Few newly approved antibiotics are innovative, which makes them susceptible to cross-resistance with pre-existing antibiotics

Following a particularly active period of antibiotic R&D from 1940 to 1980, there have been relatively few new antibiotics developed over the last three decades (Renwick & Mossialos, 2018). The new antibiotics that have received market approval in recent years have often been adaptations of pre-existing antibiotics and therefore vulnerable to cross-resistance (Mossialos et al., 2010b). This is important as the more unique a new antibiotic is compared to existing antibiotic structures (Box 2), the likelier it is that resistance development will take longer, as pathogens are unlikely to have previously encountered the chemical components of the antibiotic (WHO, 2017b).

Box 2

The WHO evaluates new antibiotics according to innovation and priority criteria.

Between 2017 and 2021, 12 new antibiotics were approved (Table 3). Generally, these new antibiotics do not meet the aforementioned innovation criteria. There is inconclusive data regarding whether they show evidence of cross-resistance to existing antibiotic classes, and only two of the antibiotics incorporated characteristics which might warrant a new chemical classification. None of these antibiotics had a new target or mechanism of action. Only one new antibiotic is effective against CRAB and CRPA pathogens. Five new antibacterials work against CRE pathogens, and seven new antimicrobials work against other priority pathogens. The WHO 2021 overview and analysis of the antibiotic pipeline describes the supply of recently approved antibiotics as “insufficient” to address the growing threat of antibiotic resistance (WHO, 2022a).

Table 3

Only one new antibiotic from those that gained market authorization between 2017 and 2021 is effective against critical priority CRAB and CRPA pathogens and only two are somewhat innovative.

There were 77 antibiotics under development in 2021, but few of them are innovative

The current antibiotic pipeline as of 2021 includes 45 traditional antibacterial agents and 32 non-traditional antibacterial agents such as antibodies, bacteriophages and immunomodulation agents. Similar to recently approved antibiotics, most antibiotics in the clinical phase of development do not demonstrate innovative characteristics. Although 27 of the 45 traditional antibiotics target WHO priority pathogens, only six meet at least one of the four WHO innovation criteria. Only two target at least one of the pathogens considered to be a ‘critical’ priority. The remaining traditional antibiotics target either tuberculosis (TB) (13/45) or Clostridioides difficile (5/45). There appear to be more innovative characteristics in antibiotics under development that target these pathogens. Six antibiotics under development to target TB demonstrate “absence of cross-resistance with existing antibiotics” and seven represent a new chemical class. Four of the five antibiotics under development to target C. difficile demonstrate at least one innovative criterion, with two meeting all innovative criteria. Approximately half of these agents were in the first phase of clinical development (44%; 34/77), a third were in the second phase (38%; 29/77), and a sixth were in the third phase (18%; 14/77) (Figure 3).

Figure 3

Traditional and non-traditional antibacterial agents by clinical development phase. Source: WHO, 2022a.

In contrast to the clinical pipeline, and in large parts thanks to the use of push incentives over the last decade, the preclinical pipeline has been described as “innovative and including a large number of non-traditional approaches” (WHO, 2022a). Moreover, the WHO has noted that “preclinical pipeline projects are broadly distributed geographically, and there is a large variety of product types” (see Tables 8 and 9 of the WHO 2021 antibiotic pipeline analysis; WHO, 2022a). Yet, as we will describe in the next section, preclinical product developers experience difficulties in securing funding for early product development, when the risk of failure is particularly high compared to advanced clinical studies. This is why their vulnerabilities and turnover rates are very high.

Many drugs at the early stages of clinical development never obtain market approval

While it may seem that there are many antibiotics under development, it is important to note that many drugs at the early stages of clinical development never obtain market approval. A review of literature on transition probabilities for antibiotics in development found that success rates for antibiotics between phase 1 and 2 was 33.3%, between phase 2 and 3 was 75.0%, between phase 3 and submission for market approval was 85.7%, and between submission and obtaining market approval was 75.0% (Figure 4).

Figure 4

Less than 3% of antibiotics make it from preclinical stage to market approval and this can take up to 15 years. Note: This figure shows the success rate of antibiotic development from preclinical stage to market approval. Pre-clinical development is defined (more...)

Collectively, these transition probabilities mean that only around one in six antibiotics that enter phase 1 trials subsequently obtain market approval (Figure 4). However, the success rate of moving an antibiotic through preclinical research to market approval is much lower. The success rate across the combined preclinical and clinical pathway has been estimated to be as low as between 1.5–3.5% and can take up to 15 years (Review on Antimicrobial Resistance, 2016). This is caused by a complex range of economic, regulatory, structural and scientific factors that impact many stages of the drug development pathway (Renwick, Brogan & Mossialos, 2016a; Theuretzbacher et al., 2022).

Most antibiotic R&D is undertaken by SMEs with limited financing

Preclinical research aims to identify new molecules that have potential to function as antibiotic agents. Several scientific challenges exist in developing new chemical classes or mechanisms of action against resistant bacteria. Despite the sequencing of the first complete bacterial genome, completed as early as 1995, scientists have been largely unsuccessful in screening target genes to identify drug candidates for new antibiotics (Payne et al., 2007). Instead, developing novel chemical structures that inhibit validated cellular targets appears to be a more promising strategy for developing compounds capable of destroying resistant bacteria. However, discovering novel chemical structures that are safe for human consumption is technically challenging. Moreover, destroying Gram-negative rather than Gram-positive bacteria has proven particularly challenging as Gram-negative bacteria have a protective outer membrane (Miller, 2016). A lack of scientific and technical expertise in antibiotic research also limits progress in this area (Silver, 2011; Theuretzbacher et al., 2022). From a funding perspective, much of the basic science and discovery research is undertaken by academic labs and SMEs that have limited funding available, meaning that many preclinical projects are delayed or abandoned due to financial issues. In 2021, the WHO identified 217 preclinical projects focused on antibiotic development, involving 121 institutions (WHO, 2022a). Of these 121 institutions, 85.1% (103) were companies, 13.2% (16) were academic institutions, and 1.7% (2) were foundations; 49.5% (51) of these companies had fewer than 10 employees (Figure 5).

Figure 5

Most preclinical antibiotic research is undertaken by SMEs. Note: This figure shows the categorization of companies with preclinical pipeline projects by ownership and size. Source: WHO, 2022a.

