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Timeline of drug approval with corresponding examples of call options pricing. A: Investment in early stage of development, the cost of the call option is low, but the risk is high. B: Investment in late stage of development, the cost of the call option is high, but the risk is low.
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Antimicrobial resistance is a growing threat resulting from the convergence of biological, economic and political pressures. Investment in research and development of new antimicrobials has suffered secondary to these pressures, leading to an emerging crisis in antibiotic resistance.
Current policies to stimulate antibiotic development have proven...
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Over the past decade, there has been a growing recognition of the increasing growth of antibiotic resistant bacteria and a relative decline in the production of novel antibacterial therapies. The combination of these two forces poses a potentially grave threat to global health, in both developed and developing countries. Current market forces do no...
Citations
... Although antibiotic resistance occurs naturally, misuse and overuse of antibiotics in humans and animals contribute to the growth of antibiotic resistance and accelerate the process. The problem is further exacerbated by the fact that the pipeline for developing new antibiotics is running dry (Boucher et al., 2009;, as the pharmaceutical industry lacks the financial incentives to develop new antibiotics that could cure conditions in weeks rather than years (Brogan & Mossialos, 2013). In countries around the world, many antibiotics are prescribed inappropriately for viral conditions that are self-limiting, such as common colds, viral sore throats, and ear infections . ...
... To encourage companies to produce antibiotics, it is crucial to provide incentives, especially when market forces do not sufficiently drive innovation [323]. Alternative incentive mechanisms can be employed to either push innovation through subsidizing at-risk investments, like government grants or pull innovation by offering rewards, such as guaranteed revenue, for successful outcomes [317] [321] [324] [325]. Other innovative models, such as subscription models (e.g., Netflix models), have been proposed by stakeholders [25]. ...
Background: Antimicrobial resistance (AMR) is a global health challenge that has escalated due to the inappropriate use of antimicrobials in humans, animals, and the environment. Developing and implementing strategies to reduce and combat AMR is critical.
... [12][13][14] However, we acknowledge that investment in research and development of new antibiotics must be balanced with investment in conservation of pre-existing antibiotics, particularly as investment in IPC and stewardship is highly cost-effective and can significantly reduce the health burden of AMR. 14 There are also many other incentive options for antibiotic research and development not considered in this article. 15,16 These include, but are not limited to, the "pay or play" model, 17 priority review vouchers, 18 the options models for antibiotics (OMA), 19 and models for public ownership of antibiotic intellectual property, and clinical trial networks. 20 While these incentive options have not been recently proposed by the European Commission, or member states, they warrant further examination and should be the subject of additional research and analysis. ...
... 32,60-62 The expected profitability of a drug development project can be expressed by the net present value (NPV), which is a sum of all expected revenues and costs of a project adjusted for the value of money over time and risk of failure. 19,63 The NPV of an antibiotic development project has been estimated at −50 million USD compared to +720 million USD for a neurological drug and +1.15 billion USD for a musculoskeletal drug. 64 As such, most pharmaceutical companies have withdrawn from investing in antibiotic research and development and the majority of antibiotic development is driven by small-and medium-sized enterprises (SMEs). ...
Antimicrobial, and particularly antibiotic resistance are one of the world's biggest challenges today, and urgent action is needed to reinvigorate the antibiotic development pipeline. To inform policy discussions during and after the 2023 Swedish Presidency of the Council of the European Union, we critically appraise incentive options recently proposed by the European Commission, and member states, and consider what has been achieved over the last two decades in relation to antibiotic research and development. While several new antibiotics have achieved regulatory approval in recent years, almost none have innovative characteristics such as new chemical classes or novel mechanisms of action. We consider four incentive options to incentivise research and development of new antibiotics, including subscription payments, market entry rewards, transferable exclusivity extensions, and milestone payments. While each option has advantages and drawbacks, a combination of incentives may be required and continued investment is needed by the EU in push incentives, such as direct funding and grants, to incentivise drug discovery and preclinical stages of development. The EU must also coordinate with international initiatives and support access to new and pre-existing antibiotics in LMICs through platforms such as the WHO, and G7 and G20 group of countries.
