Innovative funding models for drug repurposing

Funding issues for drug repurposing relate to lack of funding, the existence of funding gaps and financial disincentives/market failure in certain scenarios. There is a need for innovative funding models to address these issues and that can complement the traditional modes of funding for drug development. A range of innovative models already exist or have been proposed, but the knowledge of these is dispersed and not easily accessible to the community. In this report we aim to develop awareness of the need for innovative funding models for drug repurposing. We have collated and categorised a range of innovative funding models that were found through peer- and grey-literature reviews and through stakeholder interviews. We have made the information accessible to the repurposing community as a resource to encourage adoption and adaptation of these models for drug repurposing.

Funding models

CROWDFUNDING

Collecting donations from the public, often through online platforms, to fund specific projects.

READ MORE

CROWDFUNDING

Crowdfunding is a model which collects donations from members of the public to fund specific research projects, typically using dedicated online platforms for the collection of donations. Donations tend to be small, and therefore success depends on having a message that reaches large numbers of people and successfully persuades them to contribute. It has been used for clinical trials in some cases, though the funds raised have been small compared to more traditional sources. (Augustin et al. 2015) In addition to the difficulty in raising sufficient funds for clinical trials, there is also an issue in that crowdfunding for rare and ultra-rare diseases is disadvantaged by a lack of public awareness and reduced visibility for these conditions (Verbaanderd et al. 2021).

TAX BENEFITS

Utilising the taxation system to reduce the costs associated with clinical research in repurposing, e.g. tax credits (reduction in tax liabilities) or tax deductions (reductions in taxable income).

READ MORE

TAX BENEFITS

Utilising the tax system has been proposed by a number of groups as a mechanism for generating new incentives to encourage further drug repurposing research (Simon 2022). These proposals typically involve the creation of specific tax credits (reduction in tax liabilities) or tax deductions (reductions in taxable income). There are existing precedents for these financial models, for example the tax credits included in the US Orphan Drug Act 1983. In the UK the Association of Medical Research Charities 2017 report on repurposed medicines recommended the extension of existing UK R&D tax credits to also cover drug repurposing research carried out by the generics sector (AMRC 2017). Whether the instrument is tax credits or deductions, the aim is to use the taxation system to reduce the costs associated with clinical research in repurposing, and thereby make such work more financially attractive. A downstream effect of reducing costs is that existing funds, from standard models, can have greater impact – effectively increasing purchasing power.

REWARD- OR PRIZE-BASED MODELS

A pull-incentive using post-approval or milestone payments to develop drugs in areas which lack a traditional business case to fund clinical development.

READ MORE

REWARD- OR PRIZE-BASED MODELS

Reward- or prize-based models are a form of pull-incentive which use post-approval or other milestone payment to companies which develop drugs in areas in which traditional commercial development is often problematic, typically in repurposing generic medicines for rare diseases or for developing new antibiotics. A common factor in these scenarios is the lack of a traditional business case to fund the clinical development of the treatment. Drug pricing and sales are independent of the reward, so that even in cases where there is a small market due to disease rarity, the reward would be sufficient to give a return on investment. The Longitude Prizes, funded by the UK-based NESTA Foundation, rewards development for specific unmet needs with a lump sum prize for successful entry, is another example. Previous Longitude Prizes have targeted anti-microbial resistance and dementia, the latest Longitude Prize is looking for progress in amyotrophic lateral sclerosis, with a prize fund of £7.5M. (Longitude Prize on ALS 2025). Similarly, Rex and Outterson in 2016 have modelled a number of scenarios for calculating reward payments for new antibiotics independent of the number of likely prescriptions.

PAY FOR SUCCESS MODELS

A model in which an outcome payer, such as a government body or insurer, pledges to repay investors their initial capital plus a return only if the drug achieves the specified outcomes.