Once promising antibiotic candidates have been identified, they can move to clinical trial phases if financial support is available. However, these clinical trials can be logistically challenging to conduct due to short treatment windows and lack of rapid point-of-care diagnostics to identify potential participants. Similar to the preclinical research, the majority of clinical development of antibiotic candidates is conducted by SMEs. A survey conducted in 2021 indicated that 75% (41/55) of projects active in late-stage (phase 2 or later) antibiotic development had been developed by SMEs (Access to Medicine Foundation, 2021). As SMEs typically have limited financial and human resources, as well as technical expertise, they sometimes struggle to coordinate or set up clinical trials. In some cases, a SME cannot take the financial risk of moving an antibiotic candidate through to the clinical trial phase, or the development of an antibiotic candidate is significantly delayed while the SME seeks external funding support. There is also a particularly high turnover of SMEs involved in antibiotic development, with many SMEs becoming bankrupt or being dissolved each year. For example, 33.8% (46/136) of developers involved in antibiotic development that responded to a 2020 survey did not respond in the following year, and are now presumed to be inactive (WHO, 2022a).

Investing in antibiotic R&D is financially risky, with a lower expected return on investment than other therapeutic areas

Launching and commercializing a new antibiotic is a financially risky prospect and many antibiotic developers have subsequently experienced significant financial losses or filed for bankruptcy (ReAct, 2021). The expected return on investment of a drug development project can be expressed by the expected net present value (NPV), which is a sum of all expected revenues and costs of a project adjusted for the value of money over time and risk of failure. The expected NPV of an antibiotic development project has been estimated to be US$ –50 million, in comparison to US$ +720 million for a neurological drug and US$ +1.15 billion for a musculoskeletal drug (Sharma and Towse, 2011). An analysis of sales data from developed countries also showed that spending on antibiotics has declined between 2011 and 2020, making the antibiotic market even less attractive for the pharmaceutical industry (Figure 6).

Figure 6

Spending on antibiotics has declined between 2011 and 2020 in developed countries, making the antibiotic market even less attractive for the pharmaceutical industry. Note: This figure shows defined daily dose (DDD) growth compared to spending growth for (more...)

Greater transparency about R&D costs could help design appropriately sized incentives

Estimates of the financial cost of developing a new antibiotic vary considerably. The Review on Antimicrobial Resistance estimated the collective cost of phase 1, 2 and 3 clinical trials in 2015 to be approximately US$133 million, and the cost of post-approval trials to be approximately US$146 million (Review on Antimicrobial Resistance, 2016). In comparison, in 2020, the Wellcome Trust estimated the total cost of antibiotic R&D, including preclinical research, clinical trials and market launch, to be as high as US$1.8 billion for an existing-class antibiotic, and US$2.6 billion for a new-class antibiotic (Wellcome Trust, 2020). Outterson conducted a review of cost studies and estimated that, in 2021, the total cost of R&D for a new antibiotic, including preclinical research, clinical trials and post-approval was US$447 million (Outterson, 2021). Moving forward, greater transparency from antibiotic developers regarding the costs of R&D would assist in designing appropriately sized incentives, particularly as the R&D costs for different antibiotics vary significantly and are influenced by factors such as target pathogens and clinical indications.

Overcoming the technical and regulatory burdens is a major challenge during the marketing approval stage

Once an antibiotic candidate reaches the stage of applying for marketing approval, there are several other hurdles to overcome. There are procedural differences between national and regional drug regulatory agencies in approving novel antibiotics, including differences in patient selection criteria, specification of statistical parameters, definitions of clinical endpoints, and rules regarding expedited approvals, which makes global licensing both time-consuming and costly (Stern et al., 2017). Companies launching new antibiotics also need the technical competences to submit applications to all the relevant regulatory agencies in a timely manner that meets the necessary requirements – and this is again particularly challenging for SMEs, which typically have limited human resources. In contrast, in other therapeutic areas, there is greater involvement of large pharmaceutical companies that have the technical and regulatory expertise to guide new medicines to regulatory approval.

Conventional HTAs do not consider many dimensions of value relevant to antibiotics

Once regulatory approval has been granted, in some countries, companies are then required to undergo HTA processes to demonstrate the value of newly licensed antibiotics in relation to pre-existing treatments. However, conventional HTA processes do not consider many additional elements of value specific to antibiotics, such as the benefits of avoiding the spread of infection, and enabling treatments in other therapeutic areas (Box 3). This may contribute to a lack of confidence for pharmaceutical companies as to whether they will receive adequate return on investment following investment in the R&D of new antibiotics (Colson et al., 2021).

Box 3

Additional value elements specific to antibiotics have been proposed for inclusion in HTA considerations.

Limited access to antibiotics can lead to the use of suboptimal antibiotics or substitution of narrow-spectrum for broad-spectrum – and both drive resistance

Due to economic factors (e.g., manufacturers often find it is not commercially viable to supply certain antibiotics to some populations), or to shortages, many countries have limited access to both pre-existing and new antibiotics. Failing access to appropriate and effective antibiotics puts patients at risk and may lead to increased morbidity and mortality. Further, this can impact resistance development in several ways (ReAct, 2020b). First, this means that suboptimal antibiotics that may not be as effective are used to treat infections (Miljković et al., 2022), resulting in prolonged infections and more opportunities for resistant bacterial infections to spread. Second, particularly harmful mutations in genetic structure can occur if narrow-spectrum antibiotics (intended to be used for specific indications) have to be substituted for broad-spectrum antibiotics (intended to be used to treat a wide range of infections). This is because broad-spectrum antibiotics exert a wider ‘selection pressure’ and their use encourages strains of bacteria that are resistant to multiple types of antibiotics to develop. To guide policy, the WHO has developed the Access, Watch and Reserve (AWaRe) classification to classify antibiotics according to risk of resistance development (Box 4) (WHO, 2021a).

Box 4

WHO AWaRe classification of antibiotics differentiates between three levels of risk for resistance development.

The number of countries using at least 60% of antibiotics with low risk for resistance development has decreased in Europe

It is known that the use of ‘Access’ antibiotics exerts lower ‘selection pressure’² than ‘Watch’ antibiotics (Sulis et al., 2022), and the WHO has defined a target where at least 60% of human antibiotic used at the country level should be ‘Access’ antibiotics (WHO, 2019). Unfortunately, the number of countries meeting this target has decreased over the last two decades (Klein et al., 2021). In 2020, eight Member States did not meet this target (Bulgaria, 41%; Cyprus, 44%; Slovakia, 44%; Italy, 47%; Greece, 49%; Romania, 50%; Hungary, 51%; Malta, 55%) (ECDC, 2022b). Third, shortages of antibiotics create a market opportunity for substandard or falsified antibiotics (Cecchini & Lee, 2017). These poor-quality antibiotics can result in prolonged infections and more potential for resistance to emerge. The WHO Global Surveillance and Monitoring System for Substandard and Falsified Medical Products has identified several instances of substandard or falsified antibiotics in Europe and internationally (WHO, 2017a). However, more research is needed to quantitatively assess the impact of unavailability of pre-existing and new antibiotics on resistance development through these different mechanisms.

