Around 500 million people globally suffer from one of 7,000 diseases that lack a known, effective treatment. But new drugs developed by the pharmaceutical industry address only 10 to 30 additional diseases each year. At this rate, it would take between 250 and 700 years to find treatments for them all!

Fortunately, new drugs are not the only answer. We can also test the clinical benefits of drugs already approved for human use for one disease for the treatment of other diseases. In this way, we could quickly repurpose thousands of cheap and widely available generic drugs to create “new” treatments for diseases that currently lack remedies.

Repurposing has the potential to bring more treatments to more patients more quickly than discovering, testing safety and efficacy, and securing approval for new drugs; it also can significantly cut healthcare costs. A clinical research trial published in 2009, for example, showed that repurposing the generic drug sirolimus to treat autoimmune lymphoproliferative syndrome (ALPS)—a life-threatening pediatric genetic disorder that causes defective white blood cells to crowd out healthy cells, leading to infection and anemia—could save the lives of up to 1,000 children in the United States each year while lowering annual direct medical costs by up to $40 million. This repurposing trial cost less than $500,000 and took only 36 months to complete. Such successes can spur additional ones. The ALPS study led to the successful repurposing of the same drug for five other autoimmune diseases. Compare this repurposing cost and development timeline with the average cost of more than $2 billion over a 10-15 year timeline for a new drug.

Generic drug repurposing can help the overall economy as well. Families with members affected by diseases such as ALPS suffer financially and socially in many ways. Parents lose jobs to care for their child, who falls behind in school, and families may even lose their homes due to decreased wages and mounting healthcare costs. Repurposed drugs could reduce these difficulties by improving the health conditions that cause them.

The question is how to fund generic drug repurposing. The current pharmaceutical profit model generally supports the repurposing only of patent-protected drugs. Pfizer, for example, shifted its patented drug sildenafil from a failed heart disease drug to a profitable erectile dysfunction treatment (Viagra), which was then further repurposed to treat pulmonary arterial hypertension and diabetic neuropathy. When companies repurpose generic drugs, however, they generally have trouble making enough money from their sales to cover development costs, a calculation that stifles industry support for generic repurposing.

One mechanism that could fill this funding gap is the social impact bond (SIB)—the “pay for success” scheme structured to give funders a return on investment when the public interest initiative they support achieves positive results. In the case of generic drug repurposing research, the return on investment could come from some of the healthcare savings that the repurposed drug’s use would generate. In fact, it is likely that such healthcare savings would be greater than the amount needed to repay SIB investors, meaning that the amount of money saved by citizens and governments also would be significant. These financial benefits and improved health outcomes, in turn, could encourage governments, which usually do not fund generic drug repurposing trials, to support more such research.

SIBs previously have supported other difficult-to-fund public sector projects to address issues such as recidivism, homelessness, child protection/foster care, and preventive healthcare. But they never have been used to fund generic drug repurposing. Now Cures Within Reach, a US-based global nonprofit focused on repurposing, is preparing to pilot the first SIB for the repurposing of generic drugs in England. Partnering with Findacure, Numbers For Good, Costello Medical, and the UK’s National Health Service, we at Cures Within Reach will first establish metrics to evaluate generic drug repurposing projects and estimate potential cost savings, and then select 10 projects for the pilot. Each of these 10 projects would focus on a different disease/drug combination and would take place at a disease Centre of Excellence in the UK.  We would seek support from impact investors such as the Bridges Social Impact Bond Fund.

If this SIB initiative succeeds, our hope is to expand it across the whole European Union and then globally. This plan makes sense for two reasons. First, a drug that has been successfully repurposed in one country would also work wherever else it is available, and all countries that benefit from repurposing should pay their fair share. Second, each government would pay only from its own cost savings. If many countries participated, the SIB payment from each country would be small, but the total payment ought to be large enough to repay SIB investors and fund the next SIB.

The SIB approach would be a powerful way to create many new treatments for diseases that lack treatments without requiring governments and pharmaceutical companies to commit significant clinical research funding up front. The option would provide government and private payers with a way to reduce their costs and improve patient care, and it would give impact investors an incentive to support repurposing. With SIBs, generic drug repurposing could access scalable and sustainable sources of funding that would supplement, rather than compete with, for-profit drug development. And the focus on outcomes, rather than outputs, would significantly improve patient welfare. In short, with SIBs for generic drug repurposing, everyone would win.