All-in cost of a new antibiotic from discovery to 10 years on market

Dear All (and with thanks to Kevin Krause for co-authoring this newsletter),

The elements that contribute to the all-in cost of an antibiotic have been reviewed in two prior newsletters:

  • 6 Mar 2020 (focused on cost of R&D to approval): What does an antibiotic cost to develop? What is it worth? How to afford it?
  • 7 Jan 2020 (focused on post-approval costs): “Melinta, Part 2 / Bankruptcy Is Not The End / Post-Approval Costs For An Antibiotic”

As a further review of these ideas, Kevin Krause and I had an opportunity last week to present an integrated summary via a pair of back-to-back talks on the first day of the 5-8 Jan 2021 meeting of the NASEM committee convened for the project entitled “Examining the Long-term Health and Economic Effects of Antimicrobial Resistance in the United States.”

  • Krause: “The Post-Approval Challenges of Antimicrobial Development” (.pdf) (.pptx) (YouTube)
  • Rex: “Pricing of Antibiotics & Proposals to Strengthen the Pipeline” (.pdf) (.pptx) (YouTube)

Here are the key ideas as we see them (and please read or listen to the talks for more detail!):

  • The process is slow: Expect it take take 10-20 years for a true novel class to go from first molecule to approved product.
  • Integrating all R&D costs (the failures and the final success), a realistic average cost to first approval is ~$1.3b.
  • Keeping the product on the market (supply chain, pharmacovigilance, etc.) requires a total of ~$350m for the first 10 years after approval
    • This is the cost for each successful molecule: There aren’t a lot of synergies in bringing several molecules into one portfolio.
    • From a cash flow perspective, costs are highest in the first few years after approval and the $ figures in Kevin’s talk focus on the first five years. The resulting squeeze on the innovator’s bottom line will have a predictably negative effect! 
  • The total of ~$1.7b is for the absolutely required costs that would be incurred by any group
    • This cost includes the cost of failures along the way to (i) first approval in one indication and (ii) the required post-approval activities for the compound.
    • This cost covers salaries, a pediatric program, supply chain, surveillance studies to monitor for development of resistance, and medical support.
    • This cost does not include marketing efforts beyond required medical education (e.g., answering questions from prescribers).
    • The costs are the same for large companies vs. small, for-profit vs. not-for-profit, etc.
  • Recognizing these true costs of new molecules helps frame the discussion of the size of global pull incentives such as the UK Antibiotic Subscription Pilot (18 Dec 2020 newsletter) and the PASTEUR Act in the US (9 Dec 2020 newsletter).


One way to summarize would be to say that “Luck is not a strategy!”
If we really want new molecules, we have to plan for real costs and real timelines. Importantly, the costs are independent of the underlying business model.

  • All models (large pharma, small pharma, for-profit, non-profit, public benefit) will confront similar costs.
  • Large pharma do have some advantages for creation of a global distribution network, but supply chain costs, trial costs, and regulatory requirements are largely independent of the underlying business model.
  • Corporate models (especially small biotech) are already very lean and incorporate every possible cost reduction strategy: even nonprofits must earn positive margins in order to be sustainable.
  • For more on this, see Outterson K, Rex JH. Evaluating for-profit public benefit corporations as an additional structure for antibiotic development and commercialization. Translational Research, 2020, https://doi.org/10.1016/j.trsl.2020.02.006.

