Subscription as an advanced market commitment for new antibiotics

 Axel Ockenfels points me to the following discussion of a subscription model for antibiotics: governments would guarantee that they would "subscribe" to new antibiotics, providing payments even though the volume of prescribed doses might be small to prevent bacteria from adapting to it [see this earlier post on  The economics of antibiotics]

This is how to fight antibiotic-resistant superbugs with a simple subscription payment model  by Jeremy Farrar, Director, Wellcome Trust and Mads Krogsgaard Thomsen, Chief Executive Officer, Novo Nordisk Foundation

"A subscription model based on fixed annual payments in return for a sufficient antimicrobial product supply guarantee, de-linked from the volumes sold would offer manufacturers security and financial predictability."

"A few weeks ago, the Lancet published an analysis which concluded that global mortality associated with antimicrobial resistance (AMR) has been greatly underestimated, and that with 3,500 daily deaths being directly related to AMR, it is one of the leading threats to human health worldwide. The analysis covers more than 200 countries and is the most comprehensive study on the consequences of antimicrobial resistance to date." [see earlier post]

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"Decades of antibiotic overuse and misuse, in people and in animals, has caused the emergence of “superbugs”, strains of bacteria resistant to existing medicine, leaving the world vulnerable and decades of medical progress being undermined.

"At the same time, the world has not seen the introduction of truly novel antibiotics for many years. Regrettably, an unsustainable innovation and payer ecosystem has caused the pipeline of drugs with new targets or mechanisms of action to dry up.

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"Wellcome Trust and the Novo Nordisk Foundation have both been doing what we can to support vital antibiotic innovation, through our investments in CARB-X, the REPAIR Fund, and the AMR Action Fund. But while our investments have done much to shore up the early-stage pipeline, we now need governments to do their part and ensure that antibiotics can reach global markets – available, accessible, and affordable. With this in mind, we recently commissioned Boston Consulting Group and the World Economic Forum to produce a report with recommendations on how to address these remaining gaps in support for antibiotic R&D. The report provides a roadmap for global leaders to study and adopt.

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"The resulting recommendation is to apply a subscription payment model as the way forward. Such a payment scheme is already being piloted in the UK and Sweden. The subscription model is based on fixed annual payments for a set period, in return for a sufficient antimicrobial product supply guarantee, and, crucially, de-linked from the volumes sold. Recently, this has been dubbed the ‘Netflix model of antibiotics’ or compared to safeguarding properties by investing in fire extinguishers, hoping that there will never be a need for them.

"The idea is not new, and political leaders have time and again made warm commitments to act to support antibiotic development. But now is the time to turn these into solid action and bring fresh political goodwill to get them implemented. In the US, the world’s largest pharmaceuticals market by some margin, legislators are currently considering such a subscription model. With the support of both political sides, the so-called PASTEUR ACT (The Pioneering Antimicrobial Subscriptions To End Up Surging Resistance) bill has been drawn up, precisely with the aim of creating more attractive conditions for the development of new antibiotics.

"The subscription model is advantageous compared to the current alternatives, as it offers manufacturers security in terms of their revenues as well as certainty in terms of the demand.