LONDON – The third report from the UK body reviewing antimicrobial resistance (AMR) has proposed solutions to the market distortions that discourage development of antibiotics, suggesting companies should continue to bear the cost of clinical development but get a lump sum payment from a global fund once a product is approved.

A second global fund, set up with contributions from pharma, would jumpstart a new cycle of innovation and early stage research in drugs and diagnostics to address AMR.

The total cost would be no more than $37 billion over 10 years, a figure the report suggested is modest in the context of the additional $20 billion per annum AMR costs the health care system in the U.S. alone.

The result would be to "radically overhaul" the antibiotics pipeline, with the investment estimated to deliver 15 new antibiotics over a decade.

Those are clear proposals to "supercharge" antibiotic development, said Jim O'Neill, chair of the AMR review body. "There is potential to save millions of lives for a fraction of the $100 trillion cost of inaction," he said.

The suggestions are the most specific to date on how to address the market distortions. O'Neill will spend the next 12 months engaging with governments, pharmas and nongovernmental organizations to discuss the proposals before publishing a final report in June 2016. A new international advisory group has been set up to mediate those discussions.

The third AMR report said the main reason for the mismatch between the huge medical need and the paltry number of antibiotics in development is that the commercial returns are uncertain until resistance has emerged to a previous generation of drugs.

In contrast to other disease areas where a new drug is likely to improve on what went before, a new antibiotic is probably no better than any existing generic. By the time a new drug becomes standard of care its patent life will be shortened and the developer may struggle to get a return on investment.

The lump sum payments proposed by O'Neill would come from a new global organization and be made according to criteria agreed in advance. That would unlink profit from the volume of sales and make development financially sustainable.

Before proposing a global fund, O'Neill ruled out a number of other potential interventions, including patent life extension, transferable patent vouchers or relying solely on higher prices to stimulate R&D investment and constrain consumption.

Creating a stable commercial market should encourage investment in R&D. To support that, a second fund would invest in early stage research to provide inputs for pharma pipelines. It will be in its own self-interest for pharma to contribute to that fund, the report said.

All of which will require political leadership at a global level to put the scheme in place and formulate rules to avoid freeloading by either countries or companies. Although difficult, O'Neill pointed to examples of such successful coordination, in HIV/AIDS, access to vaccines and the Medicines for Malaria Venture.

THE IDEAL PIPELINE

Mark Lloyd Davies, chair of the antibiotic network at the Association of the British Pharmaceutical Industry, welcomed the report's focus on de-risking R&D and unlinking use from financial returns, but said there are issues to be resolved about how the global reimbursement fund operates and how new antibiotics are judged to be of sufficient value to access the fund.

"It's important that the next phase of work by O'Neill addresses how the funds will work in more detail and looks at potential gaps the funds leave unaddressed," Lloyd Davies said.

One of the few pharma companies conducting antibiotic research, Glaxosmithkline plc, also welcomed the report. "We are very encouraged by the ideas it sets out to modernize the economic model and encourage investment in research," said Patrick Vallance, GSK's president of pharmaceutical R&D.

The focus since the 1990s on tackling resistant strains of gram-positive bacteria, such as multidrug-resistant Staphyloccus aureus, means the range of antibiotics for treating gram-negative infections is relatively robust. It is the emergence of resistant strains of gram-negative bacteria, in particular, Klebsiella pneumoniae, Acinetobacter baumannii, Pseudomonas aeruginosa, Enterobacter cloacae and E. coli, that represents the greater threat currently.

Only 16 of the antibiotics in pharma development pipelines show any effect against resistant gram-negative bacteria and only three have any activity against the most resistant bacteria, which are responsible for 90 percent of infections, according to the report.

Given that, the aim should not simply be to support development of any new antibiotic, but to single out those that address greatest medical need. Faced with current patterns of emerging resistance and the need for a balance between broad-spectrum and targeted therapies, O'Neill said approval of between two to four first-in-class compounds against key species every 10 years "would allow us to keep ahead of the race against antibiotic resistance."

That "ideal pipeline" is used as the starting point to assess the level of investment required to deliver those products. Based on that, O'Neill suggested the global AMR Innovation Fund would require $2 billion to $5 billion to de-risk R&D, and the global reimbursement fund to pay for innovative antibiotics up front somewhere between $16 billion and $37 billion.