READ MORE

PAY FOR SUCCESS MODELS

A range of ‘pay for success’ models have been proposed to address specific funding scenarios – from the repurposing of generic medicines to addressing incentives for new antibiotics or low levels of funding for ultra-rare diseases. The common factor in these models is the provision of a return on investment for the successful development of a treatment for the disease of interest. These models are pure ‘pull’ mechanisms and as such do not directly address the funding of the development of the treatment, they exist to provide a strong incentive to succeed. Unlike pure reward- or prize-based models, the return is based on drug-pricing or the extent of health-care system savings derived from the drug. One example is the social impact bond proposed by Findacure (now known as Beacon: for rare diseases), developed specifically to overcome a lack of financial incentives for the repurposing of low-cost generic medicines. In this model a portion of the cost savings of a newly introduced repurposed generic medicine are paid to investors in the social impact bond who have funded the development. In this case a detailed cost model was developed for the NHS but was never implemented. (Thompson et al. 2016). Another example, by Boyer 2025 | Duke Margolis Institute for Health Policy, takes the form of health care funders making payments to the drug developers following approval of the drug in the new use. These payments are based on calculations of cost savings to health systems or some form of social value of the new treatment. In this model payers - for example insurers or national health systems - are envisioned as the bodies making the payments. The recipients of the reward are the drug developers who invested in gaining the drug approval. To date this model has not been implemented. Other examples include Advanced Market Commitments (Cernuschi et al. 2011), which guarantee purchases of a drug developed to treat a specific disease, with the most famous example being for a pneumococcal vaccine.

PARTICIPANT-FUNDED RESEARCH

A rich individual funds a trial and takes part in the trial themselves nominates another person (e.g. a family member or friend) to take part.

READ MORE

PARTICIPANT-FUNDED RESEARCH

One example of participant-funded research is the 'plutocratic proposal', first proposed by Alexander Masters and Dominic Nutt (2017), seeks to balance benefits to an individual seeking a new therapy with benefits to the broader community of patients and researchers. This model aims to fund clinical trials of 'neglected' drugs - i.e. those that have scientific evidence but lack funding for further development. The proposal suggests that rich individuals who fund trials for these drugs should be able to take part in the trial themselves as a participant or be able to nominate another person (e.g. a family member or friend) to take part. Despite ethical concerns (including equity of access, potential influence on recruitment, and conflicts between payment and scientific eligibility), a qualitative focus-group study involving patient and public representatives, research ethics committee chairs, and clinical researchers found the concept potentially acceptable, provided that appropriate safeguards were implemented. (Shearman et al. 2022) While not referencing the concept explicitly, the n-of-1 trial for rare genetic diseases corresponds closely to this idea. (Kim et al. 2019)

INNOVATION SURCHARGE

Adds a small surcharge to each generic drug prescription and uses the revenues raised to fund repurposing studies of generic drugs.

READ MORE

INNOVATION SURCHARGE

James Robinson, UC Berkeley, proposed an 'innovation surcharge' to address the lack of investment in drug repurposing research. (Robinson 2022) This surcharge would be applied to generic drugs, adding a small cost to each prescription and the revenues raised by this measure could then be used by the NIH or other public body to fund repurposing studies of generic medicines, specifically aiming to fund trials looking for label extensions. For example, Robinson calculates that a $1 surcharge per generic prescription would generate $6 billion annually. While the mechanics of such a scheme would be complex, the principle itself may be adapted – for example a voluntary subscription by generic manufacturers to a repurposing fund administered by an independent body focused on repurposing to disperse funds to researchers or trialists.

PUBLIC-PRIVATE PARTNERSHIPS

Public funding matched by private funding, e.g. from industry, venture capital or philanthropic funders.

