Industry incentives and antibiotic resistance


In the face of increasing drug resistance, there is a pressing need to develop new antibiotic compounds. However, the effort of developing such new treatments can go unrewarded, so long as there are still cheaper options in current supply, even as their effectiveness wanes.


Olof Lindahl and Chantal Morel review the business interventions, stewardship policies and prescription practices available to incentivise the development of new medicines, and thus support global health.


Find out more about their work at


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Image Credit: Fahroni/Shutterstock





00:00:06 William Mountford

Hello, I’m Will. Welcome to Research Pod. The development of tests and vaccines for the Corona 19 virus marks something of a global success story in drug design and public uptake. However, for reasons that we won’t get into just yet, not every disease can receive the same investment of time and money. For example, there are many diseases which have been manageable if not treatable for years, but the appearance of new strains has rendered old treatments less effective, coming up with new molecules to treat a rare strain of a resistant disease means a lot of investment for a small patient population.


00:00:45 William Mountford

However, in the face of a surging tide of antibiotic resistance, what can be done to facilitate the creation of new therapies whilst also making economic sense for the companies involved?


Today I’m speaking with Olof Lindahl and Chantal Morel, authors of the ASP report on financial incentives for developing mute drugs, about the financial tools they propose to support drug development in the face of economic uncertainty.


00:01:15 Olof Lindahl

Hello, my name is Olof Lindahl. I’m a PhD in business studies from Uppsala University in Sweden. I do a lot of research on economic incentives to spur innovation. And how about you?


00:01:28 Chantal Morel

Hi, I’m Chantal Morell. I am a health economist. I work primarily in issues related to infectious diseases.


00:01:36 William Mountford

In terms of infectious disease, Chantal, could you maybe tell us a little bit about how antimicrobial resistance occurs and why it is a problem for people alive today?


00:01:47 Chantal Morel

So it is a naturally occurring biological phenomenon, but it’s made much worse when we use antibiotics very widely. Uhm, so effectively, well, when, when you use antibiotics a lot it builds up something called selection pressure and then that increases the chance for mutation and resistance to come about through the mutation.


00:02:12 William Mountford

The human result of that means that the drugs we have don’t work and we need to find new drugs. Is that just for old diseases or are there new diseases coming up that we can’t effectively treat?


00:02:24 Chantal Morel

So that’s right, so the effectiveness of our existing set of antibiotics is going down quite rapidly. There was actually just a report that came out, I think it was last week, in The Lancet that quantified the the number of deaths from antimicrobial resistance and antibiotic resistance in particular. I think it was 1.27 million deaths are occurring globally per year, uh, due to this and this is putting it really, you know, on par with HIV with malaria – we’re talking those those kinds of numbers now. So it’s it’s become now, not something that’s just in the background going on quietly. It’s very much a real threat to human health.


00:03:11 William Mountford

Olof could ask how your experience in economic kind of comes to play in work that you’re doing with Chantal and the stimulus package. I guess that we’re talking about.


00:03:21 Olof Lindahl

Right, well as you guys just talked about the drugs we have against a lot of infectious diseases, especially antibiotics are not working as well as they used to.


00:03:30 Olof Lindahl

Some are nearing uselessness, and of course the bacteria are still there and we need to find new drugs.


00:03:39 Olof Lindahl

And finding new.


00:03:40 Olof Lindahl

Drugs or bringing new drugs to market is something done by pharmaceutical companies big and small and that is.


00:03:47 Olof Lindahl

Pretty much not working today.


00:03:50 Olof Lindahl

Very few new drugs are being brought to market and even companies that bring new drugs to market might not actually survive as companies because the profitability of antibiotics is so low.


00:04:04 Olof Lindahl

So this is a problem that is huge in the sense that that disincentivizes companies from trying.


00:04:11 Olof Lindahl

Because you don’t want to be the next company going into bankruptcy for doing the right thing.


00:04:23 William Mountford

It feels like to me not an economist. Someone who is developing a new antimicrobial treatment of any sort that should be a wise investment.


00:04:32 William Mountford

That should be something that has tremendous success on the market. How is that not working out for them yet?


00:04:40 Chantal Morel

So there are Three main problems with the market, so one is that we are still using generic antibiotics to treat most infections that we see within health services and for the most part they work. The problem is that there are now more and more infections where they don’t work.


