German-Backed Report Lays Out Strategy For R&D Into New Antibiotics

In the face of the lack of attractiveness of investing in research for new antibiotics for the pharmaceutical industry, and the general lack of funding for research and development for novel antibiotics, a new report commissioned by the German Federal Ministry of Health calls for countries to take action. In particular, the report proposes a global union for research and development, a global research fund, and a global launch reward. And access and pricing are key components of the strategy, it says.

The report [pdf] titled, “Breaking through the Wall –  A Call for Concerted Action on Antibiotics Research and Development,” was written by the Boston Consulting Group for the German Federal Ministry of Health.

The report proposes the establishment of a Global Union for Antibiotics Research and Development (GUARD) and describes four levers “to reinvigorate the antibiotics value chain.” It is a follow-up of a 2015 report by the same group, which identified the challenges, while the 2017 report focuses on implementation.

“GUARD represents a novel approach to high-need antibiotics: While balancing various needs as fairly and equitably as possible, it offers a practical guide to what the international community can do, starting in 2017,” it says.

It is a widely-known fact, underlined by the report, that antibiotics are less commercially attractive than other types of drugs, which “has led many large pharmaceutical companies to exit this area.” Only five of the 20 largest pharmaceutical players have antibiotic candidates in their pipelines, it says, while large investments go to oncology treatments. Antibiotics researchers “are an endangered species,” it says.

The report lays out four ways in which the international community “must take action” as soon as possible.

• “Create a system of Target Product Profiles to steer research and development efforts to where they are most urgently needed,
• Grow the antibiotics researcher community and fund more projects in basic research, early drug discovery, and preclinical development,
• Help small and medium-sized biopharmaceutical companies get through clinical development with forgivable loans,
• Create a pull incentive to make antibiotics a more attractive commercial proposition.”

Access Key, Differentiated Pricing

The report underlines the importance of surveillance and prevention, and access, as it also notes that “it has been argued that a lack of access to existing antibiotics causes more deaths today than AMR [anti-microbial resistance] does. For existing and new drugs, access is a critical issue.”

Further, the report states that “pricing is critical from an access perspective in low- and middle-income countries and, as many would argue, from a stewardship perspective in high-income health systems, we propose to define differentiated pricing and access requirements for new drugs in all funding contracts entered into with GUARD.”

Global Research Fund

The report proposes the establishment of a Global Research Fund (GRF), with an annual budget of US$200 million. With that sum, the report says, the fund “could grow the current antibiotics researcher community by 50%, triple targeted global funding for relevant basic research (funding 175 new projects) and fully finance 25 preclinical development projects..”

A timeframe of ten years is needed for the research fund, the report says, “as the new research infrastructure will take roughly a decade to become fully functional, and basic research projects can take up to ten years to produce results.”

Global Launch Reward, Repayment Mechanism

The report also proposes a Global Launch Reward (GLR), a US$1 billion payment “that seeks to improve the commercial attractiveness of high-need antibiotics… embedded in an insurance-like mechanism.”

According to the report, the difference between the GLR and previous proposals, is its built-in repayment mechanism. Moreover, the pay-out of the GLR is conditional upon access in agreed-upon markets, the report says, adding, “GUARD should monitor whether these conditions are met after launch.”

There are also pricing commitments, it notes, by which “GUARD should monitor the price differentiation.”

“Grant agreements must include rules on project governance and intellectual property rights. Joint applications by more than one organization are expected to present a plan for intellectual property sharing as part of the grant agreement,” the report says.

It also notes that “Some high-need antibiotics may return only a fraction of the financial support they received over the lifetime of the product. Repayment obligations should be forgiven once the product’s patent expires.”

“Prices are highly likely to drop once generic competitors enter the market, making a post-patent profitability spike exceedingly unlikely,” it says.

“What matters most in 2017 is for a broad coalition of actors to agree on tangible next steps,” the report concludes.