Return on investment for manufacturing and commercializing new antibiotics is much lower compared to other therapeutic areas

Once market approval has been granted, companies are expected to continue to manufacture and commercialize new antibiotics. However, the return on investment for doing so is smaller relative to other therapeutic areas such as neurologic, diabetes and cardiovascular drugs (Review on Antimicrobial Resistance, 2016). Despite their significant value for broader public health, the intrinsic nature of antibiotic treatment means they are unlikely to generate significant revenue. This is because antibiotics typically have short durations of treatment, and they are subject to stewardship efforts to minimize usage to reduce further development and spread of resistance. New antibiotics typically receive regulatory approval based on data from non-inferiority clinical trials, which means that physicians are unsure whether new antibiotics are an improvement compared to pre-existing treatments. As a result, new antibiotics are not immediately featured within clinical guidance. Moreover, the significant crossover in application between novel antibiotics and pre-existing antibiotics (which are typically off-patent/generics) places downward pressure on prices.

Many new antibiotics are only launched in larger markets

In practice, many antibiotic developers choose only to launch new antibiotics in larger markets as the costs to launch in smaller markets are often too high compared to the revenues achievable in those markets. An analysis of 18 new antibiotics launched in G7 and seven other high-income countries between 2010 and 2019 found that the majority of newly approved antibiotics were only available in the US, UK and Sweden (Outterson et al., 2022b).³ They also found that the EMA approval did not lead to an automatic launch in Europe, and that the median annual sales for antibiotics in the first year after launch was only US$16.2 million. Another study, commissioned by Merck & Co, which focused on reimbursement of five new antibiotics that had received regulatory approval by the EMA since 2015, found that all five antibiotics were only available in five Member States, and that the average time from market authorization to reimbursement varied from 165 days in Austria to 1401 days in Belgium (Figure 7). Collectively, these market failures have resulted in several antibiotic companies that have successfully brought new antibiotics to market either filing for bankruptcy or ceasing operations (ReAct, 2021).

Figure 7

Average time to reimbursement from market authorization for five new antibiotics in EU Member States varied over eight-fold. Note: Vintura were commissioned by Merck & Co to conduct an analysis of access to newly approved antibiotics across EU (more...)

Shortages of essential antibiotics are a major issue in many countries

While many challenges for suppliers exist during the market launch and commercialization of new antibiotics, there are also challenges with unpredictable supply and shortages of pre-existing and older antibiotics. Antibiotic shortages are a major issue in all countries. In 2019, there were over 1,300 notifications of antibiotic shortages across the EU (although definitions of shortages and notification requirements varied between Member States) (European Commission et al., 2021). Shortages of ‘Access’ antibiotics, such as amoxicillin and clindamycin, are also commonly reported by Member States (European Commission et al., 2021). Systemic anti-infectives were the third most frequent class of medicines for which shortages were reported (Figure 8).

Figure 8

Systemic anti-infectives were the third most frequent class of medicines for which shortages were reported. Notes: This figure shows the top five products for which shortages were notified in EU countries in 2020. Percentages shown at the subclass (level (more...)

Shortages of pre-existing antibiotics can have long-term negative impacts on stewardship efforts

In 2020, the EU Joint Action on Antimicrobial Resistance and Healthcare-Associated Infections (EU-JAMRAI) conducted interviews with 13 high-income countries in Europe, Canada, South Africa and Japan to understand to what extent shortages of antibiotics are an issue (EU-JAMRAI, 2021). Out of the 13 countries, 12 indicated that shortages of pre-existing antibiotics are a serious problem in their country, and eight out of 13 indicated that this resulted in greater use of broad-spectrum antibiotics as substitutes. Interestingly, several countries highlighted the long-term negative impact of antibiotic shortages on stewardship efforts as physicians often change their prescribing habits and reduce compliance with evidence-informed prescribing guidelines. One of the most prominent and severe examples of an antibiotic shortage, which demonstrated the insecurity of supply of antibiotics, has been the international and prolonged shortage of piperacillin-tazobactam experienced following an explosion in a Chinese factory that was responsible for producing most of the world’s supply of the API necessary for its production. This has frequently resulted in substitution with antibiotics with a broader spectrum of activity, such as cephalosporins, thereby promoting resistance development and placing patients at higher risk of hospital-associated Clostridium difficile infections (Gross et al., 2017).

Shortages often occur due to the limited number of actors involved in the production and supply chain

Antibiotic shortages typically occur because there are limited actors involved in the production and supply chain, and it has not been possible to forecast and anticipate shortages and demand for the antibiotics (Shafiq et al., 2021). The antibiotic manufacturing supply chain involves several steps, including generating raw materials, developing reaction intermediates, producing API, converting to medicinal products and packaging (Figure 9).

Figure 9

The antibiotic manufacturing supply chain involves several stages. Source: Adapted from BCG & Wellcome Trust, 2021.

The production of APIs and converting them to medicinal products are the most vulnerable stages in the antibiotic supply chain

The most vulnerable stages of antibiotic production are API production and converting those APIs to medicinal products. This is because most API production takes place in India and China, and in large quantities to achieve economies of scale and maximize profits. A global analysis of 40 antibiotics found that close to 70% of the manufacturing sites for antibiotic APIs are located in India (35%) and China (34%) (BCG & Wellcome Trust, 2021). China is also the largest exporter of antibiotic APIs, accounting for 71% of international exports in 2020 (Figure 10).

Figure 10

China is the largest exporter of antibiotic APIs globally. Note: This figure shows globally exported API volumes for antibiotics, in kilotonnes, for 2020. Source: BCG & Wellcome Trust, 2021.

Supply of many essential antibiotics is dependent on a few key API suppliers in China, with the number of manufacturers converting APIs to medicinal products also limited

This means that many generic antibiotics are produced using a single-source API, and the global supply of many essential antibiotics, such as cephalosporins, macrolides and penicillins, are dependent upon a few key API suppliers in China (TIFAC, 2020). Therefore, any disruption to supply caused by accidents or facilities shutting down, or trade restrictions, can cause major global shortages (as demonstrated by the international shortages of piperacillin-tazobactam). There are also very few generic manufacturers that convert API to medicinal products because purchasers often procure generic antibiotics from the supplier that offers the lowest price and, over time, it is not economically feasible for smaller generic manufacturers to stay in the market.

Monitoring and forecasting the antibiotic supply chain and demand is insufficient and complicated by a lack of transparency about its configuration

There is also a vacuum in responsibility at the international and national levels in relation to monitoring and forecasting the antibiotic supply chain and demand. This is further complicated by lack of transparency about the configuration of supply chains, starting from the actual manufacturers beyond market authorization holders and stretching to the relationship of manufacturers with API suppliers, as this information is typically understood to be commercially sensitive. However, some countries, such as New Zealand, have taken steps to address this by publishing the sites of all manufacturers of marketed pharmaceuticals (MedSafe, 2022).