READ MORE

PUBLIC-PRIVATE PARTNERSHIPS

A range of different models fall into the broad category of Public-Private Partnership (PPP), with varying points of focus and features but all centred on the key principle of public funds being used to strategically invest in drug repurposing. Many of the proposed new models include the provision of separate funds - at national or international level - specifically set aside for funding repurposing developments, with matched funding sought from industry, venture capital or philanthropic funders (Deplanque et al. 2023; European Investment Bank 2026; Health Holland 2026;Nolan et al. 2010; Van der Wel | Orfenix 2026; Zanello et al. 2023). In many respects these are traditional funding models used for other areas with perceived social need, such as the environment or new technologies. However, there are also some innovative ideas which go beyond the 'pump priming' model that is common in PPP projects. For example, the NIAID Radiation Countermeasures Program goes beyond providing grants to researchers but acts as 'virtual pharma company' to align funding from multiple sources and towards a common goal (Hafer et al. 2010). Another very innovative model, and one that remains very pertinent despite being suspended, is the NHS Medicines Repurposing program. In this model NHS funds were used to pay regulatory (MHRA) fees for label extension of generic medicines via a generics marketing authorisation holder. In parallel, the program included funding, via the NIHR, for additional pre-clinical or clinical studies to fill gaps in data identified by the regulator. This model, aligning health system/government funds, also ensured that existing generic pricing for the repurposed drugs was not impacted. To date it remains one of the most innovative programs to have been implemented, and although no longer in operation the program provides an interesting model for others to move forward in the future (Langley et al. 2025).The relationship between the not-for-profit Children's Tumur Foundation (CTF) and the US-government funded Neurofibromatosis Research Program (NFRP) represents another innovative PPP model. It is not a formal PPP but acts as a de facto PPP aligned with the goal of improving the lives of people with neurofibrimatosis (NF). CTF grants often lead to successful projects gaining funding at later stages from NFRP - with an emphasis on drug repositioning. As core parts of an ecosystem dedicated to NF, strategic investments are aimed at therapeutic advances and with CTF investments funding future work. (Children’s Tumor Foundation, 2023; Children’s Tumor Foundation, 2025)

VOUCHER SCHEMES

Creates a voucher, e.g. for priority regulatory review or longer data exclusivity, awarded upon approval of a drug for a specified disease or condition that can be used for a subsequent product or can be sold to others.

READ MORE

VOUCHER SCHEMES

A specific variant of the ‘pay for success’ model, and another pull mechanism, is the transferable voucher scheme which uses market mechanisms to provide the reward for drug approval. The FDA introduced the Priority Review Voucher (PRV) in 2007, targeting neglected tropical diseases and later adding rare paediatric disease and medical countermeasures (e.g. chemical, biological or other threats). The PRV is a tradeable voucher that grants the holder accelerated FDA review of a subsequent drug - which can be in any disease area. This means a company which receives the voucher for a drug in one of the target areas can sell it to another company or use it for one of its own products. The accelerated review means a drug may get on the market more quickly, with consequently a longer period to gain a return on investment. (Robertson 2021) Recent trends starting in 2024 indicate that the sale price for PRVs is $150–$205 million. (Lerner et al., 2026) A slightly different voucher idea has been agreed in the European Union as part of the new pharmaceutical legislation that has been adopted and is now moving towards implementation (Articles 40-42). The Transferable Exclusivity Extension Voucher rewards developers of new drugs that target anti-microbial resistance with a tradeable voucher that grants a 12-month extension of data exclusivity on another drug. For a company seeking to delay generic or biosimilar competition such a delay is likely to be financially attractive, and therefore worth buying from the developer of the antibiotic. (The Dental and Pharmaceutical Benefits Agency 2024) To date no voucher scheme has specifically targeted drug repurposing per se, but the mechanism lends itself to doing so in the future. As with all pull incentives, voucher systems do not by themselves supply increased funding for repurposing, but they may make investors more likely to view repurposing as an attractive proposition if repurposing vouchers are ever implemented.

All drug development is risky – at every stage of the process the failures outnumber the successes, and the attrition rate has remained high despite advances in technology and our understanding of biology. However, the rewards for successful development can be very high and the promise of a return on investment is a key factor in driving progress in the pharmaceutical industry. Funding models can be considered mechanisms that mobilize or allocate financial resources, reduce the costs and risks of development, or increase the expected financial return from successful development. The current funding models for drug development typically combine public and philanthropic funding for basic research, often provided through grants, with venture capital investments that support early-stage biotechnology companies. As development progresses into costly late-stage clinical trials and commercialization, funding is generally provided by pharmaceutical companies. The financial ecosystem of pharmaceutical R&D | SiRM (2022)

However, there are also a number of areas where the standard business model for drug development is not a good fit – leading to market failures or financial disincentives that make development more difficult. Notable examples include neglected diseases, anti-microbial resistance, paediatric medicines, ultra-rare diseases and drug repurposing in general. This is not to say that commercial development is not possible in these areas of medicine, rather that the traditional model of funding and investment leads to inefficiencies, low levels of funding and a more difficult path to success and market- and patient-access.

