health innovations.

I look forward to discussing how we can work with you to nourish innovation in the United States and in Brazil. I am grateful for the opportunity to visit FAPESP, and to share my vision and discuss the mission we all share: planting the seeds for better health today and reaping their fruits tomorrow.

Thank you.