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1. Estimating Japan’s Return on Investment from an Ambitious Program to Incentivize New Antibiotics

Author:
Rachel Silverman and Adrian Towse
Publication Date:
12-2022
Content Type:
Policy Brief
Institution:
Center for Global Development (CGD)
Abstract:
Anti-microbial drugs form the backbone of modern medicine. Yet their lifespan is naturally limited; over time, use of these drugs selects for mutations that survive exposure those same drugs, driving “anti-microbial resistance,” or AMR. Already, drug-resistant infections kill an estimated 23,210 Japanese citizens every year. In the absence of sufficient research and development (R&D) investment for new antimicrobials, deaths from drug-resistant infections could increase dramatically in the coming decade. To address this growing crisis and solve market failures that prevent the development of new antibiotics, the government of Japan is considering a new program that would provide minimum guaranteed revenue to the successful developers of new antibiotics. In this note, we present the results of a modelling exercise to estimate the likely return on investment (ROI) from such a program, assuming it is paired with complementary and proportionate efforts from Japan’s G7 partners. The results are necessarily imprecise due to several uncertain parameters, but nevertheless provide evidence of a very high expected ROI that is robust to different inputs and assumptions.
Topic:
Health, Science and Technology, Health Care Policy, and Medicine
Political Geography:
Japan and Asia

2. Estimating the UK's Return on Investment from an Ambitious Program to Incentivize New Antibiotics

Author:
Rachel Silverman and Adrian Towse
Publication Date:
12-2022
Content Type:
Policy Brief
Institution:
Center for Global Development (CGD)
Abstract:
Anti-microbial drugs form the backbone of modern medicine. Yet their lifespan is naturally limited; over time, use of these drugs selects for mutations that survive exposure those same drugs, driving “anti-microbial resistance,” or AMR. Already, drug-resistant infections kill an estimated 7,600 citizens of the United Kingdom (UK) every year. In the absence of sufficient research and development (R&D) investment for new antimicrobials, deaths from drug-resistant infections could increase dramatically in the coming decade. To address this growing crisis and solve market failures that prevent the development of new antibiotics, the UK has set up “subscription models” for purchasing antibiotics; this has been applied to two drugs thus far, and the model is under consideration for a broader rollout. In this note, we present the results of a modelling exercise to estimate the likely return on investment (ROI) from an expanded program to incentivize new antibiotics, assuming it is paired with complementary and proportionate efforts from the UK’s G7 partners. The results are necessarily imprecise due to several uncertain parameters, but nevertheless provide evidence of a very high expected ROI that is robust to different inputs and assumptions.
Topic:
Health, Science and Technology, Health Care Policy, and Medicine
Political Geography:
United Kingdom and Europe

3. Estimating the EU's Return on Investment from an Ambitious Program to Incentivize New Antibiotics

Author:
Rachel Silverman and Adrian Towse
Publication Date:
12-2022
Content Type:
Policy Brief
Institution:
Center for Global Development (CGD)
Abstract:
Anti-microbial drugs form the backbone of modern medicine. Yet their lifespan is naturally limited; over time, use of these drugs selects for mutations that survive exposure those same drugs, driving “anti-microbial resistance”, or AMR. Already, drug-resistant infections kill an estimated 33,000 citizens of the European Union (EU) every year. In the absence of sufficient research and development (R&D) investment for new antimicrobials, deaths from drug-resistant infections could increase dramatically in the coming decade. To address this growing crisis and solve market failures that prevent the development of new antibiotics, the EU is considering incentive programs that would help provide predictable and value-based compensation to the successful developers of new antibiotics. In this note, we present the results of a modelling exercise to estimate the likely return on investment (ROI) from such a program, assuming it is paired with complementary and proportionate efforts from the EU’s G7 partners. The results are necessarily imprecise due to several uncertain parameters, but nevertheless provide evidence of a very high expected ROI that is robust to different inputs and assumptions.
Topic:
Regional Cooperation, Science and Technology, European Union, and Medicine
Political Geography:
Europe

