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Incentivizing Narrow-Spectrum Antibiotic Development with Refunding

The rapid rise of antibiotic resistance is a serious threat to global public health. Without further incentives, pharmaceutical companies have little interest in developing antibiotics, since the success probability is low and development costs are huge. The situation is exacerbated by the "antibiotics dilemma": Developing narrow-spectrum antibiotics against resistant bacteria is most beneficial for society, but least attractive for companies since their usage is more limited than for broad-spectrum drugs and thus sales are low. Starting from a general mathematical framework for the study of antibiotic-resistance dynamics with an arbitrary number of antibiotics, we identify efficient treatment protocols and introduce a market-based refunding scheme that incentivizes pharmaceutical companies to develop narrow-spectrum antibiotics: Successful companies can claim a refund from a newly established antibiotics fund that partially covers their development costs. The proposed refund involves a fixed and variable part. The latter (i) increases with the use of the new antibiotic for currently resistant strains in comparison with other newly developed antibiotics for this purpose---the resistance premium---and (ii) decreases with the use of this antibiotic for non-resistant bacteria. We outline how such a refunding scheme can solve the antibiotics dilemma and cope with various sources of uncertainty inherent in antibiotic R\&D. Finally, connecting our refunding approach to the recently established antimicrobial resistance (AMR) action fund, we discuss how the antibiotics fund can be financed.