$1 billion reward proposed for development of new antibiotics

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 thirty 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 five 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 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, a professor at the University of Michigan’s Ross School of Business who