... The US GAIN Act [17] is an example of a pull strategy applied at the national government level, which includes prolonged exclusivity rights. An example of the hybrid incentive strategy is the Options Market for Antibiotics Model, in which nongovernmental organizations or government agencies purchase options for antibiotics in development [81]. Additional pull-type incentive strategies for antimicrobial development promotion are actively pursued outside of Japan. ...
Introduction
: Antimicrobial resistance (AMR) is a major threat to global health requiring continuous development of new antimicrobial agents. Antimicrobial research and development (R&D) should be promoted in the pharmaceutical industry and academia to ensure sustainable patient access to new treatment options and reduce the global AMR burden.
Areas covered
: This review describes the historical challenges in novel antimicrobial drug development in Japan, current national efforts to promote the development, and proposals to effectively manage future AMR pandemics. Literature searches were performed in the PubMed database (from inception to January 2022).
Expert opinion
: R&D activities in the antimicrobial space in Japan have been insufficient due to multiple factors, including unfavorable cost-profit balance and differences in regulatory requirements between Japan and Western countries. However, the situation is improving with the implementation of the Japanese AMR action plan, drug R&D programs led by the Japan Agency for Medical Research and Development, and efforts of regulatory agencies in the United States, Europe, and Japan in aligning and expediting the clinical development process. Further actions during the interpandemic period will strengthen antimicrobial R&D, including international and interdisciplinary collaboration, continued funding and investment with the national government’s leadership, and fostering of new-generation academic research leaders.
... The economic constraint impedes any antibiotic development programme as drug developers are reluctant to pump money into the R&D process (Renwick and Mossialos 2018). The short duration of the antibiotic treatment further hampers revenue generation (Brogan and Mossialos 2013;Darrow et al. 2018). According to an estimate, if new drugs are not developed by 2050, the world will have to bear the consequences of no antibiotic treatment (Rolain et al. 2016). ...
Antimicrobial resistance (AMR) is one of the leading global health issues that demand urgent attention. Very soon the world will have to bear the consequences of increased drug resistance if new anti-infectives aren't pumped into the clinical pipeline in a short period. This presses on the need for novel chemical entities, and the marine environment is one such hotspot to look for. The Ocean harbours a variety of organisms, of which from this aspect, "Sponges (Phylum Porifera)" are of particular interest. To tackle the stresses faced due to their sessile and filter-feeding lifestyle, sponges produce various bioactive compounds, which can be tapped for human use. The sponges harbour several microorganisms of different types and in most cases; the microbial symbionts are the actual producers of the bioactive compounds. This review describes the alarming need for the development of new antimicrobials and how marine sponges can contribute to this. Selected antimicrobial compounds from the marine sponges & their associated bacteria have been described. Additionally, measures to tackle the supply problem have been covered, which is the primary obstacle in marine natural product drug discovery.
... Although less effective than push incentives, pull incentives such as increasing marketing exclusivity [Generating Antibiotics Incentives Now act -US Food and Drug Administration (FDA)], prizes (Longitude prize -UK charity) and fast-tracked regulatory approval (Limited Population Antibacterial Drug pathway -USFDA) have helped encourage the development of new antibiotics without upfront payments by governments. 35,[47][48][49] Tax incentives that can be adapted to address the needs of small biotech and large multinationals have also been employed to varying degrees in different countries to encourage AMR research. 46,50 These incentives have clearly begun to aid antibiotic research and development because the number of new antibiotics approved in the USA increased from six in the period 2000-2009 to 15 in 2010-2019. ...
The challenges of resistance to antibiotics and resistance to herbicides have much in common. Antibiotic resistance became a risk in the 1950s, but a concerted global effort to manage it did not begin until after 2000. Widespread herbicide use began during the 1950s and was soon followed by an unabated rise in resistance. Here, we examine what lessons for combatting herbicide resistance could be learnt from the global, coordinated efforts of all stakeholders to avert the antibiotic resistance crisis. © 2021 Society of Chemical Industry.