00:04:58 Chantal Morel

The fact that we have very inexpensive drugs on the market, that’s one thing ’cause it creates a lot of pressure on prices, so there’s so that any new products that come to market have have a real struggle to attain a high price or even even a you know something above a very minimal price. It’s very hard to achieve. The second problem is volumes.


00:05:19 Chantal Morel

So because we try to restrict the use of any new antibiotics because we want to prioritise the old ones.


00:05:28 Chantal Morel

And basically use up their efficacy as much as possible.


00:05:32 Chantal Morel

Before using new ones, it means that.


00:05:34 Chantal Morel

If any new.


00:05:36 Chantal Morel

Antibiotics come to market. We’re barely going to. They’re barely going to sell. There’s a unit sale problem there really, really low volumes.


00:05:45 Chantal Morel

And then the last problem is that it is very expensive to bring a new drug to market. You know, clinical trials are extremely expensive.


00:05:55 Chantal Morel

Getting through all the regulatory hurdles is is quite difficult, so those three things put together make this a very unattractive market too.


00:06:05 Chantal Morel

Potential developers.


00:06:07 Olof Lindahl

Right then, and to add to that I think.


00:06:10 Olof Lindahl

Because I I could imagine you will asking well, why are not a health system paying higher prices so that.


00:06:18 Olof Lindahl

You get this.


00:06:19 Olof Lindahl

System back to health. The antibiotic development system.


00:06:22 Olof Lindahl

As Chantal pointed out, there’s a history and a tradition of getting antibiotics for next to nothing.


00:06:29 Olof Lindahl

And there is also. Since antibiotics are so precious because they they are life saving.


00:06:36 Olof Lindahl

There is also a hesitance to to discuss high prices because that might mean new drugs, but not for everyone, so that is also something holding the idea of raising prices back.


00:06:50 Olof Lindahl

And and something that then prolongs this. This unfortunate status quo we have, which is also why both Chantal and I do a lot of research on new ways of incentivizing antibiotic development that are not primarily related to price.


00:07:06 William Mountford

If we could maybe start with the current situation, what’s good and what’s bad about it? What does that kind of incentive look like? How are those incentives administered at the moment?


00:07:17 Chantal Morel

So right now there are no real incentives in place. We just have a pretty normal marketplace where, like we said, any new drugs that come to market have to face real competition when it comes to price and then they’re not really.


00:07:31 Chantal Morel

Sold so those are the you know those are the problems in terms of incentives.


00:07:37 Chantal Morel

Do you want to go Olof?


00:07:39 Olof Lindahl

Sure, sure. So in terms of incentives for antibiotic development, there are the old traditional ones that we might not see as incentives.


00:07:47 Olof Lindahl

But basically research grants quite common in a lot of countries to to researchers and small firms and academic labs working on on finding new antibiotics.


00:07:59 Olof Lindahl

There are also to lesser extent, subsidies to take these antibiotics into clinical trials, much less common than than these grant supports I just mentioned.


00:08:12 Olof Lindahl

However, what has been talked about much more recently is using something else than prices.


00:08:20 Olof Lindahl

Which we mentioned is is problematic.


00:08:24 Olof Lindahl

Uh, to make new antibiotics profitable?


00:08:29 Olof Lindahl

And one of those ideas has revolved around innovation prices.


00:08:36 Olof Lindahl

The most commonly discussed innovation price has been called a market entry reward.


00:08:42 Olof Lindahl

Which is essentially a.


00:08:45 Olof Lindahl

Very large price. Maybe in the size of 1 1/2 billion.


00:08:48 Olof Lindahl

Dollars where a firm that brings to market a new antibiotic that targets pathogen of particular interest.


00:08:58 Olof Lindahl

IE, an antibiotic we really need would then get an innovation price for maybe 1 1/2 billion dollars which would then cover all the costs and then some.


00:09:08 Olof Lindahl

And the idea with that type of innovation price called a market entry reward, is to get companies moving. Because this means that there is.


00:09:17 Olof Lindahl

Profitability, not for all of them, but for the winners if you will. So in other words, something that resembles a normally functioning market where the winners will take all and some will lose. But it might still on the average be a good investment for investors to support these companies.


00:09:37 William Mountford

And in terms of the financing, I mean it’s huge in scale. Who is providing that competitive incentive?


00:09:43 Olof Lindahl

Very good question that is still being worked out because while it’s quite straightforward to realise that that is the size of the incentive to to get companies moving through these.


00:09:56 Olof Lindahl

Incredibly expensive clinical trials as such.


