The European Commission’s (EC) plan to test a novel scheme to incentivise antimicrobial drug development companies remains beset by questions amidst the bloc’s drive to tackle the growing threat of antimicrobial resistance (AMR).
Presented as part of the EC’s long-awaited pharmaceutical reform in late April, the scheme aims to encourage the research of novel antimicrobials by creating a system of transferable exclusivity vouchers. In a nutshell, these vouchers would serve as a reward given to companies for developing new antimicrobials, which has historically been challenging due to its complexity and low return on investment.
The voucher scheme is built to stimulate antimicrobial R&D by giving companies in the field the chance to prolong the data exclusivity of an approved product by one year. Data exclusivity has been a heated point of debate in the recently announced pharmaceutical reform, which aims to shorten it from eight years to six, drawing the ire of pharma companies. However, while the intent is to support antimicrobial drug development, experts say smaller companies in that sector could sell the vouchers to companies that might want to extend the life of other marketed drugs. Hence, some experts remain unsure of how the scheme will incentivise the development of new drugs to fight AMR.
The voucher approach was already debated in the months leading up to the announcement. In November 2022, 13 EU member states supported the publication of a non-paper by the Netherlands, which criticised the potential use of transferable exclusivity vouchers for new antimicrobials. According to the document, this scheme would instead harm patient access to drugs, which will take longer to turn generic.
The voucher system marks another one of the EU’s steps against the rising threat of AMR announced in recent years. The EU previously focused on AMR through the One Health Action Plan, which was released in 2017. Alongside the delayed pharmaceutical reform, more recently, the EC published a proposal, which focused on limiting the overuse of antimicrobials. The Council of the EU, one of the bloc’s legislative institutions, adopted the recommendation on 13 June.
Beyond this, AMR was also the topic of talks in the European Parliament during a recent plenary session on 1 June. There, the European Commissioner for Health and Food Safety, Stella Kyriakides, stated that incentives need to be used to fuel innovation needed to bring new antimicrobials to the market. Since there were no approvals of new antimicrobial drug classes since the 1980s, new approaches need to be studied to bring innovation here, she added. One of these incentives would be the voucher scheme, which Kyriakides described as “possibly a world pioneering measure”.
A wildcard measure
Although the EC should be applauded for trying to incentivise the development of new antimicrobials, the voucher scheme remains a “wildcard,” says Christine Årdal, PhD, senior researcher at the Norwegian Institute of Public Health. Årdal previously wrote about the voucher scheme in a February 2023 article published in The Lancet. In response to the article, the European Federation of Pharmaceutical Industries and Associations (EFPIA), an organisation representing the European biopharmaceutical industry, stated that the concept of such a voucher is not new and has been previously considered in papers and stakeholder forums. This means that some of these concerns surrounding the scheme’s untested nature have been previously raised and addressed.
Nevertheless, while the EC has implemented several guardrails within the scheme, it is unclear if it will incentivise innovation, states Årdal.
As per the EC’s proposed pharma reform, only 10 vouchers will be given during this 15-year period. Additionally, a voucher has to be used no later than in the fourth year of data exclusivity. But there are still many unknowns at that point, which presents some risk for a company here, notes Årdal. It would be different if the voucher would be implemented late in the life of a patented pharmaceutical, she says. The voucher will also only be granted as reward for products that can be considered as priority antimicrobials, which fulfill at least one of three characteristics. This includes factors such as a different mechanism of action from other approved antimicrobials, as well as being part of an entirely new class. The companies that receive such vouchers also need to show that they are capable of producing enough of the priority antimicrobial for the demands of the EU.
Voucher impact on antimicrobial R&D
However, some say the scheme remains beset by questions regarding its effect and implementation. The development of new antimicrobials is dominated by small companies that do not have many products in their pipelines, says Adrian Alonso Ruiz, researcher at the Institute of International and Development Studies in Geneva, Switzerland. To an extent, the main design of the voucher system stands on the willingness of Big Pharma to spend considerable sums of money to get a hold of an additional year of data exclusivity, explains Årdal. But, it is unknown if the resale of this voucher to larger pharma companies will prove a large enough incentive to these smaller developers, notes Ruiz.
There is no available information that would point to the amount of money that a smaller antimicrobial drug developer would gain from this sale, says Enrico Baraldi, professor at Uppsala University’s Department of Civil and Industrial Engineering. Baraldi was one of the authors of The Lancet article alongside Årdal. Still, the voucher policy needs to be evaluated, says Ruiz.
The EC has said there will be a 15-year testing period wherein the scheme will be trialed. After the 15-year sunset period, the European Parliament and the Council of the EU will decide to continue or review the measure, alongside a proposal by the EC.
Beyond this, a chief concern shared among experts is the potential healthcare costs that this additional year of data exclusivity could incur by delaying the arrival of generics to the market. The major problem of the scheme is that the member states will have to pay for the extension of exclusivity, which will likely be applied on blockbusters, says Baraldi. In other words, the cost of a year of exclusivity could be larger than the benefits obtained by the initial company’s development of an antimicrobial drug, explains Ruiz.
Kyriakides assures that these vouchers will be given under extremely strict conditions to minimise the cost on healthcare systems and to ensure a fair return on investment for developers who are often small and medium-sized enterprises (SMEs).
Still, the use of different incentives should not be viewed as an alternative to the scheme, but rather as a portfolio of methods used to fight AMR, says Ruiz. These methods can be classified into “push and pull” incentives. Examples of push incentives would include direct funding and non-dilutive financing for AMR-focused drug developers who are at early stages of development, explains Ruiz. On the other side, the voucher scheme could make a positive impact, he adds.
However, additional initiatives that de-risk the development process are still needed, says Ruiz. This could be done through revenue guarantees, which were mentioned in the EC’s Council recommendation document, and other approaches, says Årdal.
This is also the way that some other countries are approaching AMR incentives, which includes Sweden and the UK, notes Årdal. In June 2020, the British government announced a scheme where the National Health Service offered two contracts to pay pharma companies upfront for developing innovative antibiotics. In 2018, the Swedish Public Health Agency was commissioned by the government to test out a guaranteed reimbursement model.
After all, the issue of AMR does not know borders, as was the case with the Covid-19 pandemic, notes Ruiz. “Whether a resistant strain emerges in the UK, Spain, or in Mali, it won’t matter. Because at the end of the day, everybody will have to face the consequences of that resistant strain. That means that the new tools that are developed need to be [made] globally accessible as soon as possible.”