... An example of a proposed hybrid strategy is the Options Market for Antibiotics (OMA), which allows investment in the development of a drug in return for receiving a specified number of units of the drug at a reduced price, if and when the antibiotic successfully reaches the market. 64 In addition to receiving the drug at a reduced price on market entry, the option purchaser also drives the development of the drug that they desire; this may be of interest to funders or investors who wish to target specific pathogens that are a burden in LMICs, for example, where the market conditions for a new drug are especially challenging. 64 Another example proposed as part of the Antibiotic Conservation Effectiveness strategy hybridizes outcomesbased and lego-regulatory pull incentives by using a combination of conservation-based market exclusivity, antitrust waivers, and value-based reimbursement. ...
... 64 In addition to receiving the drug at a reduced price on market entry, the option purchaser also drives the development of the drug that they desire; this may be of interest to funders or investors who wish to target specific pathogens that are a burden in LMICs, for example, where the market conditions for a new drug are especially challenging. 64 Another example proposed as part of the Antibiotic Conservation Effectiveness strategy hybridizes outcomesbased and lego-regulatory pull incentives by using a combination of conservation-based market exclusivity, antitrust waivers, and value-based reimbursement. 65 It is worth mentioning that such hybrid strategies may be of interest for incentivizing the development of drugs for neglected tropical diseases, which also suffer from a lack of investment from drug developers due to market considerations. ...
The COVID-19 pandemic has refocused attention worldwide on the dangers of infectious diseases, in terms of both global health and the effects on the world economy. Even in high income countries, health systems have been found wanting in dealing with the new infectious agent. However, the even greater long-term danger of antimicrobial resistance in pathogenic bacteria and fungi is still under-appreciated, especially among the general public. Although antimicrobial drug development faces significant scientific challenges, the gravest challenge at the moment appears to be economic, where the lack of a viable market has led to a collapse in drug development pipelines. There is therefore a critical need for governments across the world to further incentivize the development of antimicrobials. Most incentive strategies over the past decade have focused on so-called "push" incentives that bridge the costs of antimicrobial research and development, but these have been insufficient for reviving the pipeline. In this Perspective, we analyze the current incentive strategies in place for antimicrobial drug development, and focus on "pull" incentives, which instead aim to improve revenue generation and thereby resolve the antimicrobial market failure challenge. We further analyze these incentives in a broader "One Health" context and stress the importance of developing and enforcing strict protocols to ensure appropriate manufacturing practices and responsible use. Our analysis reiterates the importance of international cooperation, coordination across antimicrobial research, and sustained funding in tackling this significant global challenge. A failure to invest wisely and continuously to incentivize antimicrobial pipelines will have catastrophic consequences for global health and wellbeing in the years to come.
... Antibiotic infections generally occur over a short period of time and then the patient is no longer in need of the drug -contrary to chronic diseases that tend to generate revenue over the span of the patient's life postdiagnosis. 9,22,23 However, while other existing shortcourse pharmaceuticals (ie, vaccines) are nonetheless profitable, the threat of ABR requires increased antibiotic stewardship, meaning that any new antibiotics that would be introduced into the market would be reserved for infections caused by multi-drug resistant bacterial strains for which no other effective drugs exist, thereby keeping profits low. 21,22,24 Alternatively, if new antibiotics are active against multidrug-resistant bacteria for which few, if any, effective treatments exist, it is predicted that these drugs will become ineffective relatively quickly upon use as a result of ABR. ...
... 9,22,23 However, while other existing shortcourse pharmaceuticals (ie, vaccines) are nonetheless profitable, the threat of ABR requires increased antibiotic stewardship, meaning that any new antibiotics that would be introduced into the market would be reserved for infections caused by multi-drug resistant bacterial strains for which no other effective drugs exist, thereby keeping profits low. 21,22,24 Alternatively, if new antibiotics are active against multidrug-resistant bacteria for which few, if any, effective treatments exist, it is predicted that these drugs will become ineffective relatively quickly upon use as a result of ABR. Furthermore, since antibiotics of the same class typically have the same mechanism of action, resistance may develop towards a shelved product that belongs to the same class as a different drug that has higher volume sales, thereby rendering it less effective despite it being preserved. ...