00:09:59 Olof Lindahl

Who is going to pick up the bill that has not been as straightforward? However, worth noting is that a couple of countries are trying out different versions of this incentive idea, but of course, if if the incentive would be on on the scale of one and a half billion dollars.


00:10:18 Olof Lindahl

Maybe more than one price. Then of course we’re talking about the UI, the US, or even some kind of collaboration between large countries and regions in the world.


00:10:33 William Mountford

Well, in terms of setting out a plan for doing better for anyone if they can afford it.


00:10:39 William Mountford

There was also.


00:10:39 William Mountford

The Drive AB report that you guys contributed to that was backed by the Innovative Medicines Initiative.


00:10:46 William Mountford

That laid out what is needed to bring people together and get them aligned on coming up with new structures, new frameworks and new molecules. Could you maybe give us a whistle? Stop tour of that?


00:10:58 Chantal Morel

So there have been various initiatives to analyse and compare the different possible incentives for antibiotics from the three around which there has been the most consensus, while the ones that seem most promising have been the market entry awards subscription.


00:11:19 Chantal Morel

Models, sometimes called Netflix models.


00:11:22 Chantal Morel

And also transferable exclusivity vouchers, those are the three primary ones that have come out of those analysis, I think.


00:11:32 Olof Lindahl

Definitely on the so called Pull award side where you basically try to create something else than price to incentivize firms to move to the market to take to pick up all the costs involved in getting antibiotic all the way.


00:11:47 Olof Lindahl

To market, however.


00:11:48 Olof Lindahl

Part of what Drivebys suggested, we’re also so called pipeline.


00:11:52 Olof Lindahl

Coordinators, which do have quite a lot of resemblance to, to some ongoing incident.


00:12:00 Olof Lindahl

Tips such as corvex enable partly also reviving guard P, which are then partnerships that are in one way or another mid waiving these antibiotics development projects by including experts by including funds by including labs so to make the journey much easier.


00:12:20 Olof Lindahl

And also helping them by picking up the costs along the way. So that is what we call a push model.


00:12:27 Olof Lindahl

Not completely different from grants, but a much more hands on and active version of it.


00:12:33 Olof Lindahl

That being said, Chantal you’re absolutely right as far as the pool incentives go. Transferable, exclusivity, vouchers and market entry awards that we talk about mainly.


00:12:44 Chantal Morel

So that the pipeline coordinators are a very good way.


00:12:49 Chantal Morel

Somewhat level the playing field amongst different types of companies. So smaller companies who often lack certain types of expertise, especially as they get further along with development.


00:13:01 Chantal Morel

If they’re part of one of these these partnerships, they can usually hang onto the candidate molecule for longer because they’re getting this input in areas that they where they don’t have expertise.


00:13:18 William Mountford

There’s a brief mention of a company in your paper on susceptibility bonuses. Is it Achaogen?


00:13:27 William Mountford

I guess they’re an example of when things go wrong.


00:13:30 Chantal Morel

That’s right.


00:13:32 Chantal Morel

So this is a. It’s a good example of how.


00:13:37 Chantal Morel

We need whatever poll incentive we choose.


00:13:40 Chantal Morel

To really spark interest and and maintain interest amongst Big Pharma


00:13:49 Chantal Morel

Small pharma can do lots and be extremely innovative in this area, but we do need the pull.


00:13:57 Chantal Morel

Of Big Pharma interest, these small companies have been able to get drugs sometimes all the way to market. You know, including with some help from.


00:14:07 Chantal Morel

Private investors and from public sector support but.


00:14:12 Chantal Morel

Ultimately, failed because they did not have that sort of interest from the big fish in the market.


00:14:21 Chantal Morel

Olof , do you see that differently?


00:14:22 Olof Lindahl

I agree completely and I think what I failed to mention earlier is that these these pipeline coordinators that help the small developers, the small farmers forward. They can only help them so far.


00:14:37 Olof Lindahl

Because once you get into the clinical trials, especially later in clinical trials, the bill for performing those clinical trials becomes huge, and that’s when the big money needs to come in. You might need a big you know you probably need a big pharma to support.


00:14:53 Olof Lindahl

And you need some kind of profitability to support supporting, because otherwise you’re just pulling money down a well, and that is not something that that.


00:15:06 Olof Lindahl

Companies want to do. That’s not something anybody wants to do.


00:15:10 Chantal Morel

You know, despite doing really well with getting private investment and public sector support, these companies who have failed like achaogen like melinta they you know they had to go into so much debt.


