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Home » Infectious Diseases » How to fix the broken funding model for new antibiotic discovery

Aleks Engel

Partner, Novo Holdings and Director, REPAIR Impact Fund

Governments must pay for antibiotics with a subscription-for-access model offering developers appropriate reimbursement, regardless of how many drugs are used.

Two things can tackle the antimicrobial resistance (AMR) crisis, notes Aleks Engel. “The first is better stewardship of antibiotic use,” he says. “That might slow the spread of antimicrobial resistance genes. Second, we have to develop new antibiotics; but to do so, it’s vital we fix the funding model for new drug discovery because, right now, it’s broken.” Worryingly, it has been 38 years since the last new class of antibiotics was brought to market. The UN warned that, at this rate, 10 million people could die from drug-resistant infections by 2050.

Incentives for investors

Engel is a partner at Novo Holdings and director of the REPAIR Impact Fund which invests in early-stage development of therapies targeting resistant microorganisms. “I look at this from an investor perspective,” he says. “Why are so few people investing in antimicrobials? And what needs to change to re-attract support for the development of the next generation of antibiotics?”

His first question is easily answered: developing antibiotics involves significant costs for an uncertain return. Some publicly traded companies developing antimicrobials have either lost significant value or gone out of business. Engel believes the solution is the introduction of a subscription-type payment model linked to access, rather than volume of use. This would attract investors and guarantee developers appropriate reimbursement regardless of how much they sell.

It has been 38 years since the last new class of antibiotics was brought to market.

Requiring a maintenance budget

Governments must think of antibiotic development like maintaining physical infrastructure. Hospital buildings erode over time and need new roofs and windows, which is why administrators have a budget for repairs. “It’s the same with antibiotics,” explains Engel. “They’re eroding because of AMR. As a consequence, they require a set budget.”

Economic solution to the AMR crisis

The UK is a pioneer of this new subscription-style mechanism: in April, the NHS began paying two pharma companies a fixed fee for access to their antibiotics. “It seems to be working nicely,” says Engel. “It costs around £20 million a year which is an absolute bargain because of the value it derives. Sweden is doing something similar. Now, we need all the other countries in the G20 to follow suit, which is why we’re currently making the case for a subscription model to finance ministers. It’s not like some of the other intractable problems the world faces. With this one, we know what the solution is, and we know it works. So why aren’t more countries doing it?”

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