Measuring the Impact of Global R&D Investment in Product Development Partnerships (PDPs): A Case Study on Return on Investment in Antimalarial Drug Development
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Background
Product Development Partnerships (PDPs) are non-profit organizations that bridge the gap between the need for new treatments for poverty-related diseases and the resources available to develop them, leveraging a mix of public, philanthropic, multilateral, and private sector funding. This paper describes how two financial metrics were used to estimate the return on investments of drugs developed by the PDP Medicines for Malaria Venture (MMV) as a case study.
Methods
The internal rate of return (IRR) and benefit-cost ratio (BCR) were used to estimate the economic return on investment for the PDP. IRR was based on total investments from 2000 to 2023 and health gains derived from PDP-supported drugs, measured as monetized disability-adjusted life years (DALYs) minus the delivery cost of the products. BCR was calculated by dividing the present value of monetized DALYs by the present value of cost, indicating the overall efficiency and impact of the investments received by MMV.
Findings
Total investment received was $2·3 billion over the study period, and the antimalarial drugs developed and launched with the support of MMV averted an estimated 1·6 million deaths and 87 million DALYs for a cost of delivery estimated at $785 million. The IRR for the base scenario was 52·13% (CI: 52·11% - 52·16%) and the BCR 12·99 (CI: 12·92 - 13·06).
Interpretation
The substantial IRR and BCR generated by investment in antimalarial drug development suggest that the PDP model has a potentially pivotal role to play in global health.
Funding
No funding to declare.
Research in context
Evidence before this study
We searched PubMed and manually inspected the results using “internal rate of return”, “IRR”, “benefit-cost ratio*”, “BCR”, “return on investment”, “ROI”, “product development partnerships”, “PDP” as keywords, in English, and up until February 2025. We also performed a search in the grey literature and included in our review reports and articles published by consulting organizations, funders, government organisations, and development banks.
Both internal rate of return (IRR) and benefit-cost ratio (BCR) are widely used to inform investment decisions in the public and private sector. The need for better data to inform global health R&D investments is long recognised and our searches indicate a continued lack of consensus on the preferred metrics and methods. 1 A recent scoping review showed that there were inconsistencies in the calculation and interpretation of ROI associated with public health interventions. 1 The authors called for more transparency when reporting underlying assumptions.
Most economic evaluations focused on low- and middle-income countries’ estimate the cost-effectiveness of specific interventions or products. 2 Literature on the benefit cost ratios and estimates on the value of global health investments in monetary terms are uncommon. 3,4 Moreover, understanding the return on investing in global R&D is rarer still. 5 In the UK, a series of influential analyses using the Internal Rate of Return (IRR) demonstrated the economic returns of medical research funding for four diseases (cancer, mental health, cardiovascular diseases, and musculoskeletal diseases). 6 To date, no peer-reviewed publications have evaluated the return on investment in the R&D generated by product-development partnerships (PDPs).
Added value of this study
This paper contributed to knowledge in several ways. Firstly, from an empirical perspective we learn that investing in malaria research and development through the PDP model has resulted in a positive return on investment, driven by providing access to effective antimalarial treatments, averting 1·6 million deaths. Secondly, we demonstrate that a rigorous analysis of PDP returns on investment can be conducted using routine data and standardised methods to inform both productive and allocative efficiency decisions. Finally, from a policy perspective, this paper is able to show that investment in R&D, and PDPs specifically, are a competitive investment when compared to other health and non-health investments.
Implications of all the available evidence
In a funding environment where large-scale investments are increasingly coming under scrutiny, this work demonstrates that it is possible to calculate the return on investment from PDPs using routine data and standardised methods. This paper offers a retrospective and conservative view of what has been achieved. Even with this more conservative methodology, it is clear that the investment received by MMV allowed it to respond to existing market failures and develop a portfolio of drugs that have positive health and economic returns. Our paper is an example of how global health investments can assess their returns on research investment in a transparent and robust way to inform policy making and funding allocation.