00:15:25 Chantal Morel

In order to get these molecules to market and then even take to keep them on the market that it wasn’t tenable.


00:15:30 Chantal Morel

So it is really that broader interest from the market that’s lacking and it is lacking from the big companies.


00:15:40 William Mountford

Looking at your paper in the Journal of Antibiotics, the use of antibiotic susceptibility bonus as giving that incentive of making those successes more likely of fostering more innovation.


00:15:52 William Mountford

If you could tell us all about it.


00:15:54 Olof Lindahl

This paper is the outcome of a project supported by the JPA. More so, the joint programming initiative on antimicrobial resistance and a project that is performed by a consortium of universities. So University Hospital of Geneva, Faculty of Medicine, Uppsala University, and University of Calgary.


00:16:15 Olof Lindahl

So in this project.


00:16:18 Olof Lindahl

Which contains several researchers that were part of the Drive AB project and those have been highly engaged with coming up with new incentives to innovation in antibiotics.


00:16:30 Olof Lindahl

We realised that.


00:16:32 Olof Lindahl

Some of the most potent incentives, such as the market entry rewards.


00:16:36 Olof Lindahl

They incentivise innovation, so they’re very powerfully can help pull drugs to market. But once these drugs get to market.


00:16:46 Olof Lindahl

The incentive as such, which is the force in play here, does actually nothing to incentivise recall responsible use.


00:16:58 Olof Lindahl

So essentially, it doesn’t incentivize the the future efficacy of a drug. the IT doesn’t incentivize the company owning the patent to to make sure the drug will last for as long as possible.


00:17:15 Olof Lindahl

Now, this might sound like something you don’t need, because why would anybody want to to to not treat their product with greatest care?


00:17:26 Olof Lindahl

Because of the dire profitability problems in antibiotics.


00:17:30 Olof Lindahl

Situations might occur where a struggling pharmaceutical company that has developed a new drug wants to recoup their costs and that might entail selling as much as possible of the drug. I mean, that’s that’s basic economics. That’s what every company in the world does, but in antibiotics.


00:17:51 Olof Lindahl

That’s a problem because.


00:17:54 Olof Lindahl

Potential overuse of antibiotics leads to antibiotic resistance.


00:17:59 Olof Lindahl

Therefore, this project set out to design A incentive that could work as an add on to market entry rewards, for example, which would then incentivize the responsible use from the perspective of the company when it came to new antibiotics.


00:18:17 Chantal Morel

There are these.


00:18:18 Chantal Morel

Large pull incentives that we hope will be put in place.


00:18:24 Chantal Morel

The antibiotic susceptibility bonus is intended as added reward.


00:18:33 Chantal Morel

If an antibiotic remains effective over time, so it’s a, it’s a bonus that would be paid out. For example, every five years if resistance remains low.


00:18:48 Chantal Morel

So there’s going to be have to be a threshold that’s set, and if it goes above that threshold, then they would no longer qualify for these bonus payments.


00:18:55 Chantal Morel

And the idea is here that we don’t want any antibiotic to be used unnecessarily and we also don’t want it to be pushed for wider cells than are necessary. So we want there to be, you know, sort of responsible.


00:19:12 Chantal Morel

Sales responsible consumption all the way along the chain. So if we can incentivize industry at the very highest level of the chain to want to protect the efficacy of their product over time.


00:19:27 Chantal Morel

Then we think that over time we will, you know well maintain a stronger arsenal of antibiotics.


00:19:35 Chantal Morel

We would like to ideally be able to make you know lots of specifications on the antibiotic that we want from this right.


00:19:43 Chantal Morel

We want to be able to say OK, we would like this antibiotic to be effective against X pathogen. We would like it to have a half life of whatever I mean, but the problem is that the more we specify, the more.


00:19:56 Chantal Morel

You actually put off potential development in that area? I mean you you want to bring back.


00:20:03 Chantal Morel

People with the right expertise to try to develop these products, but if you make it too specific, you are also really raising the bar in terms of what you know can be achieved and there’s a lot of uncertainty in this.


00:20:15 Chantal Morel

And you know having an idea for you know drug innovation. In the beginning, you actually don’t know what you’re going to be developing through time.


00:20:24 Chantal Morel

So the more specific you are in terms of what molecule you want to get using these incentives.


00:20:31 Chantal Morel

The fewer number of potential players you have actually trying to produce that product, so you you want to. You do want to specify the most important criteria or characteristics of the drugs, but you don’t want to be so specific that actually you just put off potential developers.


