Antibiotic Innovation Begins with Making It Easier for Manufacturers to Stay in Business

4 Key Factors Stifling Innovation for Antibiotic Makers

As discussed in a recent Wall Street Journal article, “the world desperately needs new antibiotics to tackle the rising threat of drug-resistant superbugs, but there is little reward for doing so.” As news of the devastating effects of the coronavirus outbreak mounts, the need for continued innovation among drug manufacturers for novel antibiotic treatments becomes clearer than ever.

The problem is that there has been little incentive for drug makers to work on new antibiotics; and even worse, those that have attempted to do so, have seen little profit, or have been forced out of business. Major drug makers, such as Melinta Therapeutics or Achaogen, filed for bankruptcy in 2019. According to the Wall Street Journal, “Achaogen’s Zemdri drug was sold for about $16 million, a fraction of the roughly $300 million spent developing it.” 

Today, smaller biotech companies account for 80 percent of antibiotic development, yet their small size makes it more difficult than ever to remain afloat. Further, while 40 antibiotics are being developed, that’s in comparison to 771 new drugs and vaccines for cancer.

So what’s causing the stifled innovation and less-than-stellar returns on investment for antibiotic makers? Below are four key reasons:

  1. Smaller margins. Unlike drugs that treat chronic diseases, such as high blood pressure or diabetes, most antibiotics are prescribed for a short, finite time. Given the costs to develop, manufacture and commercialize them (upwards of $350M), it’s impossible to recoup the costs when large quantities are not consumed on a recurring basis and sold at low prices. 
  2. Established players. When it comes to antibiotics, many of the original ones, such as Penicillin, still seem to do the trick for a variety of infections. When a traditional antibiotic works, there is no reason to switch to another one.  Many new antibiotics are used only when patients build up immunity to Penicillin, or if they are allergic to it.  Of course, they also can reach blockbuster status if they are the only ones to address a new superbug epidemic, but thankfully they are few and far between.
  3. Little incentives. The U.S. government and European counterparts are beginning to put great urgency behind the need for greater incentives to spark continued innovation of new antibiotics to combat superbug threats, but to date there remains quite a lot to do. Some of the ideas being addressed, include providing reimbursements for new antibiotics, federal funding to stockpile critical drugs and financial incentives for start-ups.
  4. Less prescribing. Over the years, physicians have found that overprescribing antibiotics have caused bacteria to mutate and create their own survival mechanisms. For this reason, today, antibiotics treatments are prescribed more sparingly, creating less of a demand for them except for the most severe infections.

It’s All Good Until It Isn’t

Since Dr. Alexander Fleming first discovered Penicillin in London in 1928, it and other traditional antibiotics have continued to treat bacterial infections very well in the majority of patients. These antibiotics have enabled infections such as strep throat or pneumonia from killing people, as well as keeping hospital patients safer during their stays.


It’s been easy to grow complacent, since most of us have never experienced life without antibiotics.  But, despite the many positive outcomes made possible by Pencillin, drug-resistant infections still kill 35,000 people in the United States each year and sicken 2.8 million people, according to a report from the Centers for Disease Control and Prevention reported in The New York Times.  There has not been a new antibiotic in the market since 1980. More alarming, without new therapies, the United Nations says the global death toll could grow to 10 million by 2050.

If we continue to allow innovation to dry up, we will experience very real consequences. With fewer drug makers investing in continued antibiotic R&D, there will be no new weapons in the war against drug-resistant microbes, or emerging superbugs like the coronavirus. 

Innovation Needs to be Reignited

It’s clear that companies have to be able to innovate new treatments to address superbugs and antibiotics, but they must be able to remain profitable in order to do so. Governments around the world are putting forth ideas such as “play or pay rules,” through which drug firms are given incentives for having antibiotic development programs in addition to their other drug innovation initiatives. Other ideas are that smaller biotech firms can be given additional resources for continue innovation, or they can work alongside big pharma to help fund their efforts.

Given the urgent need for new solutions to address antibiotic resistance or ever-smarter superbugs, what’s really required is cooperation between business and government and a renaissance of innovation that results in new treatments to address whatever comes next.