Lack of profitability is the main reason why many existing antibiotics are not available in some countries

In some cases, when generic antibiotics are being used in small quantities and the margins for profits are particularly low, market authorization holders may choose not to place a product on the market or to withdraw older antibiotics completely from specific markets. This means there are many so-called ‘forgotten’ antibiotics that have potential to treat resistant bacterial infections or to be used to save last-resort options for the most severe cases that are not available in many countries. In 2011, a survey of pharmacists, microbiologists and infectious disease experts from Europe, the US, Canada and Australia reviewed availability of 33 antibiotics, and discovered that 22 were available in fewer than 20 of 38 countries (Pulcini et al., 2012). A follow-up survey, conducted in 2015, revealed that 25 out of 36 selected antibiotics were available in 20 of 39 countries (Figure 11) (Pulcini et al., 2017). There have also been similar findings in low- and middle-income countries (LMICs) (Tebano et al., 2019). Limited profitability due to a combination of small market size and volume sales plus low prices, was the major reason for these antibiotics not being available in certain countries. The regulatory costs to keep antibiotics on the market, or to create new availability of antibiotics not previously registered in a country, were also barriers to maintaining access to antibiotics. Other factors contributing to withdrawals were lack of demand among clinicians and non-inclusion in national prescribing guidelines. However, there have been examples of professional groups lobbying government and national regulatory agencies to make older antibiotics available in their country. Examples include temocillin, and amikacin being marketed in France after being absent from the French market for several years following intervention by the French National Drug Agency (Pulcini et al., 2017; AFMPS, 2022).

Figure 11

The availability of antibiotics is relatively higher in France, Italy, Malta and USA. Note: The figure shows the availability of 36 selected antibiotics in Europe, the United States, Canada and Australia, displayed by country. * United States, Canada (more...)

4.1.1. Overview of push and pull incentives

Push incentives reduce the cost of researching and developing new antibiotics, while pull incentives increase or ensure potential revenues once antibiotics reach market approval

Push and pull incentives are broadly used to classify the two main types of mechanisms for supporting antibiotic R&D (Table 5) (Renwick, Simpkin & Mossialos, 2016). Push incentives, such as research grants, tax incentives and R&D partnerships, reduce the cost of researching and developing new antibiotics (Morel & Mossialos, 2010). Whereas, pull incentives attempt to increase or ensure the potential revenue generated by antibiotics that successfully achieve market approval (Mrazek & Mossialos, 2003). This may be through direct financial pull incentives, such as milestone prizes, pay-for-performance agreements or advanced commitments to purchase the drug.

Table 5

A range of push and direct or indirect pull incentives can be used to stimulate antibiotic development.

4.1.2. What progress has been made in implementing push incentives?

Major international and national programmes have been established to encourage antibiotic R&D

Over the last decade, government agencies, non-governmental organizations and drug developers have accelerated efforts aimed at encouraging antibiotic R&D through the formation of major international and national programmes (Figure 12). A review of programmes published in 2017 identified more than 58 different initiatives that incentivize the development of novel antibiotics, functioning at either the multilateral, EU or national level (Simpkin et al., 2017). In total, since the 2016 UN High Level Meeting on AMR there has been over $2bn invested in push incentives through multi-lateral, national, and private sector initiatives.

Figure 12

Major global initiatives provide push incentives for antibiotic R&D. Notes: This is a catalogue of selected major antibiotic R&D funders internationally with transparent information on funding allocations. There are many more national (more...)

4.1.3. What progress has been made in implementing pull incentives?

Implementation of pull incentives has seen less progress compared to push incentives

There has been less progress in implementing pull incentives compared to push incentives for antibiotics, and this continues to be a major barrier to the creation of a viable market for antibiotics in many countries. A recent review on reimbursement models to incentivize antibiotic R&D identified practical applications of different pull incentives in France, Germany, Sweden, the UK and USA (Table 6). Moving forward, there needs to be evaluation of the different approaches to pull incentives used so far to establish to what extent they have improved access to antibiotics and stimulated innovation in research and development.

Table 6

The last decade saw the introduction of pull incentives in France, Germany, Sweden, the UK and USA, from which other countries can learn.

A holistic package of push and pull incentives is needed to stimulate antibiotic R&D

There is consensus that no single incentive will be sufficient to stimulate antibiotic R&D, and an end-to-end approach is needed that applies a combination of push and pull incentives across the antibiotic R&D pathway. This has also been modelled (Outterson, 2021), and an appropriately sized pull incentive would predominantly function to incentivise development from Phase 2 or 3 clinical trails onwards, with push incentives required to simulate development from drug discovery to early clinical trials. Each incentive has advantages and disadvantages in terms of expected impact and operational feasibility. Therefore, a framework or set of principles is required to guide policy-makers when assessing the suitability of different options for incentives at the European level. Renwick, Simpkin & Mossialos (2016) developed such a framework, centred around three levels that examine public health, market and feasibility criteria (Figure 13).

Figure 13

Various incentives for antibiotic R&D can be aligned by considering public health and market factors, as well as implementation and feasibility. Note: NPV: net present value; SME: small and medium-sized enterprise. Source: Adapted from Simpkin (more...)

4.2.1. Public health factors: medical needs, stewardship, access and environmental protection

Most importantly, a holistic incentive package for antibiotic R&D reinforces broader public health objectives. There are four key public health principles to consider:

Principle 1: Targeting high-priority medical need

Incentives should reflect the extent to which new antibiotics are expected to reduce the health burden of antibiotic-resistant bacterial infections

Antibiotic developers need to be remunerated in a manner that incentivizes innovation in antibiotics that target clinical indications of high-priority medical need. This means that incentive design should reward antibiotic developers proportionally according to the extent to which new antibiotics are expected to reduce the health burden of antibiotic-resistant bacterial infections. We know that over 80% of the health burden of antibiotic resistance in Europe is the result of bloodstream infections, intra-abdominal infections and respiratory tract infections (Figure 14). This is also an important consideration for policy-makers to ensure that public investment in push and pull incentives are prioritized for antibiotics of significant societal value. Innovation could be incentivized towards high-priority medical need by modifying lists of priority pathogens to signpost clinical indications with the highest health burden from antibiotic-resistant bacterial infections. This would signal to antibiotic developers which should be prioritized and which may be eligible for greater investment in push and pull incentive funding.

Figure 14

80% of the health burden of antibiotic resistance in Europe is the result of bloodstream infections, intra-abdominal infections and respiratory tract infections. Note: This figure shows DALYs attributed to antimicrobial resistance in WHO Europe Region, (more...)

Incentives should also promote development of antibiotics with innovative characteristics

It is also important that new antibiotics are novel and demonstrate innovative characteristics, such as a new mechanism of action, target or chemical class. To incentivize innovation in a meaningful way, antibiotic developers need to be assured that reimbursement mechanisms will value these characteristics. This will require the application of novel approaches to HTA that consider additional elements of value specific to antibiotics, such as benefits from avoiding the spread of infection and enabling treatments in other therapeutic areas, such as oncology or surgical treatments (Box 3).