00:20:50 Chantal Morel

So there’s a fine line to be had there, and what’s important about this antibiotic susceptibility?


00:20:55 Chantal Morel

The idea is that it’s offering this as a reward. As a bonus, not as the reward for development.


00:21:04 Chantal Morel

There’s a really.


00:21:04 Chantal Morel

Subtle nuance there, but it’s it’s separate in the sense that we know that there are lots of unknowns here. We know that you know once the drug gets onto the market.


00:21:15 Chantal Morel

The company only has so much control over how it’s going to be used. We think it has some influence on how it markets its product, but there are lots of uncertainties, so it’s really saying OK.


00:21:26 Chantal Morel

If you can develop a product that remains effective over time.


00:21:29 Chantal Morel

You get this.


00:21:29 Chantal Morel

Bonus with the long term hope that.


00:21:33 Chantal Morel

Early on in the development process, they will start to take into consideration resistance characteristics very very early on.


00:21:42 Chantal Morel

Such that we get more efficacious drugs that last longer to the market over time.


00:21:49 Chantal Morel

I guess what’s important to note here is that there should be good rewards in the system offered to antibiotics that make it through to approval.


00:22:01 Chantal Morel

If those drugs are able to maintain their efficacy over time, they should be offered this type of a bonus.


00:22:08 William Mountford

It’s an investment in time rather than an upfront reward. Planning ahead for a future that you might not even get to see.


00:22:16 William Mountford

But it does pay off in the long term.


00:22:22 Olof Lindahl

This project is also trying to address a.


00:22:26 Olof Lindahl

But what could be called an oversight by partly ourselves but us and in the Community that are working on coming up with these new incentives? Because earlier incentives like the market entry reward with another pool incentives?


00:22:42 Olof Lindahl

They they are well designed to address the problem of innovate, lack of innovation. So they are in different ways. Trying to to help.


00:22:52 Olof Lindahl

Companies recoup the costs of innovation so that they don’t go bankrupt, so that they want to do this. And of course we also want new companies to get into the development of antibiotics.


00:23:04 Olof Lindahl

Oh, so you want to create this this virtuous spiral rather than the death spiral that has been going on for a while.


00:23:10 Olof Lindahl

However, what we haven’t been thinking about as much until now.


00:23:15 Olof Lindahl

Is what about compensating firms for the cost of restricting their own profitability for the sake of stewardship and responsible use?


00:23:27 Olof Lindahl

That is what the antibiotic susceptibility bonus is addressing. We are, we are. We are wanting from from a from a public health standpoint.


00:23:36 Olof Lindahl

We want the companies to restrict sales and marketing. We want them to register their their drug first few indications as possible or as needed.


00:23:44 Olof Lindahl

And and this is going to cost them in an environment where survival is is not in any way guaranteed.


00:23:53 Olof Lindahl

And so this is perhaps.


00:23:56 Olof Lindahl

The first step in trying to remedy that that we we are expecting things, but the the financial message if you will.


00:24:05 Olof Lindahl

Is that we are not going to help or incentivize this the least.


00:24:11 Olof Lindahl

So to to say that this differently I was speaking to some PhD students in the Ypsilanti Biotic Centre earlier today.


00:24:19 Olof Lindahl

And I talked about the Pharmaceutical industry as a machine that that society uses for the development production of drugs.


00:24:28 Olof Lindahl

And we are sending messages.


00:24:30 Olof Lindahl

And part of the messages are of course through for legal and regulatory channels, but but a very important message is sent.


00:24:37 Olof Lindahl

Via the prices we pay for what they do.


00:24:40 Olof Lindahl

And if we’re not willing to pay for innovation, there will be no innovation. And what is a great example of that?


00:24:46 Olof Lindahl

If we’re not willing by the same logic to pay for stewardship responsible use, we should not actually expect that.


00:24:54 Olof Lindahl

Because industry , for good and bad runs on money. Not much.


00:25:01 Olof Lindahl

But it also makes it easy for us from a public health standpoint. To answer the question, how does this machine work?


00:25:07 Olof Lindahl

Well, it it runs on money, so if you pay for stewardship through a bonus or any other means, you can get stewardship.


00:25:14 Olof Lindahl

If you refuse to…

00:25:16 Olof Lindahl


Well, you can guess yourself, so we are kind of trying to take the next step in the development of incentives by not only addressing that innovation, but also what we would want given that we manage to address innovation.


