Antibiotics: Netflix-style subscriptions target superbugs

Price is not always a reliable guide to value. The financial rewards that come from developing new antibiotics are pitiful, but their importance can hardly be overstated. The rise of antimicrobial resistance could claim up to 10m lives a year by 2050, resulting in a cumulative loss of up to $100tn of economic output, one study concludes. New business models to prevent this — including Netflix-style subscriptions — are being explored to overcome market failure.

Developers of new antibiotics have to contend with both low prices and low volumes. Innovative treatments are deployed slowly to reduce the risk of resistance developing. That makes it hard to recoup development costs. Those are typically around $1.5bn, about 33 times average annual sales.

Small companies have done a lot of the running, initially sustained by research grants. But they have struggled to make a return. The handful of quoted innovators, such as the US’s Summit Therapeutics and India’s Wockhardt, have together lost more than half their value since 2015. Several have been forced into bankruptcy. 

A number of big pharma companies have sounded the retreat. AstraZeneca pulled out of this line of research in 2016, followed by Sanofi and Novartis in 2018. That has left just a handful of big players in the market, led by GSK — although 20 pharma companies have contributed to a $1bn fund that aims to develop several new antibiotics by 2030.

New incentives are required. The UK and Sweden are both piloting an approach that pays pharmaceutical companies upfront for access to antibiotics, rather than for usage. The UK recently selected two antimicrobials — made by Japan’s Shionogi and the US’s Pfizer — to be purchased via this Netflix-style subscription payment model. US legislators have considered a similar scheme.

There are political obstacles. The pharmaceutical sector is not a popular recipient of government help. But the current pandemic has shown the value of planning ahead of crises. New antibiotics are akin to fire extinguishers or vehicle breakdown memberships. They are worth paying for, in preparation for future emergencies.

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