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Pharma abandons antibiotics

Lack of financial incentive for antibiotics has led large pharmaceutical companies to leave the market. We summarise a recent article in Nature that discussed why big pharma has abandoned antibiotics and what this means for emerging antibiotic resistance.


The threat to healthcare caused by the misuse of antimicrobial drugs has been known for a while. Even in 1945, bacteriologist Alexander Fleming noted that the overuse of penicillin might lead to forms of bacteria that were resistant to its effects. In fact, drug-resistant diseases kill around 700,000 people each year. Despite widespread acknowledgement that something must be done to address crisis, society has struggled to respond.

Unfortunately, no new classes of antibiotics have been discovered since the 1980s. Discovering and developing new antibiotics is challenging. It can take 10-15 years and cost over $1 billion to develop a new antibiotic, often with high failure rates. Additionally, the average revenue generated from antibiotic’s sale is roughly $46 million per year, which is nowhere near the amount needed to justify investment. To put it plainly: antibiotics are not an attractive investment. As a result, many pharma companies have dropped out of the market in pursuit of more profitable lines of drug development, such as cancer therapeutics.

An economist’s problem  

Since antibiotics were introduced at scale in the 1940s, deaths caused by infectious diseases have fallen by 70%. However, unless the economics of the market can be re-imagined this could be in jeopardy. Economics has an important role in the lack of antibiotics coming to the market. However, economists have been slow to act. For example, in one review, only 55 of more than 1 million peer-reviewed economics articles in the EconLit database were found to be related to antimicrobial resistance.

Pharmaceutical development is an expensive process. The main issue for antibiotics is the cost-benefit ratio, which is much less favourable than other drugs. Prices are low because in many countries government agencies have a role in assessing the price. In many countries, a drug has to be approved by a committee of health professionals and economists, who evaluate whether the drug offers value for money. Additionally, doctors often avoid prescribing new antibiotics to help delay the development of resistance, which means governments and health agencies are less likely to accept a premium for new antibiotics. The course of antibiotics is also short, reducing the volume that can be sold.

Costly developments

As microbes evolve, they develop new mechanisms to evade the host. This makes creating new drugs challenging as all the low-hanging fruit are gone. The preclinical stages of antibiotic R&D are the most risky and create the biggest financial burden. As a result, attention has been shifted to the use of big-data analysis that could be exploited to make antibiotic research more profitable. For example, a study this year used an AI system to predict which molecules might have antibiotic properties. The team found a compound – halicin – that is structurally different from conventional antibiotics but can still kill bacteria. While these techniques may help discover new molecules, the next step is ensuring they are stable and non-toxic to humans.

Going forward

There are only four major pharmaceutical companies still with active antibiotic research programmes. However, some smaller companies and charities have anticipated the public health problems that are likely to arise from a lack of investment in antibiotics. Fortunately, in July this year, the International Federation of Pharmaceutical Manufacturers and Associations announced the AMR Action Fund. This initiative involves 24 companies that aim to bring between two and four new antibiotics to market by 2030. It has so far committed nearly $1 billion to support the research needed to achieve this goal.

Elsewhere, some healthcare providers and drug firms are switching to a model whereby antibiotics are paid for through a subscription. Buyers would pay a pre-agreed amount to use as much or as little of the drug as they need – the so-called ‘Netlfix’ model. UK Health Secretary Matt Hancock said that the UK government will pay pharmaceutical companies for access to new antibiotics, rather than on a per-pill basis. The companies will receive their first instalments during the expensive early stages of R&D.

The need to develop antibiotics is imperative. However, the production pipeline is still flawed. The economics of the antibiotics market is broken and must be re-imagined.

Image credit: By 8photo –

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