Principle 3: Improving patient access to new antibiotics

Incentive design needs to consider how to ensure consistent availability and access to new antibiotics for relevant populations

Even when new antibiotics have received regulatory approval, there is a substantial delay until reimbursement of up to 4 years in Member States of the EU (Figure 7). In many Member States, new antibiotics are simply not launched nor equitably accessible (see section 2 for an expanded discussion of access issues for antibiotics). The Stewardship & Access Plan (SAP) Development Guide has been produced by CARB-X to help antibiotic developers develop SAPs (CARB-X, 2021), which are a requirement for antibiotic developers that have received funding from CARB-X once their product enters phase 3 trials. The guide outlines four components of access that are relevant to antibiotics (Box 5): first, whether the antibiotic is registered and accessible by patients; second, whether the supply of antibiotic is consistent and available to patients and healthcare professionals in practice; third, whether the antibiotic is affordable and suitable reimbursement mechanisms are in place; finally, the acceptability of the antibiotic to the public and the inclusion of relevant health promotion and educational efforts to ensure access and appropriate use.

Box 5

The CARB-X guide outlines four components for access to antibiotics.

4.2.2. Market enablement factors: creating a financially viable market for antibiotics

The economic or market factors of incentives for antibiotic R&D include the following two principles:

4.2.3. Implementation, sustainability and operational feasibility: ensuring a global end-to-end approach to antibiotic R&D

Governance of the incentive package can be aided by having an effective global ‘antibiotic pipeline coordinator’

Governance of the incentive package is also important as there needs to be transparency regarding the methodological assumptions and rationale behind the design (including size of the incentives), and implementation at different stages of the antibiotic R&D pathway. This will involve broad consultations with patient, health professional, industry, academic and government stakeholders and representatives. The societal value and likely success of alternative antibiotic candidates will also need to be modelled to ensure that investments are optimally distributed. The aim should be to achieve an end-to-end approach to antibiotic R&D, with full oversight of where additional investment or technical and scientific support are required. Achieving this will require designating responsibility for assessing antibiotic candidates to a scientific committee or establishing an ‘antibiotic pipeline coordinator’.

An ‘antibiotic pipeline coordinator’ is a governmental or non-profit organization that has responsibility of oversight of the antibiotic pipeline, including identifying unmet needs and actively supporting R&D projects to address these unmet needs (Baraldi et al., 2018). While the Global AMR R&D Hub produces descriptive analyses of antibiotic R&D projects, an effective ‘antibiotic pipeline coordinator’ needs to use multiple forms of financing, invest across all development stages, and provide a platform to share technical support and expertise among antibiotic developers (Wellcome Trust, 2016; Glover, Knight & Chandler, 2021). The latter point is particularly important in the earlier stages of preclinical and clinical development, as SMEs often do not have the scale necessary to achieve this expertise internally. In addition, an ‘antibiotic pipeline coordinator’ could support clinical trial networks such as the European Clinical Research Alliance on Infectious Diseases (ECRAID) (ECRAID, undated), ADVANcing Clinical Evidence in Infectious Diseases (ADVANCE-ID) (ADVANCE-ID, 2022) and the Global Health European and Developing Countries Clinical Trials Partnership (GH EDCTP3 Joint Undertaking) (EDCTP, undated). The ENABLE platform did fulfil some of these pipeline coordinating functions for a portfolio of push incentives in early stages of development, until it ended at full capacity in October 2021. As mentioned above, there is now a cut-down version of it supported by the Swedish Government, ENABLE-2, with very limited and short-term resources. Internationally, BARDA, CARB-X, and GARDP fulfil many functions at different stages of development (Table 7).

Table 7

CARB-X, BARDA and GARDP fulfil many functions of pipeline coordinators.

4.3. What policy options can be considered by European policy-makers to strengthen research and development of novel antibiotics?

A number of policy options to strengthen R&D of novel antibiotics has attracted policy attention at the European level

Drawing upon stakeholder interviews conducted with policy-makers, academics and industry representatives (see ‘Stakeholder interviewees’ in the Prelim pages), suggestions from reference group members, and relevant literature referenced in this policy brief, a number of policy options for strengthening incentives for antibiotic R&D were identified for further analysis. Of the seven policy options analysed, one has been the topic of several recent policy papers (transferable exclusivity extensions, TEE) (Berdud et al., 2019; Anderson, Wouters & Mossialos, 2022; Boyer, Kroetsch & Ridley, 2022; EFPIA, 2022; EPHA & ReAct, 2022; Medicines for Europe, 2022; Wilsdon, Robson & Lu, 2022); three were referenced in a recent letter from Member States to the European Commission (MERs, subscription payments and milestone payments) (Austria, Belgium, Finland, France, Hungary, Ireland, Latvia, Lithuania, Luxembourg, Poland, Portugal, Slovakia, & Slovenia, 2022); one is already in use in the United States (market exclusivity extensions, MEE) (Darrow & Kesselheim, 2020); and one was previously proposed to the 2009 Swedish presidency of the EU (Options Model for Antibiotics) (Mossialos et al., 2010b). These selected policy options can be classified according to whether they are direct financial pull incentives (subscription payments, MERs); indirect financial pull incentives (TEEs, MEEs); or other financial incentives (milestone payments, Options Model For Antibiotics). Each policy option is considered drawing upon the aforementioned principles for antibiotic R&D (Table 8). In addition, we draw upon data and analysis shared by CARB-X to identify where gaps may exist for funding allocations across the antibiotic R&D pathway (Figure 17).

Table 8

Selected policy options for incentivizing antibiotic R&D.

There are many other incentives for antibiotic R&D that were not selected for further analysis in this policy brief, but are analysed in other studies (Renwick, Brogan & Mossialos, 2016; Årdal et al., 2018). In particular, three further options (Non-profit Mechanism for Innovative Antibiotic Development (MIAD), the ‘Pay or Play’ Model, and priority review vouchers) were also considered for inclusion but are instead discussed in ‘Supplementary material: Additional policy options’.

4.3.1. Direct financial pull incentives

Subscription payments

Subscription payments can fully or partially separate revenues from sales volumes, which supports stewardship and promotes patient access

Subscription payment models are a type of direct financial pull incentive that either pays the developer a fixed price for access to antibiotics upfront on an annual basis (as in the UK), or guarantees annual revenues (as in Sweden) (Boluarte & Schulze, 2022). Payments can vary proportionally depending on the extent of new antibiotic target priority pathogens or clinical indications with a significant health burden. Subscription payment models separate (or partially separate in the case of guaranteed annual revenues) revenues from sales volumes. This reduces incentives to increase volumes of sales, which can be harmful to stewardship efforts (i.e., antibiotic sustainability), and promotes patient access as subscription payments include requirements to provide antibiotics. It is also possible for these access agreements to include conditions on environmental health manufacturing standards.

