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As the number of infections resistant to antimicrobial drugs continues to rise around the world, and with it their huge human and financial toll, we urgently need new ways to preserve the effectiveness of existing antibiotics and to develop much-needed new ones.

Creating state-run or publicly owned pharmaceutical companies, an idea recently floated by British economist Jim O’Neill, isn’t the way to proceed.


Back in 2014, the British government asked O’Neil to propose concrete actions to tackle the growing problem of resistance to antibiotics and other antimicrobial drugs. That work led to the 2016 publication of the Review on Antimicrobial Resistance, which called for the use of market entry rewards and an innovation fund to generate more drugs.

Yet nearly three years later, O’Neill is criticizing the biopharmaceutical industry for failing to respond to this global health crisis. I have tremendous respect for his sounding the alarm on the risk of antimicrobial resistance and his call to action in the Review, but I disagree with him here.

Developing new drugs to fight bacterial and other infections is a vastly different enterprise than developing a new medication for diabetes or chronic obstructive pulmonary disease. To be sure, antimicrobial development shares the same long development times and high development costs as other drugs. But new antimicrobials tend to have a limited market.


As Kevin Outterson, executive director of the Combating Antibiotic Resistant Bacteria Biopharmaceutical Accelerator, adroitly explained in STAT, the most innovative antimicrobials “are put on the shelf, with doctors saving the newest, most powerful antibiotics as a last resort for patients who don’t respond to older drugs. While that approach may be great for medicine and public health, it’s terrible for innovation: companies can’t make a profit on drugs they don’t sell.”

The AMR Industry Alliance, which I chair, warned in its 2018 report tracking progress in tackling antimicrobial resistance that if financial incentives are not rapidly put in place, companies will cease research on new antibiotics. We need to do everything we can to give companies still in this field reasons to continue their R&D and attract new ones to it.

Diverse stakeholders, including the United Nations, the World Health Organization, the Wellcome Trust, and leading governments, have recognized the vital role the biopharmaceutical sector is playing to reduce antimicrobial resistance and develop new antibiotics to fight infections. The AMR Industry Alliance, a group of more than 100 biotech, diagnostic, pharmaceutical, and generic drug companies, is working to address this scourge, which is now responsible for 700,000 deaths a year and could cost the global economy up to $100 trillion between now and 2050 unless urgent actions are taken.

Members of the alliance continue to invest in antimicrobial-related research and development, investigate and develop new products, and support the appropriate use of antimicrobials and global surveillance regarding their use. The private sector is by far the dominant funder of research and development on antimicrobial resistance: In 2016, the investment by a subset of AMR Industry Alliance companies was more than $2 billion — four times more than the aggregate investments of the global public sector during the same year. These investments are not “empty words,” as O’Neill claimed, but real money to develop the new antibiotics we all need.

O’Neill’s idea of creating a state-run or publicly owned pharmaceutical company to bring forward the research for new antibiotics to treat the most dangerous drug-resistant bacteria is ill-conceived, something he himself is reported to have confessed, since he does not have a clear plan for nationalizing antibiotic R&D and production.

As reported by Jonathan Guthrie, the head of Lex, a premium commentary service on companies and investment, “The problem is not a shortage of promising antimicrobial drugs. But many innovative biotechs … are struggling. … The heft of big companies is needed to take promising drugs through costly clinical trials.”

At a global level, industry experts have been working with academics, experts, and governments to support the antimicrobial R&D ecosystem — including several of the market-based ideas proposed by O’Neill’s Review on Antimicrobial Resistance. Plans are taking shape for new incentives that would help provide a more predictable and sustainable return on investment for successful innovation to combat antimicrobial resistance, including pilot programs that better recognize the value of new antibiotics instead of volume sales. This January, the U.K. announced a five-year plan to encourage the development of new antibiotics which includes testing a new payment model that will reimburse pharmaceutical companies based on how valuable their drugs are to the National Health Service rather than on the quantity of antibiotics sold.

The pharmaceutical industry has demonstrated its willingness to take on the risk and uncertainty that come with trying to develop medicines that address unmet needs. When it comes to antimicrobial drugs, the hurdle is not that the risks are too high, it is that the rewards are too low. The big question is this: What is society as whole ready to invest to avoid a post-antibiotic era?

I understand and share O’Neill’s frustration about the lack of progress. But I have serious doubts that governments will succeed where competitive businesses have struggled. Do governments really have an appetite for the risk of antibiotic research, where the chances of failure are exceptionally high? Are governments willing to invest billions of dollars a year for the next 10 to 15 years to develop new antimicrobials with no guarantee of success? Do they have the expertise and experience to identify a promising drug and take it through discovery and complex clinical trials? And how will they commercialize a product, register it in more than 100 countries, and manage their own complex regulatory requirements?

The public-funded research and development model has been tried before for tuberculosis, and it hasn’t delivered the desired innovation. In spite of annual government funding of $400 million for public research and development for TB, the only new two drugs brought to market to treat multi-drug resistant TB in the last 60 years have come from the private biopharmaceutical sector.

Instead of recreating the wheel with one or more government-run companies aimed at creating new antimicrobials, the various sectors need to work together to address the specific economic challenges faced by antibiotic developers. Incentives currently on the table, such as pull incentives that help companies ensure a predictable return for new antibiotics and adapted reimbursement procedures to better capture the value that novel antibiotics bring to patients and health care systems, represent relatively modest tweaks to the current system and build on the biopharmaceutical sector’s demonstrated capacity and proven ability to develop new and needed products.

Rewarding successful research with market-based incentives — market entry rewards, transferable exclusivity extensions, or reimbursement based on the societal value of new antibiotics rather than for sales — is likely to be more effective than subsidizing research.

I found it strange that on the same day O’Neill proposed nationalizing antibiotic research and development, my colleague Nina Grundmann took part in The Economist’s Antimicrobial Resistance Summit. She was on a panel with academics and representatives from the biotech and pharmaceutical industry working in antimicrobial R&D. All of them were on the same page: Antimicrobial resistance is a unique case that no single player or sector can tackle alone, and for which incentives are desperately needed to support innovation.

The pharmaceutical industry repeats its call for a “coalition of the willing” that includes governments and the private sector to pilot new economic models to address the current market failure in the antibiotic space. These measures will almost certainly be cheaper than the cost of inaction, as the OECD has concluded.

I invite Jim O’Neill to join this coalition and take part in a concerted effort to get the right market-based incentives over the line and do it quickly. The world can’t afford to delay action on the global crisis of antimicrobial resistance, and must make sound investments into proven models for innovation.

Thomas B. Cueni is the director general of the International Federation of Pharmaceutical Manufacturers and Associations (IFPMA) and chair of the AMR Industry Alliance.

  • What a surprise! An industry mouthpiece decrying government action. And, you pick TB as an example? Explain why we need so many pharmaceutical agents for diabetes, hypertension or hyperlipidemia (arguably, endemic conditions of the developed world) and why there are so few for effective treatment of falciparum malaria or TB.

  • This appears to be an interesting example of a case where market forces do not work to the advantage of society. It seems like the author of this piece is calling for the government to step in and fund the development of the needed antimicrobials and then to pay again for them when they are needed. If the drug companies do not have sufficient incentive to develop the drugs, what is wrong with the government hiring someone else to do it or doing it in their own labs.

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