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NEW BUSINESS MODEL FOR ANTIBIOTICS

New arrangement of collaboration including open source solutions are promising avenues for restarting the quest for new antibiotics.

 

Developing new drugs is costly. A billion-dollar price tag is not uncommon – and often too small – but considering the cost of antimicrobial resistance (AMR), this is actually a bargain. In the United States alone AMR costs more than 50 billion USD per year in health expenses and incurred societal cost – such as loss of productivity.

Still, development of new antibiotics has stifled, as current pharmaceutical business models do not harvest this opportunity. Development costs of new antibiotics are high, yet sales are impended as consumers only take antibiotics for a limited time period and often relatively few times during a lifetime. At the same time, microbes develop resistance relatively fast. So to be profitable, antibiotics today need to be sold in large quantities, but if sold in profitable quantities the risk of microbes developing resistance goes up dramatically. This catch-22 situation has kept the development of new antibiotics drugs down.

However, the enormous societal costs of AMR create an opportunity for new business models to step in, and a number are materializing.

PUBLIC-PRIVATE FUNDING
The term neglected disease business models covers a number of tools to incentivize investments in development of new drugs to treat diseases where traditional business models do not create favorable returns on investments. Using these similar measures can help bring novel antibiotics to the market. The incentives are a mix of innovative approaches to R&D, new forms of financing mechanisms and regulatory tools.

A key element in this opportunity is to blend public and private investment in innovative nancing models that can fund the development of new drugs. Funds for research on this topic can be partly financed by the public sector, philanthropy, or one could imagine for instance a one-bil- lion-dollar prize to the first five companies or academic centres that develop and get regulatory approval for a new class of antibiotics. Rewards could also be in the form of higher drug prices protected by patents or extended data exclusivity. Financial incentives can be targeted to the truly novel classes of antibiotics, with demonstrable efficiency against multidrug-resistant pathogens.

INNOVATIVE APPROACHES TO R&D
Another way to incentivize development of new antibiotics is to reduce the cost of development. Open source innovation plays a key role as a means to create avenues for companies to bene t from publicly funded research. Sourcing ideas on open platforms have proven effective in the development of drugs for neglected diseases such as tuberculosis, and this type of networked approach to R&D has demonstrated that while its costs and challenges may be too great for just one company to bear, platforms that draw on a multitude of collaborators may lower costs, diffuse risks, and recruit a broad array of resources.

New forms of public-private collaboration and open source solution hunting are potentially promising ways to revamp the interest in developing more of our miracle medicine – antibiotics.

Key Numbers

50

Million US Dollars public resources made available to co-create new antibiotics.

246

Million US Dollars partnership between the EU, industry and academia to develop new antibiotics.

4-9

percent annual increase in global market – in a 40 billion USD market.

Solutions for this Opportunity

ANTIBIOTIC INNOVATION FUND

AMR Review has proposed a fund of $2bn with rewards to pharmaceutical companies that develop new antibiotics.
Location: Global See this solution

BACTERIA FROM BEES AS ALTERNATIVE ANTIBIOTICS

Scientists in Living Antibiotics at Lund University in Sweden crowd fund their studies of active infection- fighting bacteria in bees.
Location: Global See this solution

PRIVATE-PRIVATE LICENSE AGREEMENT

Roche, Meiji Seika Pharma and Fedora have made a license agreement for the development and commercialization of a new antibiotic.
Location: Global See this solution

PUBLIC-PRIVATE PARTNERSHIP FOR NEW ANTIBIOTICS

US Department of Health and Human Services and AstraZeneca will develop drugs to treat illnesses caused by antibiotic-resistant infections.
Location: Global See this solution

FUNDING IN EXCHANGE FOR DRUG GUARANTEES

BARDA’s BSA program funds new antibiotics in exchange for guarantees that a new drug will be available in public health emergencies.
Location: Global See this solution

COLLABORATION TO PROVIDE FLEXIBLE FUNDING

GlaxoSmithKline and BARDA are collaborating to provide flexible funding for the development of several antibiotics.
Location: Global See this solution

ACADEMIC-INDUSTRIAL PARTNERSHIP FOR NEW ANTIBIOTICS

The University of Bonn, North- eastern University and Novobiotic Pharmaceutical are developing the new antibiotic teixobactin in collaboration.
Location: Global See this solution

CROSS-SECTOR COMMITMENT TO DEVELOP NEW ANTIBIOTICS

The Infectious Diseases Society of America (IDSA) has called for a global commitment across sectors to develop 10 new antibiotics by 2020.
Location: Global See this solution



SURVEY FINDINGS

LARGE REGIONAL DIFFERENCES

A new business model for antibiotics has been assessed very differently across the regions in terms of potential benefits for society and the capacity to pursue it. Very few business models currently exist to address this problem that may render it difficult for respondents to judge the value of the opportunity.

TOP AND BOTTOM RANK

Respondents in China have assessed this opportunity as the second most favoured which points to the fact that there is a felt need in the region for the development of new business models for antibiotics. China is among one of the largest users of antibiotics worldwide. India, the MENA region, and South America have also rated this opportunity favourably. However, the opportunity ends up at the bottom of the list in the eyes of Europe, South East Asia and Australia, and Other Asia.

MANUFACTURING SECTOR MOST LIKELY TO ACT

It is one of the top opportunities for respondents in the manufacturing sector with respect to positive impacts on society; still, it is not an opportunity the sector sees much new business potential in. The service sector is the most likely to pursue this opportunity, however, the sector does not have high hopes in terms of the benefits this opportunity will bring society.

Besides strong support from stakeholders in China and India, a new business model for antibiotics the data shows that the opportunity will be backed up by stakeholders in Sub Saharan Africa and South East Asia and Australia and by civil society in South America.

NUMBER 8 ON THE OPPORTUNITY RANKING

Regenerative Ocean Economy_Ranking

THE ECONOMIC CAPACITY, TECHNOLOGICAL CAPACITY, AND THE POLITICAL WILL POWER TO PURSUE THIS OPPORTUNITY ACROSS NINE REGIONS

Capacity to puruse_Regenerative Ocean

BENEFITS AND CAPACITY

Perceived benefits from pursuing this opportunity (x), and capacity to do so (y), World and geographic regions. Scale goes from -10 to +10.

GOR_SocietyCapacity_Regenerative Ocean Economy


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