Illustration: Lazaro Gamio/Axios

A group of large drug companies launched a $1 billion AMR Action Fund Thursday in collaboration with policymakers, philanthropists and development banks to push the development of two to four new antibiotics by 2030.

Why it matters: Antimicrobial resistance (AMR) is a growing problem — possibly killing up to 20 million people annually by 2050 — but a severe lack of R&D market incentives has hampered efforts to develop a robust antibiotic pipeline to address the issue.

"Antimicrobial resistance, I do believe, is the existential threat of this century."
— Admiral Brett P. Giroir, assistant secretary for health, said at a Thursday press conference

What's happening: AMR problems have been growing for decades, as bacteria, viruses, fungi and parasites become resistant to medicines and sometimes to multiple medicines.

  • Giroir, who practiced pediatric care for 14 years, said "literally not a day went by that I did not have a child, struggling for survival, in a life-and-death battle with a resistant organism."
  • "AMR is like the COVID-19 pandemic — [but happening] nearly every year. Statistics show us that AMR killed 700,000 people globally in just the last year. And, by 2050 could kill as many as 20 million annually," Eli Lilly CEO David Ricks says.
  • Giroir says in the U.S. there are more than 2.8 million AMR infections with 35,000 deaths every year.
  • "Going forward, the capacity to develop antibiotics to infectious agents, I think, is going to be seen as a matter of national security," says Scott Gottlieb, resident fellow at the American Enterprise Institute and former FDA commissioner.

The problem: It's expensive to develop a new antibiotic without being able to have a consistent market to provide a return on investment, drug executives said, particularly as effective novel antibiotics tend to be stored to address rising AMR problems in the future, rather than being distributed.

  • "We're asking folks to develop drugs but we're asking doctors not to prescribe them," says GOP Sen. Bill Cassidy, who adds it's a necessary paradigm that needs properly functioning market incentives.
  • The current COVID-19 pandemic — in which many patients experience secondary infections that are sometimes antibiotic-resistant and deadly — is a reminder of the need for new antibiotics, the participants in the press conference said.
  • "Unless the U.S. government changes antibiotic reimbursement, today's excitement will end in bankruptcy. Big companies have exited antibiotics for very good reason — bad economics," CARB-X executive director Kevin Outterson points out.
  • Recent legislative efforts are attempting to address the problem, including the DISARM Act in both the House and the Senate, according to Sen. Bob Casey.

How it works: The fund is a roughly $1 billion venture consisting of more than 20 pharmaceutical companies, philanthropies, development banks and multilateral organizations, says PhRMA president Steve Ubl.

  • The focus will be on small and middle sized enterprises that lack access to capital, Ricks says.
  • Beyond funding, the AMR Action Fund will also provide technical support to small biotech portfolio companies, Merck CEO Ken Frazier says. Sustained investment is needed as it often takes 12 to 15 years to develop new drugs, he adds.
  • The World Health Organization and the European Investment Bank, amongst other organizations, will provide assistance.
  • The fund will extend efforts currently led by CARB-X, a public-private enterprise that invests in significant research in companies working on the early phase of developing new antibiotics. "The timing of this AMR Action Fund is life-saving for these research companies and life-saving to the world," Outterson says.

The bottom line: "The next pandemic may be a superbug," Cassidy says. "We are preparing now for this next pandemic. And there will be people alive, because of this development, [who] otherwise would not be alive."

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