$1 billion reward proposed for new antibiotics

An international group tasked with researching and developing new economic models to promote antibiotic development is calling for a $1 billion market entry reward for new antibiotics, saying the reward could significantly boost the number of new antibiotics coming to market over the next 30 years.

The proposal comes today in a report by DRIVE-AB (Driving reinvestment in research and development for antibiotics and advocating their responsible use), an international consortium of public health organizations, academic institutions, and pharmaceutical companies supported by the European Medicines Initiative. The $1 billion market entry reward is one of four incentives proposed by the group to stimulate research and development (R&D) for new antibiotics and ensure that critically needed antibiotics are used sustainably and continue to be accessible.

"Without incentives, some scientifically promising treatments would probably never make it to patients," Francesco Ciabuschi, Phd, a professor of business at DRIVE-AB member Uppsala University, said in a University of Geneva press release.

The DRIVE-AB proposal comes on the heels of two recent reports on efforts by the pharmaceutical industry to meet its commitment to help solve the antimicrobial resistance crisis. At the January 2016 World Economic Forum in Davos, Switzerland, more than 100 companies signed the Davos Declaration, pledging to invest in research and development for new antibiotics, support appropriate use and stewardship, and improve access to high-quality antibiotics, vaccines, and diagnostics. Both reports, which address certain aims of the declaration, suggest more work needs to be done.

Boosting the antibiotic pipeline

According to the proposal, the market entry reward of $1 billion per antibiotic globally would be paid in a series of $200 million payments over 5 years to a pharmaceutical company for regulatory approval of an antibiotic that meets specific predetermined criteria to address a defined public health need. Companies would have to decide if they want to apply for the reward during the clinical development phase of the antibiotic.

The reward would be "partially delinked" from sales volume, which means that the company that develops a new antibiotic would derive some of its revenue from the reward and some from sales of the drug, but would also have to meet obligations for sustainable use and equitable availability.

This model, the report says, would allow companies to operate within their existing business model but would also help ensure that lower-income countries would be able to afford new antibiotics. But the authors of the report note that some members of DRIVE-AB argue that this model leaves in place a strong incentive for companies to oversell new antibiotics. "This is a risk that must be closely monitored," they write.

The authors calculated that a reward of between $800 million and $1.5 billion annually could bring on average 16 to 20 "truly innovative" new antibiotics over the next 30 years. They estimate that the current pipeline for antibiotic research and development will deliver no more than one innovative antibiotic for a World Health Organization (WHO) "priority pathogen" within the next 5 years.

Part of the reason for the inadequate pipeline, in addition to the scientific challenge of discovering new antibiotics, is the fact that antibiotics are not commercially attractive for pharmaceutical companies. Because new antibiotics for serious multidrug-resistant infections would be used sparingly to maintain their effectiveness, the companies that develop these drugs are unlikely to earn back the money spent on R&D, much less earn a profit. As a result, the pharmaceutical industry is looking to governments and global health organizations to help devise solutions to this problem.

It's not the first time a market entry reward for new antibiotics has been proposed. It's one of several "push" and "pull" incentives that have been suggested by groups trying to address rising antimicrobial resistance (AMR) and the lack of new antibiotics to replace the ones that are losing their effectiveness.

Gregory Daniel, PhD, MPH, of the Duke-Margolis Center for Health Policy, co-authored a recent paper on a similar model called the Priority Antimicrobial Value and Entry (PAVE) Award that couples a smaller market entry reward with population-based payments from insurance companies for new antibiotics. Daniel told CIDRAP News that the $1 billion market entry reward proposed by DRIVE-AB is "an economic pull incentive that is badly needed to significantly improve the market attractiveness for investors to invest in high-priority antibiotics."

But Erik Gordon, JD, a professor at the University of Michigan's Ross School of Business who follows the biomedical industry, is skeptical about the impact of the market entry reward. "Most large pharmaceutical companies will not find the $200 million per year for 5 years to be highly attractive, and all the less so to the extent they may obligate themselves to longer-term money-losing supply undertakings," Gordon said.

Other incentives in the DRIVE-AB proposal include grants for research and development given to academic and research institutions, small biopharmaceutical companies, and drug discovery units of large pharmaceutical companies; pipeline coordinators that track antibiotic development, identify gaps, and provide funding and technical support to fill those gaps; and a long-term supply continuity model to support a predictable supply of important but rarely used antibiotics.

The authors say these incentives are designed to be complementary and together form an "ecosystem" that will maximize their effectiveness. They estimate an annual cost for the combined proposals of $1 billion, with the financing coming from governments and philanthropic organizations. They recommend that the recently announced G20 Global R&D Collaboration Hub on AMR be considered to coordinate the effort.

Call for pharma to do more

In one of the two other reports, which was released yesterday, the Access to Medicine Foundation compared how a cross-section of the pharmaceutical industry is responding to the AMR threat, measuring the 30 most active companies in antibiotic development and production for their research and development efforts, approaches to ensuring that antibiotics are accessible and used wisely, and policies for ensuring responsible manufacturing. The report found that, of the 28 antibiotics for high-priority pathogens in late-stage development, only 9 are truly novel and only 2 are supported by plans to ensure they will be used wisely and be made accessible.

"While the economics are complex, we need more industry leaders, more pharmaceutical companies, to develop new antibiotics to replace the ones that no longer work, and find new, responsible ways to produce them and get them to the patient," Access to Medicine Foundation Executive Director Jayasree Iyer, PhD, said at a World Economic Forum press conference.

In addition, the report found that fewer than half of the companies are involved in efforts to track patterns in antibiotic resistance, eight companies are setting limits on the levels of antibiotics that can be released into the environment, and four companies are taking steps to separate sales bonuses from the volume of antibiotics sold.

A report last week from the AMR Industry Alliance—a collection of more than 100 companies and trade associations representing the pharmaceutical, biotechnology, generics, and diagnostics industries—concluded that while industry investment in AMR-related research and development is significant and has boosted the pipeline of new antibiotics, it's not enough. The group characterized current research and development incentives as insufficient, and said many companies might withdraw from antibiotic development if new incentives aren't created.

See also:

Jan 24 DRIVE-AB report executive summary

Jan 24 University of Geneva press release

Jan 23 Access to Medicine Foundation Antimicrobial Resistance Benchmark 2018

Jan 18 AMR Industry Alliance progress report

Jan 18 CIDRAP News story "Report tracks industry progress on drug resistance"

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