|Printable version||E-mail this to a friend|
Chatham House - Radical new business model for pharmaceutical industry needed to avert antibiotic resistance crisis
Revenues for pharmaceutical companies need to be 'delinked' from sales of antibiotics to avoid their over-use and avert a public health crisis, says a new report from the think-tank Chatham House.
Over-use of antibiotics is contributing to the growing resistance of potentially deadly bacteria to existing drugs, threatening a public health crisis in the near future. The report notes that, by 2050, failing to tackle antibiotic resistance could result in 10 million premature deaths per year.
Novel antibiotics to combat resistant pathogens are thus desperately needed, but market incentives are exacerbating the problem.
'The current business model requires high levels of antibiotic use in order to recover the costs of R&D. But mitigating the spread of resistance demands just the opposite: restrictions on the use of antibiotics.'
To tackle this catch-22 problem, the Centre on Global Health Security at Chatham House recommends the establishment of a global body to implement a radical new business model for the industry, which would encourage investment and promote global access to - and conservation of - antibiotics.
The current business model has several perverse effects. As R&D is an inherently risky and costly endeavour, the industry is chronically under-investing in new treatments. Today, few large pharmaceutical companies retain active antibacterial drug discovery programmes. Re-stoking the industry's interest in antibiotics would be one of the primary roles of the new body.
Secondly, the need to recover sunk cost under the current business model encourages both high prices and over-marketing of successful drugs, making potentially life-saving treatments unaffordable to many in developing countries, while simultaneously encouraging over-use in developed markets and increasing resistance.
The new global body would address these challenges by ‘delinking’ pharmaceutical revenues from sales of antibiotics. It would do this by directly financing the research and development of new drugs, which it would then acquire at a price based on production costs rather than the recovery of R&D expenses. Acquisition could take the form of procurement contracts with companies, the purchase of full IP rights or other licensing mechanisms.
This would enable it to promote global access to antibiotics while simultaneously restricting over-use. Conservation would be promoted through education, regulation and good clinical practice, with the report recommending that 'proven conservation methods such as antibiotic stewardship programmes… be incentivized and implemented immediately.'
Priorities for R&D financing would be based on a comprehensive assessment of threats arising from resistance. Antibiotics would qualify for the highest level of financial incentives if they combat resistant pathogens posing a serious threat to human health.
Finance for the new body would come from individual nation states, with the report noting that this could 'begin with a core group of countries with significant research activity and large antibiotic markets, (though) it is envisaged that all high income countries should make an appropriate financial contribution.'
It is not yet clear exactly how much funding would be necessary to combat resistance, but with inaction expected to cost $100 trillion in cumulative economic damage, the report argues that 'an additional global investment of up to $3.5 billion a year (about 10 per cent of the current value of global sales of antibiotics) would be a bargain.'
Towards a New Global Business Model for Antibiotics: Delinking Revenues from Sales, is a Chatham House report edited by Charles Clift, Unni Gopinathan, Chantal Morel, Kevin Outterson, John-Arne Røttingen and Anthony So.
For more information, or to request an interview with the editors, contact the press office.
Latest News from
NIESR: Sharp fall in migration post Brexit could shrink GDP per capita by more than 3pc08/12/2016 16:30:00
EU migration to the UK could fall by well over half over the period from now to 2020, resulting in net EU migration falling by more than 100,000, a new NIESR paper estimates.
Home sharing services must make sure planning rules observed to avoid future problems - IPPR08/12/2016 14:35:00
Think tank report calls for site owners and government to work together to make sure rules enforced
NIESR: GDP growth of 0.4% in 3 months ending in November 201608/12/2016 14:10:00
Our monthly estimates of GDP suggest that output grew by 0.4 per cent in the three months ending in November 2016 after growth of 0.4 per cent in the three months ending in October 2016.
Charitable ethos helps businesses boost bottom line, finds CSJ08/12/2016 13:35:00
Companies who prioritise helping their local community, funding social enterprises and increasing the number of disabled people in their workforce are more likely to retain staff, have a strong brand image and be productive, a new report from the Centre for Social Justice (CSJ) has found.