[Ip-health] FT: Big pharma hits back at tax to tackle superbugs

Thiru Balasubramaniam thiru at keionline.org
Sat May 21 02:03:40 PDT 2016


Big pharma hits back at tax to tackle superbugs

Andrew Ward, Pharmaceuticals Correspondent

Pharmaceuticals companies have hit back at calls for an industry surcharge
to pay for new antibiotics to fight drug-resistant superbugs.

Drugmakers said proposals for a “pharma tax” to finance research and
development was the wrong way to tackle market failures that have caused a
shortage of new antibiotics to stem the rise of antimicrobial resistance.

A review led by Lord Jim O’Neill, the UK Treasury minister and former
Goldman Sachs economist, on Wednesday floated the idea of a “play or pay”
scheme to reward drugmakers for producing new antibiotics with the proceeds
of a levy on companies that chose not to invest in R&D.

Responding to the proposals on Thursday, three leading pharma industry
trade groups warned that such a levy would “significantly undermine current
goodwill” among drugmakers towards efforts to combat antimicrobial

“This approach may lead to less productive collaboration and innovation,
and ignores the universal responsibility for finding the solution that all
society relies on,” said the statement by the International Federation of
Pharmaceuticals Manufacturers & Associations, jointly issued with the main
industry groups for Europe and the UK.

The trade groups welcomed Lord O’Neill’s broader call for action against a
problem his report forecast could lead to 10m deaths a year by 2050 and
cost the global economy a cumulative $100tn if nothing was done.

However, the hostile response to his proposal for industry to foot a large
part of the bill for tackling superbugs — estimated by Lord O’Neill to
require $40bn of public and private funds over a decade — demonstrated the
difficulty of forging a common response.

About 700,000 people a year are already dying worldwide from bacteria that
have evolved to survive existing antibiotics, creating an urgent need for
new ones. Market forces have largely failed to fill the gap because of
relatively low returns on investment compared with more lucrative areas
such as cancer drugs.

Lord O’Neill was recruited 18 months ago by David Cameron, UK prime
minister, to look for new approaches that could form the basis of an
international agreement through the UN and the G20 group of large economies.

His review called for companies to be paid a one-off sum of up to $1.3bn
for producing a new antibiotic; this would provide a return on R&D costs
while encouraging responsible usage by removing the incentive to maximise

Excessive use of existing antibiotics in humans and animals is helping fuel
antimicrobial resistance by increasing opportunities for superbugs to
evolve. Lord O’Neill said the world must “stop treating antibiotics like

The trio of pharma trade groups said the world was “rightly impatient” for
action to tackle a problem it said posed a “grave threat” to modern

“A new sustainable model that rewards innovation and shares the risk
equally will be challenging to implement, but the overwhelming benefit of
solving this problem requires all partners to now come together as equals
and define the right set of proportionate and fair solutions,” they said.

About $5bn was invested in anti-infective drugs in 2014 — 3.7 per cent of
global pharma R&D spending — with 34 antibiotics and infection-preventing
vaccines in development, according to the industry groups.

They highlighted a €696m antibiotics R&D fund under way through the
Innovative Medicines Initiative, a European public-private partnership, as
proof that industry was already working on new approaches.

Others welcomed the call for industry to do more. Annette Heinzelmann,
medical director of Médecins Sans Frontières, the health charity, said:
“The O’Neill report confirms what MSF has long voiced: that the current
system of pharmaceuticals R&D is not always developing and delivering the
drugs, vaccines and diagnostics we need.”

More information about the Ip-health mailing list