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UK: In the age of AMR, does a nationalised drug company make sense? The case for and against

July 2, 2019
Life sciences

A UK economist has come out saying that pharma companies are dragging their heels in the fight against superbugs and the only resolution would be creating a state-run drug company. Could he be right, or is international support and funding for a competitive marketplace the best solution to developing new lifesaving antibiotics? Our editorial team put forward the arguments for and against a national drug company.

Chloe Kent: For-profit business models won’t cover the costs; the only answer is government backing
When the World Health Organization (WHO) lists antimicrobial resistance (AMR) as one of the ten biggest threats to global health in 2019, it’s time to step up and take action. As recently argued by influential British economist and “superbug tsar” Lord Jim O’Neill, nationalised drug companies may be the best answer to the lack of investment in the development of new antibiotics.

In the 1980s, 25 large drug companies had active antibiotic discovery programmes. However, no new class of antibiotic has been found since 1987 and just over three decades later that figure of 25 has dwindled to just three: Pfizer, Merck Sharpe & Dohme (MSD) and GlaxoSmithKline (GSK).

One significant factor in this is that new infection-fighting drugs can be sold to distributors for as little as $2,000 – $5,000 per course of treatment, a mere fraction of the cost of long-term therapies for chronic, non-bacterial diseases. Large pharmaceutical conglomerates are motivated primarily by profit, and it makes perfect sense in capitalist business terms to prioritise only their most profitable drug development programmes.

This is why, O’Neill argues, nationalised drug companies are needed to fix the global antibiotics market. As they will be state funded and lack the same for-profit motivation as private big pharma firms, more time and resources will be available for areas of drastic unmet need, such as AMR.

Antimicrobial resistance has been described as a “looming apocalypse”. In January, the UK Government set out a plan to fight AMR in the country by 2040, cutting down on prescriptions by only employing the use of antibiotics where entirely necessary and offering financial aid and collaboration to big pharma companies who choose to try and tackle AMR, and this is certainly a step in the right direction.

But, a nationalised pharmaceutical company could go so much further. World-over, we need stronger regulations around AMR. The current model under which drug companies operate is deeply inefficient in this regard, and nationalised drug companies will be able to direct research to areas where it is most needed as opposed to what will nourish a capitalist bottom line.

They would also be able to implement more high-quality drug assurance systems – many of these are weak and can lead to the production and approval of low quality medicines, which aren’t strong enough to eliminate infections and instead create the perfect conditions for resistance to develop.

According to the an AMR review conducted by the Wellcome Trust and UK Government, spearheaded by O’Neill, drug resistant infections are already causing up to 50,000 deaths across Europe and the US each year. Many see nationalising pharmaceutical production as a radical position, and it must be remarked that it may well come with its own host of logistical inadequacies just like the current private system. But when insurmountable numbers of lives may be needlessly lost to once-treatable infections, radical action may be mankind’s only hope.

Allie Nawrat: Global collaboration is needed, not a patchwork of national companies
The threat to health of antimicrobial resistance is a serious global issue, which therefore needs a global solution.

Although successful development of drugs through a nationalised drug company and moving towards eradicating AMR in the UK would be a huge achievement, it may not help drive progress towards the eradication of AMR elsewhere. Research, including a study by the National Institute of Denmark, has shown that different types of AMR genes are present in different countries and regions.

Therefore, instead of one country committing resources to tackle local forms of AMR through a state-run pharmaceutical company, we should focus on encouraging international collaboration between companies, industry and related organisations to find better ways to incentivise drug development with a global focus.

The World Health Organization is in the perfect position to mediate the process. It is currently working with partners to create a global action plan regarding controlling the emergence and spread of AMR. This system could be expanded to encourage research and development of new drugs for AMR.

One option for the new system could be Wellcome Trust’s head of drug-resistant infections priority programme Dr Tim Jinks’ idea of ‘a pay or play initiative’, where companies without antibiotic development programmes would be taxed and this money would be used to reward the market entry of each novel antibiotic.

Supplementing this levy with government funding would help to distribute the risks associated with R&D among various actors. This allows pharma companies and researchers making remarkable progress in the area to be able to focus on further development and commercialisation of products that will make a real difference to the crisis.

A nationalised company will have to be pickier about which innovations it can support than an international approach, therefore potentially missing crucial discoveries and causing set-backs in the fight against AMR.

In an article for the Financial Times, Wellcome Trust director Jeremy Farrar gives the example that if the UK contributed 5% of the $1bn needed to bring a new antibiotic to market, it would only cost each taxpayer £0.06 per month. Whereas in a nationalised drug company it is possible that UK taxpayers could be responsible for 100% of the $1bn needed to bring a drug to market.

In a WHO controlled system, government funding would be further supported by private sector – particularly charitable – investment. These actors have proven their ability to support healthcare crises that are viewed as unprofitable; an excellent example is the Bill and Melinda Gates Foundation’s work in tackling malaria in collaboration with companies like GlaxoSmithKline.

Ultimately, one nationalised drug company – or even a few if other countries followed by example – would not be able to support and fund as many new antimicrobial drugs that are efficacious globally as quickly as an international programme backed by serious investment monitored by the WHO.

By Allie Nawrat and Chloe Kent

Source: Pharmaceutical Technology

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