Source: Getty Images

Jim O'Neill Has a Plan to Make Big Pharma Avert Armageddon

  • Companies not developing antibiotics should pay levy: review
  • Over next decade $40 billion needed to fight drug resistance

Pharmaceutical companies should "pay or play" to spur research into new antibiotics and prevent drug-resistant infections from causing 10 million extra deaths a year by 2050, according to a report commissioned by U.K. Prime Minister David Cameron.

Companies that don’t devote resources to develop antibiotics should pay a levy of 0.25 percent of annual sales into a pooled fund to support market rewards for rivals who successfully develop new treatments, said Jim O’Neill, who chaired the government’s Review on Antimicrobial Resistance.

"For those pharmaceutical companies that are prepared to undertake the complex, challenging and sometimes costly process of trying to get new antibiotics, they would either be exempt or get their money back,” O’Neill said. “Money could be found by a small surcharge on the rest of the industry that chooses not to play."

Acknowledging market failures that led to a dearth of new antibiotics, O’Neill’s final 84-page report released Thursday recommends a lump sum payment of as much as $1.3 billion as a reward for a successful developer of a new antibiotic drug. Other suggestions included taxes on antibiotics and transferable vouchers to let successful developers go to the front of the line for any drug awaiting regulatory approval.

Not Sweets

In one of his more controversial proposals, O’Neill also suggested developed countries should be required by 2020 to use diagnostic tests before antibiotics are prescribed in order to discourage overuse.

"We think this would have huge beneficial influence in terms of making us not treat antibiotics like sweets as we currently do," O’Neill said.

An estimated $40 billion over 10 years is needed to fund global action against antimicrobial resistance, the review says. The report estimates $16 billion is required to overhaul the antibiotics and tuberculosis research and development pipeline, using incentives such as market-entry rewards which could be funded by pharmaceutical companies under a "pay or play" program.

The pharmaceutical industry criticized the report’s recommendation that companies should foot the bill for combating anti-microbial resistance.

Innovation Fund

"The suggestions that pharmaceutical companies should shoulder the financial burden for global AMR -- and must therefore ‘pay or play’ -- fails to recognize the need for a collaborative response,” said Virginia Acha, director of research at the Association of the British Pharmaceutical Industry. "Putting the onus on any one group will not solve the problem."
 
The report recommends setting up a Global Innovation Fund endowed with $2 billion over five years to support non-commercial research in drugs, vaccines and diagnostics. O’Neill said pharmaceutical companies shouldn’t be asked to contribute to the fund if policy makers adopt a "pay or play" program for market entry rewards in antibiotics.

“We need new drugs to replace the ones that are not working anymore because
of resistance,” said O’Neill. “We have not seen a truly new class of antibiotics for decades. It is in policymakers’ hands to change this.”

He recommended that the G20 and the United Nations should agree to targets by 2018 to reduce the use of antibiotics in animals and agriculture, where overuse has encouraged resistance. His report suggests countries review carefully how they buy and price antibiotics to reward innovative drugs without stoking unnecessary use. It also calls for a group of countries such as the G20 to pool money that would be used to reward developers of new antibiotics.

"This review should be read as a call to action,” said Mark Baker, director of the Centre for Clinical Practice at the U.K.’s National Institute for Health and Care Excellence. "The time for talking is over."

Before it's here, it's on the Bloomberg Terminal. LEARN MORE