What is a social impact bond?
A social impact bond (SIB) is a financial tool. It allows investors to put their money into projects that are designed to benefit society. These projects are delivered by third sector organisations like charities. They use the investors’ money to set up and run their project and receive payments from the government based upon the project’s success.
The more successful, the more money they save the government and the more money they are paid. These payments allow investors to be repaid. This is why social impact bonds are known as payment by results models.
How can a social impact bond fund repurposing?
In 2015, Beacon, then known as Findacure, began working on an innovative way to use a social impact bond (SIB) to fund drug repurposing research for rare diseases in the UK. This is the rare disease drug repurposing social impact bond – RDDR SIB for short.
But how would it work?
Rare diseases that are left untreated cost the NHS money: surgery, care, appointments, hospital stays and monitoring. Treating patients has the potential to reduce these costs. If the drug used for treatment is a low-cost generic drug, then the savings could be significant.
In the RDDR SIB, we asked NHS England to agree to act as a commissioner. In this role, they would prescribe any repurposed generic drugs that we demonstrated had efficacy in treating a rare disease to the English patient population. If the treatment benefited the patients, NHS England would reduce their spending and improve the health of these patients.
As a commissioner, they would then pay a proportion of their savings back into the SIB, allowing Beacon to repay the research investors. Any surplus could then be invested into more drug repurposing clinical trials.
Private investors invest in the SIB, for long term return.
Beacon uses the money in SIB to fund multiple clinical trials of generic drugs repurposed for rare diseases.
Successful trials trigger off-label prescription in NHS. Save money and improve patient health.
NHS pay a proportion of savings into the SIB.
Savings are used to generate return on investment.
Excess funds more trials.
Who do you need a SIB to fund generic drug repurposing?
Currently, the majority of plans to repurpose low-cost generic drugs don’t make it to clinical testing. This is because companies don’t believe that they can effectively secure the unique right to sell an effective repurposed drug to make their investment in research and approval back.
There are very few viable business models that encourage generic drug repurposing, especially when working with small patient populations. The RDDR SIB can overcome this by rewarding the developer for saving the commissioner (here NHS England) more money.
What happened to the Social Impact Bond?
Unfortunately, despite our work showing that each of our case study projects would save money, NHS England decided not to move forward with the project in 2017. Since then, two of the three repurposing projects we identified have been funded independently. They are now in clinical trials.
We continued our work with the Rare Disease Drug Repurposing Social Impact Bond by holding a global rare disease drug repurposing open call to identify new repurposing ideas. We received 38 different proposals from around the world, but were unable to fund any using our model after the NHS decided not to take the RDDR SIB forward.
Over the last few years, a number of other groups have explored the concept of a drug repurposing SIB; both in the UK and around the world. We have seen an increased interest in drug repurposing from the NHS and the desire for a more effective use of generic medicines. We remain hopeful that the RDDR SIB will one day receive a practical pilot in the UK.
If you would like to learn more about the SIB or our work on it, feel free to contact our CEO Rick, who will be happy to discuss it with you.