Tackling the next health crisis: pharma launches $1bn AMR Action Fund

Allie Nawrat 16 July 2020 (Last Updated July 15th, 2020 12:08)

Covid-19 is not the only public health threat facing the world. Drug-resistant bacterial infections have the potential to kill 10 million people a year by 2050 unless there are serious efforts to overcome the market failure in antibiotics development. IFPMA has brought together over 20 major pharma companies and public institutions to launch a $1bn fund to support antibiotic R&D.

Tackling the next health crisis: pharma launches $1bn AMR Action Fund
How to overcome the market failure in developing novel antibiotics? Credit: Shutterstock.

More than 20 major biopharmaceutical companies, the World Health Organization (WHO), the Wellcome Trust and the European Investment Bank (EIB) have launched the antimicrobial resistance (AMR) Action Fund to help stop the world losing its most powerful tool in healthcare.

This initiative, which is coordinated by trade association the International Federation of Pharmaceutical Manufacturers & Associations (IFPMA), has raised nearly $1bn to respond to the AMR threat. This funding, and technical support from big pharma, will be used to strengthen and accelerate antibiotic development.

A brief history of antibiotic market failure

The WHO predicts that AMR could claim 10 million lives per year by 2050 and cause a global economic recession as large as the 2008 financial crisis.

“AMR is a slow tsunami that threatens to undo a century of medical progress,” said WHO director general Dr Tedros Adhanom Ghebreyesus at an IFPMA launch event. Antibiotics are truly game-changing medicines that are used to support cancer treatment and organ transplantation, as well as protect people from deadly infectious diseases, such as human immunodeficiency virus (HIV), malaria and tuberculosis (TB).

This situation has emerged because of the overuse and misuse of antibiotics. This has been exacerbated by the lack of economic incentives for pharma companies to invest in infectious disease research. The aim of developing novel antibiotics is that they will be used as a last resort as bacteria develop resistance, but this means it is incredibly hard for pharma, or investors, to make back their research and development (R&D) costs, let alone make a profit on antibiotics.

As a result, IFPMA director general Thomas Cueni noted there has not been a new class of antibiotics developed since the 1980s.

Although tackling AMR is something that has been high on the agenda of international organisations for almost a decade, since Jim O’Neill’s AMR review was published in 2014, there has been limited progress so far.

Lessons from the Covid-19 pandemic

However, Covid-19 has put a spotlight on the flaws in the infectious disease treatment landscape. In the last six months, almost 600,000 people have died from Covid-19, while approximately 700,000 die every year as a result of drug-resistant infections.

“Covid-19 has posed an unprecedented challenge”, but AMR is another challenge we now need to face, explained Bayer president of pharmaceuticals Stefan Oelrich at the IFPMA launch.

Science and industry needs to ensure the world is better prepared for future and emerging health threats, added Merck Group chairman and CEO Stefan Oschmann. GlaxoSmithKline CEO Emma Walmsley agreed, stating: “The pandemic is teaching us many things, one is that the world needs to be better prepared for health threats.”

“Unlike Covid-19, AMR is a predictable and preventable crisis,” said Cueni at the launch. “We must act together to rebuild the pipeline and ensure that the most promising and innovative antibiotics make it from the lab to patients.”

Deep dive into the AMR Action Fund

 Over the past 12 months, the public and private sectors came together to form a coalition and a fund to overcome this market failure. Cueni declared: “The AMR Action Fund is one of the largest and most ambitious collaborative initiatives ever undertaken by the pharmaceutical industry to respond to a global public health threat.”

Expected to be operational in the fourth quarter of 2020, the main focus of the AMR Action Fund is to use the $1bn committed to invest in promising small biotechs working on developing innovative antibiotics; the aim is to bring between two and four new antibiotics to the market by 2030.

Companies that receive funding will be determined by an independent scientific advisory board, which will aim to invest in particularly innovative approaches and focus on pathogens on the WHO’s 2017 priority list. In addition to TB, which is a serious public health threat, other bacteria on the WHO’s critical priority list include those that are a large threat in hospitals: AcinetobacterPseudomonas and various Enterobacteriaceae, such as E.coli.

The AMR Action Fund’s portfolio companies will also benefit from the technical support, expertise and resources from the pharma industry supporters of the fund. This will help to optimise a biotech’s chance of success in the antibiotics field.

What more needs to be done?

Although the AMR Action Fund is focusing on improving antibiotics R&D, it will not fully solve the issue of creating a long-term viable economic model for bringing antibiotics to market.

This is may be an important first step in the right direction, as Dame Sally Davies, the UK’s Special envoy on AMR, noted at the fund’s launch. However, Cueni stated that the next debate needs to be about incentives and the longer-term problems. The fund has created push incentives on the R&D side, but then we need pull incentives from the business model, said European Federation of Pharmaceutical Industries and Associations (EFPIA) director general Nathalie Moll at the launch.

Oschmann added that a system that would only pay for consumption would be wrong and that the industry, patients and public health stakeholders need to work together to overcome this next challenge.

“The AMR Action Fund will support innovative antibiotic candidates through the most challenging later stages of drug development, ultimately providing governments time to make the necessary policy reforms to enable a sustainable antibiotic pipeline,” added IFPMA president and Eli Lilly CEO and chairman David Ricks.

The UK leads the way

There is already starting to be a shift from policymakers around changing the business model for antibiotics. A noteworthy example is the UK Government’s scheme to create a subscription-style payment model for antibiotics. This initiative was announced in 2019 as part of the UK’s five-year national action plan on AMR and officially launched in mid-June 2020.

In this model, the National Health Service (NHS) will pay companies upfront for access to their antibiotic product and the price will be based on its value to the NHS, not how much is used. The government hopes the first antibiotics will be available to patients under this model by 2022.

In a statement, Davies noted: “Governments and industry must work together to produce new antibiotics and ensure that we can continue to treat common diseases.

“The UK is leading the way by encouraging companies to produce new antibiotics to stay one step ahead of life-threatening diseases.”

UK Secretary of State for Health and Social Care Matt Hancock added: “This new way of buying antibiotics for patients in the NHS breaks down restrictive barriers to offer companies a vital springboard to foster innovation and develop potentially life-saving new products.”