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Antibiotic Development Incentives May Be Tricky to Implement

June 8, 2016
A recently proposed broad suite of antibiotic development incentives has received strong support from industry stakeholders, but revealed a desire to move specific ideas and proposals into practice and skepticism about so-called “pay-or-play” provisions during a Wednesday morning panel at the BIO International Convention.

Reflecting the increasing importance of the topic, the discussion was one of three panels devoted to the serious global threat of antimicrobial resistance, noted the World Health Organization’s Martin Friede, compared to only one in 2015 and zero in prior years. Without effective action to tackle this problem, said Jeremy Knox, deputy head of the UK’s Review on Antimicrobial Resistance, by 2050 the world may see $100 trillion in lost GDP and up to 10 million deaths annually caused by infections that are resistant to treatment.

The Review’s comprehensive report on AMR was released in May 2016, and Knox said those startling figures have grabbed the attention not just of health policy wonks and the pharmaceutical industry, but finance ministers and heads of governments around the world. Tackling AMR will require addressing both the demand side of the problem (misuse and overuse of antibiotics) and the supply side, by incentivizing industry to develop new treatments.

Those incentives comprise both “push” and “pull” enticements. On the push side, organizations like BARDA in the US and the Innovative Medicines Initiative have been crucial sources of grants to support development, but more funding is needed, said Knox, and the Review proposed a global innovation fund that would offer a comprehensive and coordinated approach to funding. Pull incentives could include expedited development pathways, opportunities for better pricing, and most intriguingly, a prize for successful antibiotic development comprising a lump-sum payment of more than a billion dollars.

Awards for 15 new antibiotics might cost about $16 billion over a decade, said Knox. The goal of uch a prize would be to de-link biopharma companies’ return-on-investment from the traditional volume-based sales model, explained Gregory Daniel, deputy director of the Duke-Margolis Center for Health Policy at Duke University. Such prizes and other incentives would need to be funded, however, and one method - by placing part of the funding burden on the industry itself, particularly on companies that aren’t investing in antibacterial R&D through a pay-or-play system - was met with skepticism.

“From our perspective, we’re heavily invested in the area so it wouldn’t make a big financial impact to us, but we do have some concerns about that approach,” said David Payne, VP of antibacterial discovery at GlaxoSmithKline. “You have got to really want to work in antibacterial R&D,” and by coercing companies via pay-or-play, “I’m not sure you’ll get the vibrant R&D environment you’ll need to excel for the future.” Payne suggested that the lump sum payments could possibly be shared by a broader group of government funders, noting that these are the kind of specific discussions that have yet to happen.

“Government-funded large prizes would be great if they existed, but how you pull that off just isn’t clear yet,” said Blake Wise, COO of the anti-infectives biotech Achaogen. “So we gravitate toward things that fit into today’s system.”