Health innovation system research
IIPP: Biopharmaceutical papers
Antimicrobial resistance (AMR) is a socio-economic crisis (WHO, 2023). Associated with 4.95 million deaths per year, it is estimated to cost the world's economy up to $100 trillion and push more than 28 million people into poverty by 2050 if no action is taken (WHO, 2023). Over the past decade, the biopharmaceutical innovation system has increasingly been seen to have an "insufficient" research and development (R&D) pipeline for new antibacterial innovation to address this crisis (WHO, 2021). This paper will reassess the UK's five-year action plan for AMR, which was published in 2019, and its effectiveness in addressing AMR innovation. Using a traditional, static framework in the linear model of innovation, as well as a more dynamic approach to innovation such as Mariana Mazzucato's Entrepreneurial State, this paper will analyse and compare the significant policies outlined in the UK's five-year action plan.
The World Health Organisation (WHO) places AMR as one of the top 10 global public health threats facing humanity (WHO, 2021). Over the past decade, the prevailing economic perspective to understand and analyse this crisis has been through the lens of "broken market dynamics" that have resulted in "no viable market" for pharmaceutical companies to invest in novel antibiotics (Thomas, CFA and Wessel, 2022; WHO, 2022). It is a well-documented and accepted status quo of market failure that has led to the state fulfilling a relegated role of market fixer within a "broken" health innovation system (Mazzucato, 2023), tirelessly relying on push incentive innovation policies that promote R&D activities by directly lowering the costs of development – which, to date, has proven ineffective at bringing sufficient new products to market as major pharmaceutical companies have increasingly backed away from antibiotic development (WHO, 2023). This issue is compounded by the fact that over the past 35 years, only one direct-acting antibacterial new chemical entity has been approved by the FDA, compared to the 164 since the early 1900’s (Thomas, CFA and Wessel, 2022). And, despite this ‘market failure’ being common knowledge, in 2022, the AMR clinical pipeline contained only 10 novel direct-acting chemical, biochemical or microbial entities out of 64 (Thomas, CFA and Wessel, 2022), a number that the WHO suggests will result in very few new innovative antibiotics in the coming years (WHO, 2021).
As part of the UK's 20-year vision to "effectively contain, control, and mitigate" AMR by 2040 (DHSC, 2019), the UK's Department for Health and Social Care has committed to publishing a series of five-year national action plans to tackle AMR. Structured using the United Nations' Ad-hoc Interagency Framework for Action on AMR (DHSC, 2019; IACG, 2017), the plan is focused on three key methods of addressing the AMR crisis: (1) reducing the need for, and unintentional exposure to, antimicrobials; (2) optimising the use of antimicrobials; and (3) investing in innovation, supply, and access (DHSC, 2019). Each method is detailed with a set of actions, categorised by a number of high-level ambitions outlined in the UK’s 20-year vision (summarised in Figure 1) that align with “relevant national and international initiatives” - notably, the UN’s Sustainable Development Goals and the Global AMR Research and Development Hub (DHSC, 2019).
Figure 1. The UK's nine ambitions for change, defined in the UK 2040 AMR Vision (DHSC, 2019).
The UK's 5-year national action plan to tackle AMR has two significant innovation policies to drive AMR R&D. The Global AMR Innovation Fund (GAMRIF) is a £100 million ‘push-based’ fund to invest into “underfunded and neglected areas of early stage innovation R&D…for the benefit of people in low and middle income countries” (DHSC, 2020). The GAMRIF portfolio consists of bilateral partnerships, global research initiatives and product development partnerships that aim to bring new, affordable solutions to market (DHSC, 2020).
Alongside this push incentive policy, the national action plan committed to piloting a particularly eye-catching 'pull-based' initiative. The NICE-NHS England pilot project is a first-of-its-kind subscription model that delinks the payments made to companies from the volumes of antibiotics sold and instead bases payment on the added value to the UK's health and social care system. It is assessed using the National Institute for Health and Care (NICE) Quality-of-Life Years (QALY) framework (NICE, 2022). The purpose of the pilot has been to assess the model's ability to make antibacterial R&D a more attractive proposition for pharmaceutical companies (NICE, 2022). This pilot has led to an ongoing consultation from the UK government on proposals for an Antimicrobial Product Subscription Model (WHO, 2023).
A traditional perspective: the linear model of innovation
A traditional method of understanding innovation policy is through the lens of the linear model of innovation, a “smooth, well-behaved” framework developed to understand the relationship between science, technology, and the economy (Kline and Rosenberg, 2010; Godin, 2006). The model outlines innovation as a linear process: starting with basic research, followed by applied research and development, and ending with (production and) diffusion. Historically, it has been used to justify government support for science by providing policymakers with a sense of orientation when considering the allocation of funding for R&D, especially through the use of statistics to measure technological innovation (Godin, 2006). Innovation policies derived from the linear model typically carry a linear conception of innovation (Mowery, 1983; Godin, 2006) that map against the three stages of the framework: state-driven support for early stage R&D, an emphasis on the ‘strategic importance’ of technological development and the impact of knowledge diffusion (Godin, 2006).
The linear model of innovation reinforces the market failure narrative that dominates the AMR innovation system by emphasising a paradigm that relies on the state to fund early-stage, high-risk R&D while pharmaceutical companies focus on low risk, revenue-rich strategies (Barrenho, Miraldo, and Smith 2019; Mazzucato and Li, 2020) instead of developing solutions to address unmet needs (Mazzucato and Li, 2020). The GAMRIF is the epitome of this pattern – with 82 state-funded early-stage innovation projects currently in flight (DHSC, 2023) – this policy is rooted in the assumption that the production of knowledge serendipitously leads to the development and diffusion of new innovations. A 2021/22 annual review of the fund even celebrated 162 ‘knowledge transfer outputs’ to date (DHSC, 2023). This perspective lacks consideration of the "imperfect coordinating properties of the economic system" (Dosi, 2023) and ignores any form of incentive for firms to take on additional risk without the prospect of a reward. Put simply. Creating knowledge does not guarantee that firms will adopt it. This is especially prominent in low and middle-income countries where diseases are seven to eight times less likely to be considered for investment by firms (Røttingen et al., 2013). Globally, investments in AMR R&D from public sources amount to $1.6-1.8 billion per year (WHO, 2023), compared to $26.5 billion in venture capital funding for oncology in the United States (Thomas, CFA and Wessel, 2022), demonstrating a clear lack of incentive or reward for firm involvement through ‘push’ funds like GAMRIF.
While the linear model of innovation places emphasis on the "strategic importance of technological development" (Godin, 2006), it does not account for the social, organisational, or economic aspects of innovation that Carlota Perez argues are integral to successful innovation (Perez, 2002). The model assumes that patterns of innovation are generic, regardless of context, resulting in policies that do not differentiate between the conditions needed for successful innovation across core and peripheral countries. Although push-based funding mechanisms typically follow this one-size-fits-all approach, the GAMRIF has evidence that it considers these complex aspects of innovation through product development partnerships (FIND and GARDP), which focus on the stewardship of AMR innovations in low and middle-income countries (DHSC, 2020), effectively looking to create favourable conditions for innovations supported by other areas of the fund to successfully develop. Although this aligns with the ‘diffusion’ phase of the linear model of innovation, the GAMRIF looks to address the conditions needed for the successful development of technology in a specific context – in a way the linear model of innovation does not account for.