In the area of drug repurposing the barriers to success have been extensively researched (Petykó et al. 2025), including issues relevant to funding models. These include, but are not limited to:

  • Generic medicines repurposing, for example faces difficulties in generating a return on investment due to (low) generic pricing models being applied to repurposed off-patent medicines. There are also ‘free rider’ issues when there are multiple marketing authorisation holders for a repurposed product. A company making the investment required for a new indication or marketing authorisation cannot guarantee that competitor products will not be prescribed for the new indication (cross-label prescribing) – risking little or no return on their investment. A full list of all funding-related barriers can be found in Petykó et al. 2025. Alternatively, this creates an incentive to diverge to an exclusivity position that in turn jeopardizes the very core promise of drug repurposing of more affordable therapies than traditional “innovative” treatments.
  • The funding landscape in repurposing is fragmented and leads to funding gaps that slow progress or, in some cases, stop it completely (REMEDI4ALL Funders Network, 2026). In the absence of commercial funding streams, the journey from candidate adoption to clinical validation and final approval often requires multiple funders. Success at one stage of the journey may stall in the absence of funding for the next stage, leading to delay or abandonment of promising leads.
  • Regulatory issues, including IP, and drug approval issues for generic medicines being repurposed. Additionally, many academic investigators, who are important parts of the drug repurposing development ecosystem, may lack relevant expertise or experience in regulatory matters. Together these factors may have indirect impacts on funding for repurposing as the route to approval and market access is uncertain in comparison to commercially led drug development.

These and other issues highlight the need to look beyond traditional investment and funding models to assess alternative, innovative pathways that may be more suitable vehicles for delivering successful repurposing programs. In this paper we outline a number of funding models that have been proposed as suitable complements to the traditional funding models. Not all have been implemented to date, but they address relevant issues and are worthy of further consideration by repurposing funders, philanthropists and investors.

Deciding on which funding models are ‘innovative’ and which are ‘traditional’ is by definition a subjective task. Aside from a lack of formal definitions, there are of course blurred edges even when models can be well-defined. Our approach has been based on a simple heuristic – models which cannot be neatly categorised as ‘traditional’ are therefore candidates to be categorised as ‘innovative’. By traditional we refer to classic grant-funding mechanisms (independent of the type of granting body), standard public-private-partnerships, government-backed loans, revolving funds and so on. Outside of these there are a range of possibilities, and we therefore included models which were explicitly designed to incentivise drug repurposing research and development by increasing the availability of funding, either via push (derisk development via reduced costs) or pull (incentivise by increasing returns for successful development) mechanisms. (DNDi, 2010; Matthey et al 2024).

Previous work has explored some of these innovative funding models, most notably Verbaanderd et al. 2021. Obviously, if systemic changes to the current reimbursement landscape would yield a more predictable business case for drug repurposing (as proposed in response to the repurposing of colchicine; de Visser et al. 2024), the funding landscape would respond accordingly. Our report has a different scope and explores a wider range of models within the current reimbursement landscape. Where Verbaanderd et al. focused on the funding of clinical trials, we focus on drug repurposing across the development lifecycle, including pre-clinical and post-trial development. We also look at a broader range of models, including voucher schemes, tax benefits and so on, whereas Verbaanderd et al. explored four areas – grant-funding, crowdfunding, public-private-partnerships and social impact bonds/pay for success models. Finally, the repurposing landscape has advanced in the five years since the latter paper, and the additional models reflect more recent developments. Note that the funding models described in this report are not intended as replacements to the existing funding models used by philanthropic, public or private funders. For example, philanthropic fundraising, whether aimed at the general public or at high net-worth donors, is the standard model that generates funds for grants to projects or individual researchers, including those working in repurposing. The funding models we focus on are intended as complements that can address the need to plug funding gaps, increase the amount of funding for repurposing or reduce associated costs for repurposing so that existing funding streams can have greater impact.

