Pharma, biotech may be fined if they fail to research antibiotics

A U.K. government review believes the global life sciences industry should be paid a substantial reward if they decide to develop new antibiotic treatments--but warn those who don’t will be subject to a penalty surcharge.

This is the recommendation of former Goldman Sachs chief economist Jim O'Neill, who had been asked by the government to review how new antibiotics could be developed in the wake of the silent problem of antimicrobial resistance to older drugs, which the report suggests could kill more people than cancer by 2050.

He said that doctors (who can overprescribe these drugs), patients (who can ask for antibiotics for viral infections) and the government should all take the matter far more seriously and get “out of its comfort zone” on the issue, which could lead to people dying from once-treatable infections.

But the onus, he said, is on life science companies, which should be subject to a surcharge if they decide not to invest in R&D to bring new antibiotics to market. Under the proposals, pharma companies that don’t spend enough on developing new treatments would have to pay 0.25% of annual sales into a pooled fund to reward companies that are.

Those who do decide to "play," however, would get a reward from these pooled fines of between $1 billion and $1.5 billion for any successful new antimicrobial medicine brought to market. Some of the money could also come from the G20, he suggested.

This idea of a premium has long been asked for by the industry in the U.K., which said it has little financial incentive to spend billions on antibiotic research when it will not get that back, given that the purpose of new antibiotics is to use them as infrequently as possible, and they cannot be priced at a high level.  

But O’Neill warned in a conference in London: “If we don't do something, we're heading towards a world where there will be no antibiotics available to treat people who need them.”

His review states: “These market entry rewards, of around $1 billion each, would be given to the developers of successful new drugs, subject to certain conditions that ensure they are not over-marketed but are available to patients who need them wherever they live.”

O'Neill said the review's proposals would cost up to $40 billion over a decade, with $25 billion coming from the drug industry.

"Given the systemic risk to the pharmaceutical industry, the sector could contribute to supporting market entry rewards --on a pay or play basis," he told reporters.

Sir Andrew Witty, the outgoing CEO of GlaxoSmithKline ($GSK), welcomed the report, saying in a statement: “Governments, industry and other relevant groups must now work together to develop … effective new antibiotics for future generations.”

Neil Murray, chief executive of Redx Pharma, which is testing new meds to tackle MRSA, added: “We are now at a critical point in dealing with an unfolding health catastrophe. The review marks an important step forward, and we see significant potential for the Innovation Fund and new commercialisation models.”

But the ABPI, which represents Big Pharma in the U.K., was quick to dismiss the “pay or play” idea. “[It] fails to recognise the need for a collaborative response which this long-term review has consistently identified,” said Dr. Virginia Acha, director of research, medical and innovation at the ABPI. “Putting the onus on any one group will not solve the problem and is not a sustainable solution.”

- check out the review (PDF)