The extent to which subscription payments influence antibiotic R&D depends on the level of annual payments, but they are unlikely to stimulate early development unless explicit signals are included

The influence of subscription payment models on antibiotic R&D is uncertain, and ultimately very dependent upon the level of yearly payments. If yearly payments are set to reflect the marginal cost of production of new antibiotics, they will have little impact on encouraging antibiotic R&D. If, however, they reflect the R&D costs of antibiotics and the risk of failure at different stages of development, yearly payments are more likely to encourage antibiotic R&D. There have been several estimates, ranging from US$1–8.9 billion, of the appropriate size of a global pull incentive required to stimulate antibiotic R&D (Review on Antimicrobial Resistance, 2016; Stern et al., 2017; Årdal et al., 2018; Outterson, 2021), although there is uncertainty regarding these costs and transition probabilities exacerbated by lack of transparency in the pharmaceutical industry. As subscription payment models are typically agreed towards the end of antibiotic development they will only have a substantial impact if the institution responsible for assessing antibiotic candidates and awarding contracts also provides reliable signals to antibiotic developers during the early stages of development that they may be eligible for subscription payments upon market approval (through a mechanism of ‘pre-qualification’).

An EU-level subscription model has been proposed

Implementation feasibility at the EU level may be dependent upon achieving consensus among Member States regarding the size of payments, the public health value of the new antibiotic, and sales volumes required to meet demand. EU-JAMRAI has proposed a mechanism, modelled on the Swedish approach to subscription payments for antibiotics, for a partially delinked subscription model for antibiotics which can be implemented at the EU level (Box 6).

Box 6

JAMRAI has proposed a mechanism for a partially delinked subscription model at the EU level.

Market entry rewards

MERs could be conditional on access agreements, or granted in exchange for intellectual property rights to facilitate earlier generic market entry

Market entry rewards are another direct financial pull incentive that functions by providing a one-off reward to antibiotic developers once they have successfully achieved regulatory approval. The size of MER might vary according to the extent to which a new antibiotic targets high-priority medical needs, for example there could be higher rewards for priority pathogens and clinical indications associated with higher health burden. An MER could be granted in exchange for access to a new antibiotic over a specified timeframe, or the MER could be granted in addition to marginal revenues for unit sales of antibiotics. The second option creates less incentive for antibiotic sustainability, as companies may still choose to oversell antibiotics and this may harm stewardship efforts (i.e., antibiotic sustainability). Moreover, even if MERs include terms and conditions for access to new antibiotics, they do not guarantee long-term access, for instance if an antibiotic developer does not comply with access agreements or subsequently becomes bankrupt. This could happen, as MERs do not address fundamental market failures for antibiotics (i.e., low sales volumes and unit prices). However, an appropriately sized MER could be granted in exchange for IP rights, and this could improve patient access as it would facilitate earlier generic market entry.

MERs may disproportionately benefit large pharmaceutical companies

MERs can be used to fund post-approval costs related to pharmacovigilance or commercialization (Wouters, McKee & Luyten, 2020), which is important as these costs have contributed to several antibiotic developers either becoming bankrupt or experiencing significant economic losses (ReAct, 2021). MERs can benefit SMEs if they retain the IP rights during regulatory approval but may disproportionately benefit large pharmaceutical companies as they often purchase the IP rights of medicines at later stages of development.

If they are implemented as a one-off reward, MERs could lead to significant short-term costs for Member States

Operationally, MERs would be feasible to implement at the EU level as they are a one-off reward, which could be granted following regulatory approval by the EMA. However, collecting proportional payments from Member States to finance MERs may be challenging, and if multiple MERs were granted at once this could be responsible for significant short-term costs. In contrast, the financial burden of subscription payments could be spread over multiple years. However, it should be noted that the costs of MERs can be spread over multiple years; for example, DRIVE-AB recommended that the financial costs of MERs should be spread over up to 5 years (Årdal et al., 2018).

4.3.3. Other financial incentives

Milestone payments

Milestone payments may help SMEs to overcome the ‘valley of death’ for antibiotics in the early stages of development

Milestone payments are a type of push incentive that involves granting funding to developers at specific stages of antibiotic development. This funding is then used to fund subsequent stages of development. Milestone payments could be used to support SMEs to overcome what has been termed the ‘valley of death’, which results in the failure of many antibiotic candidates during preclinical and early stages of clinical development. They will have less impact on larger pharmaceutical companies, which are typically less involved in antibiotic development during the preclinical stages of development. Baraldi et al. demonstrate through simulations of thousands of ‘synthetic’ antibiotic R&D projects using literature on transition probabilities and R&D costs that milestone payments can have a significant impact on the expected NPV when granted following completion of phase 1 trials, which is typically when antibiotic developers (most of which are SMEs) are most financially vulnerable as earlier push incentive funding (such as grants) has become depleted (Baraldi et al., 2019). At this stage, the expected NPV of an antibiotic R&D project is very low and impacted less by pull incentives that are triggered at later stages of clinical development.

A global ‘antibiotic pipeline coordinator’ would need to take responsibility for assessing eligibility for milestone payments

Milestone payments can be targeted towards antibiotic candidates that address high-priority medical need. Assessing eligibility for milestone payments would need to be undertaken by an ‘antibiotic pipeline coordinator’, which could also facilitate cooperation among relevant stakeholders across the antibiotic pipeline (discussed further above). Ideally, this ‘antibiotic pipeline coordinator’ would function at the global level. There are already some organizations performing the functions of an ‘antibiotic pipeline coordinator’ at different stages of the antibiotic R&D pathway (Table 7). Such an antibiotic coordinator would also be tasked with interpreting the reliability and validity of clinical trial data, and would need to ensure that issuing milestone payments is dependent upon complete transparency regarding clinical trial findings.

One drawback of milestone payments is that there would be no guarantee that antibiotic candidates would successfully achieve market approval

A major advantage is that milestone payments are generally smaller in size and thus do not require the same large upfront investments as other pull incentives granted at the end of the R&D pathway, such as MERs or subscription payments. Moreover, the aforementioned simulations by Baraldia et al. indicate that milestone payments granted following the completion of phase 1 trials would require less funding than these pull incentives to successfully bring an antibiotic candidate through to market approval (Baraldi et al., 2019). However, the drawback of milestone payments is that there would be no guarantee that antibiotic candidates would successfully achieve market approval whereas the other pull incentives would only be granted once market approval had been achieved. Market payments can also, by design, include stewardship, patient access and environmental health agreements, but these stipulations are challenging to enforce as milestone payments are made during multiple stages of development and the ownership of IP rights for antibiotic candidates may change throughout the development process. However, this is also the case for other incentives discussed in this policy unless they are combined with some form of prospective payment agreement, such as subscription payments, with continued payments made conditional on compliance with these agreements.