00:25:31 Olof Lindahl

If we get new drugs to market, what then would we want? What would we need? What would be the benefit?


00:25:36 Olof Lindahl

The best for public health. And that’s stewardship.


00:25:41 William Mountford

It feels a bit like that old lesson in psychology or presenting a child with a sweet and saying if you don’t eat this sweet, you’ll get 2 sweets later.


00:25:49 William Mountford

Except sweet is a lot of money. And then there’s a lot of money later, but there’s a lot of money here right now.


00:25:54 Olof Lindahl

Well, yes, you need to be careful with incentives and both the incentives you use, but also the incentives you don’t use if you expect to get something for nothing, then generally you need to check twice.


00:26:05 Olof Lindahl

And I think when it comes to the stewardship and responsible use of new drugs.


00:26:09 Olof Lindahl

But not supporting companies in doing exactly that.


00:26:13 Olof Lindahl

It’s not the smartest thing.


00:26:16 Olof Lindahl

We believe that the antibiotic susceptibility bonus is a step in the direction of helping companies to do this.


00:26:26 Chantal Morel

We should emphasise though, that the size of the bonus has to clearly compensate companies for the sales that that they did not have, right. The ones that they did not pursue.


00:26:38 Chantal Morel

In trying to protect the efficacy of their product.


00:26:42 Chantal Morel

So yes, we’re asking them to sacrifice some some unit sales. We’re asking them not to flood the market with their product, but we’re saying, OK, you know, if if you’ve done that well, you’ll be well compensated because you are, you know, you’ll get this bonus.


00:26:57 Chantal Morel

but also I mean at this at the same time, it could be that.


00:27:00 Chantal Morel

They develop a really good product that remains effective over time and that even know how much no matter how much it’s used, still remains efficacious. Well then, that also merits a bonus.


00:27:13 William Mountford

I suspect to ask when it comes to the section in the paper on key aspects of the ASB.


00:27:17 William Mountford

You mentioned there the baseline magnitude of the bonus. The post patent years, and we could recap some of those individually and just break them down into very simple cases of.


00:27:27 William Mountford

Here is what needs to happen. Here is who can do that. Here is why it will save. Hopefully hundreds of thousands of lives.


00:27:35 Olof Lindahl

We are still working on establishing what what would be the magnitude of this.


00:27:40 Olof Lindahl

Bonus and how would it have to be adjusted to fit various conditions, which is something still being worked out.


00:27:49 Olof Lindahl

Because of course you want it to be large enough to compensate for the costs of stewardship.


00:27:55 Olof Lindahl

You probably also want it to be large enough to compensate for any uncertainty that this introduces. That if the sure companies have costs, but uncertainty is also a kind of cost.


00:28:10 Olof Lindahl

Because we can say that we’re going to be profitable, you could tell that to your investor.


00:28:16 Olof Lindahl

But if you add a ‘maybe’, that doesn’t have the same ring to it, which means that it has to be big enough to compensate for the costs, but also for the the lack of certainty that that they will actually get this bonus in the future.


00:28:29 Olof Lindahl

However, the magnitude should not be so big that it creates disincentives to making the drug available by different means.


00:28:41 Olof Lindahl

And this is the access side of. This is also something that can be achieved all through different means, but but of course you don’t want with the magnitude to create a situation where.


00:28:54 Olof Lindahl

A company in in dire economic straits might start looking for ways of restricting access, just like we wouldn’t want a company to to register its drug for more indications than than initially necessary.


00:29:07 Chantal Morel

See, I’m going to. I’m going to disagree on this point about indication.


00:29:10 Olof Lindahl

I mean,  go right ahead.


00:29:13 Chantal Morel

It’s my mind actually.


00:29:15 Chantal Morel

Going for indications going for additional indications.


00:29:20 Chantal Morel

I mean it’s it’s more expensive for the company, so it’s more difficult for them, but what it does do is it provides a lot more data about the drug.


00:29:30 Chantal Morel

So we get a lot more evidence of efficacy, but also the potential you know, side effects and such. So having that information is very valuable. So to my mind actually we.


00:29:43 Chantal Morel

We don’t want to necessarily put off the application for additional indications. I mean, it’s expensive for companies anyways. There’s already a deterrent there to go for additional indications, and you know if if they’re if they can sell their their drug to be used off label, then I think they’re pretty fine with it.


00:30:04 Chantal Morel

As long as it’s reimbursed, that’s that’s the issue.


