Towards mission-driven investment in new antimicrobials? What role for Chinese strategic industrial financing vehicles in responding to the challenge of antimicrobial resistance?

Husain et al. Globalization and Health (2024) 20:26 https://doi.org/10.1186/s12992-024-01030-2 Globalization and Health Open Access RESEARCH Towards mission-driven investment in new antimicrobials? What role for Chinese strategic industrial financing vehicles in responding to the challenge of antimicrobial resistance? Lewis Husain1* , Yajing Hu2 and Yangmu Huang3 Abstract Background Antimicrobial resistance (AMR) causes high levels of global mortality. There is a global need to develop new antimicrobials to replace those whose efficacy is being eroded, but limited incentive for companies to engage in R&D, and a limited pipeline of new drugs. There is a recognised need for policies in the form of ‘push’ and ‘pull’ incentives to support this R&D. This article discusses China, a country with a rapidly emerging pharmaceuticals and biotech (P&B) sector, and a history of using coordinated innovation and industrial policy for strategic and developmental ends. We investigate the extent to which ‘government guidance funds’ (GGFs), strategic industrial financing vehicles (a ‘push’ mechanism), support the development of antimicrobials as part of China’s ‘mission-driven’ approach to innovation and industrial policy. GGFs are potentially globally significant, having raised approximately US$ 872 billion to 2020. Results GGFs have a substantial role in P&B, but almost no role in developing new antimicrobials, despite this being a priority in the country’s AMR National Action Plan. There are multiple constraints on GGFs’ ability to function as part of a mission-driven approach to innovation at present, linked to their business model and the absence of standard markets for antimicrobials (or other effective ‘pull’ mechanisms), their unclear ‘social’ mandate, and limited technical capacity. However, GGFs are highly responsive to changing policy demands and can be used strategically by government in response to changing needs. Conclusions Despite the very limited role of GGFs in developing new antimicrobials, their responsiveness to policy means they are likely to play a larger role as P&B becomes an increasingly important component of China’s innovation and industrial strategy. However, for GGFs to effectively play that role, there is a need for reforms to their governance model, an increase in technical and managerial capacity, and supporting (‘pull’) incentives, particularly for pharmaceuticals such as antimicrobials for which there is strong social need, but a limited market. Given GGFs' scale and strategic importance, they deserve further research as China’s P&B sector becomes increasingly globally important, and as the Chinese government commits to a larger role in global health. *Correspondence: Lewis Husain Full list of author information is available at the end of the article © The Author(s) 2024. 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The Creative Commons Public Domain Dedication waiver (http://creativecommons.org/publicdomain/zero/1.0/) applies to the data made available in this article, unless otherwise stated in a credit line to the data. Husain et al. Globalization and Health (2024) 20:26 Page 2 of 14 Keywords Global health, Antimicrobial resistance, Antibiotic resistance, Research and development, R&D, China, Industrial policy, Mission-driven innovation Introduction Antimicrobial resistance (AMR) causes global mortality comparable to HIV/AIDS and malaria combined [1], and its burden of mortality and morbidity is expected to increase in the coming decades. Its economic impact by 2050 has been estimated at USD 100 trillion [2]. While many countries have implemented antimicrobial stewardship measures [3], there remains insufficient attention to developing the novel antimicrobials that are needed as older drugs lose their effectiveness [2, 4]. R&D for new antimicrobials has been declining since the 1980s [5], with only five new classes of antimicrobials brought to market since the beginning of the 21st century [6], and only 43 new drugs in clinical trials in December 2020, most of which fall within existing classes and are vulnerable to the rapid emergence of resistance [7]. There is an acknowledged need for public sector involvement in the development of new antimicrobials, to overcome market failure and provide drugs that are socially necessary, but which are insufficiently supplied by current market-driven arrangements. This ‘public goods’ nature of antimicrobials is summarised by O’Neill [2] as “things that benefit a wide group of people, where that group does not directly pay for their production”. Many procedures and much of the medical industry relies on the existence of functioning antimicrobials, but pharmaceutical companies have limited incentive to invest in their development, given the expense, risk, and likely limited market as new drugs must be carefully stewarded to slow the development of resistance. This usage of ‘public good’ is common in global health and development and differs slightly from an economic definition as it does not specifically articulate whether a given good is rival or excludable [8], and should perhaps be more accurately characterised as a ‘merit good’ [9]. In common with usage by O’Neill and others in this field, however, we use the term ‘public good’. This has led to the development of a number of initiatives intended to incentivise basic research or to support companies to bring new products to market. Such initiatives are frequently characterised as either ‘push’ or ‘pull’ incentives. Push incentives include, for example, public investment in research, clinical trials, and support to companies to gain regulatory approvals. ‘Pull’ incentives, meanwhile, are intended to create incentives for companies by, for example, paying pharmaceutical companies for access to a drug, rather than paying for consumption by volume. Well-known examples of ‘push’ schemes include CARB-X and the Joint Programming Initiative on Antimicrobial Resistance (JPIAMR). Novel pull mechanisms include ‘access’ schemes, such as the United Kingdom’s ‘subscription’ model, being piloted by the National Institute of Health and Care Excellence [10]. More broadly, t (...truncated)