Private sector funding

Private sector funding fell, partly undoing two years of growth; participation-adjusted funding was down for both large and small pharmaceutical companies.

The private sector invested a total of $619m in neglected disease basic research and product development in 2023, accounting for 15% of global funding. As in all previous years, multinational pharmaceutical companies (‘MNCs’) were responsible for most of this funding ($541m, 87% of the private sector total), with small pharmaceutical and biotechnology firms (‘SMEs’) contributing the remainder ($78m, 13%).

Investments from MNCs fell by 11% (down $66m), undoing about two-thirds of the growth over the past two years and leaving it just above its 10-year average. The top two MNC funders from 2022 both made substantial reductions to their neglected disease R&D from that year’s record highs. However, if we adjust for a slight fall in year-on-year survey participation, the overall decrease was a little smaller, at $60m or 10%.

The share of MNC funding going to the big three diseases – HIV/AIDS, tuberculosis, and malaria – fell seven percentage points to 65%, driven by a sharp reduction in their HIV R&D (down $80m, -38%), leaving big three funding more than $80m below its average over the previous half-decade. Also driving this shift was record-high MNC funding for the WHO neglected tropical diseases (NTDs), which grew by more than a third ($35m), mostly via increases for dengue (up $30m, 68%), kinetoplastid diseases (up $7.3m, 24%) and leprosy (up $3.4m, 60%). MNCs’ funding for NTDs has now grown by more than $60m since 2020, with more than 80% of the increase driven by rising dengue drug funding.

MNC R&D fell across all of their major product areas, headlined by significant decreases in both vaccines (down $32m, -32%) and drugs (down $26m, -5.6%), taking their vaccine R&D to a near-record low and just a third of its peak in 2018. There were also proportionally significant decreases for biologics (down $10m, -55%) – after a record year in 2022 – and basic research (down $3.7m, -66%).

The drop in MNC vaccine funding resulted from decreases in R&D across all diseases except for tuberculosis, which nearly tripled (up $4.9m, 286%). The decreases in vaccine development were heavily concentrated in two areas: HIV R&D (down $28m, -58%), following the discontinuation of a late-stage vaccine candidate after two failed clinical trials, and diarrhoeal diseases (down $6.4m, -68%). The fall for diarrhoeal diseases is likely to be at least partly artefactual: it represents funding for a Shigella vaccine candidate that changed hands to another organisation for which no spending data is available.

Total MNC funding for drug R&D dropped by $26m (-6%) as investment in HIV drugs fell by a third (down $52m, -32%). This decrease overshadowed record-high drug R&D investment for studies investigating the treatment and prevention of dengue (up $30m, 70%), post-exposure prophylaxis for leprosy (up $3.4m, 62%) and a once-a-week treatment for mycetoma (up $0.3m, 625%).

The vast majority of the headline fall in MNC R&D was in clinical development (down $50m, -15%) and post-registration studies (down $20m, -26%), while their investment in early-stage research rose slightly.

Reported investment by small pharmaceutical companies (‘SMEs’) rose by a fifth (up $14m, 22%). After adjusting for a big jump in survey participation, though, SMEs’ funding was down by nearly half, with just $28m reported by ongoing survey participants. These big shifts in participation mean that the headline data on SME funding are a bit misleading; we do our best to pick through the real and illusory changes below.

Funding for the ‘big three’ diseases – HIV, TB and malaria accounted for an uncharacteristically large 74% share of the SME total, compared to an average of just 24% over the previous decade. This swing, though, mostly reflects the impact of new survey participants – funding for the ‘big three’ diseases from ongoing participants made up just 30% of their total, though this was still up from just 12% in 2022.

Also contributing to the swing towards the ‘big three’ – though also partly an artefact of participation changes – investment for bacterial pneumonia & meningitis fell from $22m to zero after four years of steady funding as one of only two funders from 2022 reported zero funding and the other was unable to participate in the 2023 survey. Another artefactual drop in SME funding, this time for dengue (down $3.3m, -88%) was caused by a lack of reporting for still-ongoing clinical trials of pan-serotype monoclonal antibody-based biologics, now being run by a new (and non-participating) corporate sponsor.

A key driver of the (as noted above, mostly artefactual) shift towards the ‘big three’ funding from SMEs was a big jump in reported malaria investment (up $25m, 663%), which came mostly from new survey participants and was all for the clinical development of vaccines ($24m). The $20m increase in tuberculosis was also mostly an artefact of new participants and went to vaccine R&D to advance mRNA candidates ($16m, from a low base) and to diagnostics (up $4.0m, 224%) for a point-of-care blood-based test.

There was also record SME funding for snakebite envenoming, which jumped 307% (up $4.8m), most of it going to drug development.

SME’s investment increased for both basic & early-stage research (up $8.2m, 141%) and clinical development & post-registration studies (up $16m, 40%), though the latter was entirely thanks to a new survey participant. Shifts in participation also meant that, for the first time since 2013, HIC-based SMEs provided the clear majority of funding ($65m, 83%), as LMIC-based SMEs reported just $13m (17%), almost all of which came from India.