00:30:06 Olof Lindahl

No, but this is good. I mean about the susceptibility of the drug. How can that be established?


00:30:14 Chantal Morel

Yeah, determining whether or not a drug is eligible for the bonus is is a bit tricky because at the moment.


00:30:23 Chantal Morel

Our surveillance or routine surveillance of antimicrobial resistance does not include resistance to the newest antibiotics right now. Routine surveillance is only looking at resistance to the older set of antibiotics, so that would have to change.


00:30:42 Chantal Morel

We would need surveillance of resistance to the newer drugs to become far more common in order to do


00:30:50 Chantal Morel

This, or to gather the evidence that we need. We also would probably want to consider not using what are called breakpoints.


00:31:00 Chantal Morel

At the moment, when we decide that that an infection is resistant to a drug, we’re using a certain threshold, that’s called a breakpoint.


00:31:11 Chantal Morel

Now we could use data from many many people to decide that on average you know the drug goes beyond that breakpoint.


00:31:22 Chantal Morel

You know resistance is no longer at an acceptable level, so that drug is not eligible for the bonus. However, these these breakpoints do change over time.


00:31:34 Chantal Morel

And we don’t want to also be creating a lot of pressure on the panel. Who creates the breakpoints to change breakpoints?


00:31:44 Chantal Morel

So instead we could choose another measure that that does not change at all, and those are called ecoff. So basically it’s it’s. It’s a different threshold to use to determine eligibility for the bonus during the patent years.


00:32:05 Chantal Morel

That’s what’s important about establishing patterns of use. It’s important because actually those are the years when prescribing patterns are set.


00:32:14 Chantal Morel

So usually if a drug is going to be used very widely.


00:32:19 Chantal Morel

It will start to be used widely during the patent years, but if it remains, you know a bit more restricted it will probably move on to have those similar patterns post patent. It may go up a bit, you know when prices go down after the patent Cliff.


00:32:34 Chantal Morel

However, in terms of, you know, common usage, you can kind of count on the pattern being set fairly early on when it’s still under under intellectual property protection.


00:32:46 Chantal Morel

If we can try to influence how the drug is marketed during those years, we’ll have gained a lot.


00:32:55 Chantal Morel

But we also say that, OK, we do think that beyond the patent years, a bonus system should remain in place.


00:33:02 Chantal Morel

So that we’re still trying to keep the incentive towards protecting the efficacy of the product.


00:33:07 Chantal Morel

Because in most cases you know these these drugs do remain very useful way beyond their patent life.


00:33:13 Chantal Morel

So we don’t want them just to be flooding the market. We do want them to still be used in an appropriate way.


00:33:21 William Mountford

If these and other incentives, the push and pull incentives, what goes right if they work? What goes wrong if they don’t?


00:33:27 William Mountford

And what needs to change in the way of the world to make that work?


00:33:34 Chantal Morel

If these incentives work, then we would reignite interest amongst pharmaceutical companies who perhaps had some interests in this area. You know 20 years back, but then left. We hope to bring them back to the table.


00:33:47 Chantal Morel

And you know, it would mean that we’d see new molecules coming to market, so you know it would take some years ’cause it takes new 10 to 15 years to.


00:33:55 Chantal Morel

Develop a new antibiotic, but we’d see a, not necessarily a filled pipeline, but a pipeline that’s a little less dry than what we see now.


00:34:04 Chantal Morel

It might not be that every antibiotic that would make it through that pipeline would be. You know, some miracle drug you know.


00:34:14 Chantal Morel

We may end up paying for some drugs that are not perfect. I think that would be somewhat inevitable with this.


00:34:23 Chantal Morel

However, we would have the security of having many new molecules come to market.


00:34:29 Olof Lindahl

And I suppose specifically for the antibiotic susceptibility bone.


00:34:34 Olof Lindahl

It has a number of benefits should it be introduced. One is that it adds this component of stewardship to these large innovation incentives that we’ve been talking about.


00:34:45 Olof Lindahl

Something that has so far been missing.


00:34:49 Olof Lindahl

So what it would do is to basically up the game a bit when it comes to what is the expected effect of these incentives. So not only would we get new drugs to market, but they might actually stay on the market for longer and the quality of those drugs might, in the best case scenario be higher.


00:35:08 Chantal Morel

It’s also, I think, important to note.


00:35:10 Chantal Morel

That you can add this type of bonus system to any any incentive that you use any full incentive that you use. You can tack on this bonus feature.


00:35:19 Chantal Morel

Which then adds in this stewardship measure to protect the efficacy of the product.