Pan Pantziarka & Heleen van der Meer, August 2026

A narrative review approach was adopted, using a combination of backward and forward snowball searches to develop a corpus for review and analysis. The starting point was a collection of references previously identified by the authors in connection with other research in this area [here we can reference the SLR and other R4ALL activities]. This was supplemented by a Pubmed search using the terms:

(“funding model”[All Fields] OR “funding mechanism”[All Fields] OR
“business model”[All Fields]) AND (“Drug Development”[MeSH] OR
“Drug Discovery”[MeSH] OR “Drug Industry”[MeSH] OR
“pharmaceutical innovation”[All Fields] OR
“medicine development”[All Fields] OR
“orphan drugs”[All Fields] OR
“Drug Repurposing”[All Fields] OR
“Drug Repositioning”[All Fields])

Much discussion of innovative funding models takes place outside of the academic literature in white papers, blog articles, business web sites and other non-peer reviewed sources. These grey literature sources were also explored and any relevant references included in these were also tracked for forward snowball searching.

Finally, an additional source of ideas and suggestions came from discussions with expert stakeholders from the REMEDI4ALL platform and the associated REMEDI4ALL Funders Network.

The review process was performed by three reviewers. The randomly assigned records were first screened by one reviewer who classed the record as yes, no or unclear. For the unclear records a second reviewer made an assessment. Data extracts were taken from each in scope record. All in scope records were consolidated and classification was applied based on the funding model described.

All records for the same classification were grouped. For each classification a summary description was written, referring to the best examples.

In this report we have presented a selection of innovative funding models that seek to address gaps in the funding landscape for drug repurposing. As part of our analysis of the field, we have determined that a range of innovative models already exist with different degrees of implementation and success, but that the knowledge of these is dispersed and not easily accessible to the community. We aimed to develop awareness of the need for innovative funding models for drug repurposing and to outline what those might be, or indeed to develop new models if needed. We have collated and categorised a range of innovative funding models that were found through peer- and grey- literature reviews and through stakeholder interviews. The innovative funding models we describe include crowdfunding, tax benefits, reward- or prize-based models, pay for success models, participant-funded research, innovation surcharge, innovative public-private partnerships and voucher schemes.

The innovative models mentioned in the report, including both push- and pull-focused models, are designed to complement the standard funding models that are successfully contributing to the development of repurposed therapies across different disease areas. This includes both philanthropic, venture capitalist and public funding sources. However, as previously highlighted (REMEDI4ALL Funders Network, 2026), these current models can lead to fragmented funding, lack of funding and ultimately market failure. The models we have highlighted, therefore, are intended to address some of these issues.

It is notable that many of these models have yet to be implemented for drug repurposing. Voucher-based systems, for example, have been implemented, and in the case of the FDA PRV, have been successful in addressing the niches they have been designed for. The same kind of system can be implemented specifically to address drug repurposing; there is nothing intrinsically different from addressing the needs of anti-microbial resistance or paediatric drug development. However, the creation of such systems depends very much on regulators being directed by policy makers – meaning that political will is required.

Additionally, a fundamental issue in pay-for-success models is the problem of tracking prescriptions or health-system savings, particularly when cross-label prescribing is the case. REMEDI4ALL has active policy workstreams focusing on issues related to pricing mechanisms for drug repurposing. (Inotai et al., 2025)

Furthermore, it is likely, and indeed desirable, that combinations of models are deployed in order to fully realise the potential value in repurposing. For example, the development of a treatment for an ultra-rare genetic condition may involve traditional grant-funding from public and philanthropic funders, crowdfunding from the general public and a participant-funded n-of-1 clinical trial of a shelved compound or repurposed therapy.

More can also be done within the existing traditional models to improve the funding of drug repurposing development. Addressing inefficiencies through such means as creating joint funding calls, encouraging longitudinal funding and sharing best practices amongst funders is a core function of the REMEDI4ALL Funders Network. More recently the development of the REMEDI4ALL Marketplace has provided groups of funders with a new source of potential project proposals that have undergone a degree of due diligence and quality control that sporadic applications or standard request for application responses do not usually possess.

The further development of the funding models outlined in this paper may well occur within the group work of the Funders Network, collaborating with regulators, payers and other stakeholders who are part of the REMEDI4ALL platform and ecosystem.