New Drugs to Tackle Antimicrobial Resistance: Breaking the European Deadlock (part 1)

At the end of April 2023, the European Commission published a series of proposals to tackle AMR, including proposals to get new drugs to tackle AMR. There is a need for action because:

  • AMR is a significant problem in Europe, with an estimated 670,000 infections and 33,000 deaths a year due to resistant bacteria. AMR is estimated to be costing the EU €1.5 billion per year in healthcare costs and productivity losses.
  • New drugs are needed, as existing antibiotics lose effectiveness over time as bacteria become resistant to them, but the market for new antibiotics is not commercially viable for reasons that are well documented, resulting in a weak pipeline for new antibiotics.

Money to support research and development (“push” incentives) is important, and the EU can do more to grow an R&D pipeline, for example, with financial support for CARB-X. Beyond EU support for CARB-X the policy need is for “pull” incentives that create financial rewards for the successful development of a new product. These are currently missing in many global markets, including the EU. Europe represents a quarter of global pharmaceutical sales, and must implement a suitable pull incentive if we are to see new antibiotics emerge.

The Commission’s proposals and the related controversy

The European Commission launched a package of proposals in a Council Recommendation, including the following pull incentives:

  • Temporary mechanism consisting of transferable data exclusivity vouchers, for the development of novel antimicrobials to be granted and used under strict conditions.
  • Procurement mechanisms for access to new and existing antimicrobials that would guarantee revenue for antimicrobials marketing authorisation holders, regardless of sales volumes.”

The pull incentive proposal for a Transferable (data) Exclusivity Voucher (TEV) of 1 year was included in its major revision to Pharmaceutical Legislation. The guaranteed revenue proposal requires further work, with an expectation that it will be based on the Swedish minimum revenue guarantee or the UK  subscription model. However, a review by PWC for the Commission’s HERA and HADEA agencies set out four possible proposals for “pull” procurement mechanisms – revenue guarantee, market entry rewards, a combination of these, and the use of milestone payments – indicating that there is not yet a clear focus on the need to focus on a revenue guarantee model.

In a series of blogs, we will:

  • Review the TEV proposal, noting that benefits will exceed costs manyfold whilst critics of TEVs, including Member States, have argued that other pull incentives, such as a revenue guarantee scheme, are more appropriate;
  • Discuss the potential application of a revenue guarantee/ subscription model in the EU, where the key challenge is how can it be implemented on a pan-EU basis? Without a practical EU procurement model, it is unlikely to offer meaningful revenues to motivate or reward innovation. We will also comment on the other procurement pull proposals included in the PWC review;
  • Assess the reward criteria, what are the appropriate conditions that a new antibiotic should meet in order to qualify for a pull incentive? How many new antibiotics do we need, and do criteria need to be consistent across different jurisdictions around the globe?

But in order to assess the merits of different proposals, it is important to set out the objectives of an AMR pull objective for Europe, which we discuss in this blog.

What would a fit-for-purpose pull incentive look like?

A review by CRA identified principles and objectives set out in earlier papers, notably Outterson and McDonnell (2016), EU-JAMRAI (2017, 2020), BCG (2022), and the EU Member States Non-paper (2022). We adapt the CRA consolidated principles around efficiency (getting the outcomes needed at minimum cost) and fairness (notably that access, when needed, is open to all within the EU and, potentially, on a global basis). For a pull incentive to be effective in this context, it must:

  • Represent a substantial incentive, sufficient to attract research and development investment (via small, medium and large enterprises) in antibacterial drug development,
  • Deliver value for money, with rewards being targeted at the type of new antibiotic needed and, at least in part, varying with the value of the antibiotic. Value for money also means it should minimise the financial burden on health care systems to get the required antibiotics.
  • De-link revenue from volume to allow for alignment of appropriate stewardship with an attractive return on investment and enable stewardship provisions to be monitored and enforced.
  • Be predictable and sustainable, with consistency of the reward and rules over time, with any changes phased in over time so that innovators and investors are clear on what will be rewarded.
  • Allow for consistency of eligibility criteria across jurisdictions so that the global sums add up for innovators.
  • Demonstrate legal and political feasibility of implementation over a relatively short period of time.
  • Ensure availability across the EU as needed, with provision for improving availability outside of the EU, subject to stewardship principles being met.