00:35:27 Chantal Morel

And also I think it’s an important thing to note is that we are talking about very big rewards. They’re being given to companies, and some of these companies are already quite profitable. You know, especially if we do.


00:35:39 Chantal Morel

If we can bring in the big, the big players reignite their interest in antibiotic development. I mean, these companies are known to be highly profitable, so it is going to be politically very difficult to sustain.


00:35:51 Chantal Morel

You know large scale pull incentives overtime, so having this bonus feature helps kind of improve the accountability. I guess you could say because it’s saying OK, we’re going to be, you know, incentivizing the production of the best drugs possible, the drugs that remain effective overtime.


00:36:12 Chantal Morel

You know, not just throwing large sums of money yet anything and everything.


00:36:17 William Mountford

I guess trying to sell it as a wise investment.


00:36:19 Chantal Morel

Yeah, and and something to in a way to protect the public interest, we are considering very large scale rewards for for companies and we need to make sure that what we’re incentivizing is truly what society needs over time.


00:36:35 Olof Lindahl

I suppose this is also a. I mean, you could ask the question why, why, why hasn’t this been part of these discussions earlier?


00:36:42 Olof Lindahl

Why wasn’t this already included in the original incentives that we are now suggesting to tack this onto? Well, first of all, it’s it’s a research front issue, so we of course first need to identify.


00:36:55 Olof Lindahl

The incentives before improving upon them.


00:36:59 Olof Lindahl

So that’s that’s the most important reason, but of course that doesn’t mean that there are not drawbacks to this bonus, and one could be that it complicates things that you are not only asking companies to come up with new drugs and bringing them to market, but you’re also assking for better drugs.

00:37:19 Olof Lindahl

You’re asking them to steward them, and you’re asking the drugs to stay efficacious over the long term, which is adding complexity to anything that companies are trying to do. I mentioned earlier that there’s a cost in uncertainty, so if the ASB would ask more of the company.


00:37:42 Olof Lindahl

Then that they would also be slightly more uncertain as to whether they could actually deliver on it, ’cause they might not know themselves. How well will will our drug be doing in five 10-15 years?


00:37:56 Olof Lindahl

So while it is a great idea, it does increase complexity when it comes to these incentives for good reason, but still.


00:38:03 Chantal Morel

Which is why we see the susceptibility bonus really, as a bonus and not a reward when it comes to resistance.


00:38:10 Chantal Morel

It it really is important to underline that these are natural biological processes and we cannot predict which new resistances or resistance mechanisms will come about in future.


00:38:23 Chantal Morel

So it’s unknown what resistances will emerge, the degree to which they’ll be transmitted across people or from animals to people or unknown.


00:38:34 William Mountford

That’ll be very slightly catastrophic with a final question.


00:38:38 William Mountford

Is it too late? If it’s not too late, do we get to stop it before it is too late?


00:38:46 Chantal Morel

Well, clearly everyone you know across the world is thinking more about infectious diseases now because of the COVID pandemic.


00:38:54 Chantal Morel

But we need to be careful not to over learn from our experience with COVID, we saw an immense amount of innovation.


00:39:04 Chantal Morel

To try to combat the COVID pandemic, and we’ve had these vaccines come to market after just one year. I mean it’s amazing progress, but we cannot assume that if we were to see an outbreak.


00:39:21 Chantal Morel

Resistant bacterial infection that we would have that same pace of innovation we have been looking for molecules for several decades now with very very few results.


00:39:33 Chantal Morel

So this is hard stuff.


00:39:36 Chantal Morel

And we we shouldn’t assume that if we do have, you know some some worrying evolution when it comes to bacterial infection that we will be able to react in the same way and so quickly.


00:39:52 Chantal Morel

Long time to develop new antibiotics so we do need to think about this now.


00:39:57 Olof Lindahl

While it always feels a bit late, what you can see is that governments are seeing it in this similar light now, and you see a lot of.


00:40:06 Olof Lindahl

New research projects and you see a lot of pilots of new incentives and you see new stewardship programmes being launched in a lot of countries.


00:40:15 Olof Lindahl

So what you what we’re seeing is how more and more stakeholders are getting on board with trying to find solutions to the threat from AMR, which is very promising.


00:40:27 William Mountford

If people who have listened to this want to find out more, where can they find more from you?


00:40:30 Olof Lindahl

If you want to know more about our research, please go to and search for antibiotic susceptibility bonus.


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