Options Model for Antibiotics

The Options Model for Antibiotics (OMA) allows public investors to share the risk of investing in antibiotic development with antibiotic developers in return for access agreements and discounted prices

The OMA outlines a mechanism whereby public investors effectively become co-investors with antibiotic developers, sharing the risk of investing in antibiotic development in return for guarantees to access and discounted prices. Public investors can target investments towards antibiotic candidates that address high-priority medical need, and prospective purchase agreements can include conditions on access, antibiotic sustainability and environmental health manufacturing standards. This is a hybrid mechanism, as it combines push incentives (i.e., funding for early drug discovery research and early clinical trials) and pull incentives (i.e., advanced commitments to purchase antibiotics if they achieve market authorization). The OMA is modelled on the principle of financial call options and allows payers to invest in antibiotic R&D by purchasing the right to buy antibiotics at discounted prices if and when these products obtain market approval (Figure 16) (Brogan & Mossialos, 2013; Forman et al 2020; Brogan & Mossialos, 2016; Brogan & Mossialos, 2006). This effectively means that public and private investors share the risk of investing in antibiotics. Early investments in phase 1 trial (which have a higher probability of failure and therefore are riskier) options would be cheaper; while less risky options purchased towards the end of the antibiotic development cycle would be more expensive. As a co-investor, the options purchaser may potentially have the opportunity to codetermine the market price for the new antibiotic alongside the developer. Thus, the option purchaser benefits in several ways. Firstly, the options holder invests in, and therefore incentivizes, the development of the antibiotics they desire (i.e., public investors can choose antibiotics that meet target drug profiles and unmet needs). Second, the options holder becomes a co-investor, and can therefore exert influence over price settings if and when that antibiotic successfully receives market approval. Thirdly, the options holder can ensure access to the antibiotic at a discounted price and in specified quantities (Brogan & Mossialos, 2013).

Figure 16

Option models for antibiotics allow payers to purchase the right to buy antibiotics at discounted prices if and when these products obtain market approval. Notes: A: The price of purchasing Option A is discounted because the antibiotic is in the early (more...)

Implementation of the OMA would require a legislative framework to regulate agreements between option sellers and purchasers

There are some practical considerations for implementing the OMA. First, a legislative framework would need to be created that would provide antibiotic developers (option sellers) and investors (public purchasers) with confidence that options agreements would be adhered to, including designating roles and responsibilities to relevant institutions for monitoring compliance and resolving any potential disagreements between antibiotic developers and investors. Second, estimating the appropriate size of investments and discounts on yet-to-be determined future prices might be challenging to calculate. During the early stages of development, antibiotic developers might be reluctant to share the necessary data and clinical trial findings required to undertake these calculations. However, this could be overcome with confidentiality agreements. Third, the uncertainties regarding the potential effectiveness of new antibiotics at earlier stages of development may discourage investments following the completion of preclinical or phase 1 trials when bottlenecks in antibiotic R&D exist. Investments would be cheaper during these earlier stages of development to reflect the risk of investment, but they would also need to be large enough to significantly contribute to funding the next stage of development.

4.3.4. The case for greater push incentive funding

There is a funding gap for preclinical and earlier stages of clinical development, which contributes to many antibiotic candidates not continuing to later stages of development

While there has been substantial investment in push incentives over the last decade (see section 2), as of 2023, the majority of expected investments in antibacterial therapeutic R&D over the coming decade is either concentrated in the basic science research or the later stages of advanced clinical development. This means there remains a very significant funding gap for early-stage product development, a period during which SMEs are particularly vulnerable to experiencing financial difficulties. Figure 17 shows the results of a preliminary analysis, which projects various public and private funding allocations for antibacterial therapeutic R&D over the next decade, drawing upon data from the Dynamic Dashboard of the Global AMR R&D Hub and expected investments from CARB-X, the AMR Action Fund, G7 countries and HERA, among others. This is compared to the minimal investments required over a decade to bring to market at least six novel antibacterial treatments, using drug development costs and transition probabilities identified from a literature review by Outterson (2021).

Figure 17

Preclinical research and phase 1 trials face the largest funding gap*. Notes: This figure shows a visual representation of the potential bottleneck for antibacterial R&D funding to obtain six novel antibacterial treatments. Estimates do not include (more...)

While it should be acknowledged that there are uncertainties regarding transition probabilities and antibiotic development costs, this preliminary analysis does demonstrate the significant funding gaps during the early stages of product development, which are likely to be responsible for many antibiotic candidates not continuing to later clinical stages of development. The full assumptions underlying this analysis are included in Supplementary Tables 1 and 2. The largest uncertainty is for transition probabilities from basic science and drug discovery research to preclinical trial phases, as no reliable estimates exist. Instead, this is reliant on expert opinion.

As discussed above, the conclusion of the ENABLE research programme points to the even greater unmet need for push incentives from the European Commission, such as direct funding and grants during early stages of antibiotic R&D, especially in the transition from early drug discovery to preclinical development. This is even more urgent and timely in order to take advantage of the creation of the AMR Action Fund and its planned injection of US$1 billion of private investment in clinical development until 2032. Drawing upon the analysis above, there is a strong argument for the EU to also consider increasing funding for push incentives alongside implementing pull incentives, as well as to join other G7 governments in supporting antibiotic pipeline coordinators to distribute this push incentive funding with responsibility for oversight of antibiotic candidates under development, identification of unmet needs for funding, and the provision of platforms to share technical support and expertise among antibiotic developers (see section above on implementation and operational feasibility).

Increasing the target population through joint purchasing options at the EU level could increase commercial viability of supplying essential generic antibiotics

At the EU level, one option for increasing the commercial viability of existing antibiotics, particularly those that are vulnerable to shortages, would be to increase target populations by exploring joint purchasing options. Given the nature of antibiotic resistance pathogens, antibiotics arguably fall within the scope of the EU Joint Procurement Agreement (JPA) (McEvoy & Ferri, 2020), which is applicable for medical countermeasures to address serious cross-border threats to health (see Box 8). In theory, cross-country joint procurement can enhance transparency through better information-sharing; enable cross-country learning by sharing experience; strengthen bargaining power and mitigate overly high transaction costs by pooling skills, capacities and negotiations; ensure sustainable access to health technologies by sharing resources through cross-border exchange of products in short supply; achieve sustainable prices through economies of scale; thereby also improving the quality of purchased goods, ensuring supply security and availability, and fostering certain innovations (Espín et al., 2016). In practice, its implementation can be resource-intensive and requires political will and flexibility for necessary trade-offs (Espín et al., 2016; European Commission et al., 2022). What is more, to maximize gains in the context of antibiotics, a priority list of products to be purchased jointly would need to be developed and agreed among participating countries (see also next section); such a prioritization would also prevent overcentralization, which could mean fewer opportunities for local marketing authorization holders to win central tenders, thus endangering their sustainability.

