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The growth of antimicrobial resistance is often compared with climate change as an intractable global problem. However, the Review on Antimicrobial Resistance, appointed by UK Prime Minister David Cameron last year and chaired by economist Jim O’Neill, has made a bold start. Its latest report advocates a wholly new business model for antibiotics for the pharmaceutical industry known as ‘de-linkage’.

De-linkage: A controversial idea

The current business model of the pharmaceutical industry uses the pricing of its products to fund investment in research and development (R&D), as well as to generate profits. The ability to do this depends heavily on the temporary exclusive rights conferred by patents. In the de-linkage model, companies would be rewarded for R&D by other means (such as lump sums) in exchange for accepting some form of restriction on the prices they could charge for the product. The medicine could then be sold at a price close to production costs, thereby ensuring better access, particularly for poor people in developing countries who often pay for their own treatment.

But ‘de-linkage’ remains controversial because it was originally promoted by civil society organizations as a better way of financing R&D than the patent-based system.  For the most part industry opposed this strenuously as an attack on the patent system on which their business model depends, or the ‘free’ market in general because it involved governments deciding how R&D should be rewarded.

To their credit some industry leaders have nevertheless seen its merits in the specific context of antibiotics. In the fight against resistance most new antibiotics are unlikely to sell in large quantities initially because they should be reserved for use only when all other options have been exhausted. Even if very high prices could be charged, this would not be a paying proposition. Moreover, de-linkage removes the incentive for industry to boost sales in ways which may encourage overuse or misuse in ways that accelerate the development of antibiotic resistance, and correspondingly relieves industry of the need to spend large sums on marketing.

Developing the idea

But industry opinion is slow to change, so the Review deserves high praise for being the first influential official body to recommend solutions based on de-linkage, and for developing them in an intriguing fashion. The report, released today, proposes ways to stimulate the development of 15 new antibiotics a decade, of which four should have totally novel modes of action (which will better outwit resistance). Companies would be offered lump sum payments if they successfully develop a drug meeting specified (but yet to be defined) criteria. A ‘global body’, financed by as many countries as possible, would make the pay-outs.

In one option the report suggests, companies could be bought out completely, with the global body managing the international supply of the product. Under a second option (called ‘hybrid’), companies would maintain control of marketing but receive lower pay-outs and be subject to conditions on pricing and distribution to promote both conservation and access. The Review favours this second approach because it is more market-based, cheaper and less complex than the first option. The cost is estimated at between $15 billion (option 2) and $37 billion (option 1) over a decade – which the report rightly says is cheap compared to the costs of inaction.

In addition the report fleshes out an earlier proposal for a global antimicrobial resistance innovation fund which it suggests should operate for five years only at a cost of $2 billion. Intriguingly it is proposed that the pharmaceutical industry should support this fund financially and technically. Chairman O’Neill believes the industry should do this in the spirit of enlightened self-interest rather than spend their high returns on share buy-backs.

Bold action

The chairman has been a key asset to the Review in spite of, by his own admission, knowing nothing about antibiotic resistance. His background has enabled him to see the global importance of emerging countries if resistance is to be successfully addressed. He has been given the necessary independence to be bold and go where others may fear to tread.

Inevitably such a short interim report cannot address the numerous difficult practical and political questions it raises. How could a ‘global body’ be constituted and financed?  How would the criteria for rewards be defined? In the favoured option, what conditions could be imposed on companies to promote conservation and access? There is a lot of work to be done by the Review to turn these ideas into a workable scheme for their final report next year. But it has made a welcome start.

Charles Clift is a co-author of a forthcoming report of a Chatham House working group which examines in detail the issues raised in the implementation of de-linkage schemes to stimulate antibiotic R&D. The Review saw an earlier draft of this report. Chatham House is also a member of DRIVE-AB, a European public-private research partnership driving reinvestment in research and development and responsible antibiotic use.

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