Funding flows
By Impact Global Health 29 January 2025
Overview
Funding for PDPs and late-stage clinical development continued their slow decline
Funding flow trends
In 2023, just over three-quarters of investment in neglected disease R&D – amounting to $3,176 million or 76% – came from external funding sources. The remaining 24% was spent internally through intramural funding or private sector self-funding. These proportions were broadly consistent with previous years.
However, there were shifts within these categories: external funding increased by $116 million (up 4%), while internal funding decreased by $146 million (down 13%). Although industry self-funding declined by 8% ($55 million – and potentially more when adjusting for increased participation), the majority of the reduction in internal funding was due to a significant drop in public sector intramural funding, which fell by nearly $90 million or 19%.
This, in turn, was mostly the result of a sharp drop in the NIH’s intramural funding (down $67m, -21%) from last year’s record high, alongside smaller intramural funding reductions from the US DOD and CDC.
Most of the increase in external funding went to researchers & developers (up $105m, 4%), with a smaller – though proportionally more significant – increase in funding to Other Intermediaries (up $28m, 16%). Funding to PDPs fell by a further $16m (-5%), their fifth consecutive year of decline.
A large share of the rise in funding to non-PDP intermediaries was the result of a scheduled cyclical increase in funding to the GHIT fund from the Japanese government (up $18m), while funding from the EC (still the top funder of Other Intermediaries) was down by $12m (-12%), mostly due to its reduced contributions to the EDCTP.
While funding from Gates – the top funder of PDPs – rebounded slightly, by $12m (9%) after four years of decline, overall funding to PDPs was still down from 2022, mostly due to a $17m drop from the US NIH (primarily in its funding for FHI360), as well as a fifth consecutive drop in PDP funding from the German BMBF (down $6.1m, -62%). The Gates Foundation’s increase was thanks to a $24m rise in its funding to IAVI, along with a smaller ($6m) increase to MMV, though these increases were partly offset by drops in its funding to several other PDPs, most prominently FHI360 and IVI.
How funding was allocated across the different stages of R&D
In 2023, a little under three-fifths of the funding allocated to a specific stage of R&D went to basic or early-stage research (58%, $1,883m), with a third going to either clinical development or post-registration studies (33%, $1,070m), both broadly in line with the shares across the last decade. The remaining 8.5% ($276m) was for platform technologies, which had grown rapidly before remaining basically unchanged in 2023. These shares do not include an additional $569m (14% of the global total) which did not specify an R&D stage ($569m, 14%) or $649m (16% of global funding) for non-disease-specific R&D ($649m, 16%). Funding in the latter category skews much more heavily towards clinical and platform development, suggesting that our 58% share for basic and early-stage research is a slight overestimate.
These figures remained largely unchanged from their 2022 values, with basic & early-stage increasing by $22m (1%) and clinical development & post-registration down by $82m (-7%). This was the fifth consecutive year of decreasing funding for clinical development & post-registration studies from its industry-driven peak of $1,603m in 2018, leaving it reduced by a total of more than half a billion dollars.
Basic research spending was essentially unchanged at $789m (down 1%). In comparison, the slight rise in early-stage research (up $31m, 3%) was due to increases in funding for discovery & preclinical drug research and early development of diagnostics.
The decrease in clinical development & post-registration studies was felt in both the private sector (down $54m, -14%, or by 17% if we adjust for changes in survey participation) and the public sector (down $80m, -14%, a little over half via the NIH), partly offset by a sharp rise in philanthropic product development (up $53m, 43%).
Alongside a big fall in clinical development without a specified R&D stage (down $70m), the drop was concentrated on later-stage product development, including Phase III development (down $58m) and post-registration studies (down $30m), reflecting a mix of successful and abandoned late-stage trials. This fall in late-stage development was partly offset by a $65m increase in funding for Phase II clinical development, much of it for malaria drugs and vaccines. Most of the overall drop in clinical development was in drug R&D (-$52m), but biologics, VCP and microbicides all experienced a decline.
Funding for product development partnerships
Funding to product development partnerships (PDPs) declined slightly in 2023 (down $16m, -5%) to a new record low, following a fifth year of consecutive decline. The decline has, at least, begun to slow relative to the previous two years when funding dropped by over $100m each time. Their cumulative effect still left funding at less than half of its 2014 decade high and more than 60% below its all-time high in back 2008.
