New research from Charles Rivers Associates for EFPIA demonstrates that a voucher system designed to drive research and development (R&D) into new antibiotics would cost Member States 45% less than previously estimated by the European Commission.

Antimicrobial resistance (AMR) is one of the world’s most pressing health emergencies. Yet despite the urgent need, private investment in antimicrobial R&D is limited. To prevent bacteria developing resistance to existing treatments, the aim with any new antibiotic is to use it as little as possible - not an attractive proposition for investors.

The transferable exclusivity voucher (TEV) is designed to address this challenge by rewarding the discovery of novel antibiotics without requiring upfront public investment. The voucher allows a developer to defer generic competition on another one of their products for one year, rather than receiving direct payment for their new antibiotic. This incentivises the company to invest in the development of a new antibiotic despite the medical need to limit its use.

EFPIA views TEV as part of a broader package of measures needed to address the AMR challenge. This could include subscription models and other pull incentives.

Nathalie Moll, Director-General, EFPIA, said:

"AMR affects hundreds of thousands of people in Europe every year. We urgently need new thinking to kickstart R&D. The TEV is an affordable and balanced mechanism for unlocking antimicrobial innovation."

The new forward-looking analysis by CRA finds that strong safeguards built into legislative proposals will avoid ‘overcompensation’. This will reduce the expected costs of implementing TEV.

Key findings:

• Initial estimate: The European Commission’s 2023 Impact Assessment estimated the cost of one TEV at €294 million to EU public payers.
• New analysis: The CRA model, which takes account of proposed constraints on how TEVs can be used, estimates the average cost per TEV to be €162 million.
• Cost of inaction: The burden of AMR exceeds the cost of a TEV in every Member State. For example, in France, AMR costs are €264.3 million per year – the cost of TEV would be €28 million.
  

BackgroundWhy R&D for AMR matters

AMR is escalating but current market conditions are failing to support new antimicrobial development. AMR causes 670,000 infections and 33,000 deaths each year in the EU. These figures are expected to rise significantly. The economic impact is projected to reach between €180 billion and €680 billion annually by 2050 if no effective action is taken.

How TEV worksA TEV allows a developer to monetise their antimicrobial innovation by deferring generic competition on another product, rather than receiving a direct payment. This makes TEV a market-based alternative to direct funding, with the value depending on product sales.

Read the report here.