Big pharma risks public backlash on antibiotics, says Jim O'Neill

Pharmaceuticals companies risk a backlash similar to the one experienced by banks after the financial crisis if they fail to invest more in new antibiotics, according to the head of a government-backed commission looking into the problem of antimicrobial resistance.

Jim O'Neill, former chief economist at Goldman Sachs, said drug companies would be blamed for the rising number of deaths from drug-resistant superbugs if they refused to contribute to global efforts to develop a new generation of anti-infective medicines.

Drug companies have cut investment in antibiotic research in recent decades and focused instead on higher-margin products such as cancer drugs. Mr O'Neill said this reminded him of the way banks concentrated on exotic financial instruments before the 2008 crash while neglecting their broader social responsibilities.

"If we get closer to 2050 and there are 10m people around the world dying [from drug-resistant infections], guess who is going to be blamed?"

The warning came as he unveiled a multi-billion dollar plan to revive antibiotic research and development - with industry expected to help finance the scheme along with taxpayers.

Mr O'Neill was appointed by David Cameron, UK prime minister, last year to find solutions to the market failures that have caused the antibiotics pipeline to dry up.

In its most detailed proposals so far, his commission on Thursday said drug companies should receive lump-sum, upfront payments from governments for successful new antibiotics once they have been proved effective. This would remove the link between sales volume and profits which encourages over-use of medicines, which in turn fuels resistance.

However, Mr O'Neill said that, in return for this guaranteed reward, the industry should foot a large part of the development costs, estimated at between $16bn and $37bn to produce four major new antibiotics over 10 years.

In addition, the industry should commit $2bn over five years to a new R&D fund to spur more early stage research.

He acknowledged that governments and their taxpayers would also have to contribute but the sums involved were "peanuts" compared with the price of inaction.

An initial report by his commission last year predicted drug resistance would cost the global economy $100tn over the next 35 years and cause 10m deaths a year by 2050 if no new antibiotics are produced. Mr Cameron has warned of a return to "the dark ages of medicine" with minor infections proving fatal.

While UK-led, the commission is aiming to win international support for its plans. Mr O'Neill, best known for coining the "Brics" moniker for big emerging economies, is hoping to persuade China to embrace the issue as part of its chairmanship of the Group of 20 major economies next year.

Roche and GlaxoSmithKline, two of the world's biggest drugmakers, on Thursday promised to work with the commission on its ideas - without making firm financial commitments.

Mr O'Neill said the industry needed greater incentives to invest because returns from antibiotics were so low; it takes about a decade of sales before development costs are recouped.

But he said drugmakers could afford to do more - highlighting the almost $90bn in annual profits made by the top 10 companies and the billions returned to shareholders through buy backs.

Mr O'Neill's comments echoed those of Sir Andrew Witty, GSK chief executive, about the industry's broader social responsibilities in an interview with the Financial Times last week. Sir Andrew said: "The banking industry has found itself out of love with stakeholders in society... For us as an industry it's really important we don't end up in a similar situation."

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