So, that’s a lot of bad news: new antibiotics are expensive and take a long time to create! The good news is that although it takes a lot of money and time to get there, we see strong signs that the needed ecosystem is coming into existence:

  • The more than 90 pre-clinical to Phase 1 projects funded to date by CARB-X and the Novo REPAIR Impact Fund are proof of the interest by many in this area.
  • The recently created $1b AMR Action Fund will provide support for Phase 2-3 for the most promising molecules (9 Jul 2020 newsletter) and has the intent of bringing 2-4 molecules to approval by 2030. Aside: Don’t forget that this fund will require Pull incentives to be self-sustaining — without such Pull awards, both it and any molecules reaching approval will likely go bankrupt.
  • Finally, the high-level discussions of strong Pull models now include
    • The UK and US (as noted above)
    • The recently announced EU Pharmaceutical Strategy (28 Nov 2020 newsletter)
      • A pilot will be announced this year, per the Commission
      • Encouragingly, an EU-JAMRAI-sponsored survey (link to 11 Dec 2020 white paper) of policymakers in 13 countries (10 from EU plus Canada, South Africa, and Japan) found support for incentives in most countries, including interest in a multinational incentive
    • Activity in Japan (11 Jan 2020 newsletter)
    • And other early signs of interest (the 9 Dec 2020 newsletter provides a global survey of novel antibiotic reimbursement models)

Wow! It is indeed amazing to reflect on how far we’ve come in this area in the last 10 years. There is still more to do, but this momentum is so very encouraging!

All best wishes, John and Kevin

John H. Rex, MD | Chief Medical Officer, F2G Ltd. | Operating Partner, Advent Life Sciences. Follow me on Twitter: @JohnRex_NewAbx. See past newsletters and subscribe for the future: https://amr.solutions/blog/. All opinions are my own.

Kevin Krause, BSc, MBA | V.P. Clinical Sciences and Development Operations, AN2 Therapeutics. All opinions are my own.

Current funding opportunities (most current list is here):

  • CDC has released a Broad Agency Announcement with that includes multiple opportunities for AMR-related work. See this newsletter for details. The deadline is 13 Jan 2021.
  • FDA have released RFPs for work on breakpoint updates, impact of extended duration infusion beta-lactam therapy, and development of PROs for NTM, ABPA, and coccidioidomycosis. All have 28 Jan 2021 deadlines for an initial Quad Chart and White Paper. See this newsletter for more details.
  • The US Department of Defense is funding pre-clinical research on small molecules vs. P. aeruginosa. See this newsletter for details. The deadline is 18 Feb 2021.
  • FDA have announced two fellowship opportunities (one for research on ordinal endpoints, one for research on endpoints in cUTI), both with a 26 Feb 2021 deadline. See this newsletter for more details.
  • CDC has released an RFP entitled “Safe Healthcare, Epidemiology, and Prevention Research Development (SHEPheRD)” that seeks support for a broad range of healthcare epidemiology projects. See this newsletter for details. The deadline is 3 Mar 2021.
  • The National Institute of Allergy and Infectious Diseases (NIAID) Applicant Assistance Program (AAP) provides no cost support for companies planning to apply for a Phase II, Fast Track, or Direct-to-Phase II SBIR or STTR Award. Go here for details.
  • Novo REPAIR Impact Fund closed its most recent round on 31 Jul 2020. Go here for current details.
  • CARB-X recently announced that their existing resources will be reserved to fund their existing portfolio (75 total awards, and counting and they conclude contracting on prior rounds), including future options on those awards. New rounds from CARB-X will occur only after new funding is obtained in 2021.
  • The Global AMR R&D Hub’s dynamic dashboard (link) summarizes funders and projects by geography, stage, and more.
  • It’s not a funder, but AiCuris’ AiCubator offers incubator support to very early stage projects. Read more about it here.
  • Finally, you might also be interested in the most current lists of R&D incentives (link) and priority pathogens (link)


Upcoming meetings of interest to the AMR community (most current list is here):

