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Could taxes on antibiotic use in human and animal health be a solution?

Taxing has been used previously to raise revenues or alter the behaviour of the public (e.g. tobacco) and it could be a solution to reducing the overall use of antibiotics. Taxes may also have the added benefit of providing a revenue stream to fund future research in antimicrobial development. However, O’Neill, in his extensive AMR Review for the UK government, warns that the impact of an antibiotic tax will greatly vary depending on its context. It is therefore wiser to implement it at the national level rather than globally (AMR Review 2016).

In the case of antibiotics, it might be more interesting to impose a tax on antibiotics only for animal-use. This would discourage their use in husbandry but would not directly increase the healthcare costs of citizens. Furthermore, it is unlikely that raising the costs of antibiotics for medicine would lead to behaviour changes from patients (AMR Review 2016).

Two examples of countries that have successfully applied such a tax are Belgium and Denmark.

Belgium introduced the tax in 2014 and it was increased by 75% in 2018: this tax only targets veterinary antibiotics and is based on the quantity of active substance used. The price is multiplied by 1.5 in the case of critical antibiotics (e.g. quinolones, cephalosporines and macrolides) (AFMPS, 2018).

Denmark is one of the earliest countries to establish a plan to deal with AMR. After establishing the Danish Veterinary Medicines Statistic Program, VetStat, they observed that antimicrobial usage increased from 2003 to 2009 in pigs in particular. In response, the Danish Veterinary and Food Administration (DVFA) developed the “Yellow Card” initiative, where a pig farmer that exceeded the national threshold limits for use of antimicrobials in weaners, grower pigs and mature pigs would receive an injunction to lower their use. A decline in antimicrobial use was observed after 2010 and can be attributed to this initiative (DANMAP, 2017). To further tackle AMR, two new interventions were used: a “differentiated tax on the active antimicrobial compound, thus favouring narrow-spectrum antimicrobials and vaccines compared with broad-spectrum compounds” and “a requirement of laboratory verification of the diagnosis on an annual basis for issuing prescriptions for group treatments of intestinal and respiratory infections” (NAM, 1, 2, 3) As a result of these various strategies, Denmark is currently showing lower levels of AMR than most EU countries (EFSA, 2017).

What is the role of economic investment in Research & Development in AMR?

Discovering new antimicrobials and using them inherently poses the risk that those new drugs may develop resistance over time. Ideally, the newly discovered antimicrobials should be restricted for last resort use only, which makes the market unattractive for the private sector in terms of sales volumes.

Developing a new antibiotic can take over a decade and cost over €850 million (Drive-AB, 2018). It can generally be divided into two main phases: initial R&D development, which is done by SMEs and public institutions mostly, followed by drug development and testing, which is done by larger pharmaceutical companies. The AMR Industry Alliance reports investment of around 2 billion into AMR research across 22 companies in 2018 (AMR Industry Alliance, 2018). While a number of companies are producing antibiotics (IFPMA, 2015) (Access to Medicine Foundation, 2018), many of them are variations on existing antibiotics. While these are a safer bet for companies to invest in as less research is needed and approvals are faster due to similarities to existing approved drugs, these slightly modified antibiotics only overcome resistance for a short period of time. Research into novel antibiotic classes is very low.

As our last-resort antibiotics, such as colistin and carbapenem, lose their efficacy (CIDRAP, 2017) (Meletis, 2016) it is imperative that antibiotic R&D is prioritised so that we may have new and effective antimicrobials in time.

Is it true that if AMR is not properly addressed it could cost the global economy up to USD 100 trillion by 2050?

Yes, as evidenced by the extensive AMR review commissioned by the UK Government, “the cost in terms of lost global production between now and 2050 would be an enormous 100 trillion USD if we do not take action.” (AMR Review 2016)

What is the global economic burden of AMR, per annum?

Depending on best or worst case scenarios, by 2050 the expected economic burden due to AMR will account for 1.1-3.8% of the global GDP (World Bank Group, 2017). This tremendous economic impact has been confirmed by the UN Interagency Coordination Group (IACG) on AMR which has compared the situation to the financial crisis of 2008. The economic impact would come mainly from rising health care costs but also secondary impacts on the food/feed production sector, trade and livelihoods, and an increase in poverty and inequality (WHO, 2019).

In 2003, Severe Acute Respiratory Syndrome (SARS) broke out in China and presented not only a previously unknown threat to human health, but also a poignant economic burden. A later study which used the outbreak as a frame of reference estimated that the direct output loss in China’s animal husbandry industry would be over 467 billion Yuan at minimum if a full-blown AMR crisis were to break out in the future.

In Europe, the cost is estimated to be around EUR 1.5 billion per year. This covers figure covers both healthcare costs and productivity losses (EC, 2017).

Why are there so few new antibiotics being produced?

Developing a new antibiotic is time consuming, costly and, most of all, not guaranteed to succeed. As such, it is a risky endeavour for pharmaceutical companies to partake in. Furthermore, with AMR on the rise, newly developed antibiotics should be preserved except for when absolutely needed. Because of these constraints, the market for them is shrinking. All of this makes the development of new antibiotics unattractive for the private sector.

A number of companies are producing antibiotics (IFPMA, 2015) (Access to Medicine Foundation, 2018), but many of these are only variations on existing antibiotics. Such ventures are a safer bet for companies to invest in because less research is needed and approvals are faster due to similarities to existing approved drugs. However, these slightly modified antibiotics only overcome resistance for a short period of time.

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