It’s rare that you hear NICE stand up and say that the innovative industry should be better remunerated but that’s exactly what Andrew Dillon, the CEO of NICE, said in his contribution from the floor at the seminar on anti-microbial resistance at the World Innovation Summit for Health (WISH), which I attended in Doha this week. The video for the 70 minute discussion is worth a look if this is an area of interest.
The report authored and co-ordinated by Dame Sally Davies, the UK’s chief medical officer, aims to move forward the international debate on how best to develop next generation anti-infectives and it was great to see that this is an area of concern that is being given serious policy consideration at key international fora, since several BIA members are active in this space.
The report published to coincide with the event came up with a range of suggestions that ranged from measures to raise awareness, conserve existing antibiotics, through sanitation hygiene and infection prevention and control to proper surveillance and monitoring.
But, from a parochial private small company R&D view the most interesting parts of the report are the practical suggestions for actions to incentivise R&D. Given that the report suggests that 80 per cent of this work is being done by biotech and small pharma companies, I know this is an area where incentives might make a difference to member companies.
On incentivising R&D the report suggested four basic approaches:
- Increase the price of antibiotics
- Extend IP or patent protection to reward the developer of a new antibiotic with a longer period of exclusivity
- Decouple sales from R&D, and thereby separate the incentive to innovate from the incentive to sell
- Guarantee income to innovators, by entering into long term contractual agreements – agreements ensuring a minimum level of return regardless of the volume of product sold
The last two of these were the ones that attracted the attention of attendees and generated serious debate in the room. The concept of decoupling sales from R&D, and thereby separating the incentive to innovate from the incentive to sell was discussed. Essentially, a separate funding mechanism would have to be found for R&D. Suggestions included a public-private partnership (PPP), a grant from an R&D granting agency, a prize, or a goal-specific investment by government or philanthropic organisations. Many in the audience favoured the PPP model. If the PPP holds the IP in the drugs discovered, it could license the drugs to different manufacturers in ways that promote both access and appropriate use. But, the model has some disadvantages too: the PPP would demand substantial public funding up front, as the R&D pipeline has to be large enough to ensure sustainable output; and the PPP would need rigorous governance and performance management, to ensure that the public funds are invested responsibly and produce the expected results.
Contributors from the floor also suggested that missions that had been successful in this area in the past had been cornerstoned by a single philanthropic organisation but this was not the case at present for anti-microbial resistance.
The other idea that was discussed was whether a guaranteed income to innovators could be made to work by essentially establishing agreements ensuring a minimum level of return regardless of the volume of product sold. To operationalise such a guarantee, various options are possible: a fixed fee, licensing fee, or an advanced market commitment. The advantage of this guarantee mechanism is that the public funds would be spent only once the product is launched. The disadvantages are that appropriate safeguards have to be created to ensure access and appropriate use, and that the commitment needs to be negotiated upfront.
Both of these ideas were seen as addressing the R&D incentive problem holistically, and they could be implemented with design features to ensure access and appropriate use. Andrew Dillon’s comments were that the market had not sent a strong signal to potential providers of next generation anti-infectives that their innovation was valued – hence greater incentives should be introduced through policy.
This is a moving global policy debate that I will watch with interest and I’d very much welcome comment on the Doha discussion as we formulate our own position on what would work best to incetivise companies to tackle this thorny global challenge.
Policy makers are engaged on this – 2014 is when we can make our collective voice heard.