... 6,28 Also, the prices of new antibiotics are generally kept low by the existence of a wide variety of inexpensive generic products that have similar clinical indications as branded products and which continue to have clinical utility. 6,17,21,22,29 Given these multi-layered challenges and the lack of significant progress -despite strategies to address antibiotic resistance at other levels (ie, stewardship programs, awareness campaigns, surveillance, etc.) -action is needed to stimulate the R&D of new antibiotics. In order to address ABR, we need a steady supply of new and clinically important antibiotics; therefore, a handful of antibiotics should be in development at any given time, rather than there being extremes where multiple antibiotic developments occur and then many years where they do not. ...
Antibiotic resistance is an urgent public health threat that has received substantial attention from the world’s leading health agencies and national governmental bodies alike. However, despite increasing rates of antibiotic resistance, pharmaceutical companies are reluctant to develop new antibiotics due to scientific, regulatory, and financial barriers. Nonetheless, only a handful of countries have addressed this by implementing or proposing financial incentive models to promote antibiotic innovation. This study is comprised of a systematic review that aimed to understand which antibiotic incentive strategies are most recommended within the literature and subsequently analyzed these incentives to determine which are most likely to sustainably revitalize the antibiotic pipeline. Through a case study of Canada, we apply our incentive analysis to the Canadian landscape to provide decision-makers with a possible path forward. Based on our findings, we propose that Canada support the ongoing efforts of other countries by implementing a fully delinked subscription-based market entry reward. This paper seeks to spark action in Canada by shifting the national paradigm to one where antibiotic research and development is prioritized as a key element to addressing antibiotic resistance.
... Instead, an optimal financing mechanism would involve a hybrid of push incentives (such as funding for basic science research and early clinical trials) and pull incentives (such as AMCs and market entry rewards). A pre-existing financing mechanism proposed for antibiotics, the Options Market for Antibiotics (OMA), meets this specification and could be adapted for use with vaccines under pandemic circumstances or for neglected diseases [12]. The OMA, modelled on the principle of financial call options, allows payers investing in R&D to buy the right to purchase antibiotics at discounted prices if and when these products reach market approval. ...
... The influence on determining the market price of the vaccine and the degree of discount received will be dependent on the timing and size of the investments made by options purchasers. Thus, the option purchaser benefits in a number of ways: firstly, the options holder invests in, and therefore incentivises, the development of the vaccine they desire; secondly, the options holder becomes a coinvestor, and therefore will be able to exert influence over price setting if and when that vaccine is delivered successfully; and thirdly, the options holder gets the vaccine at a discounted price [12]. ...
... In the first model, for a qualifying vaccine, the AMC guarantees a certain price for a specified number of units. 44 This incentivises development of novel vaccines by guaranteeing a profitable market, post development. With the COV model, purchasers make payments during the early stages of development in exchange for reduced future prices. ...
... Here, a third party, typically an NGO or government agency, will purchase 'options' for an antibiotic, that they could redeem if/ when the drug goes to market. 44 If they purchase the options early in development, the price would be low, but the risk of the drug failing would be comparatively BMJ Global Health high. If they purchase the options near the end of development, the price would be much higher but the risk of failure lower. ...
... If they purchase the options near the end of development, the price would be much higher but the risk of failure lower. 44 These methods, though examples of incentives outside of the diagnostic space, can pose as valuable models to help rally appropriate funding and execute on development of diagnostics for the POC. With better incentives and funding, we can bypass many obstacles to technology development in LMICs. ...
Liver disease is a significant public health burden in both high-income and low-income countries, accounting for over 2 million annual, global deaths. Despite the significant mortality burden, liver diseases are historically a neglected problem due to a lack of accurate incidence and prevalence statistics, as well as national and international programmes targeting these diseases. A large portion of deaths due to liver diseases can be treated (eg, chronic hepatitis B), cured (eg, chronic hepatitis C) or prevented (eg, acute liver failure due to medications) if prompt diagnosis is made, but currently diagnostic methods fall short. Therefore, there is a critical need to fund the development of prompt, effective diagnostics for liver function, specifically in low-income and middle-income countries where the landscape for this testing is sparse. Here, we review and compare available and currently emerging diagnostic methods for liver injury in low-income and middle-income settings, while highlighting the opportunities and challenges that exist in the field.