Box 8

Experience with joint purchasing in the EU includes the Joint Procurement Agreement and advance purchase agreements for COVID-19 vaccines.

Good procurement practice is crucial at the national level and also for any joint purchasing initiatives

Importantly, any joint purchasing efforts at the EU level should mirror good practice in national level procurement. This entails refraining from race-to-the-bottom tendering by ensuring more than one supplier is contracted, and that contracts are of sufficient duration and entail sufficient minimum order amounts to attract adequate bids and improve predictability. When it comes to the expectations of purchasers, delivery security should be considered in the procurement process, either as a criterion for awarding the contract or as a bonus reimbursement component when related targets have been achieved. Examples of such practices are already available in Europe, as showcased in a recent study exploring public procurement practice in European countries (European Commission et al., 2022). While the study focused on practices in different countries, its findings are transferrable to collaborative efforts, and cross-country collaboration is recognized as a fundamental pillar for future efforts. The exchange of good procurement practice across countries can be facilitated through existing initiatives, such as the Network of Competent Authorities on Pricing & Reimbursement (NCAPR), an informal cooperation platform steered by the European Commission. Specifically for antibiotics, the introduction of environmental criteria into procurement terms also merits consideration under the One Health approach; examples from the Nordics are already available (European Commission et al., 2022).

Delinked payment models, such as subscription payments, are promising for existing antibiotics as well

Beyond optimizing procurement practice, partially or fully delinking revenue from sales volume and price is an option that can be considered for existing antibiotics as well. The use of subscription-style payment models can be applied here too, including the mechanism for a partially delinked subscription model at the EU level proposed by JAMRAI (Box 6). The exact size of the guarantee would require discussion, as would the exact implementation of such a plan and its alignment with public health needs. Political will to agree and consider the different abilities to pay among EU Member States would be crucial for the initiation and success of such models. Sweden’s annual revenue guarantee pilot, described in section 3, partially delinks revenue from sales and includes the older antibiotic fosfomycin in addition to new products. The pilot was evaluated positively in January 2023; this should encourage additional discussions on the potential of similar models for ensuring access to existing antibiotics and addressing market failures.

Mapping European pharmaceutical production capacity would facilitate prompt identification of alternative producers when shortages occur

Despite European and national obligations for market authorization holders to notify competent authorities of any foreseeable temporary or permanent disruptions in supply, a lack of transparency persists (not least due to suboptimal information-sharing among the numerous stakeholders that make up the pharmaceutical supply chain) (see Årdal et al., 2021 and Article 23a of 2001/83/EC on the European regulatory framework (European Commission, 2001; Årdal et al., 2021). A first step to counteract this problem could entail a European pharmaceutical production capacity mapping database of all industrial entities that make up the pharmaceutical supply chain. Such a mapping would allow the prompt identification of alternative producers when shortages occur and spread risks at procurement. A recent feasibility study commissioned by HERA and carried out by McKinsey identified potential measures that could help increase transparency of information in the event of shortages, as supply-chain set-up information is often protected and difficult to obtain (European Commission, 2022b, 2022d). A Staff Working Document from the European Commission also highlights the necessity for increased transparency along the supply chain, starting with raw materials prior to the registered starting material phase (European Commission, 2022d). For instance, the EU may choose to adapt the policy implemented by New Zealand, where the New Zealand Medicines and Medical Devices Safety Authority provides publicly available information on the names and locations of API producers, finished product manufacturers, product sponsors and the marketers of products (MedSafe, 2022).

An EU-level facilitated exchange between Member States could help identify and compare which antibiotic formulations are available in different settings

Another approach towards strengthening intelligence and providing a solid foundation for action to improve the supply chain would entail EU-level facilitated exchange between Member States to identify and compare which antibiotic formulations are available in different settings, and which are the best options for existing medical needs according to best available evidence. A good example of how different strengths and formulations exist without clinical necessity is the widespread use of both amoxicillin 125mg/5ml and 135mg/5ml oral suspensions in Europe. If formulations were aligned, this could help concentrate manufacturing efforts to those products that would provide the most benefit across the EU. Such a documentation initiative of available formulations in different countries could also provide the basis for a platform that could support swift action in cases of shortages in individual countries, which could use it to identify where to look for support (see a best-practice example in this direction in Box 8). Alongside aligning formulations, there are potential opportunities to harmonize the packaging and labelling of certain antibiotics to facilitate joint procurement efforts that are applicable to multiple Member States and to ensure that stockpiles of antibiotics can be deployed across Europe without the need for repackaging.

Strengthening manufacturing capacities within the EU, as well as outside China and India, could help improve availability of antibiotics

Building on this, strengthening manufacturing capacities within the EU, as well as outside China and India (see also next chapter on the EU’s engagement at the global level), could be considered. This could include subsidies to manufacturers investing in facilities within the EU, but would require careful consideration of the nature of these subsidies and the implications for competition in the common market as well the limitations imposed by rules on state aid. Given the significant infrastructure and investment requirements for developing manufacturing capacity for antibiotics, such an option merits consideration at the EU level, in addition to (and ideally in conjunction with) national initiatives. In the Pharmaceutical Strategy for Europe, the European Commission committed to “promote investment and coordinate research, development, manufacturing, deployment and use for novel antibiotics as part of the new EU Health Emergency Response Authority” (European Commission, 2020); however, such coordinated action is also necessary for existing antibiotics. A recent example in this direction is the investment of the Austrian government and Sandoz in penicillin manufacturing capacities (Wallace, 2020). It is evident that EU action aimed at strengthening manufacturing capacity is a long-term solution to supply considerations and would require substantial investment, meticulous planning and consideration of externalities.

Virtual stockpiling could help reduce shortages that are caused by supply disruptions

Relatedly, the aforementioned McKinsey analysis on addressing shortages concluded that virtual stockpiling (see Table 9), whereby an EU overview of decentralized buffers of supplies is maintained, might be a solution for shortages that are caused by supply disruptions. Combined with mandatory inventories in the private sector, such a system could also provide the basis for balancing physical stockpiles across EU Member States and determining the need for EU-coordinated procurement as described above. This would likely need to be complemented with public sector inventories for some high-risk infections, such as extensively resistant TB, where there would be benefits in having a supply of antibiotics that could be rapidly deployed to Member States. How such a virtual stockpile might be operationalized at the EU level would require additional thought, balancing benefits with the challenges of regulatory and legal change. During the COVID-19 pandemic, the European Commission upgraded the EU Civil Protection Mechanism to create rescEU, which established a new European reserve of resources (the ‘rescEU reserve’), including a stockpile of medical items and field hospitals that can respond to health emergencies. rescEU could be leveraged to store antibiotics in light of AMR-related action in the Pharmaceutical Strategy for Europe.