Antimicrobial resistance (AMR) is emerging as one of the greatest threats to global health and the economy. This phenomenon occurs when bacteria, viruses, fungi, and parasites become resistant to the drugs designed to combat them, making the treatment of common infections more difficult and, in some cases, impossible. With impacts ranging from increased mortality to enormous economic costs, AMR already accounts for more annual deaths than HIV/AIDS and malaria combined and could result in global losses of up to USD 3.4 trillion per year by 2050.
While AMR presents significant risks to public health, it also offers investment opportunities for those willing to bet on innovation and sustainability in the health sector. This article discusses how investors can not only help combat this crisis but also find growth opportunities in an expanding market.
The Impact of Antimicrobial Resistance on Health and the Economy
AMR poses a direct threat to public health worldwide. Today, it is estimated that 1.27 million people die annually due to drug-resistant infections, with most cases concentrated in low- and middle-income countries (LMICs). Furthermore, the economic impact of AMR includes increased hospital costs, loss of productivity, and trade restrictions. World Bank studies estimate that, by 2050, AMR could lead to a 3.8% drop in global GDP, severely affecting both developed and emerging countries.
Resistance also affects animal production and food safety. Approximately 73% of global antimicrobial sales are directed toward livestock, which exacerbates resistance in animal species and increases the risk of contamination in the food chain. This could lead to trade restrictions and threaten the stability of global supply chains.
The Innovation Crisis in Antibiotic Development
Despite the urgent need for new treatments, antibiotic development has stagnated. Since the 1980s, few new classes of antibiotics have been introduced to the market. The reason for this is simple: developing new antibiotics is expensive and time-consuming, and the traditional business model does not apply. Unlike drugs for chronic diseases, which are used continuously, new antibiotics are kept as a last resort and used sparingly to slow the development of resistance. This means the revenue potential is limited, deterring major players in the pharmaceutical sector.
Nonetheless, small and medium enterprises (SMEs) represent 81% of antibacterial drugs currently in clinical trials, indicating that innovation is coming from startups and smaller biotech companies. However, these companies often face funding gaps in the later stages of development and regulatory approval, creating a "valley of death" that prevents new treatments from reaching the market.
Financing Models and Incentives for New Antimicrobials
To address the financial challenges of developing new antibiotics, a series of innovative financing models and incentives have been proposed. The creation of public-private investment funds, such as the AMR Action Fund, aims to support smaller companies in their research. This fund, which aims to bring up to four new antibiotics to market by 2030, is an example of how strategic alliances can help overcome financial barriers.
Additionally, regulatory mechanisms such as the subscription payment model in the United Kingdom and the U.S. PASTEUR Act provide an innovative approach by compensating companies for new antibiotics based on their value to public health rather than sales volume. These models aim to ensure a market for new drugs, encouraging companies to invest in research and development (R&D) without relying solely on traditional sales.
The Role of Investors in the Fight Against AMR
Investors play a crucial role in mitigating the risks associated with AMR and promoting sustainable solutions. By integrating an "AMR lens" into their investment decisions, investors can identify both financial risks and opportunities to support companies at the forefront of the fight against antimicrobial resistance. This could include investments in biotechnology for the development of new antibiotics, rapid diagnostics, and vaccines, as well as more sustainable agricultural practices that reduce the need for antimicrobials.
The AMR innovation market offers significant return potential. It is estimated that introducing 18 new antibiotics over 30 years could prevent up to 1.2 million deaths in G7 countries and the European Union alone, with returns ranging from 11 times in the UK to nearly 28 times in the United States and Japan. By supporting R&D initiatives and new financing models, investors can help build a robust and sustainable market for antimicrobials.
Strategies to Accelerate the Development and Commercialization of New Treatments
Several global initiatives are already underway to accelerate the development of new therapies. Partnerships such as CARB-X and the Global Antibiotic Research and Development Partnership (GARDP) are examples of how targeted funding can support the final stages of development and clinical trials. Additionally, regulatory incentives, such as accelerated approval and extended exclusivity for new antibiotics, are essential to reducing costs and the time to market.
For biotech and pharmaceutical companies, investing in R&D focused on AMR can not only generate a positive impact on global health but also offer sustainable financial returns in the long term. Initiatives that decouple profits from sales volume, such as subscription models, are crucial to ensuring that new treatments can be developed and distributed without compromising financial sustainability.
Conclusion: A Coordinated Response to a Global Health Crisis
Antimicrobial resistance is a global health crisis that requires a coordinated and innovative response. For investors, AMR presents both significant risks and opportunities to drive positive change in the health sector. By supporting initiatives that promote sustainable practices and finance the research and development of new treatments, investors can play an essential role in mitigating this crisis.
If you are an investor interested in contributing to sustainable and impactful solutions in the health sector, consider supporting initiatives focused on innovation and combating AMR. The Brazilian Health Innovation Institute - IBIS is committed to fostering a robust health innovation ecosystem and connecting investors to opportunities that truly make a difference. Contact us to learn how you can be part of this transformation.
Reference
This article was inspired and based on the guide "Health & Wealth: An Investor's Guide to Antimicrobial Resistance," which offers a detailed overview of the challenges and opportunities related to AMR. To access the full report, visit FAIRR - Health & Wealth: The Investor's Guide to Antimicrobial Resistance.
by Marcio de Paula
Brazilian Health Innovation Institute - IBIS
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