4. Estimating Canada’s Return on Investment from an Ambitious Program to Incentivize New Antibiotics

Author:
Rachel Silverman and Adrian Towse
Publication Date:
12-2022
Content Type:
Policy Brief
Institution:
Center for Global Development (CGD)
Abstract:
Anti-microbial drugs form the backbone of modern medicine. Yet their lifespan is naturally limited; over time, use of these drugs selects for mutations that survive exposure those same drugs, driving “anti-microbial resistance,” or AMR. Already, drug-resistant infections kill an estimated 5,400 Canadian citizens every year. In the absence of sufficient research and development (R&D) investment for new antimicrobials, deaths from drug-resistant infections could increase dramatically in the coming decade. To address this growing crisis and solve market failures that prevent the development of new antibiotics, the Government of Canada is considering a new program that would provide minimum guaranteed revenue to the successful developers of new antibiotics. In this note, we present the results of a modelling exercise to estimate the likely return on investment (ROI) from such a program, assuming it is paired with complementary and proportionate efforts from Canada’s G7 partners. The results are necessarily imprecise due to several uncertain parameters, but nevertheless provide evidence of a very high expected ROI that is robust to different inputs and assumptions.
Topic:
Health, Science and Technology, Investment, and Medicine
Political Geography:
Canada and North America

5. An Ambitious USG Advanced Commitment for Subscription-Based Purchasing of Novel Antimicrobials and Its Expected Return on Investment

Author:
Rachel Silverman and Adrian Towse
Publication Date:
11-2022
Content Type:
Working Paper
Institution:
Center for Global Development (CGD)
Abstract:
Antimicrobial drugs form the backbone of modern medicine. Yet their lifespan is naturally limited; over time, use of these drugs selects for mutations that survive exposure to those same drugs, driving “antimicrobial resistance,” or AMR. Already, drug-resistant infections kill an estimated 35,000 Americans and 1.27 million global citizens every year. In the absence of sufficient research and development (R&D) investment for new antimicrobials, deaths from drug-resistant infections could increase dramatically in the coming decade. However, the R&D pipeline for new antimicrobials remains sparse, constrained by an array of market failures that prevent private companies from capturing a sufficient private return on investment (ROI) despite the very high social value of new antimicrobials. Widespread recognition of these market failures among experts and policymakers has driven a search for creative solutions, and generated enthusiasm for the use of pull mechanisms which could help incentivize antibiotic development. One particularly promising pull approach—so-called “subscription models”—would offer guaranteed annual payments to successful antibiotic developers delinked from sales volumes. A subscription approach is included in the pending PASTEUR Act, which is legislation introduced by lawmakers in the US House of Representatives and Senate and endorsed in President Biden’s 2023 budget request. In this paper, we consider the expected return on investment for such a program—that is, an ambitious new program to incentivize antibiotic development via a US government subscription-based pull mechanism (though not necessarily the PASTEUR Act, per se). We construct an illustrative subscription program from first principles, with parameters drawn (where possible) from the literature and some simplifying and deliberately conservative assumptions about program design and remuneration. We model the 10- and 30-year costs and benefits of such an initiative, both from the US domestic perspective and from a global welfare perspective. We find that the program is likely to generate a very high social ROI in both the short and long-term. From the US domestic perspective—considering both the value of averted death/disease and associated hospital costs—ROI is calculated at 6:1 over a 10-year time horizon and 28:1 over a 30-year time horizon. From the global perspective—exclusively considering the health value of DALYs (Disability Adjusted Life Years) averted—ROI grows to 27:1 over a 10-year time horizon and 125:1 over the full 30-year program duration. Sensitivity analysis suggests that the overall high returns are robust under a wide variety of alternative assumptions and scenarios. Based on these high social returns, we encourage the US Congress to urgently finance and authorize a subscription program for new antimicrobials, with particularly consideration for the PASTEUR Act.
Topic:
Health, Science and Technology, Innovation, and Medicine
Political Geography:
North America and United States of America