  • 14 Jan 2021 (online, 5-6.30p CET): GARDP-sponsored webinar entitled “Manipulating the host response to treat infections,” moderated by Neeloffer Mookherjee. Go here to register.
  • 18-20 Jan 2021 (online, 10.00a EST to ???): A pair of virtual Keystone Symposia entitled “Harnessing the Microbiome for Disease Prevention and Therapy” and “The Microbiome: From Mother to Child”. Not a lot specifically on infection, but the deep biology typical of Keystone’s programs looks fascinating. Go here and here to register. 
  • 25 Jan 2021 (online, 4-6 UK): Update webinar by the NHS England and NHS Improvement team who are running the UK Antibiotic Subscription pilot. Please mark your calendar now; the link for the webinar will be posted to https://amr.solutions/meetings/ when I have it.
  • 26-28 Jan 2021 (online, runs ~7.30a-5.00p Central each day): 4th Annual Texas Medical Center Antimicrobial Resistance and Stewardship Conference. Sponsored by McGovern Medical School, ARLG, and the Gulf Coast Consortia, the agenda includes both poster sessions and keynotes. The call for abstracts closes 18 Dec 2020. Go here for more details.
  • 2-3 Feb 2021 (online, 1-5p GMT): Antimicrobial Chemotherapy Conference 2021 sponsored by BSAC and GARDP in collaboration with the Helmholtz Institute for Pharmaceutical Sciences (HIPS), the German Center for Infection Research (DZIF) and the International Research Alliance for Antibiotic Discovery and Development (IRAADD, a JPIAMR-funded network). Go here for details and to register.
  • 10-11 Feb 2021 (online, 10a-4p EST): Virtual public meeting of PACCARB (US Presidential Advisory Council on Combatting Antimicrobial Resistant Bacteria). Go here for details.
  • [TITLE AMENDED] 25 Feb 2021 (online, 5-6.30p CET): GARDP-sponsored webinar entitled “From discovery to the pre-clinical antimicrobial candidate,” moderated by Michael Mourez. Go here to register.
  • 10-12 Mar 2021 (Stellenbosch, South Africa): The University of Cape Town’s H3D Research Centre will celebrate its 10th anniversary with a symposium covering the Centre’s research on Malaria, TB, Neglected Tropical Diseases, and AMR. Go here to register; abstract deadline is 15 Nov 2020.
  • 9-12 Jul 2021 (Vienna): Annual ECCMID meeting (#31)
  • 18-21 May 2021 (Albuquerque, New Mexico): Biannual meeting of the MSGERC (Mycoses Study Group Education and Research Consortium). Save-the-date announcement is here, details to follow.
  • 24-29 May 2021 (online and in Geneva): ESPID 2021, the 39th Annual Meeting of the European Society for Paediatric Infectious Diseases. Save-the-date announcement is here, details to follow. 
  • 20-24 June 2021 (Toronto): International Symposium on Pneumococci and Pneumococcal Diseases (ISPPD-12). Go here for details.
  • 3-7 Jun 2021 (Anaheim), ASM Microbe 2021. Go here for details.
  • 27 Jun-2 Jul 2021 (Ventura, CA): Gordon Research Conference entitled “Antimicrobial Peptides”. Go here for details, go here for the linked 26-27 Jun Gordon Research Seminar that precedes it.
  • 5-21 Aug 2021 (Marine Biology Laboratory, Woods Hole, MA): Residential course entitled “Molecular Mycology: Current Approaches to Fungal Pathogenesis.” This 2-week intensive training program has run annually for many years and gets outstanding reviews. Go here for details.
  • 8-11 Oct 2021 (Aberdeen, Scotland): 10th Trends in Medical Mycology. Go here for details.
  • 16-24 Oct 2021 (Annecy, France): Interdisciplinary Course on Antibiotics and Resistance (ICARe). This is a soup-to-nuts residential course on antibiotics, antibiotic resistance, and antibiotic R&D. The course is very intense, very detailed, and gets rave reviews. Registration is here and is limited to 40 students. Bonus feature: For obvious reasons, the course didn’t happen in 2020! But as a celebration of the course’s 5th year, a webinar version was held on 29 Oct 2020: go here to stream it. 
  • 6-11 Mar 2022 (Il Ciocco, Tuscany): Gordon Research Conference entitled “New Antibacterial Discovery and Development”. Go here for details, go here for the linked 5-6 Mar Gordon Research Seminar that precedes it.

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