[Ip-health] FT: Multibillion-dollar pharma levy proposed in superbugs battle

Thiru Balasubramaniam thiru at keionline.org
Sat May 21 01:47:18 PDT 2016


May 19, 2016 12:03 am

Multibillion-dollar pharma levy proposed in superbugs battle

Andrew Ward, Pharmaceuticals Correspondent

Pharmaceutical companies may be charged a multibillion-dollar levy to pay
for the development of antibiotics that can overcome drug-resistant
superbugs under proposals from a UK review.

Jim O’Neill, the UK Treasury minister and former Goldman Sachs economist
who led the review, said there was a “strong case” for drugmakers to pay
for new anti-infective drugs that market forces have failed to deliver.

He urged a “play or pay” scheme under which pharma companies would be
offered a “market entry reward” of up to $1.3bn for producing an effective
new antibiotic, paid in large part by a surcharge on other drugmakers.

“For those pharma companies prepared to embark on the very complex and
challenging and sometimes costly process of developing new antibiotics,
they would be either exempt or get their money back,” said Lord O’Neill.
“The money could be found from a small surcharge on the rest of the
industry that chooses not to play.”

Few new antibiotics have reached market in recent decades, leaving existing
products exposed to the natural evolution of bacteria capable of surviving
the drugs. An estimated 700,000 people a year are already dying from
resistant strains of infectious diseases such as tuberculosis and
Clostridium difficile.

The threat was highlighted by the discovery in Chinese livestock last year
of bacteria resistant to colistin, an antibiotic often used as the last
resort in humans when others have failed.

Lord O’Neill said the scheme could also be financed by general taxation or
through international institutions but urged policymakers to give “serious
consideration” to an industry levy.

The idea was among a range of recommendations made at the end of a review
set up 18 months ago by David Cameron, UK prime minister, to find solutions
to the spread of antimicrobial resistance.

Lord O’Neill said the estimated $40bn total cost of his proposals over 10
years paled in comparison with the cumulative $100tn global cost — and 10m
annual deaths — that he forecast would result from drug-resistant
infections by 2050 if no action were taken.

He is hoping to win international support at the G20 summit in China and at
the UN General Assembly, both in September. George Osborne, UK chancellor,
called on finance ministers, industry leaders and the medical community to
agree a common approach this year.

“Apart from the moral case for action of the sort Lord O’Neill proposes,
the economic cost of failing to act is too great to contemplate,” said Mr

Stronger incentives must be created for pharma companies to invest in the
new antibiotics needed to beat back superbugs, the review concluded; but
the industry should help finance those rewards in recognition of the threat
posed by antimicrobial resistance to their wider businesses.

Cancer patients, for example, often rely on antibiotics to fend off
infections when their immune system is weakened by chemotherapy.

Lord O’Neill said his proposed one-off “reward” for new antibiotics would
be an improvement on the low returns on investment which have deterred
pharma companies from investing in the past — while removing the link
between profit and volume that has encouraged manufacturers to push
excessive use of the products GlaxoSmithKline and Sanofiwere among pharma
companies to broadly welcome Lord O’Neill’s proposals but others were more
cautious. “This is a societal issue,” said Mike Nally, UK managing director
of Merck of the US. “For pharma to bear a disproportionate share of the
burden doesn’t seem just. We are keen to be partners . . . but the burden
must be shared.”

In addition to the estimated $16bn cost of financing new antibiotics over
10 years, the review proposed a $2bn global innovation fund over five years
to catalyse early-stage research and development.

As well as spurring new antibiotics, Lord O’Neill said, it was at least as
important to halt inappropriate use of existing antibiotics — in both
humans and animals — that helps fuel resistance.

Up to $2bn a year should be invested in new diagnostic technology to more
accurately identify when antibiotics are needed and to promote wider use of
vaccines to prevent infections in the first place, the report said. A
further $40m-$100m a year should be spent on raising global awareness of
the problem. Meanwhile, bans should be imposed on use of some important
antibiotics in animals, the report added.

“We need to stop treating antibiotics like sweets,” said Lord O’Neill. “New
drugs will solve the problem for a generation but the only way to solve it
permanently is by reducing demand.”

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