UK to provide upfront payment for new antibiotics via worldfirst ‘Netflix style’ scheme
Updated: Mar 31
The declining sales of antibiotics from restricted usage translate into a low return on investment, leading to a reduced interest in development and a shortage of options. The result is the development of a significant public health issue. However, governments are starting to incentivise development by offering attractive funding propositions, as seen recently with the UK.
By Aroudra Outtandy, MSc –Senior Analyst at RJW & partners
Antimicrobial resistance (AMR) is currently estimated to cause 700,000 annual deaths around the globe, a figure that is expected to rise to 10 million by 2050 if no action is taken (1). Common procedures such as caesarean sections could become too dangerous to perform in the absence of effective antibiotics.
Increased global awareness of AMR over recent years has led to a decrease in antibiotic use. In the UK, antibiotic use has reduced by 7% overall since 2014, with sales of antibiotics for use in food-generating animals falling by 40%2. Despite the application of such measures, drug-resistant infections have increased by 35% between 2013 –2017 (2). Antibiotic research has become an unattractive area for investment, leading to a shortage of new options In order to conserve the effectiveness of novel antibiotic compounds, it is generally advisable to restrict their consumption to cases that cannot be successfully treated with existing medicines. This initiative has led to many countries adapting their prescribing practice to limit the use of antibiotics. Initial low sale volumes for new products is thus discouraging for pharmaceutical companies to invest significantly in this field at present. Achaogen is one example of a pharmaceutical company which has suffered the consequences of reduced antibiotic uptake. The company’s antibiotic, Zemdri(plazomicin), was granted marketing authorisation by the Food and Drug Administration in June 2018 for the treatment of urinary tract infections caused by multidrug-resistant Enterobacteriaceae3. The product was seen as an important option for treatment of carbapenem-resistant Enterobacteriaceae infections, which are among the most difficult bacterial infections to treat. Despite the value of their product, the company filed for bankruptcy in April 2019 having struggled to generate adequate profit (3).
As of January 2020, 41 antibiotic products were estimated to be in Phases I to III of the development pipeline (1). However, the current pipeline is not likely to be adequately robust to address the clinical need for the following reasons (1):
Approximately only 33% of antibiotic products successfully reach the market
The majority of products in development do not have the novel mechanisms of action or chemical composition to target well-validated candidates
Many of the pipeline products do not target the antibiotic-resistant pathogens of highest priority rate adequate profit (3).
The UK launch a world-first ‘Netflix-style’ payment model In 2019, the UK government published a 5-year national plan to contribute to controlling and containing AMR. The plan included targets such as (4):
Cutting the number of drug-resistant infections by 10% (5,000 infections) by 2025
Reducing the use of antibiotics in humans by 15%
Preventing at least 15,000 patients from contracting infections as a result of their healthcare each year by 2024
To incentivise development, the government also expressed their desire to test a new payment model that will de-link payment made to companies from the volumes of antibiotics sold. Soon after the plan was published, the UK launched a world-first ‘Netflix-style’ payment model whereby pharmaceutical companies will be paid upfront for access to their innovative antibiotic products, rather than based on product usage (5). Suppliers have been able to register their interest for the scheme on NHS England’s eTendering Service since June this year (5).
The new evaluation model would forecast the health benefits provided by an antimicrobial product, that would be estimated by the National Institute of Health and Care Excellence (NICE) through an adapted health technology assessment (HTA) with information from health economic modelling and expert opinion (5). The model will capture value not only from the direct health gain to patients treated, but additional elements such as insurance value, diversity value and transmission value (6). Thereafter, the value forecast will be used to inform commercial negotiations, leading to payments to the company in installments (6). Upon proving to be safe and efficacious, two products will be chosen to undergo this process for testing throughout 20215. NICE, however, acknowledge the need to tailor the model to suit particular medicines, pathogens and settings including the unmet need and future threats (6).
The value of each contract is stated to be worth up to £10m per year (7), with an initial contract duration of 3 years. Each contract can be potentially extended by an additional 7 years or until patent expiry (whichever is the earlier) (7).
