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Hub News Article Oct 05, 2017

New Investment Models in Health-Related R&D – the Case of Antibiotic Resistance

Recent World Bank research has shown that the economic fallout from drug-resistant infections by 2050 could match the damage wreaked by the 2008 financial crisis.

Multiple issues hamper investment in Research and Development related to drug resistance.The risk of patients’ developing resistance precludes the use by the private sector of the usual business model to sell drugs in high volumes. This, in turn, has stifled research and development. Moreover, there is an imperative to keep costs low to ensure new treatments are affordable and accessible in developing countries in line with the health-related development objectives under the Sustainable Development Goals, Zhan emphasized.

To bolster the creation of new classes of antibiotic drugs, more public and private investment is needed for R&D. While proposals have been mooted to delink the cost of R&D from sales volume and drug prices, governments are yet to commit sufficient funds to shift R&D decisively from the volume-oriented business model approach to an effective market entry rewards approach.

Experts at the UNCTAD meeting held early October also cautioned about the risk of shortages in the supply of older, existing antibiotics due to unattractive market conditions.

As with new classes of antibiotic drugs, innovative “pull” mechanisms were needed to incentivize the continued production of existing antibiotics under conditions that avoid overuse and the development of resistance (i.e. a stewardship approach).

Participants suggested that investment models should be flexible, small-step and tailored to particular circumstances without losing sight of the global regime.

UNCTAD convened a meeting of intellectual property rights experts to discuss options for investment models in health-related research and investment (R&D) to address antibiotic resistance.

The intellectual property rights-related experts meeting was attended by experts from both the public and private sectors, as well as civil society.

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