News and Opinions  –  2017

Boston Consulting Group report shies away from addressing affordable access and stewardship


In a follow-up to a previous 2015 report, the Boston Consulting Group published the report Breaking through the Wall: A Call for Concerted Action on Antibiotics Research and Development for the German Federal Ministry of Health in late February 2017. Focusing in on four out of ten originaly proposed levers (from the 2015 report) to reinvigorate the research and development (R&D) pipeline for new antibiotics the report includes recommendations for: a global system of target product profiles (TPPs) to ensure global R&D priorities are met; a Global Research Fund upstream in the R&D pipeline; a Global Development Fund to support clinical research and a Global Launch Reward. The coordination of these policy tools would be done by the proposed entity “Global Union for Antibiotics Research and Development” or GUARD (not to be mistaken with GARDP, the Global Antibiotic Research and Development Partnership, incubated by the Drugs for Neglected Diseases Initiative with the support of the World Health Organization).

The recommended levers proposed both in the 2015 BCG report as well as the 2017 report ends at the point of commercialization. However, comprehensively addressing how new antibiotics, once developed, should be managed to ensure affordable access, stewardship and conservation is urgently needed.

Excludes price target setting

The BCG suggests a global system for Target Product Profiles (TPPs) which is a method used by both private sector and non-profit product development partnerships to outline desired end product specificities which gives direction to the R&D process. The BCG recommends avoiding the inclusion of price targets in the TPPs. Instead they propose an approach which depends on “differentiated pricing and access requirements for new drugs in all funding contracts entered into with GUARD”. Differentiated pricing, however, has in the form of country tiered pricing been widely criticized as an effective tool to achieve affordable access, in particular in bridging income disparities within middle income countries, where over 70 percent of the world’s poor today live and where income disparities are huge. Conversely, TPPs including price targets have been used by non-profit product development partnerships, such as the Drugs for Neglected Diseases Initiative and the Medicines for Malaria Venture and has proven successful towards achieving affordable end products.

A global prioritisation system

The idea of a global TPP system to coordinate R&D and guide funding towards the areas of priority global health needs is good. However, one has be careful to make sure the TPPs clearly incentivizes novel, urgently needed products. The first category of needed drugs proposed by the BCG is “resistance breaking”, which could for example include combinations of existing drugs with beta-lactamase inhibitors. While there is a medical need for these types of drugs, the global TPPs and the funding mechanisms should focus on incentivizing new classes of antibiotics without cross- and co-resistance to existing classes. This message is also clear from WHO’s recently published Priority Pathogen List[1], which is the first step toward developing clear TPPs.

Maintaining a sales-based innovation model

Another area of concern, which is particularly noteworthy given the recent strong UNGA declaration language on delinkage (where the company’s return on investment is divorced from the price and quantity of drug sold), is the recommendation to do only so-called partial delinkage. In this proposal revenues derived from sales are maintained in high-income countries (HICs) on top of the proposed 1 billion USD Global Launch reward. This approach rests on a faulty assumption that currently stewardship policies are strong enough in HIC to avoid inappropriate use.  Meanwhile, the CDC reports that 1 in 3 antibiotic prescriptions are unnecessary in the US[2] and purchasing antibiotics without a prescription in Greece has been shown to be possible in 53-100% of attempts, depending on the type of antibiotic that was requested)[3].

The report should be commended for highlighting that addressing how access and conservation is ensured in LMICs is key. Conservation, stewardship and affordable access are, however, global concerns and must be tackled in all countries. By recommending partial delinkage, the BCG report suggest an unfortunate North/South divide, where access may be restricted in LMICs for stewardship purposes (without having a plan to support countries in strengthening their health systems in order to better manage the drugs) while the sales-based model continues in HICs with some minor limitations (see below).

A limited “insurance system”

The Global Launch Reward would offer 1 billion USD payments, in installments contingent on meeting “access, quality, and good stewardship conditions,” for “high-need antibiotics.” The installments would be front-loaded, but paid out over an eight-year period with the possibility of paying back part or all of the reward in proportion to the sales. The BCG envisions that these arrangements would give GUARD leverage over price differentiation and stewardship of other products in the portfolio of awarded companies. However, once the product’s patent expires, the company would no longer be obliged to repay the reward and the envisioned GUARD leverage to ensure access and stewardship disappears. Addressing access and conservation of new antibiotics only through the means of obligations tied to payments are time-limited solutions. How stewardship for example will be ensured after patent expiry in this proposed model is not addressed.

Transformation of innovation ecosystems needed 

The proposed $200 million Global Research Fund would divide funding across a portfolio of basic research and pre-clinical projects of varying risk. While the report should be commended for acknowledging the urgent need for collaboration in research (e.g., substance libraries, standardized methodologies, a digital platform etc.), the Global Research Fund focuses only on individual projects. Financing in this phase should instead focus on strategically transforming the innovation ecosystem rather than simply making bets, drug by drug or company by company.

Finally, the Global Development Fund with a $200 million yearly budget would support and de-risk financing of clinical trials through a mechanism of forgivable loans which would have to be paid back if a drug candidate is brought to market or sold to another company. The relationship among the various proposed funds and whether receiving pay-outs from the Global Research Fund or the Global Development Fund would impact or reduce later pay-out from the Global Launch Reward is not obvious. It is also unclear how the public investments in the earlier R&D stages would be accounted for in the end price to avoid paying for the same product twice. An alternative proposal in the report suggests that GUARD could share in revenues generated, or the debt could be assumed by a new company spun off by an academic institution.

Common for all of these proposals is that the report does not address how these mechanisms, which are linked to potential market size and sales volumes, actually align with the goals of stewardship and conservation.

In summary, while the report does explore some interesting ideas like the TPP system and important areas such as the early stages of innovation, the trade-offs made in order to presumably make more modest upfront investment recommendations to the politicians and governments of the G20, means that a sales based system and high prices is maintained in HICs. It is not made clear how such an approach would be compatible with ensuring affordable access and sustainable use of new antibiotics in all countries.


Helle Aagaard, Otto Cars and Anna Zorzet
[2]Prevalence of Inappropriate Antibiotic Prescriptions Among US Ambulatory Care Visits, 2010-2011
[3] Dispensing of antibiotics without prescription in Greece, 2008: another link in the antibiotic resistance chain., Antibiotic Prescriptions and Prophylaxis in Italian Children. Is It Time to Change? Data from the ARPEC Project,