What constitutes a substantial incentive? How much does it need to be?

Estimates in Outterson (2021) are the most up-to-date and appropriate for estimating the global pull incentive (Brassel et al., 2023). The estimates are based on a review of cost and success estimates for antibiotics and are presented according to a variety of scenarios. The best estimate for a global subscription style delinked amounts over a 10-year period is $3.1 billion when a drug is acquired that is ready for Phase 2 trials (i.e. there is an element of “push” funding). The full cost estimate is $4.2 billion, using what the author regards as relatively poor data for estimating both preclinical costs and the probability of technical and regulatory success (i.e. the likelihood of approval).

How much of this global incentive should Europe pay? Is this amount feasible?

The EU should contribute its fair share towards the global incentive, with a fair share based on relative ability to pay (relative wealth, proxied by GDP). Both Outterson  022 and Towse and Silverman 2022 have proposed using G7+EU as the denominator, giving an EU share of the global incentive of 34-39% depending on the date and exchange rates used. This implies a range of values for an EU incentive.

Evidence indicates that a pull incentive program would be a good investment, saving an estimated 20,000 EU lives in the first ten years, increasing to nearly 400,000 lives by year 30, giving a 10 year (30 year) return on investment for the EU estimated to be 4:1 (18:1). Globally, 9.9 million lives will be saved over the next 30 years.

Why now?

The time for EU action is now. The UK has successfully piloted a subscription style model and is due to announce the next steps, Sweden has successfully implemented a revenue-guarantee scheme, the PASTEUR Act has been reintroduced into the US Congress, and Canada and Japan are, respectively, considering subscription and revenue guarantee schemes.

Simultaneous global action is required for any of these incentives to work, so the EU cannot risk falling behind. Until progress is made, inertia will continue to cause avoidable deaths and generate avoidable costs in the EU.


The purpose of this blog series is to explore how progress towards an effective pull incentive for antibiotics can be made in Europe. Using the objectives we have set out in this first blog, the second blog will review the TEV proposal, the third will discuss the potential application of a revenue guarantee/ subscription model in the EU, and the final blog will review the reward criteria that a new antibiotic should meet in order to qualify for whatever pull incentive is agreed by the EU.



We are grateful to Kevin Outterson for comments on an earlier draft of this blog. The final text is the sole responsibility of the authors.


Related Research 

Firth, I., Pan, J., Towse, A., Steuten, L., 2023. A Novel Incentive Model for Uptake of Diagnostics to Combat Antimicrobial Resistance. OHE Contract Research Report, London: Office of Health Economics. Available at:

Brassel S., Firth I., Oliver E., Hampson, G., Towse A. & Steuten L. 2023. Incentivising New Antibiotics: Designing a Value-Based Delinked Pull Incentive Mechanism. OHE Contract Research. Available from

Silverman Bonnifield R and Towse A. 2022. Estimating EU’s Return on Investment from an Ambitious Program to Incentivize New Antibiotics. Policy Brief. Center for Global Development. Available at

Towse, A. and Silverman Bonnifield, R. 2022. “An Ambitious USG Advanced Commitment for Subscription-Based Purchasing of Novel Antimicrobials and Its Expected Return on Investment.” CGD Policy Paper 277. Washington, DC: Center for Global Development. An Ambitious USG Advanced Commitment for Subscription-Based Purchasing of Novel Antimicrobials and Its Expected Return on Investment | Center for Global Development | Ideas to Action (

Neri, M., Hampson, G., Henshall, C. and Towse, A. 2019. HTA and Payment Mechanisms for New Drugs to Tackle AMR. OHE Grant-Funded Research. Available from