The Gates Foundation was again by far the largest funder of PDPs in 2023, accounting for almost half of the total and over $100m more than the UK FCDO, the next largest funder. While a large proportion of the longer-term decline in funding to PDPs was attributable to declining PDP funding from the Gates Foundation, its funding actually rebounded slightly in 2023, though it remained more than $100m below where it was in 2018 when the recent decline began – and almost three-quarters below its peak in 2008.
Most of the 2023 increase in Gates PDP funding went to IAVI (up $24m), though even IAVI’s 2023 total was less than it had received from the Foundation in 2018. Gates Foundation's funding to MMV also increased (up $6m), while its funding to most other PDPs declined, especially in its contributions to FHI 360 and IVI.
The 2023 decline in overall funding to PDPs was primarily due to a $17m drop in funding from the US NIH – particularly their funding to FHI360 as part of the HIV Prevention Trials Network – and the German BMBF. The BMBF’s 2023 funding to PDPs was just $4m, having peaked at $22m in 2018, with the BMBF 2023 cuts falling most heavily on DNDi and MMV and its long-term reductions on IPM and FIND. Funding from the UK stabilised at $40m in 2023, after having dropped by almost two-thirds between 2020 and 2021, at least maintaining its new lower level of funding.
Funding to PDPs from the Netherlands Ministry of Foreign Affairs failed to recover the drop we saw in 2022. However, our forecasts show that with the advent of PDP IV – their new PDP funding round running from 2022-2027 – that total committed funding will remain similar to the previous round, implying an imminent rebound in disbursements. The situation is similar with PDP funding from the Australian DFAT, which was between its PDP funding cycles in 2023, with no funding disbursed before the new, slightly increased, cycle beginning in 2024.
Unitaid was the only PDP funder other than the Gates Foundation to significantly increase their funding – a rise of $60m (up almost 80%) – which went mostly to MMV. There was also new, first-time PDP funding from the Japanese government, albeit just $2.6m.
MMV was again the top-funded PDP in 2023, receiving 22% of all PDP funding. The Gates-driven rebound in IAVI’s funding left it a close second, with 20% of the overall total. Funding to most other PDPs declined, most significantly FHI 360 and IVI, both of which saw their funding drop by 50% or more, compounding previous declines.
Figure 5. R&D funding flows 2023
Figure 6. PDP funding 2023
Funding for other intermediaries
Funding for non-PDP intermediaries (‘Other intermediaries’) rebounded to $199m, an increase of $28m (16%), which restored about half the funding they lost in the previous year’s sharp dip.
The bumpy path of Other Intermediary funding mostly reflects the two-year cycles on which the Japanese Government makes its disbursements to the GHIT fund; its contributions went from $21m in 2021 to just over $5m in 2022, to $24m in 2023 – generating illusory changes in each year. Amid these cycles, GHIT funding has trended chiefly upward over time, reaching a record $47m in 2023, thanks to record funding from the Japanese Government and a doubling in funding from industry, which rose from $5.7m to $11m.
The other major driver of non-PDP intermediary funding is the European and Developing Countries Clinical Trials Partnership (EDCTP). Though it remained the largest recipient of intermediary funding, the EDCTP saw its funding dip by $5.5m (-5%) in 2023 to $101m – its lowest level since it began benefiting from increased funding under the second EDCTP funding round in 2017. The decline in funding to the EDCTP was the result of a second consecutive drop in disbursements from the EC, which fell by another $12m (-12%) after having dropped by $16m in 2022. This fall was only partly offset by increased contributions from the German BMBF (up $3.4m) and the UK MRC (up $3.7m after a three-year absence).
In 2024, Fundacio La Caixa announced it would join the Gates Foundation and Wellcome in providing core funding to the GHIT funding, promising an initial contribution of $125k.
The only other notable shift was an $8.5m increase in funding to the Barcelona Institute for Global Health (up $8.5m), mostly due to increased funding from the Spanish philanthropy Fundació La Caixa.
Figure 7. Intermediary funding 2023