‘Push’ and ‘pull’ initiatives The UK’s new payment model falls under the category of ‘pull’ initiatives, whereby a level of revenue is guaranteed for products that have undergone successful development (8). Other examples of ‘pull’ initiatives include the US Generating Antibiotic Incentives Now (GAIN) Act8, which provides 5 years of additional market exclusivity for new antibiotics, and the US Re-Valuing Anti-Microbial Products Act (REVAMP) of 2018 (9), which grants the successful firm a transferable 12-month extension of exclusivity to another product or which can be sold. However, governments have largely only provided ‘push’ incentives for antibiotic development, typically in the form of grants and public private partnerships to reduce the cost of research and development (8,9).
Advantages exist for both ‘push’ and ‘pull’ initiatives. The provision of funding for companies via ‘push’ initiatives lowers the cost and risk of research and development, supporting both successful and unsuccessful efforts. With ‘pull’ initiatives such as the UK’s scheme, manufacturers will be directly or indirectly rewarded for the successful development of new products –the limited use of newly approved antibiotics highlights the importance of such initiatives.
‘We hope that this project will inspire healthcare systems across the world to consider adopting similar models so that collectively, we deliver meaningful incentives that reinvigorate the global antimicrobial pipeline.’–Professor Gill Leng, Chief Executive, NICE UK (5)
The UK is making strides to encourage antibiotic drug development and paving the way for others
There is a general consensus on the need for both ‘push’ and ‘pull’ initiatives to stimulate antibacterial drug development. A mixture of incentives is required to promote innovation for manufacturers to develop different types of products capable of treating drug-resistant infections. The UK’s promise of a financial reward for suitable candidates is a significant step forward and may pave the way for many other countries to follow suit and develop attractive propositions upon market entry. There has been significant focus on ‘push’ initiatives across the globe, but it is clear that more ‘pull’ initiatives are also required in the efforts of convincing manufacturers to invest in this field.
The effects of the ongoing global pandemic have underlined the risks associated with infectious diseases. With antimicrobial resistance continuing to gain prominence as a global issue, aggravated by the thin development pipeline, it is crucial for stakeholders come together to articulate a set of consensus solutions.
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Simpkin, V. L., Renwick, M. J., Kelly, R., & Mossialos, E. (2017).Incentivising innovation in antibiotic drug discovery and development: progress, challenges and next steps. The Journal of Antibiotics, 70(12), 1087–1096.
GOV.UK. Antimicrobial resistance: UK launches 5-year action plan and 20-year vision. Available at https://www.gov.uk/government/news/antimicrobial-resistance-uk-launches-5-year-action-plan-and-20-year-vision. (Accessed November 2020).
Chris Dall. Achaogen bankruptcy raises worry over antibiotic pipeline. Available at https://www.cidrap.umn.edu/news-perspective/2019/04/achaogen-bankruptcy-raises-worry-over-antibiotic-pipeline. (Accessed November 2020).
HM Government. Tackling antimicrobial resistance 2019–2024. The UK’s five-year national action plan.Available at https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/784894/UK_AMR_5_year_national_action_plan.pdf. (Accessed November 2020).
GOV.UK. World-first scheme underway to tackle AMR and protect UK patients. Available at https://www.gov.uk/government/news/world-first-scheme-underway-to-tackle-amr-and-protect-uk-patients#:~:text=The%20NHS%20is%20offering%202,time%20in%20almost%2030%20years. (Accessed November 2020).
NICE. Antimicrobial Resistance: Developing and testing innovative models for the evaluation and purchase of antimicrobials.Available at https://www.nice.org.uk/about/what-we-do/life-sciences/scientific-advice/models-for-the-evaluation-and-purchase-of-antimicrobials. (Accessed November 2020).
NICE. Information for bidders.Available at https://www.nice.org.uk/about/what-we-do/life-sciences/scientific-advice/models-for-the-evaluation-and-purchase-of-antimicrobials. (Accessed November 2020).
Årdal, C., Røttingen, J.-A., Opalska, A., Van Hengel, A. J., & Larsen, J. (2017). Pull Incentives for Antibacterial Drug Development: An Analysis by the Transatlantic Task Force on Antimicrobial Resistance. Clinical Infectious Diseases, 65(8), 1378–1382.
Morel, C. M., Lindahl, O., Harbarth, S., de Kraker, M. E. A., Edwards, S., & Hollis, A. (2020).Industry incentives and antibiotic resistance: an introduction to the antibiotic susceptibility bonus. The Journal of Antibiotics.